C-67.3, orAn Act respecting the Mouvement Desjardins, S.Q. 2000, c. 77;
(d)an association regulated by theCooperative Credit Associations Act;
(e)a company to which theTrust and Loan Companies Actapplies;
(f)a trust company regulated by a provincial Act;
(g)a loan company regulated by a provincial Act;
(h)a money services business;
(i)a casino, including a casino owned or controlled by Her Majesty;
(j)a department or an agent of Her Majesty in right of Canada or of a province that is engaged in the business of accepting deposit liabilities in the course of providing financial services to the public; or
(k)a credit union central in respect of financial services it offers to an entity, other than an entity that is referred to in any of paragraphs (a) to (g) and (j) and is a member of that credit union central. (entité déclarante)
Marginal note:Electronic funds transfer
244.2(1)Every reporting entity shall file with the Minister an information return in prescribed form in respect of
(a)the sending out of Canada, at the request of a client, of an electronic funds transfer of $10,000 or more in the course of a single transaction; or
(b)the receipt from outside Canada of an electronic funds transfer, sent at the request of a client, of $10,000 or more in the course of a single transaction.
Marginal note:Transfer within Canada
(2)For greater certainty and subject to subsection (3), subsection (1) does not apply to a reporting entity in respect of an electronic funds transfer if the entity
(a)sends the transfer to an entity in Canada, even if the final recipient is outside Canada; or
(b)receives the transfer from an entity in Canada, even if the initial sender is outside Canada.
Marginal note:Intermediary
(3)Subsection (1) applies to a reporting entity in respect of an electronic funds transfer if the entity
(a)orders another reporting entity to send, at the request of a client, the transfer out of Canada, unless it provides the other reporting entity with the name and address of the client; or
(b)receives the transfer for a beneficiary in Canada from another reporting entity in circumstances where the initial sender is outside Canada, unless the transfer contains the name and address of the beneficiary.
Marginal note:Transfer conducted by agent
(4)If a particular reporting entity is an agent of or is authorized to act on behalf of another reporting entity in respect of an electronic funds transfer, subsection (1) applies, in respect of the transfer, to the other reporting entity and not to the particular reporting entity.
Marginal note:Entities outside Canada
(5)Subsection (1) does not apply to an entity described in paragraph (b) of the definitionmoney services businessin respect of the services it provides to entities outside Canada.
Marginal note:Casino
244.3An electronic funds transfer in respect of which subsection 244.2(1) applies that occurs in the course of a business, temporarily conducted for charitable purposes in the establishment of a casino by a registered charity carried on for not more than two consecutive days at a time under the supervision of the casino, shall be reported by the supervising casino.
Marginal note:Single transaction
244.4(1)For the purposes of this Part, two or more electronic funds transfers of less than $10,000 each that are made within 24 consecutive hours and that total $10,000 or more are considered to be made in the course of a single transaction of $10,000 or more if
(a)an individual, other than a trust, who is a reporting entity knows that the transfers are conducted by, or on behalf of, the same entity; and
(b)an employee of a reporting entity, other than an entity described in paragraph (a), knows that the transfers are conducted by, or on behalf of, the same entity.
Marginal note:Exception
(2)For greater certainty, subsection (1) does not apply in respect of an electronic funds transfer sent to two or more beneficiaries if the transfer is requested by
(a)an administrator of a pension fund that is regulated by or under an Act of Parliament or of the legislature of a province;
(b)a department or agent of Her Majesty in right of Canada or of a province;
(c)an incorporated city, town, village, metropolitan authority, township, district, county, rural municipality or other incorporated municipal body or an agent of any of them;
(d)an organization that operates a public hospital and that is designated by the Minister as a hospital authority under theExcise Tax Act, or an agent of such an organization; or
(e)a corporation that has minimum net assets of $75 million on its last audited balance sheet, whose shares are traded on a Canadian stock exchange or a designated stock exchange and that operates in a country that is a member of the Financial Action Task Force on Money Laundering established in 1989.
Marginal note:Foreign currency
244.5If an electronic funds transfer is carried out by a reporting entity in a foreign currency, the amount of the transfer is to be converted into Canadian dollars using
(a)the official conversion rate of the Bank of Canada for the currency published in the Bank of Canada’sDaily Memorandum of Exchange Ratesthat is in effect at the time of the transfer; or
(b)if no official conversion rate is set out in that publication for the currency, the conversion rate that the entity would use for the currency in the normal course of business at the time of the transfer.
Marginal note:Filing of return
244.6An information return in respect of an electronic funds transfer that is required to be filed by a reporting entity under this Part shall be filed
(a)not later than five working days after the day of the transfer; and
(b)using electronic media, in the manner specified by the Minister, if the entity has the technical capabilities to do so.
Marginal note:Record keeping
244.7(1)Every reporting entity that is required to file an information return under this Part shall keep such records as will enable the Minister to determine whether the entity has complied with its duties and obligations under this Part.
Marginal note:Form of records
(2)A record that is required to be kept under this Part may be kept in machine-readable or electronic form if a paper copy can be readily produced from it.
Marginal note:Retention of records
(3)A reporting entity that is required to keep records under this Part in respect of an electronic funds transfer shall retain those records for a period of at least five years from the day of the transfer.
Marginal note:Definitions
245(1)In this section,
tax benefitmeans
(a)a reduction, avoidance or deferral of tax or other amount payable under this Act, and includes a reduction, avoidance or deferral of tax or other amount that would be payable under this Act but for a tax treaty,
(b)an increase in a refund of tax or other amount under this Act, and includes an increase in a refund of tax or other amount under this Act as a result of a tax treaty, or
(c)a reduction, increase or preservation of an amount that could at a subsequent time
(i)be relevant for the purpose of computing an amount referred to in paragraph (a) or (b), and
(ii)result in any of the effects described in paragraph (a) or (b); (avantage fiscal)
tax consequences, to a person, means
(a)the amount of income, taxable income or taxable income earned in Canada of the person under this Act,
(b)the tax or other amount payable by, or refundable to, the person under this Act, or
(c)any other amount that is, or could at a subsequent time be, relevant for the purpose of computing an amount referred to in paragraph (a) or (b); (attribut fiscal)
transactionincludes an arrangement or event. (opération)
Marginal note:General anti-avoidance provision
(2)Where a transaction is an avoidance transaction, the tax consequences to a person shall be determined as is reasonable in the circumstances in order to deny a tax benefit that, but for this section, would result, directly or indirectly, from that transaction or from a series of transactions that includes that transaction.
Marginal note:Avoidance transaction
(3)An avoidance transaction means any transaction
(a)that, but for this section, would result, directly or indirectly, in a tax benefit, unless the transaction may reasonably be considered to have been undertaken or arranged primarily forbona fidepurposes other than to obtain the tax benefit; or
(b)that is part of a series of transactions, which series, but for this section, would result, directly or indirectly, in a tax benefit, unless the transaction may reasonably be considered to have been undertaken or arranged primarily forbona fidepurposes other than to obtain the tax benefit.
Marginal note:Application of subsection (2)
(4)Subsection (2) applies to a transaction only if it may reasonably be considered that the transaction
(a)would, if this Act were read without reference to this section, result directly or indirectly in a misuse of the provisions of any one or more of
(i)this Act,
(ii)theIncome Tax Regulations,
(iii)theIncome Tax Application Rules,
(iv)a tax treaty, or
(v)any other enactment that is relevant in computing tax or any other amount payable by or refundable to a person under this Act or in determining any amount that is relevant for the purposes of that computation; or
(b)would result directly or indirectly in an abuse having regard to those provisions, other than this section, read as a whole.
Marginal note:Determination of tax consequences
(5)Without restricting the generality of subsection (2), and notwithstanding any other enactment,
(a)any deduction, exemption or exclusion in computing income, taxable income, taxable income earned in Canada or tax payable or any part thereof may be allowed or disallowed in whole or in part,
(b)any such deduction, exemption or exclusion, any income, loss or other amount or part thereof may be allocated to any person,
(c)the nature of any payment or other amount may be recharacterized, and
(d)the tax effects that would otherwise result from the application of other provisions of this Act may be ignored,
in determining the tax consequences to a person as is reasonable in the circumstances in order to deny a tax benefit that would, but for this section, result, directly or indirectly, from an avoidance transaction.
Marginal note:Request for adjustments
(6)Where with respect to a transaction
(a)a notice of assessment, reassessment or additional assessment involving the application of subsection 245(2) with respect to the transaction has been sent to a person, or
(b)a notice of determination pursuant to subsection 152(1.11) has been sent to a person with respect to the transaction,
any person (other than a person referred to in paragraph (a) or (b)) shall be entitled, within 180 days after the day of sending of the notice, to request in writing that the Minister make an assessment, reassessment or additional assessment applying subsection (2) or make a determination applying subsection 152(1.11) with respect to that transaction.
Marginal note:Exception
(7)Notwithstanding any other provision of this Act, the tax consequences to any person, following the application of this section, shall only be determined through a notice of assessment, reassessment, additional assessment or determination pursuant to subsection 152(1.11) involving the application of this section.
