Technical Tax Amendments Act, 2012 (S.C. 2013, c. 34)
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Assented to 2013-06-26
PART 1AMENDMENTS IN RESPECT OF OFFSHORE INVESTMENT FUND PROPERTY AND NON-RESIDENT TRUSTS
R.S., c. 1 (5th Supp.)Income Tax Act
18. (1) Paragraph 163(2.4)(b) of the Act is replaced by the following:
(b) if the return is required to be filed under section 233.2 in respect of a trust, the greater of
(i) $24,000, and
(ii) 5% of the total of all amounts each of which is the fair market value, at the time it was made, of a contribution of the person or partnership made to the trust before the end of the last taxation year of the trust in respect of which the return is required;
(2) Section 163 of the Act is amended by adding the following after subsection (2.4):
Marginal note:Application to trust contributions
(2.41) In subparagraph (2.4)(b)(ii), subsections 94(1), (2) and (9) apply.
(3) Subsections (1) and (2) apply to taxation years that end after 2006. Those subsections also apply to returns in respect of an earlier taxation year of a taxpayer if subsection 94(1) of the Act, as enacted by section 7, applies to that earlier taxation year of the taxpayer.
19. (1) Subsection 215(1) of the Act is replaced by the following:
Marginal note:Withholding and remittance of tax
215. (1) When a person pays, credits or provides, or is deemed to have paid, credited or provided, an amount on which an income tax is payable under this Part, or would be so payable if this Act were read without reference to subparagraph 94(3)(a)(viii) and to subsection 216.1(1), the person shall, notwithstanding any agreement or law to the contrary, deduct or withhold from it the amount of the tax and forthwith remit that amount to the Receiver General on behalf of the non-resident person on account of the tax and shall submit with the remittance a statement in prescribed form.
(2) Subsection (1) applies to trust taxation years that end after 2006. Subsection (1) also applies to each earlier taxation year of a trust to which subsection 94(1) of the Act, as enacted by section 7, applies.
20. (1) Section 216 of the Act is amended by adding the following after subsection (4):
Marginal note:Optional method of payment
(4.1) If a trust is deemed by subsection 94(3) to be resident in Canada for a taxation year for the purpose of computing the trust’s income for the year, a person who is otherwise required by subsection 215(3) to remit in the year, in respect of the trust, an amount to the Receiver General in payment of tax on rent on real or immovable property or on a timber royalty may elect in prescribed form filed with the Minister under this subsection not to remit under subsection 215(3) in respect of amounts received after the election is made, and if that election is made, the elector shall,
(a) when any amount is available out of the rent or royalty received for remittance to the trust, deduct 25% of the amount available and remit the amount deducted to the Receiver General on behalf of the trust on account of the trust’s tax under Part I; and
(b) if the trust does not file a return for the year as required by section 150, or does not pay the tax that the trust is liable to pay under Part I for the year within the time required by that Part, on the expiration of the time for filing or payment, as the case may be, pay to the Receiver General, on account of the trust’s tax under Part I, the amount by which the full amount that the elector would otherwise have been required to remit in the year in respect of the rent or royalty exceeds the amounts that the elector has remitted in the year under paragraph (a) in respect of the rent or royalty.
(2) Subsection (1) applies to trust taxation years that end after 2006, except that
(a) it also applies to each earlier taxation year of a trust to which subsection 94(1) of the Act, as enacted by section 7, applies; and
(b) an election referred to in subsection 216(4.1) of the Act, as enacted by subsection (1), is deemed to have been filed with the Minister of National Revenue on a timely basis if it is filed with the Minister of National Revenue on or before the trust’s filing-due date for the trust’s taxation year that includes the day on which this Act receives royal assent.
21. (1) The definitions “specified beneficiary” and “specified foreign trust” in subsection 233.2(1) of the Act are repealed.
(2) Subsections 233.2(2) and (3) of the Act are replaced by the following:
Marginal note:Rule of application
(2) In this section and paragraph 233.5(c.1), subsections 94(1), (2) and (10) to (13) apply, except that the reference to the expression “(other than restricted property)” in the definition “arm’s length transfer” in subsection 94(1) is to be read as a reference to the expression “(other than property to which paragraph 94(2)(g) applies but not including a unit of a mutual fund trust or of a trust that would be a mutual fund trust if section 4801 of the Income Tax Regulations were read without reference to paragraph 4801(b), a share of the capital stock of a mutual fund corporation, or a particular share of the capital stock of a corporation (other than a closely held corporation) which particular share is identical to a share that is, at the transfer time, of a class that is listed on a designated stock exchange)”.
