Technical Tax Amendments Act, 2012 (S.C. 2013, c. 34)
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Assented to 2013-06-26
PART 5OTHER AMENDMENTS TO THE INCOME TAX ACT AND RELATED LEGISLATION
R.S., c. 1 (5th Supp.)Income Tax Act
346. (1) Section 211.9 of the Act is repealed.
(2) Subsection (1) applies to taxation years that end after October 24, 2012.
347. (1) Subparagraph 212(1)(b)(iv) of the Act, as it read immediately before it was amended by S.C. 2007, c. 35, s. 59(2), is replaced by the following:
(iv) interest payable to a person with whom the payer is dealing at arm’s length and to whom a certificate of exemption that is in force on the day the amount is paid or credited was issued under subsection (14),
(2) The portion of subparagraph 212(1)(b)(xii) of the Act, as it read immediately before it was amended by S.C. 2007, c. 35, s. 59(2), before clause (A) is replaced by the following:
(xii) interest payable by a lender under a securities lending arrangement, if the lender and the borrower deal with each other at arm’s length and the lender is a financial institution prescribed for the purpose of clause (iii)(D), or a registered securities dealer resident in Canada, on money provided to the lender either as collateral or as consideration for the particular security lent or transferred under the arrangement where
(3) Paragraph 212(1)(b) of the Act, as it read immediately before it was amended by S.C. 2007, c. 35, s. 59(2), is amended by striking out “and” at the end of subparagraph (xi), by adding “and” at the end of subparagraph (xii) and by adding the following after subparagraph (xii):
(xiii) an amount paid or credited under a securities lending arrangement that is deemed by subparagraph 260(8)(c)(i) to be a payment made by a borrower to a lender of interest if
(A) the securities lending arrangement was entered into by the borrower in the course of carrying on a business outside Canada, and
(B) the security that is transferred or lent to the borrower under the securities lending arrangement is described in paragraph (b) or (c) of the definition “qualified security” in subsection 260(1) and issued by a non-resident issuer;
(4) Paragraph 212(1)(b) of the Act, as amended by subsections (1) to (3), is replaced by the following:
Marginal note:Interest
(b) interest that
(i) is not fully exempt interest, and is paid or payable to a person with whom the payer is not dealing at arm’s length, or
(ii) is participating debt interest;
(5) Subparagraph 212(1)(b)(i) of the Act, as enacted by subsection (4), is replaced by the following:
(i) is not fully exempt interest and is paid or payable
(A) to a person with whom the payer is not dealing at arm’s length, or
(B) in respect of a debt or other obligation to pay an amount to a person with whom the payer is not dealing at arm’s length, or
(6) Subparagraph 212(1)(c)(ii) of the French version of the Act is replaced by the following:
(ii) peut raisonnablement être considérée, compte tenu des circonstances, y compris les modalités de la succession ou de l’acte de fiducie, comme la distribution d’un montant reçu par la succession ou la fiducie, ou comme une somme provenant d’un tel montant, au titre d’un dividende non imposable sur une action du capital-actions d’une société résidant au Canada;
(7) Subparagraph 212(1)(d)(iv) of the Act is replaced by the following:
(iv) unless paragraph (i) applies to the amount, made pursuant to an agreement between a person resident in Canada and a non-resident person under which the non-resident person agrees not to use or not to permit any other person to use any thing referred to in subparagraph (i) or any information referred to in subparagraph (ii), or
(8) Subparagraph 212(1)(d)(xi) of the Act is amended by striking out “or” at the end of clause (B) and by adding the following after clause (C):
(D) air navigation equipment utilized in the provision of services under the Civil Air Navigation Services Commercialization Act or computer software the use of which is necessary for the operation of that equipment that is used by the payer for no other purpose; or
(9) Paragraph 212(1)(d) of the Act is amended by striking out “or” at the end of subparagraph (x), by adding “or” at the end of subparagraph (xi) and by adding the following after subparagraph (xi):
(xii) an amount to which subsection (5) would apply if that subsection were read without reference to “to the extent that the amount relates to that use or reproduction”;
(10) Subsection 212(1) of the Act is amended by adding the following after paragraph (h):
Marginal note:Restrictive covenant amount
(i) an amount that would, if the non-resident person had been resident in Canada throughout the taxation year in which the amount was received or receivable, be required by paragraph 56(1)(m) or subsection 56.4(2) to be included in computing the non-resident person’s income for the taxation year;
(11) Section 212 of the Act is amended by adding the following after subsection (2):
Marginal note:Exempt dividends
(2.1) Subsection (2) does not apply to an amount paid or credited, by a borrower, under a securities lending arrangement if
(a) the amount is deemed by subparagraph 260(8)(c)(i) to be a dividend;
(b) the securities lending arrangement was entered into by the borrower in the course of carrying on a business outside Canada; and
(c) the security that is transferred or lent to the borrower under the securities lending arrangement is a share of a class of the capital stock of a non-resident corporation.
(12) Subsection 212(3) of the Act, as it read immediately before it was amended by S.C. 2007, c. 35, s. 59(3), is amended by adding “and” at the end of paragraph (a) and by repealing paragraph (b).
