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Income Tax Regulations (C.R.C., c. 945)

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Regulations are current to 2022-06-20 and last amended on 2022-06-09. Previous Versions

PART LXXAccrued Interest on Debt Obligations (continued)

Indexed Debt Obligations

  •  (1) For the purpose of subparagraph 16(6)(a)(i) of the Act, where at any time in a taxation year a taxpayer holds an interest in an indexed debt obligation, there is prescribed as interest receivable and received by the taxpayer in the year in respect of the obligation the total of

    • (a) the amount, if any, by which

      • (i) the total of all amounts each of which is the amount by which the amount payable in respect of the taxpayer’s interest in an indexed payment under the obligation (other than a payment that is an excluded payment with respect to the taxpayer for the year) has, because of a change in the purchasing power of money, increased over an inflation adjustment period of the obligation that ends in the year

      exceeds the total of

      • (ii) that portion of the total, if any, determined under subparagraph (i) that is required, otherwise than by subsection 16(6) of the Act, to be included in computing the taxpayer’s income for the year or a preceding taxation year, and

      • (iii) the total of all amounts each of which is the amount by which the amount payable in respect of the taxpayer’s interest in an indexed payment under the obligation (other than a payment that is an excluded payment with respect to the taxpayer for the year) has, by reason of a change in the purchasing power of money, decreased over an inflation adjustment period of the obligation that ends in the year, and

    • (b) where the non-indexed debt obligation associated with the indexed debt obligation is an obligation that is described in any of paragraphs 7000(1)(a) to (d), the amount of interest that would be determined under subsection 7000(2) to accrue to the taxpayer in respect of the non-indexed debt obligation in the particular period that

      • (i) begins at the beginning of the first inflation adjustment period of the indexed debt obligation in respect of the taxpayer that ends in the year, and

      • (ii) ends at the end of the last inflation adjustment period of the indexed debt obligation in respect of the taxpayer that ends in the year

      if the particular period were a taxation year of the taxpayer and the taxpayer’s interest in the indexed debt obligation were an interest in the non-indexed debt obligation.

  • (2) For the purposes of subparagraph 16(6)(a)(ii) of the Act, where at any time in a taxation year a taxpayer holds an interest in an indexed debt obligation, there is prescribed as interest payable and paid by the taxpayer in the year in respect of the obligation the amount, if any, by which

    • (a) the total of the amounts, if any, determined under subparagraphs (1)(a)(ii) and (iii) for the year in respect of the taxpayer’s interest in the obligation

    exceeds

    • (b) the amount, if any, determined under subparagraph (1)(a)(i) for the year in respect of the taxpayer’s interest in the obligation.

  • (3) For the purposes of subparagraph 16(6)(b)(i) of the Act, where at any time in a taxation year an indexed debt obligation is an obligation of a taxpayer, there is prescribed as interest payable in respect of the year by the taxpayer in respect of the obligation the amount, if any, that would be determined under paragraph (1)(a) in respect of the taxpayer for the year if, at each time at which the obligation is an obligation of the taxpayer, the taxpayer were the holder of the obligation and not the debtor under the obligation.

  • (4) For the purposes of subparagraph 16(6)(b)(ii) of the Act, where at any time in a taxation year an indexed debt obligation is an obligation of a taxpayer, there is prescribed as interest receivable and received by the taxpayer in the year in respect of the obligation the amount, if any, that would be determined under subsection (2) in respect of the taxpayer for the year if, at each time at which the obligation is an obligation of the taxpayer, the taxpayer were the holder of the obligation and not the debtor under the obligation.

  • (5) For the purpose of determining the amount by which an indexed payment under an indexed debt obligation has increased or decreased over a period because of a change in the purchasing power of money, the amount of the indexed payment at any time shall be determined using the method for computing the amount of the payment at the time it is to be made, adjusted in a reasonable manner to take into account the earlier date of computation.

  • (6) For the purposes of this section, the non-indexed debt obligation associated with an indexed debt obligation is the debt obligation that would result if the indexed debt obligation were amended to eliminate all adjustments determined by reference to changes in the purchasing power of money.