(3) Subsection 233.2(4) of the Act is replaced by the following:
Marginal note:Filing information on foreign trusts
(4) A person shall file an information return in prescribed form, in respect of a taxation year of a particular trust (other than an exempt trust or a trust described in any of paragraphs (c) to (h) of the definition “exempt foreign trust” in subsection 94(1)) with the Minister on or before the person’s filing-due date for the person’s taxation year in which the particular trust’s taxation year ends if
(a) the particular trust is non-resident at a specified time in that taxation year of the particular trust;
(b) the person is a contributor, a connected contributor or a resident contributor to the particular trust; and
(c) the person
(i) is resident in Canada at that specified time, and
(ii) is not, at that specified time,
(A) a mutual fund corporation,
(B) an exempt person,
(C) a mutual fund trust,
(D) a trust described in any of paragraphs (a) to (e.1) of the definition “trust” in subsection 108(1),
(E) a registered investment,
(F) a trust in which all persons beneficially interested are persons described in clauses (A) to (E), or
(G) a contributor to the particular trust by reason only of being a contributor to another trust that is resident in Canada and is described in any of clauses (B) to (F).
Marginal note:Similar arrangements
(4.1) In this section and sections 162, 163 and 233.5, a person’s obligations under subsection (4) (except to the extent that they are waived in writing by the Minister) are to be determined as if a contributor described in paragraph (4)(b) were any person who had transferred or loaned property, an arrangement or entity were a non-resident trust throughout the calendar year that includes the time referred to in paragraph (a) and that calendar year were a taxation year of the arrangement or entity, if
(a) the person at any time, directly or indirectly, transferred or loaned the property to be held
(i) under the arrangement and the arrangement is governed by the laws of a country or a political subdivision of a country other than Canada or exists, was formed or organized, or was last continued under the laws of a country or a political subdivision of a country other than Canada, or
(ii) by the entity and the entity is a non-resident entity (as defined by subsection 94.1(2));
(b) the transfer or loan is not an arm’s length transfer;
(c) the transfer or loan is not solely in exchange for property that would be described in paragraphs (a) to (i) of the definition “specified foreign property” in subsection 233.3(1) if that definition were read without reference to paragraphs (j) to (q);
(d) the arrangement or entity is not a trust in respect of which the person would, if this Act were read without reference to this subsection, be required to file an information return for a taxation year that includes that time; and
(e) the arrangement or entity is, for a taxation year or fiscal period of the arrangement or entity that includes that time, not
(i) an exempt foreign trust (as defined in subsection 94(1)),
(ii) a foreign affiliate in respect of which the person is a reporting entity (within the meaning assigned by subsection 233.4(1)), or
(iii) an exempt trust.
(4) Subsections (1) to (3) apply to returns in respect of trust taxation years that end after 2006. Those subsections also apply to returns in respect of an earlier taxation year of a trust if subsection 94(1) of the Act, as enacted by section 7, applies to the trust for that earlier taxation year. However, the reference to “designated stock exchange” in subsection 233.2(2) of the Act, as enacted by subsection (2), is in its application to a time that is before December 14, 2007 to be read as a reference to “prescribed stock exchange”.
(5) A return required to be filed by a person because of subsection 233.2(4) of the Act, as enacted by subsection (3), is deemed to have been filed with the Minister of National Revenue on a timely basis if it is filed with the Minister of National Revenue on or before the person’s filing-due date for the person’s taxation year that includes the day on which this Act receives royal assent.
22. (1) Subparagraph (a)(iv) of the definition bien étranger déterminé in subsection 233.3(1) of the French version of the Act is replaced by the following:
(iv) la participation dans une fiducie non-résidente,
(2) Paragraph (d) of the definition “specified foreign property” in subsection 233.3(1) of the English version of the Act is replaced by the following:
(d) an interest in a non-resident trust,
(3) Subsections (1) and (2) apply to returns in respect of trust taxation years that end after 2006. Those subsections also apply to returns in respect of an earlier taxation year of a trust if subsection 94(1) of the Act, as enacted by section 7, applies to the trust for that earlier taxation year.
23. (1) Paragraph 233.5(c) of the Act is replaced by the following:
(c) if the return is required to be filed under section 233.2 in respect of a trust, at the time of each transaction, if any, entered into by the person or partnership after March 5, 1996 and before June 23, 2000 that gave rise to the requirement to file a return for a taxation year of the trust that ended before 2007 or that affects the information to be reported in the return, it was reasonable to expect that sufficient information would be available to the person or partnership to comply with section 233.2 in respect of each taxation year of the trust that ended before 2007;
(c.1) if the return is required to be filed under section 233.2, at the time of each contribution (determined with reference to subsection 233.2(2)) made by the person or partnership after June 22, 2000 that gives rise to the requirement to file the return or that affects the information to be reported in the return, it was reasonable to expect that sufficient information would be available to the person or partnership to comply with section 233.2;
(c.2) if the return is required to be filed under section 233.4 by a person or partnership in respect of a corporation that is a controlled foreign affiliate for the purpose of that section of the person or partnership, at the time of each transaction, if any, entered into by the person or partnership after March 5, 1996 that gives rise to the requirement to file the return or that affects the information to be reported in the return, it was reasonable to expect that sufficient information would be available to the person or partnership to comply with section 233.4; and
(2) Subsection (1) applies to returns in respect of trust taxation years that end after 2006. Subsection (1) also applies to returns in respect of an earlier taxation year of a trust if subsection 94(1) of the Act, as enacted by section 7, applies to that earlier taxation year of the trust.
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