Federal-Provincial Fiscal Arrangements Act (R.S.C., 1985, c. F-8)

Act current to 2019-07-01 and last amended on 2018-06-21. Previous Versions

PART IV.01Transfer Payments — Tax in Respect of Stock Option Benefit Deferral Under Part I.01 of the Income Tax Act

Marginal note:Transfer payments — Consolidated Revenue Fund

 Subject to this Act, the Minister may pay to a province, out of the Consolidated Revenue Fund, at such time as the Minister may determine, an amount equal to 1/3 of the tax payable under subparagraph 180.01(2)(c)(ii) of the Income Tax Act for a taxation year by a taxpayer who is resident in the province on the last day of that taxation year.

  • 2010, c. 25, s. 144

Marginal note:Eligibility for payment

 No payment may be made under this Part to a province if, in the opinion of the Minister, the province imposes or purports to impose a tax that is similar to the tax imposed under Part I.01 of the Income Tax Act.

  • 2010, c. 25, s. 144

PART IV.1Transfer Payments with Respect to Preferred Share Dividend Taxes Under Parts IV.1 and VI.1 of the Income Tax Act

Marginal note:Transfer payments in respect of preferred share dividend taxes under Parts IV.1 and VI.1 of the Income Tax Act

  •  (1) Subject to this Act, the Minister may, in respect of taxes payable under Parts IV.1 and VI.1 of the Income Tax Act by a corporation for a taxation year of the corporation ending in a fiscal year, pay to a province out of the Consolidated Revenue Fund, at such time as the Minister may determine, an amount for the fiscal year equal to thirty-five per cent of that proportion of the taxes so payable that

    • (a) the amount of taxable income of the corporation earned in that taxation year in that province determined in accordance with the provisions of regulations made under the Income Tax Act,

    is of

    • (b) the corporation’s taxable income for that taxation year.

  • Marginal note:Where income of corporation is nil

    (2) For the purposes of subsection (1), where a corporation’s taxable income for a taxation year would, but for this subsection, be nil, the corporation shall be deemed to have taxable income for the taxation year equal to $100.

  • R.S., 1985, c. 46 (4th Supp.), s. 6

Marginal note:Eligibility for payments

  •  (1) No payment may be made under this Part to a province for a fiscal year unless

    • (a) pursuant to a tax collection agreement, Canada has undertaken for the calendar year ending in the fiscal year to collect taxes imposed by the province under an Act of the legislature of the province imposing a tax on the income of corporations; or

    • (b) the Act of the legislature of the province imposing a tax on the income of corporations provides, in the opinion of the Minister, for a deduction in computing taxable income of a corporation for taxation years ending in the fiscal year of an amount that is not less than the amount deductible by the corporation for the year under paragraph 110(1)(k) of the Income Tax Act.

  • Marginal note:Idem

    (2) No payment may be made under this Part to a province for a fiscal year where, in the opinion of the Minister, the province imposes or purports to impose a tax payable by corporations for taxation years ending in the fiscal year that is identical or similar to the taxes imposed under Parts IV.1 and VI.1 of the Income Tax Act.

  • R.S., 1985, c. 46 (4th Supp.), s. 6
  • 1990, c. 39, s. 56
  • 1999, c. 31, s. 237(F)
  • 2013, c. 34, s. 370

Marginal note:Information

 A corporation shall furnish to the Minister of National Revenue any information that Minister may require for the purpose of determining the amount payable to a province under this Part in respect of the taxes payable by the corporation under Parts IV.1 and VI.1 of the Income Tax Act.

  • R.S., 1985, c. 46 (4th Supp.), s. 6

PART IV.11Transfer Payments — Tax in Respect of Sift Trusts or Sift Partnerships

Marginal note:Definitions

 The following definitions apply in this Part.

