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

Regulations are current to 2016-08-15 and last amended on 2016-06-22. Previous Versions

 For the purposes of paragraph (n) of the definition retirement compensation arrangement in subsection 248(1) of the Act, a prescribed plan or arrangement is

  • (a) the plan instituted by the Canada Pension Plan;

  • (b) a provincial pension plan as defined in section 3 of the Canada Pension Plan;

  • (c) a plan instituted by the Unemployment Insurance Act;

  • (d) a plan pursuant to an agreement in writing that is established for the purpose of deferring the salary or wages of a professional on-ice official for the official’s 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 plan is resident in Canada;

  • (e) 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;

  • (f) 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;

  • (g) a plan or arrangement instituted by the social security legislation of a country other than Canada or of a state, province or other political subdivision of such a country; or

  • (h) a trust established

    • (i) to hold shares of Air Canada, pursuant to the June 2009 memorandum of understanding between Air Canada and certain trade unions who represent employees of Air Canada, if

      • (A) the shares are held by the trust for the benefit of the trade unions, and

      • (B) each of the trade unions may direct the trustee to contribute, from time to time, amounts received or receivable by the trust in respect of the shares, whether as dividends, proceeds of disposition or otherwise, to one or more registered pension plans under which Air Canada is a participating employer, or

    • (ii) in relation to the wind-up of a registered pension plan sponsored by Fraser Papers Inc., if

      • (A) shares are held by the trust for the benefit of the registered pension plan, and

      • (B) the trustee will contribute amounts received or receivable by the trust in respect of the shares, whether as dividends, proceeds of disposition or otherwise, to the registered pension plan, not later than December 31, 2018.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts and regulations. SOR/92-51, s. 6;
  • SOR/94-686, s. 79(F);
  • SOR/96-311, s. 3;
  • 2013, c. 34, s. 405.
  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending regulations. SOR/2000-12, s. 2.

 For the purposes of the definition foreign retirement arrangement in subsection 248(1) of the Act, a prescribed plan or arrangement is a plan or arrangement to which subsection 408(a), (b) or (h) of the United States’ Internal Revenue Code of 1986, as amended from time to time, applies.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending regulations. SOR/92-692, s. 1;
  • SOR/2007-116, s. 10.

Contributions to Foreign Plans

Definitions

  •  (1) The definitions in this subsection apply in this section.

    foreign non-profit organization

    foreign non-profit organization means,

    • (a) at any time before 1995, an organization

      • (i) that at that time meets the conditions in subparagraphs (b)(i) to (iii), or

      • (ii) that at that time is not operated for the purpose of profit, and whose assets are situated primarily outside Canada throughout the calendar year that includes that time, and

    • (b) at any time after 1994, an organization that at that time

      • (i) is not operated for the purpose of profit,

      • (ii) has its main place of management outside Canada, and

      • (iii) carries on its activities primarily outside Canada. (organisme étranger à but non lucratif)

    foreign plan

    foreign plan means a plan or arrangement (determined without regard to subsection 207.6(5) of the Act) that would, but for paragraph (l) of the definition retirement compensation arrangement in subsection 248(1) of the Act, be a retirement compensation arrangement. (régime étranger)

    qualifying entity

    qualifying entity means a non-resident entity that holds all or part of the assets of a foreign plan where the following conditions are satisfied:

    • (a) the entity is resident in a country under the laws of which an income tax is imposed, and

    • (b) where those laws provide an exemption from tax, a reduced rate of tax or other favourable tax treatment for entities that hold assets of pension or other retirement plans, the entity qualifies for the favourable treatment. (entité admissible)

Electing Employer

  • (2) For the purposes of this section, an employer is an electing employer for a calendar year with respect to a foreign plan where

    • (a) the employer has sent or delivered to the Minister a letter stating that the employer elects to have this section apply with respect to contributions to the foreign plan, and

    • (b) the letter was sent or delivered on or before

      • (i) the last day of February in the year following the first calendar year after 1991 in which a contribution that is, or would be if subsection 207.6(5.1) of the Act were read without reference to paragraph (a) of that subsection, a resident’s contribution (as defined in that subsection) was made under the foreign plan in respect of services rendered by an individual to the employer, or

      • (ii) any later date that is acceptable to the Minister,

    except that an employer is not an electing employer for a year with respect to a foreign plan if the Minister has granted written permission for the employer to revoke, for the year or a preceding calendar year, the election made under paragraph (a) in respect of the foreign plan.

Election by Union

  • (3) Except as otherwise permitted in writing by the Minister, an election made by a trade union for the purpose of subsection (2) is valid only if it is made by the highest-level structural unit of the union.