Marginal note:Duties of Minister
(8)On receipt of a request by a person under subsection 245(6), the Minister shall, with all due dispatch, consider the request and, notwithstanding subsection 152(4), assess, reassess or make an additional assessment or determination pursuant to subsection 152(1.11) with respect to that person, except that an assessment, reassessment, additional assessment or determination may be made under this subsection only to the extent that it may reasonably be regarded as relating to the transaction referred to in subsection 245(6).
Marginal note:Benefit conferred on a person
246(1)Where at any time a person confers a benefit, either directly or indirectly, by any means whatever, on a taxpayer, the amount of the benefit shall, to the extent that it is not otherwise included in the taxpayer’s income or taxable income earned in Canada under Part I and would be included in the taxpayer’s income if the amount of the benefit were a payment made directly by the person to the taxpayer and if the taxpayer were resident in Canada, be
(a)included in computing the taxpayer’s income or taxable income earned in Canada under Part I for the taxation year that includes that time; or
(b)where the taxpayer is a non-resident person, deemed for the purposes of Part XIII to be a payment made at that time to the taxpayer in respect of property, services or otherwise, depending on the nature of the benefit.
Marginal note:Arm’s length
(2)Where it is established that a transaction was entered into by persons dealing at arm’s length,bona fideand not pursuant to, or as part of, any other transaction and not to effect payment, in whole or in part, of an existing or future obligation, no party thereto shall be regarded, for the purpose of this section, as having conferred a benefit on a party with whom the first-mentioned party was so dealing.
Marginal note:Definitions
247(1)The definitions in this subsection apply in this section.
arm’s length allocationmeans, in respect of a transaction, an allocation of profit or loss that would have occurred between the participants in the transaction if they had been dealing at arm’s length with each other. (attribution de pleine concurrence)
arm’s length transfer pricemeans, in respect of a transaction, an amount that would have been a transfer price in respect of the transaction if the participants in the transaction had been dealing at arm’s length with each other. (prix de transfert de pleine concurrence)
documentation-due datefor a taxation year or fiscal period of a person or partnership means
(a)in the case of a person, the person’s filing-due date for the year; or
(b)in the case of a partnership, the day on or before which a return is required by section 229 of theIncome Tax Regulationsto be filed in respect of the period or would be required to be so filed if that section applied to the partnership. (date limite de production)
qualifying cost contribution arrangementmeans an arrangement under which reasonable efforts are made by the participants in the arrangement to establish a basis for contributing to, and to contribute on that basis to, the cost of producing, developing or acquiring any property, or acquiring or performing any services, in proportion to the benefits which each participant is reasonably expected to derive from the property or services, as the case may be, as a result of the arrangement. (arrangement admissible de participation au coût)
tax benefithas the meaning assigned by subsection 245(1). (avantage fiscal)
transactionincludes an arrangement or event. (opération)
transfer pricemeans, in respect of a transaction, an amount paid or payable or an amount received or receivable, as the case may be, by a participant in the transaction as a price, a rental, a royalty, a premium or other payment for, or for the use, production or reproduction of, property or as consideration for services (including services provided as an employee and the insurance or reinsurance of risks) as part of the transaction. (prix de transfert)
transfer pricing capital adjustmentof a taxpayer for a taxation year means the total of
(a)all amounts each of which is
(i)1/2 of the amount, if any, by which the adjusted cost base to the taxpayer of a capital property (other than a depreciable property) is reduced in the year because of an adjustment made under subsection (2), or
(ii)[Repealed, 2016, c. 12, s. 62]
(iii)the amount, if any, by which the capital cost to the taxpayer of a depreciable property is reduced in the year because of an adjustment made under subsection (2); and
(b)all amounts each of which is that proportion of the total of
(i)1/2 of the amount, if any, by which the adjusted cost base to a partnership of a capital property (other than a depreciable property) is reduced in a fiscal period that ends in the year because of an adjustment made under subsection (2), and
(ii)[Repealed, 2016, c. 12, s. 62]
(iii)the amount, if any, by which the capital cost to a partnership of a depreciable property is reduced in the period because of an adjustment made under subsection (2),
that
(iv)the taxpayer’s share of the income or loss of the partnership for the period
is of
(v)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 taxpayer’s share of the partnership’s income for the purpose of this definition. (redressement de capital)
transfer pricing capital setoff adjustmentof a taxpayer for a taxation year means the amount, if any, that would be the taxpayer’s transfer pricing capital adjustment for the year if the references, in the definitiontransfer pricing capital adjustment, to “reduced” were read as “increased”. (redressement compensatoire de capital)
transfer pricing income adjustmentof a taxpayer for a taxation year means the total of all amounts each of which is the amount, if any, by which an adjustment made under subsection 247(2) (other than an adjustment included in determining a transfer pricing capital adjustment of the taxpayer for a taxation year) would result in an increase in the taxpayer’s income for the year or a decrease in a loss of the taxpayer for the year from a source if that adjustment were the only adjustment made under subsection 247(2). (redressement de revenu)
transfer pricing income setoff adjustmentof a taxpayer for a taxation year means the total of all amounts each of which is the amount, if any, by which an adjustment made under subsection 247(2) (other than an adjustment included in determining a transfer pricing capital setoff adjustment of the taxpayer for a taxation year) would result in a decrease in the taxpayer’s income for the year or an increase in a loss of the taxpayer for the year from a source if that adjustment were the only adjustment made under subsection 247(2). (redressement compensatoire de revenu)
Marginal note:Transfer pricing adjustment
(2)Where a taxpayer or a partnership and a non-resident person with whom the taxpayer or the partnership, or a member of the partnership, does not deal at arm’s length (or a partnership of which the non-resident person is a member) are participants in a transaction or a series of transactions and
(a)the terms or conditions made or imposed, in respect of the transaction or series, between any of the participants in the transaction or series differ from those that would have been made between persons dealing at arm’s length, or
(b)the transaction or series
(i)would not have been entered into between persons dealing at arm’s length, and
(ii)can reasonably be considered not to have been entered into primarily forbona fidepurposes other than to obtain a tax benefit,
any amounts (in subsection (2.1) referred to as the “initial amounts”) that would be determined for the purposes of applying the provisions of this Act (if this Act were read without reference to this section and section 245) in respect of the taxpayer or the partnership for a taxation year or fiscal period shall be adjusted (in this section referred to as an “adjustment”) to the quantum or nature of the amounts (in subsection (2.1) referred to as the “adjusted amounts”) that would have been determined if,
(c)where only paragraph 247(2)(a) applies, the terms and conditions made or imposed, in respect of the transaction or series, between the participants in the transaction or series had been those that would have been made between persons dealing at arm’s length, or
(d)where paragraph 247(2)(b) applies, the transaction or series entered into between the participants had been the transaction or series that would have been entered into between persons dealing at arm’s length, under terms and conditions that would have been made between persons dealing at arm’s length.
Marginal note:Ordering
(2.1)For the purpose of applying subsection (2) in the context of the other provisions of this Act, the following order is to be applied:
(a)first determine each of the initial amounts;
(b)then make the adjustments, if any, to each of the initial amounts; and
(c)then apply each of the provisions of this Act (other than subsection (2) and, for greater certainty, including section 245) using the adjusted amounts.
Marginal note:Penalty
(3)A taxpayer (other than a taxpayer all of whose taxable income for the year is exempt from tax under Part I) is liable to a penalty for a taxation year equal to 10% of the amount determined under paragraph 247(3)(a) in respect of the taxpayer for the year, where
(a)the amount, if any, by which
(i)the total of
(A)the taxpayer’s transfer pricing capital adjustment for the year, and
(B)the taxpayer’s transfer pricing income adjustment for the year
exceeds the total of
(ii)the total of all amounts each of which is the portion of the taxpayer’s transfer pricing capital adjustment or transfer pricing income adjustment for the year that can reasonably be considered to relate to a particular transaction, where
(A)the transaction is a qualifying cost contribution arrangement in which the taxpayer or a partnership of which the taxpayer is a member is a participant, or
(B)in any other case, the taxpayer or a partnership of which the taxpayer is a member made reasonable efforts to determine arm’s length transfer prices or arm’s length allocations in respect of the transaction, and to use those prices or allocations for the purposes of this Act, and
(iii)the total of all amounts, each of which is the portion of the taxpayer’s transfer pricing capital setoff adjustment or transfer pricing income setoff adjustment for the year that can reasonably be considered to relate to a particular transaction, where
(A)the transaction is a qualifying cost contribution arrangement in which the taxpayer or a partnership of which the taxpayer is a member is a participant, or
(B)in any other case, the taxpayer or a partnership of which the taxpayer is a member made reasonable efforts to determine arm’s length transfer prices or arm’s length allocations in respect of the transaction, and to use those prices or allocations for the purposes of this Act,
is greater than
(b)the lesser of
(i)10% of the amount that would be the taxpayer’s gross revenue for the year if this Act were read without reference to subsection 247(2), subsections 69(1) and 69(1.2) and section 245, and
(ii)$5,000,000.
