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Technical Tax Amendments Act, 2012 (S.C. 2013, c. 34)

Assented to 2013-06-26

  •  (1) The portion of subsection 96(3) of the Act before paragraph (a), as enacted by subsection 228(5), is replaced by the following:

    • Marginal note:Agreement or election of partnership members

      (3) If a taxpayer who was a member of a partnership at any time in a fiscal period has, for any purpose relevant to the computation of the taxpayer’s income from the partnership for the fiscal period, made or executed an agreement, designation or election under or in respect of the application of any of subsections 13(4), (4.2) and (16) and 14(1.01), (1.02) and (6), section 15.2, subsections 20(9) and 21(1) to (4), section 22, subsection 29(1), section 34, clause 37(8)(a)(ii)(B), subsections 44(1) and (6), 50(1) and 80(5) and (9) to (11), section 80.04, subsections 86.1(2), 88(3.1), (3.3) and (3.5) and 90(3), the definition “relevant cost base” in subsection 95(4) and subsections 97(2), 139.1(16) and (17) and 249.1(4) and (6) that, if this Act were read without reference to this subsection, would be a valid agreement, designation or election,

  • (2) Subsection (1) applies to agreements, designations and elections made or executed after August 19, 2011.

  •  (1) Subsection 113(1) of the Act is amended by adding the following after paragraph (a):

    • (a.1) an amount equal to the total of

      • (i) one-half of the portion of the dividend that is prescribed to have been paid out of the hybrid surplus, as defined by regulation (in this Part referred to as “hybrid surplus”), of the affiliate, and

      • (ii) the lesser of

        • (A) the total of

          • (I) the product obtained when the foreign tax prescribed to be applicable to the portion of the dividend referred to in subparagraph (i) is multiplied by the amount by which

            1. the corporation’s relevant tax factor for the year

            exceeds

            2. one-half, and

          • (II) the product obtained when

            1. the non-business-income tax paid by the corporation applicable to the portion of the dividend referred to in subparagraph (i)

            is multiplied by

            2. the corporation’s relevant tax factor for the year, and

        • (B) the amount determined under subparagraph (i),

  • (2) Subparagraph 113(2)(b)(iii.1) of the Act is replaced by the following:

    • (iii.1) the total of all amounts received by the corporation on the share after the end of its 1975 taxation year and before the particular time

      • (A) on a reduction, before August 20, 2011, of the paid-up capital of the foreign affiliate in respect of the share, or

      • (B) on a reduction, after August 19, 2011, of the paid-up capital of the foreign affiliate in respect of the share that is a qualifying return of capital (within the meaning assigned by subsection 90(3)) in respect of the share, and

  • (3) Subsection (1) applies in respect of dividends received after August 19, 2011.

  • (4) Subsection (2) is deemed to have come into force on August 20, 2011.

  •  (1) Subparagraphs 128.1(1)(d)(i) and (ii) of the Act are replaced by the following:

    • (i) the affiliate is deemed to have been a controlled foreign affiliate of the other taxpayer immediately before the particular time, and

    • (ii) the prescribed amount is to be included in the foreign accrual property income of the affiliate for its taxation year that ends immediately before the particular time.

  • (2) Subsection (1) applies to taxation years that begin after 2006.

  •  (1) Paragraph 152(6.1)(b) of the Act, as enacted by Part 2, is replaced by the following:

    • (b) the amount included in computing the taxpayer’s income for the particular year under subsection 91(1) is subsequently reduced because of a reduction in the foreign accrual property income of a foreign affiliate of the taxpayer for a taxation year (referred to in this paragraph as the “claim year”) of the affiliate that ends in the particular year, if

      • (i) the reduction is

        • (A) attributable to a foreign accrual property loss (within the meaning assigned by subsection 5903(3) of the Income Tax Regulations) of the affiliate for a taxation year of the affiliate that ends in a subsequent taxation year of the taxpayer, and

        • (B) included in the description of F in the definition “foreign accrual property income” in subsection 95(1) in respect of the affiliate for the claim year, or

      • (ii) the reduction is

        • (A) attributable to a foreign accrual capital loss (within the meaning assigned by subsection 5903.1(3) of the Income Tax Regulations) of the affiliate for a taxation year of the affiliate that ends in a subsequent taxation year of the taxpayer, and

        • (B) included in the description of F.1 in the definition “foreign accrual property income” in subsection 95(1) in respect of the affiliate for the claim year, and

  • (2) Subsection (1) applies to taxation years that end after August 19, 2011.

