VIII, s. 109(1)]
182[Repealed, 2017, c. 20, s. 27]
183[Repealed, 2017, c. 20, s. 27]
Marginal note:Application of Part
183.1(1)This Part applies to a corporation (other than a mutual fund corporation) for a taxation year in which the corporation, at any time in the year,
(a)was a public corporation; or
(b)was resident in Canada and had a class of shares outstanding that were purchased and sold in the manner in which such shares normally are purchased and sold by any member of the public in the open market.
Marginal note:Tax payable
(2)Where, as a part of a transaction or series of transactions or events,
(a)a corporation, or any person with whom the corporation was not dealing at arm’s length, has, at any time, paid an amount, directly or indirectly, to any person as proceeds of disposition of any property, and
(b)all or any portion of the amount may reasonably be considered, having regard to all the circumstances, to have been paid as a substitute for dividends that would otherwise have been paid in the normal course by the corporation,
the corporation shall, on or before its balance-due day for its taxation year that includes that time, pay tax of 45% of that amount or portion of it, as the case may be.
Marginal note:Stock dividend
(3)Where, as a part of a transaction or series of transactions or events,
(a)a share was issued by a corporation as a stock dividend and the amount of the stock dividend was less than the fair market value of the share at the time that it was issued, and
(b)the share or any other share of the capital stock of the corporation was purchased, directly or indirectly, by the corporation, or by a person with whom the corporation was not dealing at arm’s length, for an amount in excess of its paid-up capital,
that excess shall, for the purposes of subsection 183.1(2), be deemed to have been paid as a substitute for dividends that would otherwise have been paid in the normal course by the corporation.
Marginal note:Purchase of shares
(4)Where, as a part of a transaction or series of transactions or events,
(a)a share of the capital stock of a corporation was purchased, directly or indirectly, by the corporation, or by any person with whom the corporation was not dealing at arm’s length, and
(b)any portion of the amount paid for the share may reasonably be considered, having regard to all the circumstances, as consideration for a dividend that had been declared, but not yet paid, on the share,
that portion of the amount shall, for the purposes of subsection 183.1(2), be deemed to have been paid as a substitute for dividends that would otherwise have been paid in the normal course by the corporation notwithstanding that the dividend was actually paid thereafter.
Marginal note:Indirect payment
(5)Where, as a part of a transaction or series of transactions or events, a person received a payment from a corporation, or from any person with whom the corporation was not dealing at arm’s length, in consideration, in whole or in part, for paying an amount to any other person as proceeds of disposition of any property, the corporation shall, for the purposes of subsection 183.1(2), be deemed to have paid the amount indirectly to the other person.
Marginal note:Where s. (2) does not apply
(6)Subsection 183.1(2) does not apply if none of the purposes of the transaction or series of transactions or events referred to therein may reasonably be considered, having regard to all the circumstances, to have been to enable shareholders of a corporation who are individuals or non-resident persons to receive an amount, directly or indirectly, as proceeds of disposition of property rather than as a dividend on a share that was of a class that was listed on a stock exchange or that was purchased and sold in the manner in which shares are normally purchased and sold by any member of the public in the open market.
Marginal note:Where s. 110.6(8) does not apply
(7)Where this section has been applied in respect of an amount, subsection 110.6(8) does not apply to the capital gain in respect of which the amount formed all or a part of the proceeds of disposition.
Marginal note:Return
183.2(1)Every corporation liable to pay tax under this Part for a taxation year shall, on or before the day on or before which it is required to file its return of income under Part I for the year, file with the Minister a return for the year under this Part in prescribed form.
Marginal note:Provisions applicable to Part
(2)Subsections 150(2) and 150(3), sections 152, 158 and 159, subsections 160.1(1) and 161(1) and 161(11), sections 162 to 167 and Division J of Part I are applicable to this Part with such modifications as the circumstances require.
