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

Act current to 2016-01-25 and last amended on 2015-08-01. Previous Versions

Marginal note:Casino

 An electronic funds transfer in respect of which subsection 244.2(1) applies that occurs in the course of a business, temporarily conducted for charitable purposes in the establishment of a casino by a registered charity carried on for not more than two consecutive days at a time under the supervision of the casino, shall be reported by the supervising casino.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 2014, c. 20, s. 29.
Marginal note:Single transaction
  •  (1) For the purposes of this Part, two or more electronic funds transfers of less than $10,000 each that are made within 24 consecutive hours and that total $10,000 or more are considered to be made in the course of a single transaction of $10,000 or more if

    • (a) an individual, other than a trust, who is a reporting entity knows that the transfers are conducted by, or on behalf of, the same entity; and

    • (b) an employee of a reporting entity, other than an entity described in paragraph (a), knows that the transfers are conducted by, or on behalf of, the same entity.

  • Marginal note:Exception

    (2) For greater certainty, subsection (1) does not apply in respect of an electronic funds transfer sent to two or more beneficiaries if the transfer is requested by

    • (a) an administrator of a pension fund that is regulated by or under an Act of Parliament or of the legislature of a province;

    • (b) a department or agent of Her Majesty in right of Canada or of a province;

    • (c) an incorporated city, town, village, metropolitan authority, township, district, county, rural municipality or other incorporated municipal body or an agent of any of them;

    • (d) an organization that operates a public hospital and that is designated by the Minister as a hospital authority under the Excise Tax Act, or an agent of such an organization; or

    • (e) a corporation that has minimum net assets of $75 million on its last audited balance sheet, whose shares are traded on a Canadian stock exchange or a designated stock exchange and that operates in a country that is a member of the Financial Action Task Force on Money Laundering established in 1989.

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