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

Act current to 2017-06-19 and last amended on 2017-06-19. Previous Versions

Marginal note:Resource expenses of limited partner
  •  (1) Where a taxpayer is a limited partner of a partnership at the end of a fiscal period of the partnership, the following rules apply:

    • (a) determine the amount, if any, by which

      • (i) the total of all amounts each of which is the taxpayer’s share of

        • (A) the Canadian oil and gas property expenses (in this subsection referred to as “property expenses”),

        • (B) the Canadian development expenses (in this subsection referred to as “development expenses”),

        • (C) the Canadian exploration expenses (in this subsection referred to as “exploration expenses”),

        • (D) the foreign resource expenses in respect of a country (in this subsection referred to as “country-specific foreign expenses”), or

        • (E) the foreign exploration and development expenses (in this subsection referred to as “global foreign expenses”),

        incurred by the partnership in the fiscal period determined without reference to this subsection

      exceeds

      • (ii) the amount, if any, by which

        • (A) the taxpayer’s at-risk amount at the end of the fiscal period in respect of the partnership

        exceeds

        • (B) the total of

          • (I) the amount required by subsection 127(8) in respect of the partnership to be added in computing the investment tax credit of the taxpayer in respect of the fiscal period, and

          • (II) the taxpayer’s share of any losses of the partnership for the fiscal period from a farming business;

    • (b) the amount determined under paragraph 66.8(1)(a) shall be applied

      • (i) first to reduce the taxpayer’s share of property expenses,

      • (ii) if any remains unapplied, then to reduce the taxpayer’s share of development expenses,

      • (iii) if any remains unapplied, then to reduce the taxpayer’s share of exploration expenses,

      • (iv) if any remains unapplied, then to reduce (in the order specified by the taxpayer in writing filed with the Minister on or before the taxpayer’s filing-due date for the taxpayer’s taxation year in which the fiscal period ends or, where no such specification is made, in the order determined by the Minister) the taxpayer’s share of country-specific foreign expenses, and

      • (v) if any remains unapplied, then to reduce the taxpayer’s share of global foreign expenses; and

      incurred by the partnership in the fiscal period; and

    • (c) for the purposes of subparagraph 53(2)(c)(ii), sections 66 to 66.7, subsection 96(2.1) and section 111, the taxpayer’s share of each class of expenses described in subparagraph 66.8(1)(a)(i) incurred by the partnership in the fiscal period shall be deemed to be the amount by which the taxpayer’s share of that class of expenses as determined under subparagraph 66.8(1)(a)(i) exceeds the amount, if any, that was applied under paragraph 66.8(1)(b) to reduce the taxpayer’s share of that class of expenses.

  • Marginal note:Expenses in following fiscal period

    (2) For the purposes of subparagraph 66.8(1)(a)(i), the amount by which a taxpayer’s share of a class of expenses incurred by a partnership is reduced under paragraph 66.8(1)(b) in respect of a fiscal period of the partnership shall be added to the taxpayer’s share, otherwise determined, of that class of expenses incurred by the partnership in the immediately following fiscal period of the partnership.

  • Marginal note:Interpretation

    (3) In this section,

    • (a) the expression limited partner of a partnership has the meaning that would be assigned by subsection 96(2.4), if in subsection 96(2.5) each reference to

      • (i) “February 25, 1986” were a reference to “June 17, 1987”,

      • (ii) “February 26, 1986” were a reference to “June 18, 1987”,

      • (iii) “January 1, 1987” were a reference to “January 1, 1988”,

      • (iv) “June 12, 1986” were a reference to “June 18, 1987”, and

      • (v) “prospectus, preliminary prospectus or registration statement” were a reference to “prospectus, preliminary prospectus, registration statement, offering memorandum or notice that is required to be filed before any distribution of securities may commence”;

    • (a.1) the expression at-risk amount of a taxpayer in respect of a partnership has the meaning that would be assigned by subsection 96(2.2) if paragraph 96(2.2)(c) read as follows:

      • (c) all amounts each of which is an amount owing at that time to the partnership, or to a person or partnership not dealing at arm’s length with the partnership, by the taxpayer or by a person or partnership not dealing at arm’s length with the taxpayer, other than any amount deducted under subparagraph 53(2)(c)(i.3) in computing the adjusted cost base, or under section 143.2 in computing the cost, to the taxpayer of the taxpayer’s partnership interest at that time, or any amount owing by the taxpayer to a person in respect of which the taxpayer is a subsidiary wholly-owned corporation or where the taxpayer is a trust, to a person that is the sole beneficiary of the taxpayer, and;

    • (b) a reference to a taxpayer who is a member of a particular partnership shall include a reference to another partnership that is a member if the particular partnership; and

    • (c) a taxpayer’s share of Canadian development expenses or Canadian oil and gas property expenses incurred by a partnership in a fiscal period in respect of which the taxpayer has elected in respect of the share under paragraph (f) of the definition Canadian development expense in subsection 66.2(5) or paragraph (b) of the definition Canadian oil and gas property expense in subsection 66.4(5), as the case may be, shall be deemed to be nil.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. R.S., 1985, c. 1 (5th Supp.), s. 66.8;
  • 1994, c. 7, Sch. VIII, s. 26;
  • 2001, c. 17, s. 50;
  • 2013, c. 34, s. 205.

SUBDIVISION FRules Relating to Computation of Income

Marginal note:General limitation re expenses

 In computing income, no deduction shall be made in respect of an outlay or expense in respect of which any amount is otherwise deductible under this Act, except to the extent that the outlay or expense was reasonable in the circumstances.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 1970-71-72, c. 63, s. 1“67”.
Marginal note:Expenses for food, etc.
  •  (1) Subject to subsection (1.1), for the purposes of this Act, other than sections 62, 63, 118.01 and 118.2, an amount paid or payable in respect of the human consumption of food or beverages or the enjoyment of entertainment is deemed to be 50 per cent of the lesser of

    • (a) the amount actually paid or payable in respect thereof, and

    • (b) an amount in respect thereof that would be reasonable in the circumstances.

  • Marginal note:Meal expenses for long-haul truck drivers

    (1.1) An amount paid or payable in respect of the consumption of food or beverages by a long-haul truck driver during an eligible travel period of the driver is deemed to be the amount determined by multiplying the specified percentage in respect of the amount so paid or payable by the lesser of

    • (a) the amount so paid or payable, and

    • (b) a reasonable amount in the circumstances.

  • Marginal note:Exceptions

    (2) Subsection 67.1(1) does not apply to an amount paid or payable by a person in respect of the consumption of food or beverages or the enjoyment of entertainment where the amount

    • (a) is paid or payable for food, beverages or entertainment provided for, or in expectation of, compensation in the ordinary course of a business carried on by that person of providing the food, beverages or entertainment for compensation;

    • (b) relates to a fund-raising event the primary purpose of which is to benefit a registered charity;

    • (c) is an amount for which the person is compensated and the amount of the compensation is reasonable and specifically identified in writing to the person paying the compensation;

    • (d) is required to be included in computing any taxpayer’s income because of the application of section 6 in respect of food or beverages consumed or entertainment enjoyed by the taxpayer or a person with whom the taxpayer does not deal at arm’s length, or would be so required but for subparagraph 6(6)(a)(ii);

    • (e) is an amount that

      • (i) is not paid or payable in respect of a conference, convention, seminar or similar event,

      • (ii) would, but for subparagraph 6(6)(a)(i), be required to be included in computing any taxpayer’s income for a taxation year because of the application of section 6 in respect of food or beverages consumed or entertainment enjoyed by the taxpayer or a person with whom the taxpayer does not deal at arm’s length, and

      • (iii) is paid or payable in respect of the taxpayer’s duties performed at a work site in Canada that is

        • (A) outside any population centre, as defined by the last Census Dictionary published by Statistics Canada before the year, that has a population of at least 40,000 individuals as determined in the last census published by Statistics Canada before the year, and

        • (B) at least 30 kilometres from the nearest point on the boundary of the nearest such population centre;

    • (e.1) is an amount that

      • (i) is not paid or payable in respect of entertainment or of a conference, convention, seminar or similar event,