Marginal note:Tax on excessive elections
184(2)If a corporation has elected in accordance with subsection 83(2), 130.1(4) or 131(1) in respect of the full amount of any dividend payable by it on shares of any class of its capital stock (in this section referred to as the “original dividend”) and the full amount of the original dividend exceeds the portion of the original dividend deemed by that subsection to be a capital dividend or capital gains dividend, as the case may be, the corporation shall, at the time of the election, pay a tax under this Part equal to 3/5 of the excess.
(2.1)[Repealed, 2013, c. 34, s. 327]
Marginal note:Election to treat excess as separate dividend
(3)If, in respect of an original dividend payable at a particular time, a corporation would, but for this subsection, be required to pay a tax under this Part in respect of an excess referred to in subsection (2), and the corporation elects in prescribed manner on or before the day that is 90 days after the day of sending of the notice of assessment in respect of the tax that would otherwise be payable under this Part, the following rules apply:
(a)the portion of the original dividend deemed by subsection 83(2), 130.1(4) or 131(1) to be a capital dividend or capital gains dividend, as the case may be, is deemed for the purposes of this Act to be the amount of a separate dividend that became payable at the particular time;
(b)if the corporation identifies in its election any part of the excess, that part is, for the purposes of any election under subsection 83(2), 130.1(4) or 131(1) in respect of that part, and, where the corporation has so elected, for all purposes of this Act, deemed to be the amount of a separate dividend that became payable immediately after the particular time;
(c)the amount by which the excess exceeds any portion deemed by paragraph (b) to be a separate dividend for all purposes of this Act is deemed to be a separate taxable dividend that became payable at the particular time; and
(d)each person who held any of the issued shares of the class of shares of the capital stock of the corporation in respect of which the original dividend was paid is deemed
(i)not to have received any portion of the original dividend, and
(ii)to have received, at the time that any separate dividend determined under any of paragraphs (a) to (c) became payable, the proportion of that dividend that the number of shares of that class held by the person at the particular time is of the number of shares of that class outstanding at the particular time except that, for the purpose of Part ​XIII, the separate dividend is deemed to be paid on the day that the election in respect of this subsection is made.
(3.1) and (3.2)[Repealed, 2013, c. 34, s. 327]
Marginal note:Concurrence with election
(4)An election under subsection (3) is valid only if
(a)it is made with the concurrence of the corporation and all its shareholders
(i)who received or were entitled to receive all or any portion of the original dividend, and
(ii)whose addresses were known to the corporation; and
(b)either
(i)it is made on or before the day that is 30 months after the day on which the original dividend became payable, or
(ii)each shareholder described in subparagraph (a)(i) concurs with the election, in which case, notwithstanding subsections 152(4) to (5), any assessment of the tax, interest and penalties payable by each of those shareholders for any taxation year shall be made that is necessary to take the corporation’s election into account.
Marginal note:Exception for non-taxable shareholders
(5)If each person who, in respect of an election made under subsection (3), is deemed by subsection (3) to have received a dividend at a particular time is also, at the particular time, a person all of whose taxable income is exempt from tax under Part I,
(a)subsection (4) does not apply to the election; and
(b)the election is valid only if it is made on or before the day that is 30 months after the day on which the original dividend became payable.
Marginal note:Assessment of tax
185(1)The Minister shall, with all due dispatch, examine each election made by a corporation in accordance with subsection 83(2), 130.1(4) or 131(1), assess the tax, if any, payable under this Part in respect of the election and send a notice of assessment to the corporation.
Marginal note:Payment of tax and interest
(2)Where an election has been made by a corporation in accordance with subsection 83(2), 130.1(4) or 131(1) and the Minister mails a notice of assessment under this Part in respect of the election, that part of the amount assessed then remaining unpaid and interest thereon at the prescribed rate computed from the day of the election to the day of payment is payable forthwith by the corporation to the Receiver General.
Marginal note:Provisions applicable to Part
(3)Subsections 152(3), 152(4), 152(5), 152(7) and 152(8) and 161(11), sections 163 to 167 and Division J of Part I are applicable to this Part with such modifications as the circumstances require.
