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

Act current to 2017-10-13 and last amended on 2017-07-01. Previous Versions

Marginal note:Due diligence exception

 The information required in a return filed under section 233.2 or 233.4 does not include information that is not available, on the day on which the return is filed, to the person or partnership required to file the return where

  • (a) there is a reasonable disclosure in the return of the unavailability of the information;

  • (b) before that day, the person or partnership exercised due diligence in attempting to obtain the information;

  • (c) if the return is required to be filed under section 233.2 in respect of a trust, at the time of each transaction, if any, entered into by the person or partnership after March 5, 1996 and before June 23, 2000 that gave rise to the requirement to file a return for a taxation year of the trust that ended before 2007 or that affects the information to be reported in the return, it was reasonable to expect that sufficient information would be available to the person or partnership to comply with section 233.2 in respect of each taxation year of the trust that ended before 2007;

  • (c.1) if the return is required to be filed under section 233.2, at the time of each contribution (determined with reference to subsection 233.2(2)) made by the person or partnership after June 22, 2000 that gives rise to the requirement to file the return or that affects the information to be reported in the return, it was reasonable to expect that sufficient information would be available to the person or partnership to comply with section 233.2;

  • (c.2) if the return is required to be filed under section 233.4 by a person or partnership in respect of a corporation that is a controlled foreign affiliate for the purpose of that section of the person or partnership, at the time of each transaction, if any, entered into by the person or partnership after March 5, 1996 that gives rise to the requirement to file the return or that affects the information to be reported in the return, it was reasonable to expect that sufficient information would be available to the person or partnership to comply with section 233.4; and

  • (d) if the information subsequently becomes available to the person or partnership, it is filed with the Minister not more than 90 days after it becomes so available.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 1997, c. 25, s. 69;
  • 2013, c. 34, s. 23.
Marginal note:Returns respecting distributions from non-resident trusts
  •  (1) Where a specified Canadian entity (as defined by subsection 233.3(1)) for a taxation year or fiscal period receives a distribution of property from, or is indebted to, a non-resident trust (other than a trust that was an excluded trust in respect of the year or period of the entity or an estate that arose on and as a consequence of the death of an individual) in the year or period and the entity is beneficially interested in the trust at any time in the year or period, the entity shall file with the Minister for the year or period a return in prescribed form on or before the day that is

    • (a) where the entity is a partnership, the day on or before which a return is required by section 229 of the Income Tax Regulations to be filed in respect of the fiscal period of the partnership or would be required to be so filed if that section applied to the partnership; and

    • (b) where the entity is not a partnership, the entity’s filing-due date for the year.

  • Marginal note:Excluded trust defined

    (2) For the purpose of subsection 233.6(1), an excluded trust in respect of the taxation year or fiscal period of an entity means

    • (a) a trust described in paragraph (a) or (b) of the definition exempt trust in subsection 233.2(1) throughout the portion of the year or period during which the trust was extant;

    • (b) a trust in respect of which the entity is required by section 233.2 to file a return in respect of each taxation year of the trust that ends in the entity’s year;

    • (c) a trust an interest in which is at any time in the year or period specified foreign property (as defined by subsection 233.3(1)) of the entity, where the entity is a reporting entity (as defined by subsection 233.3(1)) for the year or period; and

    • (d) a trust in respect of which the entity is required by section 233.4 to file a return for the year or period.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 1997, c. 25, s. 69.
Marginal note:Exception for first-year residents

 Notwithstanding sections 233.2, 233.3, 233.4 and 233.6, a person who, but for this section, would be required under any of those sections to file an information return for a taxation year, is not required to file the return if the person is an individual (other than a trust) who first became resident in Canada in the year.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 1997, c. 25, s. 69.
Marginal note:Country-by-country report — definitions
  •  (1) The following definitions apply in this section.

    business entity

    business entity means

    • (a) a person (other than an individual that is not a trust) or partnership; and

    • (b) a business that is carried on through a permanent establishment, if a separate financial statement for the business is prepared for financial reporting, regulatory, tax reporting or internal management control purposes. (entité)

    consolidated financial statements

    consolidated financial statements means financial statements in which the assets, liabilities, income, expenses and cash flows of the members of a group are presented as those of a single economic entity. (états financiers consolidés)

    constituent entity

    constituent entity, of an MNE group, means

    • (a) any business entity of the MNE group that

      • (i) is included in the consolidated financial statements of the MNE group for financial reporting purposes, or

      • (ii) would be required to be included if equity interests in any of the business entities in the MNE group were traded on a public securities exchange; and

    • (b) any business entity that is excluded from the MNE group’s consolidated financial statements solely because of size or materiality. (entité constitutive)

    excluded MNE group

    excluded MNE group means two or more business entities that meet the conditions in paragraphs (a) and (b) of the definition MNE group, if, with respect to a particular fiscal year of the MNE group, it has a total consolidated group revenue of less than €750 million during the fiscal year immediately preceding the particular fiscal year, as reflected in its consolidated financial statements for the preceding fiscal year. (groupe d’entreprises multinationales exclu)

    fiscal year

    fiscal year, of an MNE group, means an annual accounting period with respect to which the ultimate parent entity of the MNE group prepares its financial statements. (exercice)

    multinational enterprise group

    multinational enterprise group or MNE group means two or more business entities, if

    • (a) they are either required to prepare consolidated financial statements for financial reporting purposes under applicable accounting principles or would be so required if equity interests in any of the business entities were traded on a public securities exchange;