Marginal note:Contemporaneous documentation
(4)For the purposes of subsection 247(3) and the definitionqualifying cost contribution arrangementin subsection 247(1), a taxpayer or a partnership is deemed not to have made reasonable efforts to determine and use arm’s length transfer prices or arm’s length allocations in respect of a transaction or not to have participated in a transaction that is a qualifying cost contribution arrangement, unless the taxpayer or the partnership, as the case may be,
(a)makes or obtains, on or before the taxpayer’s or partnership’s documentation-due date for the taxation year or fiscal period, as the case may be, in which the transaction is entered into, records or documents that provide a description that is complete and accurate in all material respects of
(i)the property or services to which the transaction relates,
(ii)the terms and conditions of the transaction and their relationship, if any, to the terms and conditions of each other transaction entered into between the participants in the transaction,
(iii)the identity of the participants in the transaction and their relationship to each other at the time the transaction was entered into,
(iv)the functions performed, the property used or contributed and the risks assumed, in respect of the transaction, by the participants in the transaction,
(v)the data and methods considered and the analysis performed to determine the transfer prices or the allocations of profits or losses or contributions to costs, as the case may be, in respect of the transaction, and
(vi)the assumptions, strategies and policies, if any, that influenced the determination of the transfer prices or the allocations of profits or losses or contributions to costs, as the case may be, in respect of the transaction;
(b)for each subsequent taxation year or fiscal period, if any, in which the transaction continues, makes or obtains, on or before the taxpayer’s or partnership’s documentation-due date for that year or period, as the case may be, records or documents that completely and accurately describe each material change in the year or period to the matters referred to in any of subparagraphs 247(4)(a)(i) to 247(4)(a)(vi) in respect of the transaction; and
(c)provides the records or documents described in paragraphs 247(4)(a) and 247(4)(b) to the Minister within 3 months after service, made personally or by registered or certified mail, of a written request therefor.
Marginal note:Partner’s gross revenue
(5)For the purpose of subparagraph 247(3)(b)(i), where a taxpayer is a member of a partnership in a taxation year, the taxpayer’s gross revenue for the year as a member of the partnership from any activities carried on by means of the partnership is deemed to be that proportion of the amount that would be the partnership’s gross revenue from the activities if it were a taxpayer (to the extent that amount does not include amounts received or receivable from other partnerships of which the taxpayer is a member in the year), for a fiscal period of the partnership that ends in the year, that
(a)the taxpayer’s share of the income or loss of the partnership from its activities for the period
is of
(b)the income or loss of the partnership from its activities for the period,
and where the income and loss of the partnership from its activities are nil for the period, the income of the partnership from its activities for the period is deemed to be $1,000,000 for the purpose of determining a taxpayer’s share of the partnership’s income from its activities for the purpose of this subsection.
Marginal note:Deemed member of partnership
(6)For the purposes of this section, where a person is a member of a partnership that is a member of another partnership,
(a)the person 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:Exclusion for loans to certain controlled foreign affiliates
(7)Where, in a taxation year of a corporation resident in Canada, a non-resident person owes an amount to the corporation, the non-resident person is a controlled foreign affiliate of the corporation for the purpose of section 17 throughout the period in the year during which the amount is owing and it is established that the amount owing is an amount owing described in paragraph 17(8)(a) or (b), subsection (2) does not apply to adjust the amount of interest paid, payable or accruing in the year on the amount owing.
Marginal note:Exclusion — certain guarantees
(7.1)Subsection (2) does not apply to adjust an amount of consideration paid, payable or accruing to a corporation resident in Canada (in this subsection referred to as the “parent”) in a taxation year of the parent for the provision of a guarantee to a person or partnership (in this subsection referred to as the “lender”) for the repayment, in whole or in part, of a particular amount owing to the lender by a non-resident person, if
(a)the non-resident person is a controlled foreign affiliate of the parent for the purposes of section 17 throughout the period in the year during which the particular amount is owing; and
(b)it is established that the particular amount would be an amount owing described in paragraph 17(8)(a) or (b) if it were owed to the parent.
(8)[Repealed, 2021, c. 23, s. 60]
Marginal note:Anti-avoidance
(9)For the purposes of determining a taxpayer’s gross revenue under subparagraph 247(3)(b)(i) and subsection 247(5), a transaction or series of transactions is deemed not to have occurred, if one of the purposes of the transaction or series was to increase the taxpayer’s gross revenue for the purpose of subsection 247(3).
Marginal note:No adjustment unless appropriate
(10)An adjustment (other than an adjustment that results in or increases a transfer pricing capital adjustment or a transfer pricing income adjustment of a taxpayer for a taxation year) shall not be made under subsection 247(2) unless, in the opinion of the Minister, the circumstances are such that it would be appropriate that the adjustment be made.
Marginal note:Provisions applicable to Part
(11)Sections 152, 158, 159, 162 to 167 and Division J of Part I apply to this Part, with such modifications as the circumstances require.
Marginal note:Deemed dividends to non-residents
(12)For the purposes of Part XIII, if a particular corporation that is a resident of Canada for the purposes of Part XIII would have a transfer pricing capital adjustment or a transfer pricing income adjustment for a taxation year, if the particular corporation, or a partnership of which the particular corporation is a member, had undertaken no transactions or series of transactions other than those in which a particular non-resident person, or a partnership of which the particular non-resident person is a member, that does not deal at arm’s length with the particular corporation (other than a corporation that was for the purposes of section 17 a controlled foreign affiliate of the particular corporation throughout the period during which the transaction or series of transactions occurred) was a participant,
(a)a dividend is deemed to have been paid by the particular corporation and received by the particular non-resident person immediately before the end of the taxation year; and
(b)the amount of the dividend is the amount, if any, by which
(i)the amount that would be the portion of the total of the particular corporation’s transfer pricing capital adjustment and transfer pricing income adjustment for the taxation year that could reasonably be considered to relate to the particular non-resident person if
(A)the only transactions or series of transactions undertaken by the particular corporation were those in which the particular non-resident person was a participant, and
(B)the definitiontransfer pricing capital adjustmentin subsection (1) were read without reference to the references therein to “1/2 of” and “3/4 of”
exceeds
(ii)the amount that would be the portion of the total of the particular corporation’s transfer pricing capital setoff adjustment, and transfer pricing income setoff adjustment, for the taxation year that could reasonably be considered to relate to the particular non-resident person if
(A)the only transactions or series of transactions undertaken by the particular corporation were those in which the particular non-resident person was a participant, and
(B)the definitiontransfer pricing capital adjustmentin subsection (1) were read without reference to the references therein to “1/2 of” and “3/4 of”.
Marginal note:Repatriation
(13)If a dividend is deemed by subsection (12) to have been paid by a corporation and received by a non-resident person, and a particular amount has been paid with the concurrence of the Minister by the non-resident person to the corporation,
(a)the amount of the dividend may be reduced by the amount (in this subsection referred to as the “reduction”) that the Minister considers appropriate, having regard to all the circumstances, and
(b)subsections 227(8.1) and (8.3) apply as if
(i)the amount of the dividend were not reduced, and
(ii)on the day on which the particular amount was paid, the corporation paid to the Receiver General an amount equal to the amount that would be required to be withheld and remitted under Part XIII in respect of the reduction.
Marginal note:Repatriation — interest
(14)If the amount of a dividend is reduced under paragraph (13)(a), the amount of interest payable by a taxpayer because of paragraph (13)(b) may be reduced to the amount that the Minister considers appropriate, having regard to all the circumstances, including the provision of reciprocal treatment by the country in which the non-resident person referred to in subsection (13) is resident.
Marginal note:Non-application of provisions
(15)Section 15, subsections 56(2) and 212.3(2) and section 246 do not apply in respect of an amount to the extent that a dividend is deemed by subsection (12) (determined without reference to subsection (13)) to have been paid in respect of the amount.