Marginal note:Joint and several, or solidary, liability from excessive elections
(4)Each person who has received a dividend from a corporation in respect of which the corporation elected under subsection 83(2), 130.1(4) or 131(1) is jointly and severally, or solidarily, liable with the corporation to pay that proportion of the corporation’s tax payable under this Part because of the election that
(a)the amount of the dividend received by the person
is of
(b)the full amount of the dividend in respect of which the election was made,
but nothing in this subsection limits the liability of any person under any other provision of this Act.
Marginal note:Assessment
(5)The Minister may, at any time after the last day on which a corporation may make an election under subsection 184(3) in respect of a dividend, assess a person in respect of any amount payable under subsection 185(4) in respect of the dividend, and the provisions of Division I of Part I apply, with such modifications as the circumstances require, to an assessment made under this subsection as though it were made under section 152.
Marginal note:Rules applicable
(6)If under subsection (4) a corporation and another person have become jointly and severally, or solidarily, liable to pay part or all of the corporation’s tax payable under this Part in respect of a dividend described in that subsection,
(a)a payment at any time by the other person on account of the liability shall, to the extent of the payment, discharge their liability after that time; and
(b)a payment at any time by the corporation on account of its liability shall discharge the other person’s liability only to the extent of the amount determined by the formula
(A - B) × C/D
where
(i)the amount of the corporation’s liability, immediately before that time, under this Part in respect of the full amount of the dividend, and
(ii)the amount of the payment,
Marginal note:Tax on excessive eligible dividend designations
185.1(1)A corporation that has made an excessive eligible dividend designation in respect of an eligible dividend paid by it at any time in a taxation year shall, on or before the corporation’s balance-due day for the taxation year, pay a tax under this Part for the taxation year equal to the total of
(a)20% of the excessive eligible dividend designation, and
(b)if the excessive eligible dividend designation arises because of the application of paragraph (c) of the definitionexcessive eligible dividend designationin subsection 89(1), 10% of the excessive eligible dividend designation.
Marginal note:Election to treat excessive eligible dividend designation as an ordinary dividend
(2)If, in respect of an excessive eligible dividend designation that is not described in paragraph (1)(b) and that is made by a corporation in respect of an eligible dividend (in this subsection and subsection (3) referred to as the “original dividend”) paid by it at a particular time, the corporation would, if this Act were read without reference to this subsection, be required to pay a tax under subsection (1), and it elects in prescribed manner on or before the day that is 90 days after the day of sending the notice of assessment in respect of that tax that would otherwise be payable under subsection (1), the following rules apply:
(a)notwithstanding the definitioneligible dividendin subsection 89(1), the amount of the original dividend paid by the corporation is deemed to be the amount, if any, by which
(i)the amount of the original dividend, determined without reference to this subsection
exceeds
(ii)the amount claimed by the corporation in the election not exceeding the excessive eligible dividend designation, determined without reference to this subsection;
(b)an amount equal to the amount claimed by the corporation in the election is deemed to be a separate taxable dividend (other than an eligible dividend) that was paid by the corporation immediately before the particular time;
(c)each shareholder of the corporation who at the particular time held any of the issued shares of the class of shares in respect of which the original dividend was paid is deemed
(i)not to have received the original dividend, and
(ii)to have received at the particular time
(A)as an eligible dividend, the shareholder’s pro rata portion of the amount of any dividend determined under paragraph (a), and
(B)as a taxable dividend (other than an eligible dividend) the shareholder’s pro rata portion of the amount of any dividend determined under paragraph (b); and
(d)a shareholder’s pro rata portion of a dividend paid at any time on a class of the shares of the capital stock of a corporation is that proportion of the dividend that the number of shares of that class held by the shareholder at that time is of the number of shares of that class outstanding at that time.