      • (ii) would, if this Act were read without reference to subparagraph 6(6)(a)(i), be required to be included in computing a taxpayer’s income for a taxation year because of the application of section 6 in respect of food or beverages consumed by the taxpayer or by a person with whom the taxpayer does not deal at arm’s length,

      • (iii) is paid or payable in respect of the taxpayer’s duties performed at a site in Canada at which the person carries on a construction activity or at a construction work camp referred to in subparagraph (iv) in respect of the site, and

      • (iv) is paid or payable for food or beverages provided at a construction work camp, at which the taxpayer is lodged, that was constructed or installed at or near the site to provide board and lodging to employees while they are engaged in construction services at the site; or

    • (f) is in respect of one of six or fewer special events held in a calendar year at which the food, beverages or entertainment is generally available to all individuals employed by the person at a particular place of business of the person and consumed or enjoyed by those individuals.

  • Marginal note:Fees for convention, etc.

    (3) For the purposes of this section, where a fee paid or payable for a conference, convention, seminar or similar event entitles the participant to food, beverages or entertainment (other than incidental beverages and refreshments made available during the course of meetings or receptions at the event) and a reasonable part of the fee, determined on the basis of the cost of providing the food, beverages and entertainment, is not identified in the account for the fee as compensation for the food, beverages and entertainment, $50 or such other amount as may be prescribed shall be deemed to be the actual amount paid or payable in respect of food, beverages and entertainment for each day of the event on which food, beverages or entertainment is provided and, for the purposes of this Act, the fee for the event shall be deemed to be the actual amount of the fee minus the amount deemed by this subsection to be the actual amount paid or payable for the food, beverages and entertainment.

  • Marginal note:Interpretation

    (4) For the purposes of this section,

    • (a) no amount paid or payable for travel on an airplane, train or bus shall be considered to be in respect of food, beverages or entertainment consumed or enjoyed while travelling thereon; and

    • (b) entertainment includes amusement and recreation.

  • Marginal note:Definitions

    (5) The following definitions apply for the purpose of this section.

    eligible travel period

    période de déplacement admissible

    eligible travel period in respect of a long-haul truck driver is a period during which the driver is away from the municipality or metropolitan area where the specified place in respect of the driver is located for a period of at least 24 continuous hours for the purpose of driving a long-haul truck that transports goods to, or from, a location that is beyond a radius of 160 kilometres from the specified place. (période de déplacement admissible)

    long-haul truck

    grand routier

    long-haul truck means a truck or a tractor that is designed for hauling freight and that has a gross vehicle weight rating (as that term is defined in subsection 2(1) of the Motor Vehicle Safety Regulations) that exceeds 11 788 kilograms. (grand routier)

    long-haul truck driver

    conducteur de grand routier

    long-haul truck driver means an individual whose principal business or principal duty of employment is driving a long-haul truck that transports goods. (conducteur de grand routier)

    specified percentage

    pourcentage déterminé

    specified percentage in respect of an amount paid or payable is

    • (a) 60 per cent, if the amount is paid or becomes payable on or after March 19, 2007 and before 2008;

    • (b) 65 per cent, if the amount is paid or becomes payable in 2008;

    • (c) 70 per cent, if the amount is paid or becomes payable in 2009;

    • (d) 75 per cent, if the amount is paid or becomes payable in 2010; and

    • (e) 80 per cent, if the amount is paid or becomes payable after 2010. (pourcentage déterminé)

    specified place

    endroit déterminé

    specified place means, in the case of an employee, the employer’s establishment to which the employee ordinarily reports to work is located and, in the case of an individual whose principal business is to drive a long-haul truck to transport goods, the place where the individual resides. (endroit déterminé)

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. R.S., 1985, c. 1 (5th Supp.), s. 67.1;
  • 1994, c. 7, Sch. II, s. 43;
  • 1995, c. 3, s. 17;
  • 1999, c. 22, s. 20;
  • 2002, c. 9, s. 26;
  • 2006, c. 4, s. 54;
  • 2007, c. 35, s. 20;
  • 2013, c. 34, s. 206, c. 40, s. 33.
 
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