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

Act current to 2016-09-18 and last amended on 2016-07-01. Previous Versions

Marginal note:Foreign currency

 If an electronic funds transfer is carried out by a reporting entity in a foreign currency, the amount of the transfer is to be converted into Canadian dollars using

  • (a) the official conversion rate of the Bank of Canada for the currency published in the Bank of Canada’s Daily Memorandum of Exchange Rates that is in effect at the time of the transfer; or

  • (b) if no official conversion rate is set out in that publication for the currency, the conversion rate that the entity would use for the currency in the normal course of business at the time of the transfer.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 2014, c. 20, s. 29.
Marginal note:Filing of return

 An information return in respect of an electronic funds transfer that is required to be filed by a reporting entity under this Part shall be filed

  • (a) not later than five working days after the day of the transfer; and

  • (b) using electronic media, in the manner specified by the Minister, if the entity has the technical capabilities to do so.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 2014, c. 20, s. 29.
Marginal note:Record keeping
  •  (1) Every reporting entity that is required to file an information return under this Part shall keep such records as will enable the Minister to determine whether the entity has complied with its duties and obligations under this Part.

  • Marginal note:Form of records

    (2) A record that is required to be kept under this Part may be kept in machine-readable or electronic form if a paper copy can be readily produced from it.

  • Marginal note:Retention of records

    (3) A reporting entity that is required to keep records under this Part in respect of an electronic funds transfer shall retain those records for a period of at least five years from the day of the transfer.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 2014, c. 20, s. 29.

PART XVITax Avoidance

Marginal note:Definitions
  •  (1) In this section,

    tax benefit

    avantage fiscal

    tax benefit means a reduction, avoidance or deferral of tax or other amount payable under this Act or an increase in a refund of tax or other amount under this Act, and includes a reduction, avoidance or deferral of tax or other amount that would be payable under this Act but for a tax treaty or an increase in a refund of tax or other amount under this Act as a result of a tax treaty; (avantage fiscal)

    tax consequences

    attribut fiscal

    tax consequences to a person means the amount of income, taxable income, or taxable income earned in Canada of, tax or other amount payable by or refundable to the person under this Act, or any other amount that is relevant for the purposes of computing that amount; (attribut fiscal)

    transaction

    opération

    transaction includes an arrangement or event. (opération)

  • Marginal note:General anti-avoidance provision

    (2) Where a transaction is an avoidance transaction, the tax consequences to a person shall be determined as is reasonable in the circumstances in order to deny a tax benefit that, but for this section, would result, directly or indirectly, from that transaction or from a series of transactions that includes that transaction.

  • Marginal note:Avoidance transaction

    (3) An avoidance transaction means any transaction

    • (a) that, but for this section, would result, directly or indirectly, in a tax benefit, unless the transaction may reasonably be considered to have been undertaken or arranged primarily for bona fide purposes other than to obtain the tax benefit; or

    • (b) that is part of a series of transactions, which series, but for this section, would result, directly or indirectly, in a tax benefit, unless the transaction may reasonably be considered to have been undertaken or arranged primarily for bona fide purposes other than to obtain the tax benefit.

  • Marginal note:Application of subsection (2)

    (4) Subsection (2) applies to a transaction only if it may reasonably be considered that the transaction

    • (a) would, if this Act were read without reference to this section, result directly or indirectly in a misuse of the provisions of any one or more of

      • (i) this Act,

      • (ii) the Income Tax Regulations,

      • (iii) the Income Tax Application Rules,

      • (iv) a tax treaty, or

      • (v) any other enactment that is relevant in computing tax or any other amount payable by or refundable to a person under this Act or in determining any amount that is relevant for the purposes of that computation; or

    • (b) would result directly or indirectly in an abuse having regard to those provisions, other than this section, read as a whole.

  • Marginal note:Determination of tax consequences

    (5) Without restricting the generality of subsection (2), and notwithstanding any other enactment,

    • (a) any deduction, exemption or exclusion in computing income, taxable income, taxable income earned in Canada or tax payable or any part thereof may be allowed or disallowed in whole or in part,

    • (b) any such deduction, exemption or exclusion, any income, loss or other amount or part thereof may be allocated to any person,

    • (c) the nature of any payment or other amount may be recharacterized, and

    • (d) the tax effects that would otherwise result from the application of other provisions of this Act may be ignored,

    in determining the tax consequences to a person as is reasonable in the circumstances in order to deny a tax benefit that would, but for this section, result, directly or indirectly, from an avoidance transaction.

  • Marginal note:Request for adjustments

    (6) Where with respect to a transaction

    • (a) a notice of assessment, reassessment or additional assessment involving the application of subsection 245(2) with respect to the transaction has been sent to a person, or

    • (b) a notice of determination pursuant to subsection 152(1.11) has been sent to a person with respect to the transaction,

    any person (other than a person referred to in paragraph (a) or (b)) shall be entitled, within 180 days after the day of sending of the notice, to request in writing that the Minister make an assessment, reassessment or additional assessment applying subsection (2) or make a determination applying subsection 152(1.11) with respect to that transaction.

  • Marginal note:Exception

    (7) Notwithstanding any other provision of this Act, the tax consequences to any person, following the application of this section, shall only be determined through a notice of assessment, reassessment, additional assessment or determination pursuant to subsection 152(1.11) involving the application of this section.

  • Marginal note:Duties of Minister

    (8) On receipt of a request by a person under subsection 245(6), the Minister shall, with all due dispatch, consider the request and, notwithstanding subsection 152(4), assess, reassess or make an additional assessment or determination pursuant to subsection 152(1.11) with respect to that person, except that an assessment, reassessment, additional assessment or determination may be made under this subsection only to the extent that it may reasonably be regarded as relating to the transaction referred to in subsection 245(6).

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. R.S., 1985, c. 1 (5th Supp.), s. 245;
  • 2005, c. 19, s. 52;
  • 2010, c. 25, s. 68.
Marginal note:Benefit conferred on a person
  •  (1) Where at any time a person confers a benefit, either directly or indirectly, by any means whatever, on a taxpayer, the amount of the benefit shall, to the extent that it is not otherwise included in the taxpayer’s income or taxable income earned in Canada under Part I and would be included in the taxpayer’s income if the amount of the benefit were a payment made directly by the person to the taxpayer and if the taxpayer were resident in Canada, be

    • (a) included in computing the taxpayer’s income or taxable income earned in Canada under Part I for the taxation year that includes that time; or

    • (b) where the taxpayer is a non-resident person, deemed for the purposes of Part XIII to be a payment made at that time to the taxpayer in respect of property, services or otherwise, depending on the nature of the benefit.

  • Marginal note:Arm’s length

    (2) Where it is established that a transaction was entered into by persons dealing at arm’s length, bona fide and not pursuant to, or as part of, any other transaction and not to effect payment, in whole or in part, of an existing or future obligation, no party thereto shall be regarded, for the purpose of this section, as having conferred a benefit on a party with whom the first-mentioned party was so dealing.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 1970-71-72, c. 63, s. 1“246”;
  • 1984, c. 45, s. 91;
  • 1988, c. 55, s. 186.
 
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