Marginal note:Concurrence with election
(3)An election under subsection (2) in respect of an original dividend is valid only if
(a)it is made with the concurrence of the corporation and all its shareholders
(i)who received or were entitled to receive all or any portion of the original dividend, and
(ii)whose addresses were known to the corporation; and
(b)either
(i)it is made on or before the day that is 30 months after the day on which the original dividend was paid, or
(ii)each shareholder described in subparagraph (a)(i) concurs with the election, in which case, notwithstanding subsections 152(4) to (5), any assessment of the tax, interest and penalties payable by each of those shareholders for any taxation year shall be made that is necessary to take the corporation’s election into account.
Marginal note:Exception for non-taxable shareholders
(4)If each shareholder who, in respect of an election made under subsection (2), is deemed by subsection (2) to have received a dividend at a particular time is also, at the particular time, a person all of whose taxable income is exempt from tax under Part I,
(a)subsection (3) does not apply to the election; and
(b)the election is valid only if it is made on or before the day that is 30 months after the day on which the original dividend was paid.
Marginal note:Return
185.2(1)Every corporation resident in Canada that pays a taxable dividend (other than a capital gains dividend within the meaning assigned by subsection 130.1(4) or 131(1)) in a taxation year shall file with the Minister, not later than the corporation’s filing-due date for the taxation year, a return for the year under this Part in prescribed form containing an estimate of the taxes payable by it under this Part for the taxation year.
Marginal note:Provisions applicable to Part
(2)Subsections 150(2) and (3), sections 151, 152, 158 and 159, subsections 161(1) and (11), sections 162 to 167 and Division J of Part I are applicable to this Part with such modifications as the circumstances require.
Marginal note:Joint and several liability from excessive eligible dividend designations
(3)Without limiting the liability of any person under any other provision of this Act, if a Canadian-controlled private corporation or a deposit insurance corporation pays an eligible dividend in respect of which it has made an excessive eligible dividend designation to a shareholder with whom it does not deal at arm’s length, the shareholder is jointly and severally, or solidarily, liable with the corporation to pay that proportion of the corporation’s tax payable under this Part because of the designation that the amount of the eligible dividend received by the shareholder is of the total of all amounts each of which is a dividend in respect of which the designation was made.
Marginal note:Assessment
(4)The Minister may, at any time after the last day on which a corporation may make an election under subsection 185.1(2) in respect of an excessive eligible dividend designation, assess a person in respect of any amount payable under subsection (3) in respect of the designation, and the provisions of Division I of Part I (including, for greater certainty, the provisions in respect of interest payable) apply, with any modifications that the circumstances require, to an assessment made under this subsection as though it were made under section 152.
Marginal note:Rules applicable
(5)If under subsection (3) a corporation and a shareholder have become jointly and severally, or solidarily, liable to pay part or all of the corporation’s tax payable under this Part in respect of an excessive eligible dividend designation described in subsection (3),
(a)a payment at any time by the shareholder on account of the liability shall, to the extent of the payment, discharge their liability after that time; and
(b)a payment at any time by the corporation on account of its liability shall discharge the shareholder’s liability only to the extent of the amount determined by the formula
(A - B) × C/D
where
(i)the amount of the corporation’s liability, immediately before that time, under this Part in respect of the designation, and
(ii)the amount of the payment,
Marginal note:Tax on assessable dividends
186(1)Every corporation (in this section referred to as the “particular corporation”) that is at any time in a taxation year a private corporation or a subject corporation shall, on or before its balance-due day for the year, pay a tax under this Part for the year equal to the amount, if any, by which the total of
(a)38 1/3% of all assessable dividends received by the particular corporation in the year from corporations other than payer corporations connected with it, and
(b)all amounts, each of which is an amount in respect of an assessable dividend received by the particular corporation in the year from a private corporation or a subject corporation that was a payer corporation connected with the particular corporation, equal to that proportion of the payer corporation’s dividend refund (within the meaning assigned by paragraph 129(1)(a)) for its taxation year in which it paid the dividend that
(i)the amount of the dividend received by the particular corporation
is of
(ii)the total of all taxable dividends paid by the payer corporation in its taxation year in which it paid the dividend and at a time when it was a private corporation or a subject corporation
exceeds 38 1/3% of the total of
(c)such part of the particular corporation’s non-capital loss and farm loss for the year as it claims, and
(d)such part of the particular corporation’s
(i)non-capital loss for any of its 20 taxation years immediately preceding or 3 taxation years immediately following the year, and
(ii)farm loss for any of its 20 taxation years immediately preceding or 3 taxation years immediately following the year
as it claims, not exceeding the portion thereof that would have been deductible under section 111 in computing its taxable income for the year if subparagraph 111(3)(a)(ii) were read without reference to the words “the particular taxation year and” and if the corporation had sufficient income for the year.
