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

Regulations are current to 2016-01-25 and last amended on 2015-07-01. Previous Versions

 [Repealed, 2013, c. 34, s. 28]

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts and regulations. SOR/89-135, s. 4;
  • 2013, c. 34, s. 28.
  •  (1) If a foreign affiliate of a corporation resident in Canada carries on in a particular taxation year an active business that is a foreign oil and gas business in a taxing country, the affiliate is deemed for the purposes of this Part to have paid for the particular year, as an income or profits tax to the government of the taxing country in respect of its earnings from the business for the particular year, an amount equal to the lesser of

    • (a) the amount, if any, determined by the formula

      (A × B) – C

      where

      A 
      is the percentage determined under subsection (2) for the particular year,
      B 
      is the affiliate’s earnings from the business for the particular year, and
      C 
      is the total of all amounts each of which is an amount that would, but for this subsection, be an income or profits tax paid to the government of the taxing country by the affiliate for the particular year in respect of its earnings from the business for the particular year; and
    • (b) the affiliate’s production tax amount for the business in the taxing country for the particular year.

  • (2) The percentage determined under this subsection for the particular year is the percentage determined by the formula

    P – Q

    where

    P 
    is the percentage set out in paragraph 123(1)(a) of the Act for the corporation’s taxation year that includes the last day of the particular year; and
    Q 
    is the corporation’s general rate reduction percentage (within the meaning assigned by subsection 123.4(1) of the Act) for that taxation year of the corporation.
  • (3) [Repealed, 2013, c. 34, s. 87]

  • (4) In this section, foreign oil and gas business, production tax amount and taxing country have the meanings assigned by subsection 126(7) of the Act.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts and regulations. 2013, c. 34, ss. 48, 87.
  •  (1) A listed election is to be made by the taxpayer and, if applicable, the disposing affiliate by so notifying the Minister in writing on or before

    • (a) if the taxpayer is a partnership, the earliest of the filing-due dates of any member of the partnership for the member’s taxation year that includes the last day of the partnership’s fiscal period that includes the last day of the foreign affiliate’s taxation year that includes the time of distribution of a distributed property; and

    • (b) in any other case, the taxpayer’s filing-due date for its taxation year that includes the last day of the foreign affiliate’s taxation year that includes the time of distribution of a distributed property.

  • (2) For the purposes of subsection (1), a listed election is any of the following:

    • (a) an election by the taxpayer under subsection 88(3.1) of the Act in respect of a liquidation and dissolution of a disposing affiliate;

    • (b) an election by the taxpayer under subsection 88(3.3) of the Act in respect of a distribution of distributed property; and

    • (c) a joint election by the taxpayer and a disposing affiliate under subsection 88(3.5) of the Act in respect of a distribution of distributed property.

  • (3) Subsection (4) applies if

    • (a) a taxpayer has made an election (referred to in this subsection and subsection (4) as the “initial election”) under subsection 88(3.3) of the Act in respect of a distribution of distributed property on or before the filing-due date specified in subsection (1);

    • (b) the taxpayer made reasonable efforts to determine all amounts, in respect of the disposing affiliate, that may reasonably be considered to be relevant in making the claim under the initial election; and

    • (c) the taxpayer amends the initial election on or before the day that is 10 years after the filing-due date referred to in paragraph (a).

  • (4) If this subsection applies and, in the opinion of the Minister, the circumstances are such that it would be just and equitable to permit the initial election to be amended, the amended election under paragraph (3)(c) is deemed to have been made on the day on which the initial election was made and the initial election is deemed not to have been made.

  • (5) An election under the definition relevant cost base in subsection 95(4) of the Act in respect of a property of a foreign affiliate of a taxpayer, in respect of the taxpayer, is to be made by the taxpayer by so notifying the Minister in writing on or before

    • (a) if the taxpayer is a partnership, the earliest of the filing-due dates of any member of the partnership for the member’s taxation year that includes the last day of the partnership’s fiscal period that includes the last day of the foreign affiliate’s taxation year in which the determination of the relevant cost base of the property, in respect of the taxpayer, is relevant; and

    • (b) in any other case, the taxpayer’s filing-due date for its taxation year that includes the last day of the foreign affiliate’s taxation year in which the determination of the relevant cost base of the property, in respect of the taxpayer, is relevant.

