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

Act current to 2015-08-30 and last amended on 2015-08-01. Previous Versions

Marginal note:Return and payment of tax
  •  (1) Within 90 days from the end of each taxation year commencing after 1980, a registered investment shall

    • (a) file with the Minister a return for the year under this Part in prescribed form and containing prescribed information, without notice or demand therefor;

    • (b) estimate in the return the amount of tax, if any, payable by it under this Part for the year; and

    • (c) pay to the Receiver General the amount of tax, if any, payable by it under this Part for the year.

  • Marginal note:Liability of trustee

    (2) Where the trustee of a registered investment that is liable to pay tax under this Part does not remit to the Receiver General the amount of the tax within the time specified in subsection 204.7(1), the trustee is personally liable to pay on behalf of the registered investment the full amount of the tax and is entitled to recover from the registered investment any amount paid by the trustee as tax under this section.

  • Marginal note:Provisions applicable to Part

    (3) Subsections 150(2) and 150(3), sections 152 and 158, subsections 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. 1980-81-82-83, c. 48, s. 94;
  • 1985, c. 45, s. 126(F);
  • 1986, c. 6, s. 108.

PART X.3LABOUR-SPONSORED VENTURE CAPITAL CORPORATIONS

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

    “annuitant”

    « rentier »

    “annuitant” has the meaning assigned by subsection 146(1);

    “eligible business entity”

    « entreprise admissible »

    “eligible business entity”, at any time, means a particular entity that is

    • (a) a prescribed corporation, or

    • (b) a Canadian partnership or a taxable Canadian corporation, all or substantially all of the fair market value of the property of which is, at that time, attributable to

      • (i) property used in a specified active business carried on by the particular entity or by a corporation controlled by the particular entity,

      • (ii) shares of the capital stock or debt obligations of one or more entities that, at that time, are eligible business entities related to the particular entity, or

      • (iii) any combination of properties described in subparagraph (i) or (ii);

    “eligible investment”

    « placement admissible »

    “eligible investment” of a particular corporation means

    • (a) a share that was issued to the particular corporation and that is a share of the capital stock of a corporation that was an eligible business entity at the time the share was issued,

    • (b) a particular debt obligation that was issued to the particular corporation by an entity that was an eligible business entity at the time the particular debt obligation was issued where

      • (i) the entity is not restricted by the terms of the particular debt obligation or by the terms of any agreement related to that obligation from incurring other debts,

      • (ii) the particular debt obligation, if secured, is secured solely by a floating charge on the assets of the entity or by a guarantee referred to in paragraph (c), and

      • (iii) the particular debt obligation, by its terms or any agreement relating to that obligation, is subordinate to all other debt obligations of the entity, except that, where the entity is a corporation, the particular debt obligation need not be subordinate to

        • (A) a debt obligation, issued by the entity, that is prescribed to be a small business security, or

        • (B) a debt obligation owing to a shareholder of the entity or to a person related to any such shareholder,

    • (c) a guarantee provided by the particular corporation in respect of a debt obligation that would, if the debt obligation had been issued to the particular corporation at the time the guarantee was provided, have been at that time an eligible investment because of paragraph (b), or

    • (d) an option or a right granted by an eligible business entity that is a corporation, in conjunction with the issue of a share or debt obligation that is an eligible investment, to acquire a share of the capital stock of the eligible business entity that would be an eligible investment if that share were issued at the time that the option or right was granted,

    if the following conditions are satisfied:

    • (e) immediately after the time the share or debt obligation was issued, the guarantee was provided or the option or right was granted, as the case may be, the total of the costs to the particular corporation of all shares, options, rights and debt obligations of the eligible business entity and all corporations related to it and 25% of the amount of all guarantees provided by the particular corporation in respect of debt obligations of the eligible business entity and the related corporations does not exceed the lesser of $15,000,000 and 10% of the shareholders’ equity in the particular corporation, determined in accordance with generally accepted accounting principles, on a cost basis and without taking into account any unrealized gains or losses on the investments of the particular corporation, and

    • (f) immediately before the time the share or debt obligation was issued, the guarantee was provided or the option or right was granted, as the case may be,

      • (i) the carrying value of the total assets of the eligible business entity and all corporations (other than prescribed labour-sponsored venture capital corporations) related to it (determined in accordance with generally accepted accounting principles on a consolidated or combined basis, where applicable) did not exceed $50,000,000, and

      • (ii) the total of

        • (A) the number of employees of the eligible business entity and all corporations related to it who normally work at least 20 hours per week for the entity and the related corporations, and

        • (B) 1/2 of the number of other employees of the entity and the related corporations,

        did not exceed 500;

    • (g[Repealed, 1998, c. 19, s. 51(1)]

    “eligible labour body”

    « organisme syndical admissible »

    “eligible labour body” means a trade union, as defined in the Canada Labour Code, that represents employees in more than one province, or an organization that is composed of 2 or more such unions;