Marginal note:Definitions
248(1)In this Act,
active business, in relation to any business carried on by a taxpayer resident in Canada, means any business carried on by the taxpayer other than a specified investment business or a personal services business; (entreprise exploitée activement)
additional voluntary contributionto a registered pension plan means a contribution that is made by a member to the plan, that is used to provide benefits under a money purchase provision (within the meaning assigned by subsection 147.1(1)) of the plan and that is not required as a general condition of membership in the plan; (cotisation facultative)
adjusted cost basehas the meaning assigned by section 54; (prix de base rajusté)
adjustment time[Repealed, 2016, c. 12, s. 63]
advanced life deferred annuityhas the meaning assigned by subsection 146.5(1); (rente viagère différée à un âge avancé)
aggregate investment incomehas the meaning assigned by subsection 129(4); (revenu de placement total)
allowable business investment losshas the meaning assigned by section 38; (perte déductible au titre d’un placement d’entreprise)
allowable capital losshas the meaning assigned by section 38; (perte en capital déductible)
alter ego trustmeans a trust to which paragraph 104(4)(a) would apply if that paragraph were read without reference to subparagraph 104(4)(a)(iii) and clauses 104(4)(a)(iv)(B) and (C); (fiducie en faveur de soi-même)
amateur athlete trusthas the meaning assigned by subsection 143.1(1.2); (fiducie au profit d’un athlète amateur)
amortized costof a loan or lending asset at any time to a taxpayer means the amount, if any, by which the total of
(a)in the case of a loan made by the taxpayer, the total of all amounts advanced in respect of the loan at or before that time,
(b)in the case of a loan or lending asset acquired by the taxpayer, the cost of the loan or lending asset to the taxpayer,
(c)in the case of a loan or lending asset acquired by the taxpayer, the part of the amount, if any, by which
(i)the principal amount of the loan or lending asset at the time it was so acquired
exceeds
(ii)the cost to the taxpayer of the loan or lending asset
that was included in computing the taxpayer’s income for any taxation year ending at or before that time,
(c.1)the total of all amounts each of which is an amount in respect of the loan or lending asset that was included in computing the taxpayer’s income for a taxation year that ended at or before that time in respect of changes in the value of the loan or lending asset attributable to the fluctuation in the value of a currency of a country other than Canada relative to Canadian currency,
(d)where the taxpayer is an insurer, any amount in respect of the loan or lending asset that was deemed by reason of paragraph 142(3)(a) of theIncome Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, as it read in its application to the 1977 taxation year, to be a gain for any taxation year ending at or before that time, and
(e)the total of all amounts each of which is an amount in respect of the loan or lending asset that was included under paragraph 12(1)(i) in computing the taxpayer’s income for any taxation year ending at or before that time
exceeds the total of
(f)the part of the amount, if any, by which
(i)the amount referred to in subparagraph (c)(ii)
exceeds
(ii)the amount referred to in subparagraph (c)(i)
that was deducted in computing the taxpayer’s income for any taxation year ending at or before that time,
(f.1)the total of all amounts each of which is an amount in respect of the loan or lending asset that was deducted in computing the taxpayer’s income for a taxation year that ended at or before that time in respect of changes in the value of the loan or lending asset attributable to the fluctuation in the value of a currency of a country other than Canada relative to Canadian currency,
(g)the total of all amounts that, at or before that time, the taxpayer had received as or on account or in lieu of payment of or in satisfaction of the principal amount of the loan or lending asset,
(h)where the taxpayer is an insurer, any amount in respect of the loan or lending asset that was deemed by reason of paragraph 142(3)(b) of theIncome Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, as it read in its application to the 1977 taxation year, to be a loss for any taxation year ending at or before that time, and
(i)the total of all amounts each of which is an amount in respect of the loan or lending asset deducted under paragraph 20(1)(p) in computing the taxpayer’s income for any taxation year ending at or before that time; (coût amorti)
amountmeans money, rights or things expressed in terms of the amount of money or the value in terms of money of the right or thing, except that,
(a)notwithstanding paragraph (b), in any case where subsection 112(2.1), 112(2.2) or 112(2.4), or section 187.2 or 187.3 or subsection 258(3) or 258(5) applies to a stock dividend, theamountof the stock dividend is the greater of
(i)the amount by which the paid-up capital of the corporation that paid the dividend is increased by reason of the payment of the dividend, and
(ii)the fair market value of the share or shares paid as a stock dividend at the time of payment,
(b)in any case where section 191.1 applies to a stock dividend, theamountof the stock dividend for the purposes of Part VI.1 is the greater of
(i)the amount by which the paid-up capital of the corporation that paid the dividend is increased by reason of the payment of the dividend, and
(ii)the fair market value of the share or shares paid as a stock dividend at the time of payment,
and for any other purpose the amount referred to in subparagraph (i), and
(b.1)[Repealed, 2013, c. 34, s. 358]
(c)in any other case, theamountof any stock dividend is the amount by which the paid-up capital of the corporation that paid the dividend is increased by reason of the payment of the dividend; (montant)
annuityincludes an amount payable on a periodic basis whether payable at intervals longer or shorter than a year and whether payable under a contract, will or trust or otherwise; (rente)
appropriate percentage, for a taxation year, means the lowest percentage referred to in subsection 117(2) for the taxation year; (taux de base pour l’année)
assessmentincludes a reassessment; (cotisation)
authorized foreign bankhas the meaning assigned by section 2 of theBank Act; (banque étrangère autorisée)
automobilemeans
(a)a motor vehicle that is designed or adapted primarily to carry individuals on highways and streets and that has a seating capacity for not more than the driver and 8 passengers,
but does not include
(b)an ambulance,
(b.1)a clearly marked emergency-response vehicle that is used in connection with or in the course of an individual’s office or employment with a fire department or the police;
(b.2)a clearly marked emergency medical response vehicle that is used, in connection with or in the course of an individual’s office or employment with an emergency medical response or ambulance service, to carry emergency medical equipment together with one or more emergency medical attendants or paramedics,
(c)a motor vehicle acquired primarily for use as a taxi, a bus used in a business of transporting passengers or a hearse used in the course of a business of arranging or managing funerals,
(d)except for the purposes of section 6, a motor vehicle acquired to be sold, rented or leased in the course of carrying on a business of selling, renting or leasing motor vehicles or a motor vehicle used for the purpose of transporting passengers in the course of carrying on a business of arranging or managing funerals, and
(e)a motor vehicle
(i)of a type commonly called a van or pick-up truck, or a similar vehicle, that has a seating capacity for not more than the driver and two passengers and that, in the taxation year in which it is acquired or leased, is used primarily for the transportation of goods or equipment in the course of gaining or producing income,
(ii)of a type commonly called a van or pick-up truck, or a similar vehicle, the use of which, in the taxation year in which it is acquired or leased, is all or substantially all for the transportation of goods, equipment or passengers in the course of gaining or producing income, or
(iii)of a type commonly called a pick-up truck that is used in the taxation year in which it is acquired or leased primarily for the transportation of goods, equipment or passengers in the course of earning or producing income at one or more locations in Canada that are
(A)described, in respect of any of the occupants of the vehicle, in subparagraph 6(6)(a)(i) or (ii), and
(B)at least 30 kilometres outside the nearest point on the boundary of the nearest population centre, as defined by the last census dictionary published by Statistics Canada before the year, that has a population of at least 40,000 individuals as determined in the last census published by Statistics Canada before the year; (automobile)
balance-due dayof a taxpayer for a taxation year means,
(a)if the taxpayer is a trust,
(i)in the case where the time at which the taxation year ends is determined under paragraph 249(4)(a), the day that is
(A)in the case where that time occurs in a calendar year after the end of the trust’s particular taxation year that ends on December 15 of that calendar year because of an election made under paragraph 132.11(1)(a), the balance-due day of the trust for the particular taxation year,
(B)in the case where clause (A) does not apply and the trust’s particular taxation year that begins immediately after that time ends in the calendar year that includes that time, the balance-due day of the trust for the particular taxation year, and
(C)in any other case, 90 days after the end of the calendar year that includes that time, and
(ii)in any other case, the day that is 90 days after the end of the taxation year,
(b)where the taxpayer is an individual who died after October in the year and before May in the following taxation year, the day that is 6 months after the day of death,
(c)in any other case where the taxpayer is an individual, April 30 in the following taxation year, and
(d)where the taxpayer is a corporation,
(i)the day that is three months after the day on which the taxation year (in this subparagraph referred to as the “current year”) ends, if
(A)an amount was deducted under section 125 in computing the corporation’s tax payable under this Part for the current year or for its preceding taxation year,
(B)the corporation is, throughout the current year, a Canadian-controlled private corporation, and
(C)either
(I)in the case of a corporation that is not associated with another corporation in the current year, its taxable income for its preceding taxation year (determined before taking into consideration the specified future tax consequences for that preceding taxation year) does not exceed its business limit for that preceding taxation year, or
(II)in the case of a corporation that is associated with one or more other corporations in the current year, the total of the taxable incomes of the corporation and of those other corporations for their last taxation years that ended in the last calendar year that ended before the end of the current year (determined before taking into consideration the specified future tax consequences for those last taxation years) does not exceed the total of the business limits of the corporation and of those other corporations for those last taxation years, and