  • (6) An election, or joint election, as the case may be, under subsection 90(3) of the Act in respect of a distribution made by a foreign affiliate of a taxpayer is to be made by the taxpayer, or by the taxpayer and each connected person or partnership referred to in that subsection, as the case may be, by so notifying the Minister in writing on or before

    • (a) in the case of an election by the taxpayer,

      • (i) if the taxpayer is a partnership, the earliest of the filing-due dates of any member of the partnership for the member’s taxation year that includes the last day of the partnership’s fiscal period in which the distribution was made, and

      • (ii) in any other case, the taxpayer’s filing-due date for its taxation year that includes the last day of the foreign affiliate’s taxation year in which the distribution was made; and

    • (b) in the case of a joint election, the earliest of the filing-due dates that would be determined under paragraph (a) for each taxpayer that is required to make the joint election if there were no connected persons or partnerships in respect of the taxpayer.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts and regulations. 2013, c. 34, s. 88.

PART LXPrescribed Activities

 For the purpose of clause 122.3(1)(b)(i)(C) of the Act, a prescribed activity is an activity performed under contract with the United Nations.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending regulations. SOR/78-325, s. 4;
  • SOR/94-686, s. 81(F);
  • SOR/95-498, s. 1.

PART LXIRelated Segregated Fund Trusts

 An election under subsection 138.1(4) of the Act by the trustee of a related segregated fund trust shall be made by filing with the Minister the prescribed form within 90 days from the end of the taxation year of the trust in respect of any capital property deemed to have been disposed of in that taxation year by virtue of the election.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending regulations. SOR/78-680, s. 1;
  • SOR/94-686, s. 69(F).

PART LXIIPrescribed Securities, Shares and Debt Obligations

[SOR/2001-187, s. 5]

Prescribed Securities

[SOR/80-130, s. 1]

 For the purposes of subsection 39(6) of the Act, a prescribed security is, with respect to the taxpayer referred to in subsection 39(4) of the Act,

  • (a) a share of the capital stock of a corporation, other than a public corporation, the value of which is, at the time it is disposed of by that taxpayer, a value that is or may reasonably be considered to be wholly or primarily attributable to

    • (i) real property, an interest therein or an option in respect thereof,

    • (ii) Canadian resource property or a property that would have been a Canadian resource property if it had been acquired after 1971,

    • (iii) foreign resource property or a property that would have been a foreign resource property if it had been acquired after 1971, or

    • (iv) any combination of properties described in subparagraphs (i) to (iii)

    owned by

    • (v) the corporation,

    • (vi) a person other than the corporation, or

    • (vii) a partnership;

  • (b) a bond, debenture, bill, note, mortgage or similar obligation, issued by a corporation, other than a public corporation, if at any time before that taxpayer disposes of the security he does not deal at arm’s length with the corporation;

  • (c) a security that is

    • (i) a share, or

    • (ii) a bond, debenture, bill, note, mortgage or similar obligation

    that was acquired by the taxpayer from a person with whom the taxpayer does not deal at arm’s length (other than from a person subject to subsection 39(4) of the Act for the person’s taxation year that includes the time of the acquisition);

  • (c.1) a security described in subparagraph (c)(i) or (ii) that was acquired by the taxpayer from a person (other than from a person subject to subsection 39(4) of the Act for the person’s taxation year that includes the time of the acquisition) in circumstances to which subsection 85(1) or (2) of the Act applied;

  • (d) a share acquired by that taxpayer under circumstances referred to in section 66.3 of the Act; or

  • (e) a security described in subparagraph (c)(i) or (ii) that was acquired by the taxpayer

    • (i) as proceeds of disposition for a security of the taxpayer to which paragraph (a), (b), (c) or (d) applied in respect of the taxpayer, or

    • (ii) as a result of one or more transactions that can reasonably be considered to have been an exchange or substitution of a security of the taxpayer to which paragraph (a), (b), (c) or (d) applied in respect of the taxpayer.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending regulations. SOR/78-946, s. 1;
  • SOR/81-724, s. 1;
  • SOR/94-686, ss. 62, 78(F), 79(F);
  • SOR/98-418, s. 1.
 
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