Income Tax Act (R.S.C., 1985, c. 1 (5th Supp.))

Marginal note:Definitions

• 233.3 (1) The definitions in this subsection apply in this section.

  reporting entity

  reporting entity for a taxation year or fiscal period means a specified Canadian entity for the year or period where, at any time (other than a time when the entity is non-resident) in the year or period, the total of all amounts each of which is the cost amount to the entity of a specified foreign property of the entity exceeds $100,000. (déclarant)

  specified Canadian entity

  specified Canadian entity for a taxation year or fiscal period means

  • (a) a taxpayer resident in Canada in the year that is not

    • (i) a mutual fund corporation,

    • (ii) a non-resident-owned investment corporation,

    • (iii) a person (other than a trust) all of whose taxable income for the year is exempt from tax under Part I,

    • (iv) a trust all of the taxable income of which for the year is exempt from tax under Part I,

    • (v) a mutual fund trust,

    • (vi) a trust described in any of paragraphs (a) to (e.1) of the definition trust in subsection 108(1),

    • (vii) a registered investment, nor

    • (viii) a trust in which all persons beneficially interested are persons described in subparagraphs (i) to (vii); and

  • (b) a partnership where the total of all amounts, each of which is a share of the partnership’s income or loss for the period of a member that is a non-resident person or a taxpayer referred to in any of subparagraphs (a)(i) to (viii), is less than 90% of the income or loss of the partnership for the period, and, where the income and loss of the partnership are nil for the period, the income of the partnership for the period is deemed to be $1,000,000 for the purpose of this paragraph. (entité canadienne déterminée)

  specified foreign property

  specified foreign property of a person or partnership means any property of the person or the partnership that is

  • (a) funds or intangible property, or for civil law incorporeal property, situated, deposited or held outside Canada,

  • (b) tangible property, or for civil law corporeal property, situated outside Canada,

  • (c) a share of the capital stock of a non-resident corporation,

  • (d) an interest in a non-resident trust,

  • (e) an interest in a partnership that owns or holds specified foreign property,

  • (f) an interest in, or right with respect to, an entity that is non-resident,

  • (g) indebtedness owed by a non-resident person,

  • (h) an interest in, or for civil law a right in, or a right — under a contract in equity or otherwise either immediately or in the future and either absolutely or contingently — to, any property (other than any property owned by a corporation or trust that is not the person) that is specified foreign property, and

  • (i) property that, under the terms or conditions thereof or any agreement relating thereto, is convertible into, is exchangeable for or confers a right to acquire, property that is specified foreign property,

  but does not include

  • (j) property that is used or held exclusively in the course of carrying on an active business of the person or partnership (determined as if the person or partnership were a corporation resident in Canada),

  • (k) a share of the capital stock or indebtedness of a non-resident corporation that is a foreign affiliate of the person or partnership for the purpose of section 233.4,

  • (l) an interest in, or indebtedness of, a non-resident trust that is a foreign affiliate of the person or partnership for the purpose of section 233.4,

  • (m) an interest in a non-resident trust that was not acquired for consideration by either the person or partnership or a person related to the person or partnership,

  • (n) an interest in a trust that is described in paragraph (a) or (b) of the definition exempt trust in subsection 233.2(1), or that would be described in paragraph (b) of that definition if that paragraph were read as follows:

    • (b) a trust that

      • (i) is resident in Australia or New Zealand for income tax purposes under the laws of Australia or New Zealand, as the case may be,

      • (ii) qualifies for a reduced rate of income tax under the income tax laws of its country of residence referred to in subparagraph (i),

      • (iii) is established principally for the purpose of administering or providing benefits under a superannuation, pension or retirement fund or plan, and

      • (iv) is maintained primarily for the benefit of individuals that are resident in Australia or New Zealand, as the case may be; or

  • (o) an interest in a partnership that is a specified Canadian entity,

  • (o.1) a right with respect to, or indebtedness of, an authorized foreign bank that is issued by, and payable or otherwise enforceable at, a branch in Canada of the bank,

  • (p) personal-use property of the person or partnership, and

  • (q) an interest in, or for civil law a right in, or a right to acquire, a property that is described in any of paragraphs (j) to (p). (bien étranger déterminé)

• Marginal note:Application to members of partnerships

  (2) For the purpose of this section, a person who is a member of a partnership that is a member of another partnership

  • (a) is deemed to be a member of the other partnership; and

  • (b) the person’s share of the income or loss of the other partnership is deemed to be equal to the amount of that income or loss to which the person is directly or indirectly entitled.

• Marginal note:Returns respecting foreign property

  (3) A reporting entity for a taxation year or fiscal period shall file with the Minister for the year or period a return in prescribed form on or before the day that is

  • (a) where the entity is a partnership, the day on or before which a return is required by section 229 of the Income Tax Regulations to be filed in respect of the fiscal period of the partnership or would be required to be so filed if that section applied to the partnership; and

  • (b) where the entity is not a partnership, the entity’s filing-due date for the year.