(ii)the day that is two months after the day on which the taxation year ends, in any other case; (date d’exigibilité du solde)
bankmeans a bank within the meaning assigned by section 2 of theBank Act(other than a federal credit union) or an authorized foreign bank; (banque)
bankrupthas the meaning assigned by theBankruptcy and Insolvency Act; (failli)
benefit under a deferred profit sharing planreceived by a taxpayer in a taxation year means the total of all amounts each of which is an amount received by the taxpayer in the year from a trustee under the plan, minus any amounts deductible under subsections 147(11) and 147(12) in computing the income of the taxpayer for the year; (prestation en vertu d’un régime de participation différée aux bénéfices)
bituminous sandsmeans sands or other rock materials containing naturally occurring hydrocarbons (other than coal) which hydrocarbons have
(a)a viscosity, determined in a prescribed manner, equal to or greater than 10,000 centipoise, or
(b)a density, determined in a prescribed manner, equal to or less than 12 degrees API; (sables bitumineux)
borrowed moneyincludes the proceeds to a taxpayer from the sale of a post-dated bill drawn by the taxpayer on a bank; (argent emprunté)
businessincludes a profession, calling, trade, manufacture or undertaking of any kind whatever and, except for the purposes of paragraph 18(2)(c), section 54.2, subsection 95(1) and paragraph 110.6(14)(f), an adventure or concern in the nature of trade but does not include an office or employment; (commerce)
business limitof a corporation for a taxation year means the amount determined under section 125 to be its business limit for the year; (plafond des affaires)
business numbermeans the number (other than a Social Insurance Number or trust account number) used by the Minister to identify
(a)a corporation or partnership, or
(b)any other association or taxpayer that carries on a business or is required by this Act to deduct or withhold an amount from an amount paid or credited or deemed to be paid or credited under this Act
and of which the Minister has notified the corporation, partnership, association or taxpayer; (numéro d’entreprise)
Canadian banking businessmeans the business carried on by an authorized foreign bank through a permanent establishment (as defined by regulation) in Canada, other than business conducted through a representative office registered or required to be registered under section 509 of theBank Act; (entreprise bancaire canadienne)
Canadian-controlled private corporationhas the meaning assigned by subsection 125(7); (société privée sous contrôle canadien)
Canadian corporationhas the meaning assigned by subsection 89(1); (société canadienne)
Canadian development expensehas the meaning assigned by subsection 66.2(5); (frais d’aménagement au Canada)
Canadian exploration and development expenseshas the meaning assigned by subsection 66(15); (frais d’exploration et d’aménagement au Canada)
Canadian exploration expensehas the meaning assigned by subsection 66.1(6); (frais d’exploration au Canada)
Canadian field processingmeans, except as otherwise prescribed,
(a)the processing in Canada of raw natural gas at a field separation and dehydration facility,
(b)the processing in Canada of raw natural gas at a natural gas processing plant to any stage that is not beyond the stage of natural gas that is acceptable to a common carrier of natural gas,
(c)the processing in Canada of hydrogen sulphide derived from raw natural gas to any stage that is not beyond the marketable sulphur stage,
(d)the processing in Canada of natural gas liquids, at a natural gas processing plant where the input is raw natural gas derived from a natural accumulation of natural gas, to any stage that is not beyond the marketable liquefied petroleum stage or its equivalent,
(e)the processing in Canada of crude oil (other than heavy crude oil recovered from an oil or gas well or a tar sands deposit) recovered from a natural accumulation of petroleum to any stage that is not beyond the crude oil stage or its equivalent, and
(f)prescribed activities
and for the purposes of paragraphs (b) to (d),
(g)gas is not considered to cease to be raw natural gas solely because of its processing at a field separation and dehydration facility until it is received by a common carrier of natural gas, and
(h)where all or part of a natural gas processing plant is devoted primarily to the recovery of ethane, the plant, or the part of the plant, as the case may be, is considered not to be a natural gas processing plant; (traitement préliminaire au Canada)
Canadian oil and gas property expensehas the meaning assigned by subsection 66.4(5); (frais à l’égard de biens canadiens relatifs au pétrole et au gaz)
Canadian partnershiphas the meaning assigned by section 102; (société de personnes canadienne)
Canadian real, immovable or resource propertymeans
(a)a property that would, if this Act were read without reference to the definitionreal or immovable propertyin subsection 122.1(1), be a real or immovable property situated in Canada,
(b)a Canadian resource property,
(c)a timber resource property,
(d)a share of the capital stock of a corporation, an income or a capital interest in a trust or an interest in a partnership — other than a taxable Canadian corporation, a SIFT trust (determined without reference to subsection 122.1(2)), a SIFT partnership (determined without reference to subsection 197(8)) or a real estate investment trust (as defined in subsection 122.1(1)) — if more than 50% of the fair market value of the share or interest is derived directly or indirectly from one or any combination of properties described in paragraphs (a) to (c), or
(e)any right to or interest in — or, for civil law, any right to or in — any property described in any of paragraphs (a) to (d); (bien canadien immeuble, réel ou minier)
Canadian resident partnershipmeans a partnership that, at any time in respect of which the expression is relevant,
(a)is a Canadian partnership,
(b)would, if it were a corporation, be resident in Canada (including, for greater certainty, a partnership that has its central management and control in Canada), or
(c)was formed under the laws of a province; (société de personnes résidant au Canada)
Canadian resource propertyhas the meaning assigned by subsection 66(15); (avoir minier canadien)
capital dividendhas the meaning assigned by section 83; (dividende en capital)
capital gainfor a taxation year from the disposition of any property has the meaning assigned by section 39; (gain en capital)
capital interestof a taxpayer in a trust has the meaning assigned by subsection 108(1); (participation au capital)
capital lossfor a taxation year from the disposition of any property has the meaning assigned by section 39; (perte en capital)
capital propertyhas the meaning assigned by section 54; (immobilisation)
cash methodhas the meaning assigned by subsection 28(1); (méthode de comptabilité de caisse)
cemetery care trusthas the meaning assigned by subsection 148.1(1); (fiducie pour l’entretien d’un cimetière)
common-law partner, with respect to a taxpayer at any time, means a person who cohabits at that time in a conjugal relationship with the taxpayer and
(a)has so cohabited throughout the 12-month period that ends at that time, or
(b)would be the parent of a child of whom the taxpayer is a parent, if this Act were read without reference to paragraphs 252(1)(c) and (e) and subparagraph 252(2)(a)(iii),
and, for the purpose of this definition, where at any time the taxpayer and the person cohabit in a conjugal relationship, they are, at any particular time after that time, deemed to be cohabiting in a conjugal relationship unless they were living separate and apart at the particular time for a period of at least 90 days that includes the particular time because of a breakdown of their conjugal relationship; (conjoint de fait)
common-law partnershipmeans the relationship between two persons who are common-law partners of each other; (union de fait)
common sharemeans a share the holder of which is not precluded on the reduction or redemption of the capital stock from participating in the assets of the corporation beyond the amount paid up on that share plus a fixed premium and a defined rate of dividend; (action ordinaire)
controlled foreign affiliatehas, except as expressly otherwise provided in this Act, the meaning assigned by subsection 95(1); (société étrangère affiliée contrôlée)
corporationincludes an incorporated company; (société)
corporation incorporated in Canadaincludes a corporation incorporated in any part of Canada before or after it became part of Canada; (société constituée au Canada)
cost amountto a taxpayer of any property at any time means, except as expressly otherwise provided in this Act,
(a)where the property was depreciable property of the taxpayer of a prescribed class, the amount that would be that proportion of the undepreciated capital cost to the taxpayer of property of that class at that time that the capital cost to the taxpayer of the property is of the capital cost to the taxpayer of all property of that class that had not been disposed of by the taxpayer before that time if subsection 13(7) were read without reference to paragraph 13(7)(e) and if
(i)paragraph 13(7)(b) were read as follows:
“(b)where a taxpayer, having acquired property for some other purpose, has commenced at a later time to use it for the purpose of gaining or producing income, the taxpayer shall be deemed to have acquired it at that later time at a capital cost to the taxpayer equal to the fair market value of the property at that later time;”, and
(ii)subparagraph 13(7)(d)(i) were read as follows:
“(i)if the use regularly made by the taxpayer of the property for the purpose of gaining or producing income has increased, the taxpayer shall be deemed to have acquired at that time depreciable property of that class at a capital cost equal to the proportion of its fair market value at that time that the amount of the increase in the use regularly made by the taxpayer of the property for that purpose is of the whole of the use regularly made of the property, and”
(b)where the property was capital property (other than depreciable property) of the taxpayer, its adjusted cost base to the taxpayer at that time,
(c)where the property was property described in an inventory of the taxpayer, its value at that time as determined for the purpose of computing the taxpayer’s income,
(c.1)where the taxpayer was a financial institution in its taxation year that includes that time and the property was a mark-to-market property for the year, the cost to the taxpayer of the property,
(d)[Repealed, 2016, c. 12, s. 63]
(d.1)where the property was a loan or lending asset (other than a net income stabilization account or a property in respect of which paragraph (b), (c), (c.1) or (d.2) applies), the amortized cost of the property to the taxpayer at that time,
(d.2)where the taxpayer was a financial institution in its taxation year that includes that time and the property was a specified debt obligation (other than a mark-to-market property for the year), the tax basis of the property to the taxpayer at that time,
(e)where the property was a right of the taxpayer to receive an amount, other than property that is
(i)a debt the amount of which was deducted under paragraph 20(1)(p) in computing the taxpayer’s income for a taxation year that ended before that time,
(ii)a net income stabilization account,