  • (7) In this section,

    excluded payment

    excluded payment with respect to a taxpayer for a taxation year means an indexed payment under an indexed debt obligation where

    • (a) the non-indexed debt obligation associated with the indexed debt obligation provides for the payment, at least annually, of interest at a single fixed rate, and

    • (b) the indexed payment corresponds to one of the interest payments referred to in paragraph (a),

    but does not include payments under an indexed debt obligation where, at any time in the year, the taxpayer’s proportionate interest in a payment to be made under the obligation after that time differs from the taxpayer’s proportionate interest in any other payment to be made under the obligation after that time; (paiement exclu)

    indexed payment

    indexed payment means, in relation to an indexed debt obligation, an amount payable under the obligation that is determined by reference to the purchasing power of money; (paiement indexé)

    inflation adjustment period

    inflation adjustment period of an indexed debt obligation means, in relation to a taxpayer,

    • (a) where the taxpayer acquires and disposes of the taxpayer’s interest in the obligation in the same regular adjustment period of the obligation, the period that begins when the taxpayer acquires the interest in the obligation and ends when the taxpayer disposes of the interest, and

    • (b) in any other case, each of the following consecutive periods:

      • (i) the period that begins when the taxpayer acquires the taxpayer’s interest in the obligation and ends at the end of the regular adjustment period of the obligation in which the taxpayer acquires the interest in the obligation,

      • (ii) each succeeding regular adjustment period of the obligation throughout which the taxpayer holds the interest in the obligation, and

      • (iii) where the taxpayer does not dispose of the interest in the obligation at the end of a regular adjustment period of the obligation, the period that begins immediately after the last period referred to in subparagraphs (i) and (ii) and that ends when the taxpayer disposes of the interest in the obligation; (période de redressement pour inflation)

    regular adjustment period

    regular adjustment period of an indexed debt obligation means

    • (a) where the terms or conditions of the obligation provide that, while the obligation is outstanding, indexed payments are to be made at regular intervals not exceeding 12 months in length, each of the following periods:

      • (i) the period that begins when the obligation is issued and ends when the first indexed payment is required to be made, and

      • (ii) each succeeding period beginning when an indexed payment is required to be made and ending when the next indexed payment is required to be made,

    • (b) where paragraph (a) does not apply and the obligation is outstanding for less than 12 months, the period that begins when the obligation is issued and ends when the obligation ceases to be outstanding, and

    • (c) in any other case, each of the following periods:

      • (i) the 12-month period that begins when the obligation is issued,

      • (ii) each succeeding 12-month period throughout which the obligation is outstanding, and

      • (iii) where the obligation ceases to be outstanding at a time other than the end of a 12-month period referred to in subparagraph (i) or (ii), the period that commences immediately after the last period referred to in those subparagraphs and that ends when the obligation ceases to be outstanding. (période de redressement normale)

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/96-435, s. 4

PART LXXIPrescribed Federal Crown Corporations

 For the purposes of subsections 27(2) and (3), the definition private corporation in subsection 89(1) and subsection 124(3) of the Act, the following are prescribed federal Crown corporations:

  • (a) Canada Deposit Insurance Corporation;

  • (b) Canada Hibernia Holding Corporation;

  • (c) Canada Lands Company Limited;

  • (d) Canada Mortgage and Housing Corporation;

  • (e) Canada Post Corporation;

  • (f) Canadian Broadcasting Corporation;

  • (g) Cape Breton Development Corporation;

  • (h) Freshwater Fish Marketing Corporation;

  • (i) Royal Canadian Mint;

  • (j) VIA Rail Canada Inc; and

  • (k) Project Deliver II Ltd.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/84-744, s. 1
  • SOR/85-175, s. 1
  • SOR/86-1092, s. 18
  • 1991, c. 10, s. 19
  • SOR/91-174, s. 1
  • SOR/91-557, s. 1
  • SOR/91-603, s. 1
  • SOR/94-405, s. 1
  • SOR/94-686, s. 39(F)
  • SOR/97-28, s. 1
  • 2001, c. 22, s. 22
  • SOR/2003-397, s. 1
  • SOR/2018-160, s. 1

PART LXXII[Repealed, SOR/2001-295, s. 5]

PART LXXIIIPrescribed Amounts and Areas

 For the purposes of paragraph 12(1)(x) of the Act, prescribed amount means

  • (a) an amount paid to a corporation by the Native Economic Development Board created under Order in Council P.C. 1983-3394 of October 31, 1983 pursuant to the Native Economic Development Program or paid to a corporation under the Aboriginal Capital Corporation Program of the Canadian Aboriginal Economic Development Strategy, where all of the shares of the capital stock of the corporation are

