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

Act current to 2014-04-02 and last amended on 2014-01-01. Previous Versions

Marginal note:Alternatives re rents and timber royalties
  •  (1) If an amount has been paid during a taxation year to a non-resident person or to a partnership of which that person was a member as, on account of, in lieu of payment of or in satisfaction of, rent on real or immovable property in Canada or a timber royalty, that person may, within two years (or, if that person has filed an undertaking described in subsection (4) in respect of the year, within six months) after the end of the year, file a return of income under Part I for that year in prescribed form. On so filing and without affecting the liability of the non-resident person for tax otherwise payable under Part I, the non-resident person is, in lieu of paying tax under this Part on that amount, liable to pay tax under Part I for the year as though

    • (a) the non-resident person were a person resident in Canada and not exempt from tax under section 149;

    • (b) the non-resident person’s income from the non-resident person’s interest in real property, or real right in immovables, in Canada and interest in, or for civil law right in, timber resource properties and timber limits in Canada, and the non-resident person’s share of the income of a partnership of which the non-resident person was a member from its interest in real property, or real right in immovables, in Canada and interest in, or for civil law right in, timber resource properties and timber limits in Canada, were the non-resident person’s only income;

    • (c) the non-resident person were entitled to no deductions from income for the purpose of computing the non-resident person’s taxable income; and

    • (d) the non-resident person were entitled to no deductions under sections 118 to 118.9 in computing the non-resident person’s tax payable under Part I for the year.

  • Marginal note:Idem

    (2) Where a non-resident person has filed a return of income under Part I as permitted by this section, the amount deducted under this Part from

    • (a) rent on real or immovable property or from timber royalties paid to the person, and

    • (b) the person’s share of the rent on real or immovable property or from timber royalties paid to a partnership of which the person is a member

    and remitted to the Receiver General shall be deemed to have been paid on account of tax under this section and any portion of the amount so remitted to the Receiver General in a taxation year on the person’s behalf in excess of the person’s liability for tax under this Act for the year shall be refunded to the person.

  • Marginal note:Idem

    (3) Part I is applicable, with such modifications as the circumstances require, to payment of tax under this section.

  • Marginal note:Optional method of payment

    (4) If a non-resident person or, in the case of a partnership, each non-resident person who is a member of the partnership files with the Minister an undertaking in prescribed form to file within six months after the end of a taxation year a return of income under Part I for the year as permitted by this section, a person who is otherwise required by subsection 215(3) to remit in the year, in respect of the non-resident person or the partnership, an amount to the Receiver General in payment of tax on rent on real or immovable property or on a timber royalty may elect under this section not to remit under that subsection, and if that election is made, the elector shall,

    • (a) when any amount is available out of the rent or royalty received for remittance to the non-resident person or the partnership, as the case may be, deduct 25% of the amount available and remit the amount deducted to the Receiver General on behalf of the non-resident person or the partnership on account of the tax under this Part; and

    • (b) if the non-resident person or, in the case of a partnership, a non-resident person who is a member of the partnership

      • (i) does not file a return for the year in accordance with the undertaking, or

      • (ii) does not pay under this section the tax the non-resident person or member is liable to pay for the year within the time provided for payment,

      pay to the Receiver General, on account of the non-resident person’s or the partnership’s tax under this Part, on the expiration of the time for filing or payment, as the case may be, the full amount that the elector would otherwise have been required to remit in the year in respect of the rent or royalty minus the that the elector has remitted in the year under paragraph 216(4)(a) in respect of the rent or royalty.

  • Marginal note:Optional method of payment

    (4.1) If a trust is deemed by subsection 94(3) to be resident in Canada for a taxation year for the purpose of computing the trust’s income for the year, a person who is otherwise required by subsection 215(3) to remit in the year, in respect of the trust, an amount to the Receiver General in payment of tax on rent on real or immovable property or on a timber royalty may elect in prescribed form filed with the Minister under this subsection not to remit under subsection 215(3) in respect of amounts received after the election is made, and if that election is made, the elector shall,

    • (a) when any amount is available out of the rent or royalty received for remittance to the trust, deduct 25% of the amount available and remit the amount deducted to the Receiver General on behalf of the trust on account of the trust’s tax under Part I; and

    • (b) if the trust does not file a return for the year as required by section 150, or does not pay the tax that the trust is liable to pay under Part I for the year within the time required by that Part, on the expiration of the time for filing or payment, as the case may be, pay to the Receiver General, on account of the trust’s tax under Part I, the amount by which the full amount that the elector would otherwise have been required to remit in the year in respect of the rent or royalty exceeds the amounts that the elector has remitted in the year under paragraph (a) in respect of the rent or royalty.

  • Marginal note:Disposition by non-resident

    (5) If a person or a trust under which a person is a beneficiary has filed a return of income under Part I for a taxation year as permitted by this section or as required by section 150 and, in computing the amount of the person’s income under Part I an amount has been deducted under paragraph 20(1)(a), or is deemed by subsection 107(2) to have been allowed under that paragraph, in respect of property that is real property in Canada — or an interest therein — or an immovable in Canada — or a real right therein —, a timber resource property or a timber limit in Canada, the person shall file a return of income under Part I in prescribed form on or before the person’s filing-due date for any subsequent taxation year in which the person is non-resident and in which the person, or a partnership of which the person is a member, disposes of that property or any interest, or for civil law any right, in it. On so filing and without affecting the person’s liability for tax otherwise payable under Part I, the person is, in lieu of paying tax under this Part on any amount paid, or deemed by this Part to have been paid, in that subsequent taxation year in respect of any interest in, or for civil law any right in, that property to the person or to a partnership of which the person is a member, liable to pay tax under Part I for that subsequent taxation year as though

    • (a) the person were a person resident in Canada and not exempt from tax under section 149;

    • (b) the person’s income from the person’s interest in real property, or real right in immovables, in Canada or interest in, or for civil law right in, timber resource properties and timber limits in Canada, and the person’s share of the income of a partnership of which the person was a member from its interest in real property, or real right in immovables, in Canada or interest in, or for civil law right in, timber resource properties and timber limits in Canada, were the person’s only income;

    • (c) the person were entitled to no deductions from income for the purpose of computing the person’s taxable income; and

    • (d) the person were entitled to no deductions under sections 118 to 118.9 in computing the person’s tax payable under Part I for the year.

  • Marginal note:Saving provision

    (6) Subsection 216(5) does not apply to require a non-resident person

    • (a) to file a return of income under Part I for a taxation year unless, by filing that return, there would be included in computing the non-resident person’s income under Part I for that year an amount by virtue of section 13; or

    • (b) to include in computing the non-resident person’s income for a taxation year any amount to the extent that that amount has been included in computing the non-resident person’s taxable income earned in Canada for that taxation year by virtue of any provision of this Act other than subsection 216(5).

  • (7) [Repealed, 2013, c. 34, s. 349]

  • Marginal note:Restriction on deduction

    (8) For greater certainty, in determining the amount of tax payable by a non-resident person under Part I for a taxation year by reason of subsection 216(1) or 216(5), no deduction in computing the non-resident person’s income or tax payable under Part I for the year shall be made to the extent that such a deduction by non-resident persons is not permitted under Part I.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. R.S., 1985, c. 1 (5th Supp.), s. 216;
  • 1994, c. 7, Sch. II, s. 178;
  • 1998, c. 19, s. 217;
  • 2013, c. 34, ss. 20, 158, 349.