(iii)a right in respect of which paragraph (b), (c), (c.1), (d.1) or (d.2) applies, or
(iv)a right to receive production (as defined in subsection 18.1(1)) to which a matchable expenditure (as defined in subsection 18.1(1)) relates,
the amount the taxpayer has a right to receive,
(e.1)where the property was a policy loan (within the meaning assigned by subsection 138(12)) of an insurer, nil,
(e.2)where the property is an interest of a beneficiary under a qualifying environmental trust, nil, and
(f)in any other case, the cost to the taxpayer of the property as determined for the purpose of computing the taxpayer’s income, except to the extent that that cost has been deducted in computing the taxpayer’s income for any taxation year ending before that time;
and, for the purposes of this definition,financial institution,mark-to-market propertyandspecified debt obligationhave the meanings assigned by subsection 142.2(1), andtax basishas the meaning assigned by subsection 142.4(1); (coût indiqué)
credit unionhas the meaning assigned by subsection 137(6), except for the purposes of Part XV.1; (caisse de crédit)
cumulative eligible capital[Repealed, 2016, c. 12, s. 63]
death benefitmeans the total of all amounts received by a taxpayer in a taxation year on or after the death of an employee in recognition of the employee’s service in an office or employment minus
(a)where the taxpayer is the only person who has received such an amount and who is a surviving spouse or common-law partner of the employee (which person is, in this definition, referred to as the “surviving spouse or common-law partner”), the lesser of
(i)the total of all amounts so received by the taxpayer in the year, and
(ii)the amount, if any, by which $10,000 exceeds the total of all amounts received by the taxpayer in preceding taxation years on or after the death of the employee in recognition of the employee’s service in an office or employment, or
(b)where the taxpayer is not the surviving spouse or common-law partner of the employee, the lesser of
(i)the total of all amounts so received by the taxpayer in the year, and
(ii)that proportion of
(A)the amount, if any, by which $10,000 exceeds the total of all amounts received by the surviving spouse or common-law partner of the employee at any time on or after the death of the employee in recognition of the employee’s service in an office or employment
that
(B)the amount described in subparagraph (i)
is of
(C)the total of all amounts received by all taxpayers other than the surviving spouse or common-law partner of the employee at any time on or after the death of the employee in recognition of the employee’s service in an office or employment; (prestation consécutive au décès)
deferred amountat the end of a taxation year under a salary deferral arrangement in respect of a taxpayer means
(a)in the case of a trust governed by the arrangement, any amount that a person has a right under the arrangement at the end of the year to receive after the end of the year where the amount has been received, is receivable or may at any time become receivable by the trust as, on account or in lieu of salary or wages of the taxpayer for services rendered in the year or a preceding taxation year, and
(b)in any other case, any amount that a person has a right under the arrangement at the end of the year to receive after the end of the year,
and, for the purposes of this definition, a right under the arrangement shall include a right that is subject to one or more conditions unless there is a substantial risk that any one of those conditions will not be satisfied; (montant différé)
deferred profit sharing planhas the meaning assigned by subsection 147(1); (régime de participation différée aux bénéfices)
depreciable propertyhas the meaning assigned by subsection 13(21); (bien amortissable)
derivative forward agreement, of a taxpayer, means an agreement entered into by the taxpayer to purchase or sell a capital property if
(a)the term of the agreement exceeds 180 days or the agreement is part of a series of agreements with a term that exceeds 180 days,
(b)in the case of a purchase agreement, the difference between the fair market value of the property delivered on settlement, including partial settlement, of the agreement and the amount paid for the property is attributable, in whole or in part, to an underlying interest (including a value, price, rate, variable, index, event, probability or thing) other than
(i)revenue, income or cashflow in respect of the property over the term of the agreement, changes in the fair market value of the property over the term of the agreement, or any similar criteria in respect of the property unless
(A)the property is
(I)aCanadian security(as defined in subsection 39(6)), or
(II)an interest in a partnership the fair market value of which is derived, in whole or in part, from a Canadian security,
(B)the agreement is an agreement to acquire property from
(I)a tax-indifferent investor, or
(II)afinancial institution(as defined in subsection 142.2(1)), and
(C)it can reasonably be considered that one of the main purposes of the series of transactions or events, or any transaction or event in the series, of which the agreement is part is for all or any portion of the capital gain on a disposition (other than a disposition by the seller to the taxpayer under the agreement) of a Canadian security referred to in clause (A) — as part of the same series of transactions or events — to be attributable to amounts paid or payable on the Canadian security by the issuer of the Canadian security during the term of the agreement as
(I)interest,
(II)dividends, or
(III)income of a trust other than income paid out of the taxable capital gains of the trust,
(ii)if the purchase price is denominated in the currency of a country other than Canada, changes in the value of the Canadian currency relative to that other currency, or
(iii)an underlying interest that relates to a purchase of currency, if it can reasonably be considered that the purchase is agreed to by the taxpayer in order to reduce its risk of fluctuations in the value of the currency in which a purchase or sale by the taxpayer of a capital property is denominated, in which an obligation that is a capital property of the taxpayer is denominated or from which a capital property of the taxpayer derives its value, and
(c)in the case of a sale agreement,
(i)the difference between the sale price of the property and the fair market value of the property at the time the agreement is entered into by the taxpayer is attributable, in whole or in part, to an underlying interest (including a value, price, rate, variable, index, event, probability or thing) other than
(A)revenue, income or cashflow in respect of the property over the term of the agreement, changes in the fair market value of the property over the term of the agreement, or any similar criteria in respect of the property,
(B)if the sale price is denominated in the currency of a country other than Canada, changes in the value of the Canadian currency relative to that other currency, or
(C)an underlying interest that relates to a sale of currency, if it can reasonably be considered that the sale is agreed to by the taxpayer in order to reduce its risk of fluctuations in the value of the currency in which a purchase or sale by the taxpayer of a capital property is denominated, in which an obligation that is a capital property of the taxpayer is denominated or from which a capital property of the taxpayer derives its value, and
(ii)the agreement is part of an arrangement that has the effect — or would have the effect if the agreements that are part of the arrangement and that were entered into by persons or partnerships not dealing at arm’s length with the taxpayer were entered into by the taxpayer instead of non-arm’s length persons or partnerships — of eliminating a majority of the taxpayer’s risk of loss and opportunity for gain or profit in respect of the property for a period of more than 180 days; (contrat dérivé à terme)
designated insurance propertyhas the meaning assigned by subsection 138(12); (bien d’assurance désigné)
designated stock exchangemeans a stock exchange, or that part of a stock exchange, for which a designation by the Minister of Finance under section 262 is in effect; (bourse de valeurs désignée)
dispositionof any property, except as expressly otherwise provided, includes
(a)any transaction or event entitling a taxpayer to proceeds of disposition of the property,
(b)any transaction or event by which,
(i)where the property is a share, bond, debenture, note, certificate, mortgage, hypothecary claim, agreement of sale or similar property, or interest, or for civil law a right, in it, the property is in whole or in part redeemed, acquired or cancelled,
(ii)where the property is a debt or any other right to receive an amount, the debt or other right is settled or cancelled,
(iii)where the property is a share, the share is converted because of an amalgamation or merger,
(iv)where the property is an option to acquire or dispose of property, the option expires, and
(v)a trust, that can reasonably be considered to act as agent for all the beneficiaries under the trust with respect to all dealings with all of the trust’s property (unless the trust is described in any of paragraphs (a) to (e.1) of the definitiontrustin subsection 108(1)), ceases to act as agent for a beneficiary under the trust with respect to any dealing with any of the trust’s property,
(b.1)where the property is an interest in a life insurance policy, a disposition within the meaning of section 148,
(c)any transfer of the property to a trust or, where the property is property of a trust, any transfer of the property to any beneficiary under the trust, except as provided by paragraph (f) or (k), and
(d)where the property is, or is part of, a taxpayer’s capital interest in a trust, except as provided by paragraph (h) or (i), a payment made after 1999 to the taxpayer from the trust that can reasonably be considered to have been made because of the taxpayer’s capital interest in the trust,
but does not include
(e)any transfer of the property as a consequence of which there is no change in the beneficial ownership of the property, except where the transfer is
(i)from a person or a partnership to a trust for the benefit of the person or the partnership,
(ii)from a trust to a beneficiary under the trust, or
(iii)from one trust maintained for the benefit of one or more beneficiaries under the trust to another trust maintained for the benefit of the same beneficiaries,
(f)any transfer of the property as a consequence of which there is no change in the beneficial ownership of the property, where
(i)the transferor and the transferee are trusts that are, at the time of the transfer, resident in Canada,
(ii)[Repealed, 2013, c. 34, s. 358]
(iii)the transferee does not receive the property in satisfaction of the transferee’s right as a beneficiary under the transferor trust,
(iv)the transferee held no property immediately before the transfer (other than property the cost of which is not included, for the purposes of this Act, in computing a balance of undeducted outlays, expenses or other amounts in respect of the transferee),
(v)the transferee does not file a written election with the Minister on or before the filing-due date for its taxation year in which the transfer is made (or on such later date as is acceptable to the Minister) that this paragraph not apply,