Marginal note:Reduction where Part IV.1 tax payable
(1.1)Notwithstanding subsection 186(1), where an assessable dividend was received by a corporation in a taxation year and was included in an amount in respect of which tax under Part IV.1 was payable by the corporation for the year, the tax otherwise payable under this Part by the corporation for the year shall be reduced
(a)where the assessable dividend is described in paragraph 186(1)(a), by 10% of the assessable dividend, and
(b)where the assessable dividend is described in paragraph 186(1)(b), by 30% of the amount determined under that paragraph in respect of the assessable dividend.
Marginal note:When corporation controlled
(2)For the purposes of this Part, other than for the purpose of determining whether a corporation is a subject corporation, one corporation is controlled by another corporation if more than 50% of its issued share capital (having full voting rights under all circumstances) belongs to the other corporation, to persons with whom the other corporation does not deal at arm’s length, or to the other corporation and persons with whom the other corporation does not deal at arm’s length.
Marginal note:Definitions
(3)The definitions in this subsection apply in this Part.
assessable dividendmeans an amount received by a corporation at a time when it is a private corporation or a subject corporation as, on account of, in lieu of payment of or in satisfaction of, a taxable dividend from a corporation, to the extent of the amount in respect of the dividend that is deductible under section 112, paragraph 113(1)(a), (a.1), (b) or (d) or subsection 113(2) in computing the recipient corporation’s taxable income for the year. (dividende imposable déterminé)
subject corporationmeans a corporation (other than a private corporation) resident in Canada and controlled, whether because of a beneficial interest in one or more trusts or otherwise, by or for the benefit of an individual (other than a trust) or a related group of individuals (other than trusts). (société assujettie)
Marginal note:Corporations connected with particular corporation
(4)For the purposes of this Part, a payer corporation is connected with a particular corporation at any time in a taxation year (in this subsection referred to as the “particular year”) of the particular corporation if
(a)the payer corporation is controlled (otherwise than by virtue of a right referred to in paragraph 251(5)(b)) by the particular corporation at that time; or
(b)the particular corporation owned, at that time,
(i)more than 10% of the issued share capital (having full voting rights under all circumstances) of the payer corporation, and
(ii)shares of the capital stock of the payer corporation having a fair market value of more than 10% of the fair market value of all of the issued shares of the capital stock of the payer corporation.
Marginal note:Deemed private corporation
(5)A corporation that is at any time in a taxation year a subject corporation shall, for the purposes of paragraph 87(2)(aa) and section 129, be deemed to be a private corporation at that time, except that itsnon-eligible refundable dividend tax on hand(as defined in subsection 129(4)) at the end of the year shall be determined without reference to paragraph (a) of that definition.
Marginal note:Partnerships
(6)For the purposes of this Part,
(a)all amounts received in a fiscal period by a partnership as, on account or in lieu of payment of, or in satisfaction of, taxable dividends shall be deemed to have been received by each member of the partnership in the member’s fiscal period or taxation year in which the partnership’s fiscal period ends, to the extent of that member’s share thereof; and
(b)each member of a partnership shall be deemed to own at any time that proportion of the number of the shares of each class of the capital stock of a corporation that are property of the partnership at that time that the member’s share of all dividends received on those shares by the partnership in its fiscal period that includes that time is of the total of all those dividends.
