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

Regulations are current to 2014-03-16 and last amended on 2013-12-12. Previous Versions

Trust and Loan Corporations

[SOR/94-686, s. 79(F)]
  •  (1) Notwithstanding subsections 402(3) and (4), the amount of taxable income that shall be deemed to have been earned in a taxation year by a trust and loan corporation, trust corporation or loan corporation in a province in which it had a permanent establishment is that proportion of its taxable income for the year that the gross revenue for the year of its permanent establishment in the province is of the total gross revenue for the year of the corporation.

  • (2) In subsection (1), “gross revenue for the year of its permanent establishment in the province” means the aggregate of the gross revenue of the corporation for the year arising from

    • (a) loans secured by lands situated in the province;

    • (b) loans, not secured by land, to persons residing in the province;

    • (c) loans

      • (i) to persons residing in a province or country other than Canada in which the corporation has no permanent establishment, and

      • (ii) administered by a permanent establishment in the province,

      except loans secured by land situated in a province or country other than Canada in which the corporation has a permanent establishment; and

    • (d) business conducted at the permanent establishment in the province, other than revenue in respect of loans.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending regulations. SOR/80-949, s. 3;
  • SOR/94-686, s. 79(F);
  • SOR/2011-195, s. 2(F).

Railway Corporations

[SOR/94-686, s. 57(F)]
  •  (1) Notwithstanding subsections 402(3) and (4), the amount of taxable income that shall be deemed to have been earned by a railway corporation in a taxation year in a province in which it had a permanent establishment is, unless subsection (2) applies, 1/2 the aggregate of

    • (a) that proportion of the taxable income of the corporation for the year that the equated track miles of the corporation in the province is of the equated track miles of the corporation in Canada; and

    • (b) that proportion of the taxable income of the corporation for the year that the gross ton miles of the corporation for the year in the province is of the gross ton miles of the corporation for the year in Canada.

  • (2) Where a corporation to which subsection (1) would apply, if this subsection did not apply thereto, operates an airline service, ships or hotels or receives substantial revenues that are petroleum or natural gas royalties, or does a combination of two or more of those things, the amount of its taxable income that shall be deemed to have been earned in a taxation year in a province in which it had a permanent establishment is the aggregate of the amounts computed

    • (a) by applying the provisions of section 407 to that part of its taxable income for the year that may reasonably be considered to have arisen from the operation of the airline service;

    • (b) by applying the provisions of section 410 to that part of its taxable income for the year that may reasonably be considered to have arisen from the operation of the ships;

    • (c) by applying the provisions of section 402 to that part of its taxable income for the year that may reasonably be considered to have arisen from the operation of the hotels;

    • (d) by applying the provisions of section 402 to that part of its taxable income for the year that may reasonably be considered to have arisen from the ownership by the taxpayer of petroleum or natural gas rights or any interest therein; and

    • (e) by applying the provisions of subsection (1) to the remaining portion of its taxable income for the year.

  • (3) In this section, “equated track miles” in a specified place means the aggregate of

    • (a) the number of miles of first main track,

    • (b) 80 per cent of the number of miles of other main tracks, and

    • (c) 50 per cent of the number of miles of yard tracks and sidings,

    in that place.

  • (4) For the purpose of making an allocation under paragraph (2)(b), a reference in section 410 to “salaries and wages paid in the year by the corporation to employees” shall be read as a reference to salaries and wages paid by the corporation to employees employed in the operation of permanent establishments (other than ships) maintained for the shipping business.

  • (5) For the purpose of making an allocation under paragraph (2)(c),

    • (a) a reference in section 402 to “gross revenue for the year reasonably attributable to the permanent establishment in the province” shall be read as a reference to the gross revenue of the taxpayer from operating hotels therein;

    • (b) a reference in section 402 to “total gross revenue for the year” shall be read as a reference to the total gross revenue of the taxpayer for the year from operating hotels; and

    • (c) a reference in section 402 to “salaries and wages paid in the year by the corporation to employees” shall be read as a reference to salaries and wages paid to employees engaged in the operations of its hotels.

  • (6) Notwithstanding subsection 402(5), for the purpose of making an allocation under paragraph (2)(d),

    • (a) a reference in section 402 to “gross revenue for the year reasonably attributable to the permanent establishment in the province” shall be read as a reference to the gross revenue of the taxpayer from the ownership by the taxpayer of petroleum and natural gas rights in lands in the province and any interest therein;

    • (b) a reference in section 402 to “total gross revenue for the year” shall be read as a reference to the total gross revenue of the taxpayer from ownership by the taxpayer of petroleum and natural gas rights and any interest therein; and

    • (c) a reference in section 402 to “salaries and wages paid in the year by the corporation to employees” shall be read as a reference to salaries and wages paid to employees employed in connection with the corporation’s petroleum and natural gas rights and interests therein.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending regulations. SOR/80-949, s. 4;
  • SOR/94-686, ss. 57(F), 79(F);
  • SOR/2011-195, s. 3(F).