(vi)if the transferor is an amateur athlete trust, a cemetery care trust, an employee trust, a trust deemed by subsection 143(1) to exist in respect of a congregation that is a constituent part of a religious organization, a related segregated fund trust (in this paragraph having the meaning assigned by section 138.1), a trust described in paragraph 149(1)(o.4) or a trust governed by an eligible funeral arrangement, an employees profit sharing plan, a registered disability savings plan, a registered education savings plan, a registered supplementary unemployment benefit plan or a TFSA, the transferee is the same type of trust, and
(vii)the transfer results, or is part of a series of transactions or events that results, in the transferor ceasing to exist and, immediately before the time of the transfer or the beginning of that series, as the case may be, the transferee never held any property or held only property having a nominal value,
(g)[Repealed, 2005, c. 30, s. 17]
(h)where the property is part of a capital interest of a taxpayer in a trust (other than a personal trust or a trust prescribed for the purpose of subsection 107(2)) that is described by reference to units issued by the trust, a payment after 1999 from the trust in respect of the capital interest, where the number of units in the trust that are owned by the taxpayer is not reduced because of the payment,
(i)where the property is a taxpayer’s capital interest in a trust, a payment to the taxpayer after 1999 in respect of the capital interest to the extent that the payment
(i)is out of the income of the trust (determined without reference to subsection 104(6)) for a taxation year or out of the capital gains of the trust for the year, if the payment was made in the year or the right to the payment was acquired by the taxpayer in the year, or
(ii)is in respect of an amount designated in respect of the taxpayer by the trust under subsection 104(20),
(j)any transfer of the property for the purpose only of securing a debt or a loan, or any transfer by a creditor for the purpose only of returning property that had been used as security for a debt or a loan,
(k)any transfer of the property to a trust as a consequence of which there is no change in the beneficial ownership of the property, where the main purpose of the transfer is
(i)to effect payment under a debt or loan,
(ii)to provide assurance that an absolute or contingent obligation of the transferor will be satisfied, or
(iii)to facilitate either the provision of compensation or the enforcement of a penalty, in the event that an absolute or contingent obligation of the transferor is not satisfied,
(l)any issue of a bond, debenture, note, certificate, mortgage or hypothecary claim,
(m)any issue by a corporation of a share of its capital stock, or any other transaction that, but for this paragraph, would be a disposition by a corporation of a share of its capital stock, and
(n)a redemption, an acquisition or a cancellation of a share or of a right to acquire a share (which share or which right, as the case may be, is referred to in this paragraph as the “security”) of the capital stock of a corporation (referred to in this paragraph as the “issuing corporation”) held by another corporation (referred to in this paragraph as the “disposing corporation”) if
(i)the redemption, acquisition or cancellation occurs as part of a merger or combination of two or more corporations (including the issuing corporation and the disposing corporation) to form one corporate entity (referred to in this paragraph as the “new corporation”),
(ii)the merger or combination
(A)is an amalgamation (within the meaning assigned by subsection 87(1)) to which subsection 87(11) does not apply,
(B)is an amalgamation (within the meaning assigned by subsection 87(1)) to which subsection 87(11) applies, if the issuing corporation and the disposing corporation are described by subsection 87(11) as the parent and the subsidiary, respectively,
(C)is a foreign merger (within the meaning assigned by subsection 87(8.1)), or
(D)would be a foreign merger (within the meaning assigned by subsection 87(8.1)) if subparagraph 87(8.1)(c)(ii) were read without reference to the words “that was resident in a country other than Canada”, and
(iii)either
(A)the disposing corporation receives no consideration for the security, or
(B)in the case where the merger or combination is described by clause (ii)(C) or (D), the disposing corporation receives no consideration for the security other than property that was, immediately before the merger or combination, owned by the issuing corporation and that, on the merger or combination, becomes property of the new corporation; (disposition)
dividendincludes a stock dividend (other than a stock dividend that is paid to a corporation or to a mutual fund trust by a non-resident corporation); (dividende)
dividend rental arrangement, of a person or a partnership (each of which is referred to in this definition as theperson), means
(a)any arrangement entered into by the person where it can reasonably be considered that
(i)the main reason for the person entering into the arrangement was to enable the person to receive a dividend on a share of the capital stock of a corporation, other than a dividend on a prescribed share or on a share described in paragraph (e) of the definitionterm preferred sharein this subsection or an amount deemed by subsection 15(3) to be received as a dividend on a share of the capital stock of a corporation, and
(ii)under the arrangement someone other than that person bears the risk of loss or enjoys the opportunity for gain or profit with respect to the share in any material respect,
(b)for greater certainty, any arrangement under which
(i)a corporation at any time receives on a particular share a taxable dividend that would, if this Act were read without reference to subsection 112(2.3), be deductible in computing its taxable income or taxable income earned in Canada for the taxation year that includes that time, and
(ii)the corporation or a partnership of which the corporation is a member is obligated to pay to another person or partnership an amount
(A)that is compensation for
(I)the dividend described in subparagraph (i),
(II)a dividend on a share that is identical to the particular share, or
(III)a dividend on a share that, during the term of the arrangement, can reasonably be expected to provide to a holder of the share the same or substantially the same proportionate risk of loss or opportunity for gain as the particular share, and
(B)that, if paid, would be deemed by subsection 260(5.1) to have been received by that other person or partnership, as the case may be, as a taxable dividend,
(c)any synthetic equity arrangement, in respect of a DRA share of the person, and
(d)one or more agreements or arrangements (other than agreements or arrangements described in paragraph (c)) entered into by the person, the connected person referred to in paragraph (a) of the definitionsynthetic equity arrangementor, for greater certainty, by any combination of the person and connected persons, if
(i)the agreements or arrangements have the effect, or would have the effect if each agreement or arrangement entered into by a connected person were entered into by the person, of eliminating all or substantially all of the person’s risk of loss and opportunity for gain or profit in respect of a DRA share of the person,
(ii)as part of a series of transactions that includes these agreements or arrangements, a tax-indifferent investor, or a group of tax-indifferent investors each member of which is affiliated with every other member, obtains all or substantially all of the risk of loss and opportunity for gain or profit in respect of the DRA share or anidentical share(as defined in subsection 112(10)), and
(iii)it is reasonable to conclude that one of the purposes of the series of transactions is to obtain the result described in subparagraph (ii); (mécanisme de transfert de dividendes)
DRA share, of a person or partnership, means a share
(a)that is owned by the person or partnership,
(b)in respect of which the person or partnership is deemed to have received a dividend under subsection 260(5.1) and is provided with all or substantially all of the risk of loss and opportunity for gain or profit under an agreement or arrangement,
(c)that is held by a trust under which the person or partnership is a beneficiary and in respect of which the person or partnership is deemed to have received a dividend as a result of a designation by the trust under subsection 104(19),
(d)in respect of which the person or partnership is deemed to have received a dividend under subsection 82(2), or
(e)in any other case, in respect of which the person or partnership is (or would be in the absence of subsection 112(2.3)) entitled to a deduction under subsection 112(1) in respect of dividends received on the share; (action de mécanisme de transfert de dividendesouAMTD)
eligible capital amount[Repealed, 2016, c. 12, s. 63]
eligible capital expenditure[Repealed, 2016, c. 12, s. 63]
eligible capital property[Repealed, 2016, c. 12, s. 63]
eligible dividendhas the meaning assigned by subsection 89(1); (dividende déterminé)
eligible funeral arrangementhas the meaning assigned by subsection 148.1(1); (arrangement de services funéraires)
eligible relocationmeans a relocation of a taxpayer in respect of which the following apply:
(a)the relocation occurs to enable the taxpayer
(i)to carry on a business or to be employed at a location (in section 62 and this definition referred to as “the new work location”) that is, except if the taxpayer is absent from but resident in Canada, in Canada, or
(ii)to be a student in full-time attendance enrolled in a program at a post-secondary level at a location of a university, college or other educational institution (in section 62 and this definition referred to as “the new work location”),
(b)the taxpayer ordinarily resided before the relocation at a residence (in section 62 and this definition referred to as “the old residence”) and ordinarily resided after the relocation at a residence (in section 62 and this definition referred to as “the new residence”),
(c)except if the taxpayer is absent from but resident in Canada, both the old residence and the new residence are in Canada, and
(d)the distance between the old residence and the new work location is not less than 40 kilometres greater than the distance between the new residence and the new work location; (réinstallation admissible)
emissions allowancemeans an allowance, credit or similar instrument that represents a unit of emissions that can be used to satisfy a requirement under the laws of Canada or a province governing emissions of a regulated substance, such as greenhouse gas emissions; (droit d’émissions)
emissions obligationmeans an obligation to surrender an emissions allowance, or an obligation that can otherwise be satisfied through the use of an emissions allowance, under a law of Canada or a province governing emissions of a regulated substance; (obligation d’émissions)
employedmeans performing the duties of an office or employment; (employé(être))
employeeincludes officer; (employé)
employee benefit planmeans an arrangement under which contributions are made by an employer or by any person with whom the employer does not deal at arm’s length to another person (in this Act referred to as the “custodian” of an employee benefit plan) and under which one or more payments are to be made to or for the benefit of employees or former employees of the employer or persons who do not deal at arm’s length with any such employee or former employee (other than a payment that, if section 6 were read without reference to subparagraph 6(1)(a)(ii) and paragraph 6(1)(g), would not be required to be included in computing the income of the recipient or of an employee or former employee), but does not include any portion of the arrangement that is
