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

Act current to 2014-09-01 and last amended on 2014-06-27. Previous Versions

Marginal note:Return
  •  (1) Every corporation liable to pay tax under this Part for a taxation year shall, on or before the day on or before which it is required to file its return of income under Part I for the year, file with the Minister a return for the year under this Part in prescribed form.

  • Marginal note:Provisions applicable to Part

    (2) Subsections 150(2) and 150(3), sections 152, 158 and 159, subsections 160.1(1) and 161(1) and 161(11), sections 162 to 167 and Division J of Part I are applicable to this Part with such modifications as the circumstances require.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 1987, c. 46, s. 57.

PART IIIADDITIONAL TAX ON EXCESSIVE ELECTIONS

Marginal note:Tax on excessive elections
  •  (2) If a corporation has elected in accordance with subsection 83(2), 130.1(4) or 131(1) in respect of the full amount of any dividend payable by it on shares of any class of its capital stock (in this section referred to as the “original dividend”) and the full amount of the original dividend exceeds the portion of the original dividend deemed by that subsection to be a capital dividend or capital gains dividend, as the case may be, the corporation shall, at the time of the election, pay a tax under this Part equal to 3/5 of the excess.

  • (2.1) [Repealed, 2013, c. 34, s. 327]

  • Marginal note:Election to treat excess as separate dividend

    (3) If, in respect of an original dividend payable at a particular time, a corporation would, but for this subsection, be required to pay a tax under this Part in respect of an excess referred to in subsection (2), and the corporation elects in prescribed manner on or before the day that is 90 days after the day of sending of the notice of assessment in respect of the tax that would otherwise be payable under this Part, the following rules apply:

    • (a) the portion of the original dividend deemed by subsection 83(2), 130.1(4) or 131(1) to be a capital dividend or capital gains dividend, as the case may be, is deemed for the purposes of this Act to be the amount of a separate dividend that became payable at the particular time;

    • (b) if the corporation identifies in its election any part of the excess, that part is, for the purposes of any election under subsection 83(2), 130.1(4) or 131(1) in respect of that part, and, where the corporation has so elected, for all purposes of this Act, deemed to be the amount of a separate dividend that became payable immediately after the particular time;

    • (c) the amount by which the excess exceeds any portion deemed by paragraph (b) to be a separate dividend for all purposes of this Act is deemed to be a separate taxable dividend that became payable at the particular time; and

    • (d) each person who held any of the issued shares of the class of shares of the capital stock of the corporation in respect of which the original dividend was paid is deemed

      • (i) not to have received any portion of the original dividend, and

      • (ii) to have received, at the time that any separate dividend determined under any of paragraphs (a) to (c) became payable, the proportion of that dividend that the number of shares of that class held by the person at the particular time is of the number of shares of that class outstanding at the particular time except that, for the purpose of Part ​XIII, the separate dividend is deemed to be paid on the day that the election in respect of this subsection is made.

  • (3.1) and (3.2) [Repealed, 2013, c. 34, s. 327]

  • Marginal note:Concurrence with election

    (4) An election under subsection (3) is valid only if

    • (a) it is made with the concurrence of the corporation and all its shareholders

      • (i) who received or were entitled to receive all or any portion of the original dividend, and

      • (ii) whose addresses were known to the corporation; and

    • (b) either

      • (i) it is made on or before the day that is 30 months after the day on which the original dividend became payable, or

      • (ii) each shareholder described in subparagraph (a)(i) concurs with the election, in which case, notwithstanding subsections 152(4) to (5), any assessment of the tax, interest and penalties payable by each of those shareholders for any taxation year shall be made that is necessary to take the corporation’s election into account.

  • Marginal note:Exception for non-taxable shareholders

    (5) If each person who, in respect of an election made under subsection (3), is deemed by subsection (3) to have received a dividend at a particular time is also, at the particular time, a person all of whose taxable income is exempt from tax under Part I,

    • (a) subsection (4) does not apply to the election; and

    • (b) the election is valid only if it is made on or before the day that is 30 months after the day on which the original dividend became payable.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. R.S., 1985, c. 1 (5th Supp.), s. 184;
  • 1994, c. 7, Sch. II, s. 152;
  • 2010, c. 25, s. 48;
  • 2013, c. 34, s. 327.