Income Tax Act

Marginal note:Alternative re Canadian benefits

• 217 (1) In this section, a non-resident person’s “Canadian benefits” for a taxation year is the total of all amounts each of which is an amount paid or credited in the year and in respect of which tax under this Part would, but for this section, be payable by the person because of any of paragraphs 212(1)(h), (j) to (m) and (q).

• Marginal note:Part I return

  (2) No tax is payable under this Part in respect of a non-resident person’s Canadian benefits for a taxation year if the person

  • (a) files with the Minister, within 6 months after the end of the year, a return of income under Part I for the year; and

  • (b) elects in the return to have this section apply for the year.

• Marginal note:Taxable income earned in Canada

  (3) Where a non-resident person elects under paragraph (2)(b) for a taxation year, for the purposes of Part I

  • (a) the person is deemed to have been employed in Canada in the year; and

  • (b) the person’s taxable income earned in Canada for the year is deemed to be the greater of

    • (i) the amount that would, but for subparagraph (ii), be the person’s taxable income earned in Canada for the year if

      • (A) paragraph 115(1)(a) included the following subparagraph after subparagraph (i):

        • “(i.1) the non-resident person’s Canadian benefits for the year, within the meaning assigned by subsection 217(1),”, and

      • (B) paragraph 115(1)(f) were read as follows:

        • “(f) such of the other deductions permitted for the purpose of computing taxable income as can reasonably be considered wholly applicable to the amounts described in subparagraphs (a)(i) to (vi).”; and

    • (ii) the person’s income (computed without reference to subsection 56(8)) for the year minus the total of such of the deductions permitted for the purpose of computing taxable income as can reasonably be considered wholly applicable to the amounts described in subparagraphs 115(1)(a)(i) to (vi).

• Marginal note:Tax credits — limitation

  (4) Sections 118 to 118.91 and 118.94 do not apply in computing the tax payable under Part I for a taxation year by a non-resident person who elects under paragraph (2)(b) for the year, unless

  • (a) where section 114 applies to the person for the year, all or substantially all of the person’s income for the year is included in computing the person’s taxable income for the year; or

  • (b) in any other case, all or substantially all of the person’s income for the year is included in computing the amount determined under subparagraph (3)(b)(i) in respect of the person for the year.

• Marginal note:Tax credits allowed

  (5) In computing the tax payable under Part I for a taxation year by a non-resident person to whom neither paragraph (4)(a) nor paragraph (4)(b) applies for the year there may, notwithstanding section 118.94 and subsection (4), be deducted the lesser of

  • (a) the total of

    • (i) such of the amounts that would have been deductible under any of section 118.2, subsections 118.3(2) and (3) and sections 118.8 and 118.9 in computing the person’s tax payable under Part I for the year if the person had been resident in Canada throughout the year, as can reasonably be considered wholly applicable, and

    • (ii) the amounts that would have been deductible under any of sections 118 and 118.1, subsection 118.3(1) and sections 118.5 and 118.7 in computing the person’s tax payable under Part I for the year if the person had been resident in Canada throughout the year, and

  • (b) the appropriate percentage for the year of the person’s Canadian benefits for the year.

• Marginal note:Special credit

  (6) In computing the tax payable under Part I for a taxation year by a non-resident who elects under paragraph (2)(b) for the year, there may be deducted the amount determined by the formula

  A × [(B - C) / B]

  where

  A

  is the amount of tax under Part I that would, but for this subsection, be payable by the person for the year;

  B

  is the amount determined under subparagraph (3)(b)(ii) in respect of the person for the year; and

  C

  is the amount determined under subparagraph (3)(b)(i) in respect of the person for the year.