Contributions Made before 1992

  • (4) For the purpose of paragraph 207.6(5.1)(a) of the Act, a contribution made under a foreign plan by a person or body of persons in a calendar year before 1992 is a prescribed contribution where

    • (a) the contribution is paid to a qualifying entity;

    • (b) each employer (in this subsection referred to as a “contributor”) that makes a contribution under the foreign plan in the year is

      • (i) a non-resident corporation throughout the year,

      • (ii) a partnership that makes contributions under the foreign plan primarily in respect of services rendered outside Canada to the partnership by non-resident employees, or

      • (iii) a foreign non-profit organization throughout the year;

    • (c) if a corporation or partnership (other than a corporation or partnership that is a foreign non-profit organization throughout the year) is a contributor, no individual who is entitled (either absolutely or contingently) to benefits under the foreign plan is a member of a registered pension plan, or a beneficiary under a deferred profit sharing plan, to which a contributor, or a person or body of persons not dealing at arm’s length with a contributor, makes, or is required to make, contributions in relation to the year;

    • (d) contributions made in the year under the foreign plan for the benefit of individuals resident in Canada are reasonable in relation to contributions made under the plan for the benefit of non-resident individuals; and

    • (e) the foreign plan is not a pension plan the registration of which under the Act has been revoked.

Contributions Made in 1992, 1993 or 1994

  • (5) For the purpose of paragraph 207.6(5.1)(a) of the Act, a contribution made under a foreign plan by a person or body of persons at any time in 1992, 1993 or 1994 in respect of services rendered by an individual to an employer is a prescribed contribution where

    • (a) the contribution is paid to a qualifying entity;

    • (b) the employer is an electing employer for the year with respect to the foreign plan;

    • (c) if the employer is not at that time a foreign non-profit organization, the individual is not a member of a registered pension plan (other than a specified multi-employer plan, as defined in subsection 147.1(1) of the Act), or a deferred profit sharing plan, in which the employer, or a person or body of persons that does not deal at arm’s length with the employer, participates; and

    • (d) either

      • (i) the employer is

        • (A) a corporation that is not resident in Canada at that time,

        • (B) a partnership that makes contributions under the foreign plan primarily in respect of services rendered outside Canada to the partnership by non-resident employees, or

        • (C) a foreign non-profit organization at that time, or

      • (ii) the individual was non-resident at any time before the contribution is made and became a member of the foreign plan before the end of the month after the month in which the individual became resident in Canada.

Contributions Made after 1994

  • (6) For the purposes of paragraph 207.6(5.1)(a) of the Act, a contribution made under a foreign plan by a person or body of persons at any time in a calendar year after 1994 in respect of services rendered by an individual to an employer is a prescribed contribution where

    • (a) the contribution is paid to a qualifying entity;

    • (b) the employer is an electing employer for the year with respect to the foreign plan;

    • (c) if the employer is at that time a foreign non-profit organization,

      • (i) the amount that, if subsection 8301(1) were read without reference to paragraph (b) of that subsection, would be the individual’s pension adjustment for the year in respect of the employer is nil, or

      • (ii) the amount that would be the individual’s pension adjustment for the year in respect of the employer if

        • (A) all contributions made under the foreign plan in the year in respect of the individual were prescribed by this subsection,

        • (B) where the year is 1996, section 8308.1 were read without reference to subsection (4.1), and

        • (C) where the year is 1997, subparagraph 8308.1(2)(b)(v) were read as

          • “(v) the amount, if any, by which 18% of the individual’s resident compensation from the employer for the year exceeds $1,000, and”

        does not exceed the lesser of

        • (D) the money purchase limit for the year, and

        • (E) 18% of the individual’s compensation (as defined in subsection 147.1(1) of the Act) for the year from the employer;

    • (d) if

      • (i) the employer is at that time a foreign non-profit organization, and

      • (ii) a period in the year throughout which the individual rendered services to the employer would be, under paragraph 8507(3)(a), a qualifying period of the individual with respect to another employer if that paragraph were read without reference to subparagraph (iv) of that paragraph,

      subsection 8308(7) applies with respect to the determination of the individual’s pension adjustment for the year with respect to each employer; and

    • (e) if the employer is not at that time a foreign non-profit organization,

      • (i) the individual was non-resident at any time before the contribution is made,

      • (ii) the individual became a member of the foreign plan before the end of the month after the month in which the individual became resident in Canada, and

      • (iii) the individual is not a member of a registered pension plan, or a deferred profit sharing plan, in which the employer, or a person or body of persons that does not deal at arm’s length with the employer, participates.

Replacement Plan

  • (7) For the purposes of subparagraphs (5)(d)(ii) and (6)(e)(ii), where benefits provided to an individual under a particular plan or arrangement are replaced by benefits under another plan or arrangement, the other plan or arrangement is deemed, in respect of the individual, to be the same plan or arrangement as the particular plan or arrangement.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending regulations. SOR/96-311, s. 4;
  • SOR/99-9, s. 2.
 
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