    “labour-sponsored funds tax credit”

    “labour-sponsored funds tax credit”[Repealed, 1997, c. 25, s. 55(1)]

    “national central labour body”

    “national central labour body”[Repealed, 1994, c. 7, Sch. VIII, s. 118(2)]

    “original acquisition”

    « acquisition initiale »

    “original acquisition” of a share has the meaning assigned by subsection 127.4(1);

    “original purchaser”

    “original purchaser”[Repealed, 1997, c. 25, s. 55(2)]

    “registered labour-sponsored venture capital corporation”

    “registered labour-sponsored venture capital corporation”[Repealed, 1997, c. 25, s. 55(1)]

    “reserve”

    « réserve »

    “reserve” means

    • (a) property described in any of paragraphs (a), (b), (c), (f) and (g) of the definition “qualified investment” in section 204, and

    • (b) deposits with a credit union that is a “member institution” in relation to a deposit insurance corporation (within the meaning assigned by subsection 137.1(5));

    “revoked corporation”

    « Version anglaise seulement »

    “revoked corporation” means a corporation the registration of which has been revoked under subsection 204.81(6);

    “specified active business”

    « entreprise déterminée exploitée activement »

    “specified active business”, at any time, means an active business that is carried on in Canada where

    • (a) at least 50% of the full-time employees employed at that time in respect of the business are employed in Canada, and

    • (b) at least 50% of the salaries and wages paid to employees employed at that time in respect of the business are reasonably attributable to services rendered in Canada by the employees;

    “specified individual”

    « particulier déterminé »

    “specified individual”, in respect of a share, means an individual (other than a trust) whose labour-sponsored funds tax credit (as defined by subsection 127.4(6)) in respect of the original acquisition of the share is not nil or would not be nil if this Act were read without reference to paragraphs 127.4(6)(b) and 127.4(6)(d).

    “start-up period”

    « période de démarrage »

    “start-up period” of a corporation means

    • (a) subject to paragraph (c), in the case of a corporation that first issued Class A shares before February 17, 1999, the corporation’s taxation year in which it first issued those shares and the four following taxation years,

    • (b) subject to paragraph (c), in the case of a corporation that first issues Class A shares after February 16, 1999, the corporation’s taxation year in which it first issues those shares and the following taxation year, or

    • (c) where a corporation files an election with its return under this Part for a particular taxation year of the corporation that ends after 1998 and that is referred to in paragraph (a) or (b), the period, if any, consisting of the taxation years referred to in paragraph (a) or (b), as the case may be, other than the particular year and all taxation years following the particular year.

    “terminating corporation”

    « société sortante »

    “terminating corporation” in respect of a particular corporation means a predecessor corporation in circumstances where

    • (a) subsection 204.85(3) applies to a merger of the particular corporation and the predecessor corporation,

    • (b) Class A shares of the particular corporation have been issued to the predecessor corporation in exchange for property of the predecessor corporation, and

    • (c) within a reasonable period of time after the exchange, Class A shareholders of the predecessor corporation receive all of the Class A shares of the particular corporation issued to the predecessor corporation in the course of a wind-up of the predecessor corporation.

  • Marginal note:When venture capital business discontinued

    (2) For the purposes of section 127.4, this Part and Part XII.5, a corporation discontinues its venture capital business

    • (a) at the time its articles cease to comply with paragraph 204.81(1)(c) and would so cease to comply if it had been incorporated after December 5, 1996;

    • (b) at the time it begins to wind-up, and for the purpose of this paragraph a corporation is not to be considered to have begun to wind up solely because it discontinues its venture capital business under prescribed wind-up rules;

    • (c) immediately before the time it amalgamates or merges with one or more other corporations to form one corporate entity (other than an entity deemed by paragraph 204.85(3)(d) to have been registered under this Part);

    • (d) at the time it becomes a revoked corporation, if one of the grounds on which the Minister could revoke its registration for the purposes of this Part is set out in paragraph 204.81(6)(a.1); or

    • (e) at the first time after the revocation of its registration for the purposes of this Part that it fails to comply with any of the provisions of its articles governing its authorized capital, the management of its business and affairs, the reduction of paid-up capital or the redemption or transfer of its Class A shares.

  • Marginal note:Date of issue of Class A shares

    (3) For the purposes of this Part and subsection 211.8(1), in determining the time of the issue or the original acquisition of Class A shares, identical Class A shares held by a person are deemed to be disposed of by the person in the order in which the shares were issued.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 1994, c. 7, Sch. II, s. 164, Sch. VIII, s. 118, c. 8, s. 29;
  • 1997, c. 25, s. 55;
  • 1998, c. 19, ss. 51, 209;
  • 2000, c. 19, s. 54;
  • 2005, c. 30, s. 13;
  • 2013, c. 34, s. 335.