Marginal note:Interpretation
(7)For greater certainty, where a provision of this Act or the regulations indicates that the termconnectedhas the meaning assigned by subsection 186(4), that meaning shall be determined by taking into account the application of subsection 186(2) unless the provision expressly provides otherwise.
Marginal note:Exempt corporations
186.1No tax is payable under this Part for a taxation year by a corporation
(a)that was, at any time in the year, a bankrupt; or
(b)that was, throughout the year,
(i)a bank,
(ii)a corporation licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada the business of offering to the public its services as a trustee,
(iii)an insurance corporation,
(iv)a prescribed labour-sponsored venture capital corporation,
(v)a prescribed investment contract corporation,
(vi)a non-resident-owned investment corporation, or
(vii)a registered securities dealer that was throughout the year a member, or a participating organization, of a designated stock exchange in Canada.
Marginal note:Exempt dividends
186.2For the purposes of subsection 186(1), dividends received in a taxation year by a corporation that was, throughout the year, a prescribed venture capital corporation from a corporation that was a prescribed qualifying corporation with respect to those dividends shall be deemed not to be taxable dividends.
Marginal note:Information return
187(1)Every corporation that is liable to pay tax under this Part for a taxation year in respect of a dividend received by it in the year shall, on or before the day on or before which it is required to file its return of income under Part I for the year, file a return for the year under this Part in prescribed form.
Marginal note:Interest
(2)Where a corporation is liable to pay tax under this Part and has failed to pay all or any part thereof on or before the day on or before which the tax was required to be paid, it shall pay to the Receiver General interest at the prescribed rate on the amount that it failed to pay computed from the day on or before which the tax was required to be paid to the day of payment.
Marginal note:Provisions applicable to Part
(3)Sections 151, 152, 158 and 159, subsections 161(7) and 161(11), sections 162 to 167 and Division J of Part I are applicable to this Part with such modifications as the circumstances require.
Definition ofexcepted dividend
187.1In this Part,excepted dividendmeans a dividend
(a)received by a corporation on a share of the capital stock of a foreign affiliate of the corporation, other than a dividend received by a specified financial institution on a share acquired in the ordinary course of the business carried on by the institution;
(b)received by a corporation from another corporation (other than a corporation described in any of paragraphs (a) to (f) of the definitionfinancial intermediary corporationin subsection 191(1)) in which it has or would have, if the other corporation were a taxable Canadian corporation, a substantial interest (as determined under section 191) at the time the dividend was paid;
(c)received by a corporation that was, at the time the dividend was received, a private corporation or a financial intermediary corporation (within the meaning assigned by subsection 191(1));
(d)received by a corporation on a short-term preferred share of the capital stock of a taxable Canadian corporation other than a dividend described in paragraph (b) or (c) of the definitionexcluded dividendin subsection 191(1); or
(e)received by a corporation on a share (other than a taxable RFI share or a share that would be a taxable preferred share if the definitiontaxable preferred sharein subsection 248(1) were read without reference to paragraph (a) of that definition) of the capital stock of a mutual fund corporation.
Marginal note:Tax on dividends on taxable preferred shares
187.2Every corporation shall, on or before its balance-due day for a taxation year, pay a tax under this Part for the year equal to 10% of the total of all amounts each of which is a dividend, other than an excepted dividend, received by the corporation in the year on a taxable preferred share (other than a share of a class in respect of which an election under subsection 191.2(1) has been made) to the extent that an amount in respect of the dividend was deductible under section 112 or 113 or subsection 138(6) in computing its taxable income for the year or under subsection 115(1) in computing its taxable income earned in Canada for the year.
Marginal note:Tax on dividends on taxable RFI shares
187.3(1)Every restricted financial institution shall, on or before its balance-due day for a taxation year, pay a tax under this Part for the year equal to 10% of the total of all amounts each of which is a dividend, other than an excepted dividend, received by the institution at any time in the year on a share acquired by any person before that time and after 8:00 p.m