Income Tax Act (R.S.C., 1985, c. 1 (5th Supp.))

Act current to 2016-05-12 and last amended on 2015-12-31. Previous Versions

Marginal note:Alternative re: acting services
  •  (1) No tax is payable under this Part on any amount described in subsection 212(5.1) that is paid, credited or provided to a non-resident person in a taxation year if the person

    • (a) files with the Minister, on or before the person’s filing-due date for the year, a return of income under Part I for the year; and

    • (b) elects in the return to have this section apply for the year.

  • Marginal note:Deemed Part I payment

    (2) If in respect of a particular amount paid, credited or provided in a taxation year, a non-resident person has complied with paragraphs (1)(a) and (b), any amount deducted or withheld and remitted to the Receiver General on behalf of the person on account of tax under subsection 212(5.1) in respect of the particular amount is deemed to have been paid on account of the person’s tax under Part I.

  • Marginal note:Deemed election and restriction

    (3) Where a corporation payment (within the meaning assigned by subsection 212(5.2)) has been made to a non-resident corporation in respect of an actor and at any time the corporation makes an actor payment (within the meaning assigned by subsection 212(5.2)) to or for the benefit of the actor, if the corporation makes an election under subsection (1) for the taxation year in which the corporation payment is made, the actor is deemed to make an election under subsection (1) for the taxation year of the actor in which the corporation makes the actor payment.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 2001, c. 17, s. 175.
Marginal note:Alternative re Canadian benefits
  •  (1) In this section, a non-resident person’s Canadian benefits for a taxation year is the total of all each of which is an amount paid or credited in the year and in respect of which tax under this Part would, but for this section, be payable by the person because of any of paragraphs 212(1)(h), 212(1)(j) to 212(1)(m) and 212(1)(q).

  • Marginal note:Part I return

    (2) No tax is payable under this Part in respect of a non-resident person’s Canadian benefits for a taxation year if the person

    • (a) files with the Minister, within 6 months after the end of the year, a return of income under Part I for the year; and

    • (b) elects in the return to have this section apply for the year.

  • Marginal note:Taxable income earned in Canada

    (3) Where a non-resident person elects under paragraph (2)(b) for a taxation year, for the purposes of Part I

    • (a) the person is deemed to have been employed in Canada in the year; and

    • (b) the person’s taxable income earned in Canada for the year is deemed to be the greater of

      • (i) the amount that would, but for subparagraph 217(3)(b)(ii), be the person’s taxable income earned in Canada for the year if

        • (A) paragraph 115(1)(a) included the following subparagraph after subparagraph 217(3)(b)(i):

          • “(i.1) the non-resident person’s Canadian benefits for the year, within the meaning assigned by subsection 217(1),”, and

        • (B) paragraph 115(1)(f) were read as follows:

          • “(f) such of the other deductions permitted for the purpose of computing taxable income as can reasonably be considered wholly applicable to the described in subparagraphs 115(1)(a)(i) to 115(1)(a)(vi).”; and

      • (ii) the person’s income (computed without reference to subsection 56(8)) for the year minus the total of such of the deductions permitted for the purpose of computing taxable income as can reasonably be considered wholly applicable to the described in subparagraphs 115(1)(a)(i) to 115(1)(a)(vi).

  • Marginal note:Tax credits -- limitation

    (4) Sections 118 to 118.91 and 118.94 do not apply in computing the tax payable under Part I for a taxation year by a non-resident person who elects under paragraph 217(2)(b) for the year, unless

    • (a) where section 114 applies to the person for the year, all or substantially all of the person’s income for the year is included in computing the person’s taxable income for the year; or

    • (b) in any other case, all or substantially all of the person’s income for the year is included in computing the amount determined under subparagraph 217(3)(b)(i) in respect of the person for the year.

  • Marginal note:Tax credits allowed

    (5) In computing the tax payable under Part I for a taxation year by a non-resident person to whom neither paragraph 217(4)(a) nor paragraph 217(4)(b) applies for the year there may, notwithstanding section 118.94 and subsection 217(4), be deducted the lesser of

    • (a) the total of

      • (i) such of the that would have been deductible under any of section 118.2, subsections 118.3(2) and 118.3(3) and sections 118.6, 118.8 and 118.9 in computing the person’s tax payable under Part I for the year if the person had been resident in Canada throughout the year, as can reasonably be considered wholly applicable, and

      • (ii) the that would have been deductible under any of sections 118 and 118.1, subsection 118.3(1) and sections 118.5 and 118.7 in computing the person’s tax payable under Part I for the year if the person had been resident in Canada throughout the year, and

    • (b) the appropriate percentage for the year of the person’s Canadian benefits for the year.

  • Marginal note:Special credit

    (6) In computing the tax payable under Part I for a taxation year by a non-resident who elects under paragraph 217(2)(b) for the year, there may be deducted the amount determined by the formula

    A × [(B - C) / B]

    where

    A 
    is the amount of tax under Part I that would, but for this subsection, be payable by the person for the year;
    B 
    is the amount determined under subparagraph 217(3)(b)(ii) in respect of the person for the year; and
    C 
    is the amount determined under subparagraph 217(3)(b)(i) in respect of the person for the year.
  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. R.S., 1985, c. 1 (5th Supp.), s. 217;
  • 1994, c. 7, Sch. II, s. 179;
  • 1996, c. 21, s. 56;
  • 1997, c. 25, s. 64;
  • 1998, c. 19, s. 64.
Marginal note:Loan to wholly-owned subsidiary
  •  (1) For the purposes of this Act, where

    • (a) a non-resident corporation (in this section referred to as the “parent corporation”) is indebted to

      • (i) a person resident in Canada, or

      • (ii) a non-resident insurance corporation carrying on business in Canada,

      (in this section referred to as the “creditor”) under an arrangement whereby the parent corporation is required to pay interest in Canadian currency, and

    • (b) the parent corporation has lent the money in respect of which it is so indebted, or a part thereof, to a subsidiary wholly-owned corporation resident in Canada whose principal business is the making of loans (in this section referred to as the “subsidiary corporation”) under an arrangement whereby the subsidiary corporation is required to repay the loan to the parent corporation with interest at the same rate as is payable by the parent corporation to the creditor,

    the amount so lent by the parent corporation to the subsidiary corporation shall be deemed to have been borrowed by the parent corporation as agent of the subsidiary corporation and interest paid by the subsidiary corporation to the parent corporation that has been paid by the parent corporation to the creditor shall be deemed to have been paid by the subsidiary corporation to the creditor and not by the subsidiary corporation to the parent corporation or by the parent corporation to the creditor.

  • Marginal note:Idem

    (2) Where a parent corporation has lent money to a subsidiary wholly-owned corporation resident in Canada whose principal business is not the making of loans and the money has been lent by that corporation to a subsidiary corporation wholly-owned by it and resident in Canada whose principal business is the making of loans, the loan by the parent corporation shall be deemed, for the purpose of subsection 218(1), to have been a loan to a subsidiary wholly-owned corporation whose principal business is the making of loans.

  • Marginal note:Election

    (3) This section does not apply in respect of any payment of interest unless the parent corporation and the creditor have executed, and filed with the Minister, an election in prescribed form.

  • Marginal note:Application of election

    (4) An election filed under subsection 218(3) does not apply in respect of any payment of interest made more than 12 months before the date on which the election was filed with the Minister.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 1970-71-72, c. 63, s. 1 “218”;
  • 1985, c. 45, s. 126(F).
 
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