Income Tax Regulations (C.R.C., c. 945)

Regulations are current to 2017-10-13 and last amended on 2017-07-01. Previous Versions

 [Repealed, 2016, c. 7, s. 57]

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts and regulations. 2013, c. 40, s. 113;
  • 2016, c. 7, s. 57.

 For the purposes of subparagraph 40(2)(i)(ii) and clause 53(2)(k)(i)(C) of the Act, each of the following is prescribed assistance:

  • (a) the assistance received from a province that has been provided in respect of, or for the acquisition of, a share of the capital stock of a venture capital corporation described in section 6700;

  • (a.1) the assistance provided under the Employee Investment Act, R.S.B.C. 1996, c. 112, in respect of, or for the acquisition of, a share of the capital stock of a venture capital corporation described in section 6700.1;

  • (a.2) the assistance provided under the Community Small Business Investment Funds Act, S.O. 1992, c. 18, the Risk Capital Investment Tax Credits Act, S.N.W.T. 1998, c. 22, or the Risk Capital Investment Tax Credits Act, S.N.W.T. 1998, c. 22, as duplicated for Nunavut, in respect of, or for the acquisition of, a share of the capital stock of a venture capital corporation described in section 6700.2;

  • (b) a tax credit provided in respect of, or for the acquisition of, a share of a labour-sponsored venture capital corporation described in section 6701; and

  • (c) a tax credit provided by a province in respect of, or for the acquisition of, a share of the capital stock of a taxable Canadian corporation (other than a share of the capital stock of a corporation in respect of which an amount has been renounced by the corporation under subsection 66(12.6), (12.601), (12.62) or (12.64) of the Act) that is held in a stock savings plan described in section 6705.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending regulations. SOR/86-1136, s. 10;
  • SOR/89-551, s. 4;
  • SOR/92-397, s. 4;
  • SOR/93-396, s. 4;
  • SOR/94-686, s. 79(F);
  • SOR/96-199, s. 4;
  • SOR/99-102, s. 6;
  • SOR/2001-289, s. 5.

 For the purposes of section 186.1 of the Act, a prescribed investment contract corporation means a corporation described in clause 146(1)(j)(ii)(B) of the Act.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending regulations. SOR/84-948, s. 17;
  • SOR/86-1136, s. 11;
  • SOR/94-686, s. 79(F).

 For the purposes of section 186.2 of the Act, a corporation is a prescribed qualifying corporation in respect of dividends received by a shareholder on shares of its capital stock if, when the shares were acquired by the shareholder, they constituted

  • (a) an investment described in sections 33 and 34 of the Act referred to in subparagraph 6700(a)(i);

  • (b) an eligible investment under the provisions of an Act referred to in subparagraph 6700(a)(ii), (iv), (v), (vi) or (viii) or the regulation referred to in subparagraph 6700(a)(iii);

  • (c) a qualified investment under the provisions of the Act referred to in subparagraph 6700(a)(vii);

  • (d) an investment in an eligible business under the Venture Capital Policy and Directive referred to in paragraph 6700(c); or

  • (e) an investment in an eligible entity described in sections 17 and 18 of An Act constituting Capital régional et coopératif Desjardins, R.S.Q., c. C-6.1.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending regulations. SOR/89-551, s. 5;
  • SOR/92-397, s. 5;
  • SOR/93-396, s. 5;
  • SOR/94-686, s. 79(F);
  • SOR/2011-188, s. 24.

 For the purposes of paragraph 40(2)(i) and clause 53(2)(k)(i)(C) of the Act, a stock savings plan governed by any of the following is a prescribed stock savings plan:

  • (a) the Alberta Stock Savings Plan Act, Statutes of Alberta 1986, c. A-37.7;

  • (b) The Stock Savings Tax Credit Act, Statutes of Saskatchewan 1986, c. S-59.1;

  • (c) the Stock Savings Plan Act, Revised Statutes of Nova Scotia, 1989, c. 445;

  • (d) the Stock Savings Tax Credit Act, Revised Statutes of Newfoundland, 1990, c. S-28; or

  • (e) section 11.6 of the Income Tax Act, Continuing Consolidation of the Statutes of Manitoba c. I10.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending regulations. SOR/89-551, s. 5;
  • SOR/2001-289, s. 6.

 For the purpose of clause 204.81(1)(c)(v)(F) of the Act, a prescribed condition is that, in respect of a redemption of a Class A share of a corporation’s capital stock, the shareholder requires the corporation to withhold an amount in respect of the redemption in accordance with Part XII.5 of the Act.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending regulations. SOR/92-398, s. 3;
  • SOR/94-686, s. 79(F);
  • SOR/96-174, s. 1;
  • SOR/98-281, s. 4.

 For the purpose of subsection 204.82(5) of the Act, a prescribed provision of a law of a province means section 25.1 of the Community Small Business Investment Funds Act, chapter 18 of the Statutes of Ontario, 1992.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending regulations. SOR/99-102, s. 7.

 For the purposes of paragraph 204.8(2)(b), section 27.2 of the Community Small Business Investment Funds Act, 1992, S.O. 1992, c. 18, is a prescribed wind-up rule.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts and regulations. 2013, c. 34, s. 404;
  • 2014, c. 20, s. 35.

 For the purposes of section 211.81 of the Act, sections 1086.14 and 1086.20 of the Taxation Act, R.S.Q., c. I-3, are prescribed provisions of a provincial law.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts and regulations. 2013, c. 34, s. 404.