    • (b) one of the business entities is resident in a particular jurisdiction and

      • (i) another business entity resides in a different jurisdiction, or

      • (ii) is subject to tax in a different jurisdiction with respect to a business carried on by it through a business entity — described in paragraph (b) of the definition business entity — in that other jurisdiction; and

    • (c) they are not an excluded MNE group. (groupe d’entreprises multinationales)

    permanent establishment

    permanent establishment has the meaning assigned by regulation. (établissement stable)

    qualifying competent authority agreement

    qualifying competent authority agreement means an agreement that

    • (a) is between authorized representatives of those jurisdictions that are parties to a listed international agreement; and

    • (b) requires the automatic exchange of country-by-country reports between the party jurisdictions. (accord admissible)

    reporting fiscal year

    reporting fiscal year means a fiscal year, if the financial and operational results of the fiscal year are reflected in the country-by-country report. (exercice déclarable)

    surrogate parent entity

    surrogate parent entity means a constituent entity of an MNE group that has been appointed by the MNE group — in substitution for the ultimate parent entity — to file the country-by-country report on behalf of the MNE group, if one or more of the conditions in subparagraph (3)(b)(ii) applies. (entité mère de substitution)

    systemic failure

    systemic failure means, with respect to a jurisdiction, that the jurisdiction has a qualifying competent authority agreement in effect with Canada, but

    • (a) has suspended automatic exchange (for reasons other than those that are in accordance with the terms of the agreement); or

    • (b) has persistently failed to automatically provide country-by-country reports in its possession — in respect of MNE groups that have constituent entities in Canada — to Canada. (défaillance systémique)

    ultimate parent entity

    ultimate parent entity means a constituent entity of an MNE group that meets the following conditions:

    • (a) the constituent entity holds directly or indirectly a sufficient interest in one or more constituent entities of the MNE group so that it is required to prepare consolidated financial statements under accounting principles generally applied in its jurisdiction of residence, or would be so required if its equity interests were traded on a public securities exchange in its jurisdiction of residence; and

    • (b) no other constituent entity of the MNE group holds, directly or indirectly, an interest in it that is described in paragraph (a). (entité mère ultime)

  • Marginal note:Determination of residence — ultimate parent entity

    (2) For the purposes of this section, if an ultimate parent entity is a partnership, it is deemed to be resident

    • (a) if it is, under the laws of another jurisdiction, resident in that other jurisdiction for tax purposes, in that other jurisdiction; and

    • (b) in any other case, in the jurisdiction under the laws of which it was organized.

  • Marginal note:Filing obligations

    (3) A report in prescribed form (this report, along with each substantially similar report required to be filed in a jurisdiction other than Canada, collectively referred to in this section as a country-by-country report), in respect of a reporting fiscal year of an MNE group, shall be filed in prescribed manner with the Minister on or before the date specified in subsection (6) by

    • (a) the ultimate parent entity of the MNE group, if it is resident in Canada in the reporting fiscal year; or

    • (b) a constituent entity of the MNE group — which is not the ultimate parent entity of the MNE group — with respect to the reporting fiscal year of the MNE group, if the following conditions are satisfied:

      • (i) the constituent entity is resident in Canada in the reporting fiscal year, and

      • (ii) one of the following conditions applies:

        • (A) the ultimate parent entity of the MNE group is not obligated to file a country-by-country report in its jurisdiction of residence,

        • (B) the jurisdiction of residence of the ultimate parent entity of the MNE group does not have a qualifying competent authority agreement in effect to which Canada is a party on or before the time specified in subsection (6) for filing the country-by-country report for the reporting fiscal year, or

        • (C) there has been a systemic failure of the jurisdiction of residence of the ultimate parent entity and the Minister has notified the constituent entity of the systemic failure.

  • Marginal note:Designation for multiple constituent entities

    (4) If more than one constituent entity of an MNE group is described in paragraph (3)(b) in respect of a reporting fiscal year, one of those constituent entities may be designated — on or before the date specified in subsection (6) in respect of the reporting fiscal year — so that it is entitled to file a country-by-country report for the reporting fiscal year with the Minister on behalf of all such constituent entities in the MNE group.

  • Marginal note:Surrogate filing

    (5) Notwithstanding subsection (3), a constituent entity of an MNE group described in paragraph (3)(b) is not required to file a country-by-country report with the Minister with respect to a reporting fiscal year if

    • (a) a surrogate parent entity of the MNE group files a country-by-country report in respect of the reporting fiscal year with the tax authority of its jurisdiction of residence on or before the date specified in subsection (6); and

    • (b) the jurisdiction of residence of the surrogate parent entity

      • (i) requires filing of country-by-country reports,

      • (ii) has a qualifying competent authority agreement in effect to which Canada is a party on or before the time specified in subsection (6) for filing the country-by-country report in respect of the reporting fiscal year,

      • (iii) is not in a position of systemic failure, and

      • (iv) has been notified by the surrogate parent entity that it is the surrogate parent entity.

  • Marginal note:Time for filing

    (6) A country-by-country report in respect of a reporting fiscal year of an MNE group that is required to be filed by a constituent entity under this section shall be filed on or before the later of

    • (a) if notification of systemic failure has been received by the constituent entity, 30 days after receipt of the notification, and

    • (b) 12 months after the last day of the reporting fiscal year.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 2016, c. 12, s. 61.
 
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