Marginal note:Reporting entity

• 233.4 (1) For the purpose of this section, reporting entity for a taxation year or fiscal period means

  • (a) a taxpayer resident in Canada (other than a taxpayer all of whose taxable income for the year is exempt from tax under Part I) of which a non-resident corporation is a foreign affiliate at any time in the year;

  • (b) a taxpayer resident in Canada (other than a taxpayer all of whose taxable income for the year is exempt from tax under Part I) of which a non-resident trust is a foreign affiliate at any time in the year; and

  • (c) a partnership

    • (i) where the total of all amounts, each of which is a share of the partnership’s income or loss for the period of a member that is not resident in Canada or that is a taxpayer all of whose taxable income for the year in which the period ends is exempt from tax under Part I, is less than 90% of the income or loss of the partnership for the period, and, where the income and loss of the partnership are nil for the period, the income of the partnership for the period is deemed to be $1,000,000 for the purpose of determining a member’s share of the partnership’s income for the purpose of this subparagraph, and

    • (ii) of which a non-resident corporation or trust is a foreign affiliate at any time in the fiscal period.

• Marginal note:Rules of application

  (2) For the purpose of this section, in determining whether a non-resident corporation or trust is a foreign affiliate or a controlled foreign affiliate of a taxpayer resident in Canada or of a partnership

  • (a) paragraph (b) of the definition equity percentage in subsection 95(4) shall be read as if the reference to “any corporation” were a reference to “any corporation other than a corporation resident in Canada”;

  • (b) the definitions direct equity percentage and equity percentage in subsection 95(4) shall be read as if a partnership were a person;

  • (c) the definitions controlled foreign affiliate and foreign affiliate in subsection 95(1) shall be read as if a partnership were a taxpayer resident in Canada; and

  • (d) if the taxpayer is a member of one or more partnerships described in subparagraph (1)(c)(i) of which a non-resident corporation or trust is a foreign affiliate, and the taxpayer does not have any direct or indirect interest (determined without reference to subsection 93.1(1)) in the non-resident corporation or trust other than through its interest in the partnerships, then the non-resident corporation or trust is deemed not to be a foreign affiliate of the taxpayer.

• Marginal note:Application to members of partnerships

  (3) For the purpose of this section, a person who is a member of a partnership that is a member of another partnership

  • (a) is deemed to be a member of the other partnership; and

  • (b) the person’s share of the income or loss of the other partnership is deemed to be equal to the amount of that income or loss to which the person is directly or indirectly entitled.

• Marginal note:Returns respecting foreign affiliates

  (4) A reporting entity for a taxation year or fiscal period shall file with the Minister for the year or period a return in prescribed form in respect of each foreign affiliate of the entity in the year or period within 10 months after the end of the year or period.

Marginal note:Due diligence exception

233.5 The information required in a return filed under section 233.2 or 233.4 does not include information that is not available, on the day on which the return is filed, to the person or partnership required to file the return where

• (a) there is a reasonable disclosure in the return of the unavailability of the information;

• (b) before that day, the person or partnership exercised due diligence in attempting to obtain the information;

• (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

• (d) if the information subsequently becomes available to the person or partnership, it is filed with the Minister not more than 90 days after it becomes so available.

Marginal note:Returns respecting distributions from non-resident trusts

• 233.6 (1) Where a specified Canadian entity (as defined by subsection 233.3(1)) for a taxation year or fiscal period receives a distribution of property from, or is indebted to, a non-resident trust (other than a trust that was an excluded trust in respect of the year or period of the entity or an estate that arose on and as a consequence of the death of an individual) in the year or period and the entity is beneficially interested in the trust at any time in the year or period, the entity shall file with the Minister for the year or period a return in prescribed form on or before the day that is

  • (a) where the entity is a partnership, the day on or before which a return is required by section 229 of the Income Tax Regulations to be filed in respect of the fiscal period of the partnership or would be required to be so filed if that section applied to the partnership; and

  • (b) where the entity is not a partnership, the entity’s filing-due date for the year.

• Marginal note:Excluded trust defined

  (2) For the purpose of subsection 233.6(1), an excluded trust in respect of the taxation year or fiscal period of an entity means

  • (a) a trust described in paragraph (a) or (b) of the definition exempt trust in subsection 233.2(1) throughout the portion of the year or period during which the trust was extant;

  • (b) a trust in respect of which the entity is required by section 233.2 to file a return in respect of each taxation year of the trust that ends in the entity’s year;

  • (c) a trust an interest in which is at any time in the year or period specified foreign property (as defined by subsection 233.3(1)) of the entity, where the entity is a reporting entity (as defined by subsection 233.3(1)) for the year or period; and

  • (d) a trust in respect of which the entity is required by section 233.4 to file a return for the year or period.