(13) Subsection 212(3) of the Act, as amended by subsection (12), is replaced by the following:
Marginal note:Interest — definitions
(3) The following definitions apply for the purpose of paragraph (1)(b).
“fully exempt interest”
« intérêts entièrement exonérés »
“fully exempt interest” means
(a) interest that is paid or payable on a bond, debenture, note, mortgage, hypothecary claim or similar debt obligation
(i) of, or guaranteed (otherwise than by being insured by the Canada Deposit Insurance Corporation) by, the Government of Canada,
(ii) of the government of a province,
(iii) of an agent of a province,
(iv) of a municipality in Canada or a municipal or public body performing a function of government in Canada,
(v) of a corporation, commission or association to which any of paragraphs 149(1)(d) to (d.6) applies, or
(vi) of an educational institution or a hospital if repayment of the principal amount of the obligation and payment of the interest is to be made, or is guaranteed, assured or otherwise specifically provided for or secured by the government of a province;
(b) interest that is paid or payable on a mortgage, hypothecary claim or similar debt obligation secured by, or on an agreement for sale or similar obligation with respect to, real property situated outside Canada or an interest in any such real property, or to immovables situated outside Canada or a real right in any such immovable, except to the extent that the interest payable on the obligation is deductible in computing the income of the payer under Part I from a business carried on by the payer in Canada or from property other than real or immovable property situated outside Canada;
(c) interest that is paid or payable to a prescribed international organization or agency; or
(d) an amount paid or payable or credited under a securities lending arrangement that is deemed by subparagraph 260(8)(c)(i) to be a payment made by a borrower to a lender of interest, if
(i) the securities lending arrangement was entered into by the borrower in the course of carrying on a business outside Canada, and
(ii) the security that is transferred or lent to the borrower under the securities lending arrangement is described in paragraph (b) or (c) of the definition “qualified security” in subsection 260(1) and issued by a non-resident issuer.
“participating debt interest”
« intérêts sur des créances participatives »
“participating debt interest” means interest (other than interest described in any of paragraphs (b) to (d) of the definition “fully exempt interest”) that is paid or payable on an obligation, other than a prescribed obligation, all or any portion of which interest is contingent or dependent on the use of or production from property in Canada or is computed by reference to revenue, profit, cash flow, commodity price or any other similar criterion or by reference to dividends paid or payable to shareholders of any class of shares of the capital stock of a corporation.
(14) Subsection 212(5) of the French version of the Act is replaced by the following:
Marginal note:Films cinématographiques
(5) Toute personne non-résidente doit payer un impôt sur le revenu de 25 % sur toute somme qu’une personne résidant au Canada lui verse ou porte à son crédit, ou est réputée, en vertu de la partie I, lui verser ou porter à son crédit, au titre ou en paiement intégral ou partiel d’un droit sur les oeuvres ci-après qui ont été ou doivent être utilisées ou reproduites au Canada, ou d’un droit d’utilisation de telles oeuvres, dans la mesure où la somme se rapporte à cette utilisation ou reproduction :
a) un film cinématographique;
b) un film, une bande magnétoscopique ou d’autres procédés de reproduction à utiliser pour la télévision, sauf ceux utilisés uniquement pour une émission d’information produite au Canada.
(15) The portion of subsection 212(5) of the English version of the Act after paragraph (b) is replaced by the following:
that has been, or is to be, used or reproduced in Canada to the extent that the amount relates to that use or reproduction.
(16) Subsection 212(9) of the Act is amended by striking out “or” at the end of paragraph (b), by adding “or” at the end of paragraph (c) and by adding the following after paragraph (c):
(d) a dividend or interest is received by a trust that is created under a reinsurance trust agreement
(i) to which a regulatory authority — being the Superintendent of Financial Institutions or a provincial regulatory authority having powers similar to those of the Superintendent — is a party, and
(ii) that accords with guidelines issued by the regulatory authority relating to reinsurance arrangements with unregistered insurers
(17) Subsection 212(13) of the Act is amended by striking out “or” at the end of paragraph (e), by adding “or” at the end of paragraph (f) and by adding the following after paragraph (f):
(g) an amount to which paragraph (1)(i) would apply if the amount paid or credited were paid or credited by a person resident in Canada, and that amount affects, or is intended to affect, in any way whatever,
(i) the acquisition or provision of property or services in Canada,
(ii) the acquisition or provision of property or services outside Canada by a person resident in Canada, or
(iii) the acquisition or provision outside Canada of a taxable Canadian property,
(18) Subsection 212(13.2) of the Act is replaced by the following:
Marginal note:Application of Part XIII tax — non-resident operates in Canada
(13.2) For the purposes of this Part, a particular non-resident person, who in a taxation year pays or credits to another non-resident person an amount other than an amount to which subsection (13) applies, is deemed to be a person resident in Canada in respect of the portion of the amount that is deductible in computing the particular non-resident person’s taxable income earned in Canada for any taxation year from a source that is neither a treaty-protected business nor a treaty-protected property.