SIFT entity

SIFT entity means a SIFT trust or a SIFT partnership. (entité intermédiaire de placement déterminée)

SIFT partnership

SIFT partnership has the same meaning as in subsection 248(1) of the Income Tax Act. (société de personnes intermédiaire de placement déterminée)

SIFT trust

SIFT trust has the same meaning as in subsection 248(1) of the Income Tax Act. (fiducie intermédiaire de placement déterminée)

  • 2012, c. 31, s. 97

Marginal note:Permanent establishment

 The definition permanent establishment in subsection 400(2) of the Income Tax Regulations, as it read on March 12, 2009 and as it is amended from time to time after that date, applies in determining the amount payable to a province under this Part.

  • 2012, c. 31, s. 97

Marginal note:Transfer payments for SIFT entity with single permanent establishment

 Subject to this Act, the Minister may pay to a province, in respect of tax payable under subsection 122(1) or 197(2) of the Income Tax Act by a SIFT entity that, in a taxation year, has a permanent establishment in the province and no permanent establishment outside the province, the amount determined by the formula

Z × Y

where

Z
is
  • (a) in respect of a taxation year that is after 2006 and before 2009 for which no election was made by the SIFT entity under subsection 34(4) of the Budget Implementation Act, 2008, 0.13, and

  • (b) in any other case, the amount determined under paragraph 414(3)(b) of the Income Tax Regulations in respect of the SIFT entity for the taxation year; and

Y
is
  • (a) for a SIFT entity that is a SIFT trust, the SIFT trust’s taxable SIFT trust distributions, as defined in subsection 122(3) of the Income Tax Act, for the taxation year, and

  • (b) for a SIFT entity that is a SIFT partnership, the SIFT partnership’s taxable non-portfolio earnings, as defined in subsection 197(1) of the Income Tax Act, for the taxation year.

  • 2012, c. 31, s. 97

Marginal note:Transfer payments for SIFT entity with multiple permanent establishments

  •  (1) Subject to this Act, the Minister may pay to a province, in respect of tax payable under subsection 122(1) or 197(2) of the Income Tax Act by a SIFT entity that, in a taxation year, has a permanent establishment in the province and a permanent establishment outside the province, the amount determined by the formula

    (Z/Y) × (X × W)

    where

    Z
    is, subject to subsection (2), the amount determined by the second formula in paragraph 414(3)(c) of the Income Tax Regulations for the taxation year in respect of the province;
    Y
    is
    • (a) subject to subsection (2), in respect of a taxation year that is after 2006 and before 2009 for which no election was made by the SIFT entity under subsection 34(4) of the Budget Implementation Act, 2008, the amount that would be determined under paragaph 414(3)(c) of the Income Tax Regulations in respect of the SIFT entity for the taxation year if the SIFT entity had made that election, and

    • (b) in any other case, the amount determined under paragraph 414(3)(c) of the Income Tax Regulations in respect of the SIFT entity for the taxation year;

    X
    is
    • (a) in respect of a taxation year that is after 2006 and before 2009 for which no election was made by the SIFT entity under subsection 34(4) of the Budget Implementation Act, 2008, 0.13, and

    • (b) in any other case, the amount determined under paragraph 414(3)(c) of the Income Tax Regulations in respect of the SIFT entity for the taxation year; and

    W
    is
    • (a) for a SIFT entity that is a SIFT trust, the SIFT trust’s taxable SIFT trust distributions, as defined in subsection 122(3) of the Income Tax Act, for the taxation year, and

    • (b) for a SIFT entity that is a SIFT partnership, the SIFT partnership’s taxable non-portfolio earnings, as defined in subsection 197(1) of the Income Tax Act, for the taxation year.

  • Marginal note:2007 and 2008 taxation years — permanent establishment in Quebec

    (2) In respect of a taxation year that is after 2006 and before 2009 for which no election was made under subsection 34(4) of the Budget Implementation Act, 2008 by a SIFT entity that has a permanent establishment in the province of Quebec in that taxation year, in calculating the amount determined by the second formula in paragraph 414(3)(c) of the Income Tax Regulations in respect of that province, paragraph (a) of the definition general corporate income tax rate in subsection 414(1) is to be read as follows:

    • (a) for Quebec, the highest percentage rate of tax imposed under the laws of Quebec on the taxable income of a public corporation earned in the taxation year in Quebec;

  • 2012, c. 31, s. 97
 
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