  •  (1) The portion of subsection 186(1) of the French version of the Act before subparagraph (b)(i) is replaced by the following:

    Marginal note:Impôt sur les dividendes imposables déterminés
    • 186. (1) Toute société qui est une société privée ou une société assujettie au cours d’une année d’imposition est tenue de payer, au plus tard à la date d’exigibilité du solde qui lui est applicable pour l’année, un impôt pour l’année en vertu de la présente partie égal à l’excédent éventuel du total des montants suivants :

      • a) le tiers de l’ensemble des dividendes imposables déterminés qu’elle a reçus au cours de l’année de sociétés autres que des sociétés payantes auxquelles elle est rattachée,

      • b) les montants représentant chacun un montant au titre d’un dividende imposable déterminé qu’elle a reçu au cours de l’année d’une société privée ou d’une société assujettie qui était une société payante à laquelle elle était rattachée, égal au produit de la multiplication du remboursement au titre de dividendes, au sens de l’alinéa 129(1)a), de la société payante pour son année d’imposition au cours de laquelle elle a versé le dividende par le rapport entre :

  • (2) The portion of subsection 186(1.1) of the French version of the Act before paragraph (a) is replaced by the following:

    • Marginal note:Réduction d’impôt

      (1.1) Malgré le paragraphe (1), l’impôt payable par ailleurs en vertu de la présente partie par une société pour une année d’imposition est réduit de celui des montants ci-après qui est applicable si elle reçoit au cours de l’année un dividende imposable déterminé qui est inclus dans un montant sur lequel l’impôt prévu à la partie IV.1 est payable par elle pour l’année :

  • (3) The definition dividende déterminé in subsection 186(3) of the French version of the Act is repealed.

  • (4) The definition “assessable dividend” in subsection 186(3) of the English version of the Act is replaced by the following:

    “assessable dividend”

    « dividende imposable déterminé »

    “assessable dividend” means an amount received by a corporation at a time when it is a private corporation or a subject corporation as, on account of, in lieu of payment of or in satisfaction of, a taxable dividend from a corporation, to the extent of the amount in respect of the dividend that is deductible under section 112, paragraph 113(1)(a), (a.1), (b) or (d) or subsection 113(2) in computing the recipient corporation’s taxable income for the year.

  • (5) Subsection 186(3) of the French version of the Act is amended by adding the following in alphabetical order:

    « dividende imposable déterminé »

    “assessable dividend”

    dividende imposable déterminé Somme reçue par une société, à un moment où elle est une société privée ou une société assujettie, au titre ou en paiement intégral ou partiel d’un dividende imposable d’une société, jusqu’à concurrence de la somme relative au dividende qui est déductible en application de l’article 112, des alinéas 113(1)a), a.1), b) ou d) ou du paragraphe 113(2) dans le calcul du revenu imposable pour l’année de la société qui a reçu le dividende.

  • (6) Subsections (1) to (5) are deemed to have come into force on August 20, 2011.

  •  (1) Subsection 258(4) of the Act is replaced by the following:

    • Marginal note:Exception

      (4) Subsection (3) does not apply to a dividend described in paragraph (3)(a)

      • (a) if the share on which the dividend was paid was not acquired in the ordinary course of the business carried on by the corporation; or

      • (b) to the extent that the dividend would be described by subparagraph 53(2)(b)(ii) if the corporation not resident in Canada were not a foreign affiliate of the corporation.

  • (2) Section 258 of the Act is amended by adding the following after subsection (5):

    • Marginal note:Exception

      (6) Subsection (5) does not apply to a dividend described in that subsection to the extent that the dividend would be described by subparagraph 53(2)(b)(ii) if the corporation not resident in Canada were not a foreign affiliate of the recipient.

  • (3) Subsections (1) and (2) apply to dividends paid after August 19, 2011.

  •  (1) Paragraph 261(5)(e) of the Act is replaced by the following:

    • (e) except in applying paragraph 95(2)(f.15) in respect of a taxation year, of a foreign affiliate of the taxpayer, that is a functional currency year of the foreign affiliate within the meaning of subsection (6.1), each reference in subsection 39(2) to “Canadian currency” is to be read, in respect of the taxpayer and the particular taxation year, and with such modifications as the context requires, as a reference to “the taxpayer’s elected functional currency”;

  • (2) Subparagraph 261(5)(f)(i) of the Act is replaced by the following:

    • (i) section 76.1, subsection 79(7), paragraph 80(2)(k), subsections 80.01(11), 80.1(8), 93(2.01) to (2.31), 142.4(1) and 142.7(8) and the definition “amortized cost” in subsection 248(1), and subparagraph 231(6)(a)(iv) of the Income Tax Regulations, to “Canadian currency” is, in respect of the taxpayer and the particular taxation year, and with such modifications as the context requires, to be read as “the taxpayer’s elected functional currency”, and

  • (3) Subparagraph 261(7)(a)(i) of the Act is replaced by the following:

    • (i) is, or is relevant to the determination of, an amount that may be deducted under subsection 37(1) or 66(4), variable F or F.1 in the definition “foreign accrual property income” in subsection 95(1), section 110.1 or 111 or subsection 126(2), 127(5), 129(1), 181.1(4) or 190.1(3), in the particular functional currency year, and

  • (4) Subsection (1) applies in respect of gains made and losses sustained in taxation years that begin after August 19, 2011.

  • (5) Subsection (2) applies in respect of taxation years that begin after December 13, 2007.

  • (6) Subsection (3) is deemed to have come into force on August 20, 2011.

 
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