Income Tax Act

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.