Income Tax Act

Version of section 127.54 from 2006-06-22 to 2017-11-20:

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

    foreign income

    impôts payés à l’étranger

    foreign income of an individual for a taxation year means the total of

    • (a) the individual’s incomes for the year from businesses carried on by the individual in countries other than Canada, and

    • (b) the individual’s incomes for the year from sources in countries other than Canada in respect of which the individual has paid non-business-income taxes, within the meaning assigned by subsection 126(7), to governments of countries other than Canada; (impôts payés à l’étranger)

    foreign taxes

    revenu de source étrangère

    foreign taxes of an individual for a taxation year means the total of the business-income taxes, within the meaning assigned by subsection 126(7), paid by the individual for the year in respect of businesses carried on by the individual in countries other than Canada and 2/3 of the non-business-income taxes, within the meaning assigned by that subsection, paid by the individual for the year to the governments of countries other than Canada. (revenu de source étrangère)

  • Marginal note:Foreign tax credit

    (2) For the purposes of section 127.5, an individual’s special foreign tax credit for a taxation year is the greater of

    • (a) the total of all amounts deductible under section 126 from the individual’s tax for the year, and

    • (b) the lesser of

      • (i) the individual’s foreign taxes for the year, and

      • (ii) the amount determined by the formula

        A × B

        where

        A
        is the appropriate percentage for the taxation year, and
        B
        is the individual’s foreign income for the year.
  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. R.S., 1985, c. 1 (5th Supp.), s. 127.54;
  • 2001, c. 17, s. 120;
  • 2006, c. 4, s. 77.
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