    • (i) owned by aboriginal individuals,

    • (ii) held in trust for the exclusive benefit of aboriginal individuals,

    • (iii) owned by a corporation, all the shares of which are owned by aboriginal individuals or held in trust for the exclusive benefit of aboriginal individuals, or

    • (iv) owned or held in a combination of ownership structures described in subparagraph (i), (ii) or (iii)

    and the purpose of the corporation is to provide loans, loan guarantees, bridge financing, venture capital, lease financing, surety bonding or other similar financing services to aboriginal enterprises;

  • (b) prescribed assistance within the meaning assigned by section 6702;

  • (c) an amount that is the portion of a student loan forgiven under section 9.2 of the Canada Student Financial Assistance Act or under section 11.1 of the Canada Student Loans Act;

  • (c.1) an amount that is the portion of a student loan forgiven under a provincial program that would be a prescribed amount because of paragraph (c) if section 11.1 of the Canada Student Loans Act or 9.2 of the Canada Student Financial Assistance Act applied to loans under that program; or

  • (d) an emissions allowance issued to the taxpayer under the laws of Canada or a province.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/86-1136, s. 12
  • SOR/88-312, s. 2
  • SOR/90-120, s. 1
  • SOR/91-276, s. 1
  • SOR/94-686, s. 79(F)
  • 2011, c. 24, s. 88
  • 2016, c. 12, s. 81
  • 2017, c. 33, s. 100

 [Repealed, SOR/2001-295, s. 6]

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/2001-295, s. 6

 [Repealed, SOR/93-440, s. 1]

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/93-440, s. 1
  •  (1) An area is a prescribed northern zone for a taxation year for the purposes of section 110.7 of the Act where it is

    • (a) the Yukon Territory, the Northwest Territories or Nunavut;

    • (b) those parts of British Columbia, Alberta and Saskatchewan that lie north of 57°30‘N latitude;

    • (c) that part of Manitoba that lies

      • (i) north of 56°20‘N latitude, or

      • (ii) north of 52°30‘N latitude and east of 95°25‘W longitude;

    • (d) that part of Ontario that lies

      • (i) north of 52°30‘N latitude, or

      • (ii) north of 51°05‘N latitude and east of 89°10‘W longitude;

    • (e) that part of Quebec that lies

      • (i) north of 51°05‘N latitude, or

      • (ii) north of the Gulf of St. Lawrence and east of 63°00‘W longitude; or

    • (f) Labrador, including Belle Isle.

  • (2) An area is a prescribed intermediate zone for a taxation year for the purposes of section 110.7 of the Act where it is the Queen Charlotte Islands, Anticosti Island, the Magdalen Islands or Sable Island, or where it is not part of a prescribed northern zone referred to in subsection (1) for the year and is

    • (a) that part of British Columbia that lies

      • (i) north of 55°35‘N latitude,

      • (ii) north of 55°00‘N latitude and east of 122°00‘W longitude, or

      • (iii) north of 55°13′N latitude and east of 123°16′W longitude;

    • (b) that part of Alberta that lies north of 55°00‘N latitude;

    • (c) that part of Saskatchewan that lies

      • (i) north of 55°00‘N latitude,

      • (ii) north of 54°15‘N latitude and east of 107°00‘W longitude, or

      • (iii) north of 53°20‘N latitude and east of 103°00‘W longitude;

    • (d) that part of Manitoba that lies

      • (i) north of 53°20‘N latitude,

      • (ii) north of 52°10‘N latitude and east of 97°40‘W longitude, or

      • (iii) north of 51°30‘N latitude and east of 96°00‘W longitude;

    • (e) that part of Ontario that lies north of 50°35‘N latitude; or

    • (f) that part of Quebec that lies

      • (i) north of 50°35‘N latitude and west of 79°00‘W longitude,

      • (ii) north of 49°00‘N latitude, east of 79°00‘W longitude and west of 74°00‘W longitude,

      • (iii) north of 50°00‘N latitude, east of 74°00‘W longitude and west of 70°00‘W longitude,

      • (iv) north of 50°45‘N latitude, east of 70°00‘W longitude and west of 65°30‘W longitude, or

      • (v) north of the Gulf of St. Lawrence, east of 65°30‘W longitude and west of 63°00‘W longitude.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/93-440, s. 2
  • 2007, c. 35, s. 79
 
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