PART LXVIIIPrescribed Plans, Arrangements and Contributions

[SOR/96-311, s. 1]

 For the purpose of paragraph (e) of the definition employee benefit plan in subsection 248(1) of the Act, each of the following is a prescribed arrangement:

  • (a) the Major League Baseball Players Benefit Plan;

  • (b) an arrangement under which all contributions are made pursuant to a law of Canada or a province, where one of the main purposes of the law is to enforce minimum standards with respect to wages, vacation entitlement or severance pay; and

  • (c) an arrangement under which all contributions are made in connection with a dispute regarding the entitlement of one or more persons to benefits to be received or enjoyed by the person or persons.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending regulations. SOR/81-541, s. 1;
  • SOR/96-311, s. 2.

 For the purposes of paragraph (l) of the definition salary deferral arrangement in subsection 248(1) of the Act, a prescribed plan or arrangement is an arrangement in writing

  • (a) between an employer and an employee that is established on or after July 28, 1986 where

    • (i) it is reasonable to conclude, having regard to all the circumstances, including the terms and conditions of the arrangement and any agreement relating thereto, that the arrangement is not established to provide benefits to the employee on or after retirement but is established for the main purpose of permitting the employee to fund, through salary or wage deferrals, a leave of absence from the employee’s employment of not less than

      • (A) where the leave of absence is to be taken by the employee for the purpose of permitting the full-time attendance of the employee at a designated educational institution (within the meaning assigned by subsection 118.6(1) of the Act), three consecutive months, or

      • (B) in any other case, six consecutive months

      that is to commence immediately after a period (in this section referred to as the “deferral period”) not exceeding six years after the date on which the deferrals for the leave of absence commence,

    • (ii) the amount of salary or wages deferred by the employee under all such arrangements for the services rendered by the employee to the employer in a taxation year does not exceed 33 1/3 per cent of the amount of the salary or wages that the employee would, but for the arrangements, reasonably be expected to have received in the year in respect of the services,

    • (iii) the arrangement provides that throughout the period of the leave of absence the employee does not receive any salary or wages from the employer, or from any other person or partnership with whom the employer does not deal at arm’s length, other than

      • (A) the amount by which the employee’s salary or wages under the arrangement was deferred or is to be reduced or, amounts that are based on a percentage of the salary or wage scale of employees of the employer, which percentage is fixed in respect of the employee for the deferral period and the leave of absence, and

      • (B) the reasonable fringe benefits that the employer usually pays to or on behalf of employees,

    • (iv) the arrangement provides that the amounts deferred in respect of the employee under the arrangement

      • (A) are held by or for the account of a trust governed by a plan or arrangement that is an employee benefit plan within the meaning of the definition thereof in subsection 248(1) of the Act, and provides that the amount that may reasonably be considered to be the income of the trust for a taxation year that has been earned by it for the benefit of the employee shall be paid in the year to the employee, or

      • (B) are held by or for the account of any person other than a trust referred to in clause (A), and provides that the amount in respect of interest or other additional amounts that may reasonably be considered to have accrued to or for the benefit of the employee to the end of a taxation year shall be paid in the year to the employee,

    • (v) the arrangement provides that the employee is to return to his regular employment with the employer or an employer that participates in the same or a similar arrangement after the leave of absence for a period that is not less than the period of the leave of absence, and

    • (vi) subject to subparagraph (iv), the arrangement provides that all amounts held for the employee’s benefit under the arrangement shall be paid to the employee out of or under the arrangement no later than the end of the first taxation year that commences after the end of the deferral period;

  • (b) between an employer and an employee that is established before July 28, 1986 where it is reasonable to conclude, having regard to all the circumstances, including the terms and conditions of the arrangement and any agreement relating thereto, that the arrangement is not established to provide benefits on or after retirement but is established for the main purpose of permitting the employee to fund, through salary or wage deferrals, a leave of absence from the employment and under which the deferrals in respect of the leave of absence commenced before 1987;

  • (c) that is established for the purpose of deferring the salary or wages of a professional on-ice official for his services as such with the National Hockey League if, in the case of an official resident in Canada, the trust or other person who has custody and control of any funds, investments or other property under the arrangement is resident in Canada; or

  • (d) between a corporation and an employee of the corporation or a corporation related thereto under which the employee (or, after the employee’s death, a dependant or relation of the employee or the legal representative of the employee) may or shall receive an amount that may reasonably be attributable to duties of an office or employment performed by the employee on behalf of the corporation or a corporation related thereto where

    • (i) all amounts that may be received under the arrangement shall be received after the time of the employee’s death or retirement from, or loss of, the office or employment and no later than the end of the first calendar year commencing thereafter, and

    • (ii) the aggregate of all amounts each of which may be received under the arrangement depends on the fair market value of shares of the capital stock of the corporation or a corporation related thereto at a time within the period that commences one year before the time of the employee’s death or retirement from, or loss of, the office or employment and ends at the time the amount is received,

    unless, by reason of the arrangement or a series of transactions that includes the arrangement, the employee or a person with whom the employee does not deal at arm’s length is entitled, either immediately or in the future, either absolutely or contingently, to receive or obtain any amount or benefit granted or to be granted for the purpose of reducing the impact, in whole or in part, of any reduction in the fair market value of the shares of the corporation or a corporation related thereto.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending regulations. SOR/88-128, s. 1;
  • SOR/91-153, s. 1;
  • SOR/94-686, ss. 78(F), 79(F).
 
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