(19) Subparagraph (b)(i) of the description of B in subsection 212(19) of the Act, as it read immediately before it was amended by S.C. 2007, c. 35, s. 59(6), is replaced by the following:
(i) 10 times the greatest amount determined, under the laws of the province or provinces in which the taxpayer is a registered securities dealer, to be the capital employed by the taxpayer at the end of the day, and
(20) Subsection (1) applies to the 1998 and subsequent taxation years.
(21) Subsection (2) applies to arrangements made after 2002.
(22) Subsections (3) and (11) apply to securities lending arrangements entered into after May 1995, except that, in their application to arrangements made before 2002, each reference to “subparagraph 260(8)(c)(i)” in subparagraph 212(1)(b)(xiii) and paragraph 212(2.1)(a) of the Act, as respectively enacted by subsections (3) and (11), is to be read as a reference to “subparagraph 260(8)(a)(i)”.
(23) Subsections (4) and (13) are deemed to have come into force on January 1, 2008.
(24) Subsection (5) applies to interest that is paid or payable by a person or partnership (referred to in this subsection as the “payer”) to a person or partnership (referred to in this subsection as the “recipient”) on or after March 16, 2011, unless
(a) the interest is paid in respect of a debt or obligation incurred by the payer before March 16, 2011; and
(b) the recipient acquired the entitlement to the interest as a consequence of an agreement or other arrangement entered into by the recipient, and evidenced in writing, before March 16, 2011.
(25) Subsection (7) applies to amounts paid or credited after October 7, 2003.
(26) Subsection (8) applies to payments made after July 2003.
(27) Subsections (9), (14) and (15) apply to the 2000 and subsequent taxation years.
(28) Subsections (10) and (17) apply to amounts paid or credited after October 7, 2003, except that the portion of paragraph 212(13)(g) of the Act before subparagraph (i), as enacted by subsection (17), is to be read as follows before July 16, 2010:
(g) an amount to which paragraph (1)(i) applies if that amount affects, or is intended to affect, in any way whatever,
(29) Subsection (12) applies to replacement obligations issued after 2000.
(30) Subsection (16) applies to amounts paid or credited after 2000.
(31) A written application made under subsection 227(6) of the Act in respect of a particular amount that has been paid to the Receiver General is deemed to be filed on time if
(a) the application is filed with the Minister of National Revenue within 180 days after the day on which this Act receives royal assent; and
(b) the particular amount is an amount on which tax would not be payable because of the application of subsection 212(9) of the Act, as amended by subsection (16), if that subsection 212(9) were read without reference to its paragraphs (a) to (c).
(32) Subsection (18) applies to amounts paid or credited under obligations entered into after December 20, 2002.
(33) Subsection (19) applies to securities lending arrangements entered into after May 28, 1993.
348. Paragraph 214(3)(k) of the French version of the Act is replaced by the following:
k) le montant distribué par une fiducie au profit d’un athlète amateur à un moment donné, qui serait à inclure, en application du paragraphe 143.1(2), dans le calcul du revenu d’un particulier si la partie I s’appliquait est réputé avoir été payé au particulier à ce moment à titre de paiement relatif à une fiducie au profit d’un athlète amateur;
349. (1) The portion of subsection 216(1) of the Act before paragraph (a) is replaced by the following:
Marginal note:Alternatives re rents and timber royalties
216. (1) If an amount has been paid during a taxation year to a non-resident person or to a partnership of which that person was a member as, on account of, in lieu of payment of or in satisfaction of, rent on real or immovable property in Canada or a timber royalty, that person may, within two years (or, if that person has filed an undertaking described in subsection (4) in respect of the year, within six months) after the end of the year, file a return of income under Part I for that year in prescribed form. On so filing and without affecting the liability of the non-resident person for tax otherwise payable under Part I, the non-resident person is, in lieu of paying tax under this Part on that amount, liable to pay tax under Part I for the year as though
(2) The portion of subsection 216(5) of the Act before paragraph (a) is replaced with the following:
Marginal note:Disposition by non-resident
(5) If a person or a trust under which a person is a beneficiary has filed a return of income under Part I for a taxation year as permitted by this section or as required by section 150 and, in computing the amount of the person’s income under Part I an amount has been deducted under paragraph 20(1)(a), or is deemed by subsection 107(2) to have been allowed under that paragraph, in respect of property that is real property in Canada — or an interest therein — or an immovable in Canada — or a real right therein —, a timber resource property or a timber limit in Canada, the person shall file a return of income under Part I in prescribed form on or before the person’s filing-due date for any subsequent taxation year in which the person is non-resident and in which the person, or a partnership of which the person is a member, disposes of that property or any interest, or for civil law any right, in it. On so filing and without affecting the person’s liability for tax otherwise payable under Part I, the person is, in lieu of paying tax under this Part on any amount paid, or deemed by this Part to have been paid, in that subsequent taxation year in respect of any interest in, or for civil law any right in, that property to the person or to a partnership of which the person is a member, liable to pay tax under Part I for that subsequent taxation year as though
(3) Subsection 216(7) of the Act is repealed.
(4) Subsections (1) and (2) apply to taxation years that end after December 20, 2002.
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