(a)a fund, plan or trust referred to in subparagraph 6(1)(a)(i) or paragraph 6(1)(d) or (f),
(b)a trust described in paragraph 149(1)(y),
(c)an employee trust,
(c.1)a salary deferral arrangement, in respect of a taxpayer, under which deferred amounts are required to be included as benefits under paragraph 6(1)(a) in computing the taxpayer’s income,
(c.2)a retirement compensation arrangement,
(d)an arrangement the sole purpose of which is to provide education or training for employees of the employer to improve their work or work-related skills and abilities, or
(e)a prescribed arrangement; (régime de prestations aux employés)
employee life and health trusthas the meaning assigned by subsection 144.1(2); (fiducie de soins de santé au bénéfice d’employés)
employee trustmeans an arrangement (other than an employees profit sharing plan, a deferred profit sharing plan or a plan referred to in subsection 147(15) as a “revoked plan”) established after 1979
(a)under which payments are made by one or more employers to a trustee in trust solely to provide to employees or former employees of
(i)the employer, or
(ii)a person with whom the employer does not deal at arm’s length,
benefits the right to which vests at the time of each such payment and the amount of which does not depend on the individual’s position, performance or compensation as an employee,
(b)under which the trustee has, since the commencement of the arrangement, each year allocated to individuals who are beneficiaries thereunder, in such manner as is reasonable, the amount, if any, by which the total of all amounts each of which is
(i)an amount received under the arrangement by the trustee in the year from an employer or from a person with whom the employer does not deal at arm’s length,
(ii)the amount that would, if this Act were read without reference to subsection 104(6), be the income of the trust for the year (other than a taxable capital gain from the disposition of property) from a property or other source other than a business, or
(iii)a capital gain of the trust for the year from the disposition of property
exceeds the total of all amounts each of which is
(iv)the loss of the trust for the year (other than an allowable capital loss from the disposition of property) from a property or other source other than a business, or
(v)a capital loss of the trust for the year from the disposition of property, and
(c)the trustee of which has elected to qualify the arrangement as an employee trust in its return of income filed within 90 days from the end of its first taxation year; (fiducie d’employés)
employees profit sharing planhas the meaning assigned by subsection 144(1); (régime de participation des employés aux bénéfices)
employer, in relation to an officer, means the person from whom the officer receives the officer’s remuneration; (employeur)
employmentmeans the position of an individual in the service of some other person (including Her Majesty or a foreign state or sovereign) andservantoremployeemeans a person holding such a position; (emploi)
estatehas the meaning assigned by subsection 104(1) and includes, for civil law, a succession; (succession)
estate of the bankrupthas the same meaning as in theBankruptcy and Insolvency Act; (actifs du failli)
excessive eligible dividend designationhas the meaning assigned by subsection 89(1); (désignation excessive de dividende déterminé)
exempt incomemeans property received or acquired by a person in such circumstances that it is, because of any provision of Part I, not included in computing the person’s income, but does not include a dividend on a share or a support amount (as defined in subsection 56.1(4)); (revenu exonéré)
farmingincludes tillage of the soil, livestock raising or exhibiting, maintaining of horses for racing, raising of poultry, fur farming, dairy farming, fruit growing and the keeping of bees, but does not include an office or employment under a person engaged in the business of farming; (agriculture)
farm losshas the meaning assigned by subsection 111(8); (perte agricole)
federal credit unionhas the meaning assigned by section 2 of theBank Act; (coopérative de crédit fédérale)
filing-due datefor a taxation year of a taxpayer means the day on or before which the taxpayer’s return of income under Part I for the year is required to be filed or would be required to be filed if tax under that Part were payable by the taxpayer for the year; (date d’échéance de production)
first home savings accountorFHSAhas the same meaning as in subsection 146.6(1); (compte d’épargne libre d’impôt pour l’achat d’une première propriétéouCELIAPP)
fiscal period[Repealed, 1996, c. 21, s. 60]
fishingincludes fishing for or catching shellfish, crustaceans and marine animals but does not include an office or employment under a person engaged in the business of fishing; (pêche)
flow-through sharehas the meaning assigned by subsection 66(15); (action accréditive)
foreign accrual property incomehas the meaning assigned by section 95; (revenu étranger accumulé, tiré de biens)
foreign affiliatehas the meaning assigned by subsection 95(1); (société étrangère affiliée)
foreign currencymeans currency of a country other than Canada; (monnaie étrangère)
foreign currency debthas the meaning assigned by subsection 111(8); (dette en monnaie étrangère)
foreign exploration and development expenseshas the meaning assigned by subsection 66(15); (frais d’exploration et d’aménagement à l’étranger)
foreign resource expensehas the meaning assigned by subsection 66.21(1); (frais relatifs à des ressources à l’étranger)
foreign resource pool expensesof a taxpayer means the taxpayer’s foreign resource expenses in respect of all countries and the taxpayer’s foreign exploration and development expenses; (frais globaux relatifs à des ressources à l’étranger)
foreign resource propertyhas the meaning assigned by subsection 66(15), and a foreign resource property in respect of a country means a foreign resource property that is
(a)a right, licence or privilege to explore for, drill for or take petroleum, natural gas or related hydrocarbons in that country,
(b)a right, licence or privilege to
(i)store underground petroleum, natural gas or related hydrocarbons in that country, or
(ii)prospect, explore, drill or mine for minerals in a mineral resource in that country,
(c)an oil or gas well in that country or real or immovable property in that country the principal value of which depends on its petroleum or natural gas content (but not including depreciable property),
(d)any right to a rental or royalty computed by reference to the amount or value of production from an oil or gas well in that country, or from a natural accumulation of petroleum or natural gas in that country, if the payer of the rental or royalty has an interest in, or for civil law a right in, the well or accumulation, as the case may be, and 90% or more of the rental or royalty is payable out of, or from the proceeds of, the production from the well or accumulation,
(e)any right to a rental or royalty computed by reference to the amount or value of production from a mineral resource in that country, if the payer of the rental or royalty has an interest in, or for civil law a right in, the mineral resource and 90% or more of the rental or royalty is payable out of, or from the proceeds of, the production from the mineral resource,
(f)a real or immovable property in that country the principal value of which depends upon its mineral resource content (but not including depreciable property),
(g)a right to or an interest in — or for civil law a right to or in — any property described in any of paragraphs (a) to (e), other than a right or an interest that the taxpayer has because the taxpayer is a beneficiary under a trust or a member of a partnership, or
(h)an interest in real property described in paragraph (f) or a real right in an immovable described in that paragraph, other than an interest or a right that the taxpayer has because the taxpayer is a beneficiary under a trust or a member of a partnership; (avoir minier étranger)
foreign retirement arrangementmeans a prescribed plan or arrangement; (mécanisme de retraite étranger)
former business property, in respect of a taxpayer, means a capital property of the taxpayer that was used by the taxpayer or a person related to the taxpayer primarily for the purpose of gaining or producing income from a business, and that was real or immovable property of the taxpayer, an interest of the taxpayer in real property, a right of the taxpayer in an immovable or a property that is the subject of an election under subsection 13(4.2), but does not include
(a)a rental property of the taxpayer,
(b)land subjacent to a rental property of the taxpayer,
(c)land contiguous to land referred to in paragraph (b) that is a parking area, driveway, yard or garden or that is otherwise necessary for the use of the rental property referred to in that paragraph, or
(d)a leasehold interest in any property described in paragraphs (a) to (c),
and for the purpose of this definition,rental propertyof a taxpayer means real or immovable property owned by the taxpayer, whether jointly with another person or otherwise, and used by the taxpayer in the taxation year in respect of which the expression is being applied principally for the purpose of gaining or producing gross revenue that is rent (other than property leased by the taxpayer to a person related to the taxpayer and used by that related person principally for any other purpose), but, for greater certainty, does not include a property leased by the taxpayer or the related person to a lessee, in the ordinary course of a business of the taxpayer or the related person of selling goods or rendering services, under an agreement by which the lessee undertakes to use the property to carry on the business of selling or promoting the sale of the goods or services of the taxpayer or the related person; (ancien bien d’entreprise)
fully collateralized arrangementmeans a securities lending arrangement or a specified securities lending arrangement if, throughout the term of the arrangement, the borrower
(a)has provided the lender under the arrangement with money in an amount of, or securities described in paragraph (c) of the definitionqualified securityin subsection 260(1) that have a fair market value of, not less than 95% of the fair market value of the security that is transferred or lent under the arrangement, and
(b)is entitled to enjoy, directly or indirectly, the benefits of all or substantially all income derived from, and opportunity for gain in respect of, the money or securities provided; (mécanisme entièrement garanti)
functional currency[Repealed, 2009, c. 2, s. 76]
general rate income poolhas the meaning assigned by subsection 89(1); (compte de revenu à taux général)
goods and services taxmeans the tax payable under Part IX of theExcise Tax Act; (taxe sur les produits et services)
graduated rate estate, of an individual at any time, means the estate that arose on and as a consequence of the individual’s death if
(a)that time is no more than 36 months after the death,
(b)the estate is at that time a testamentary trust,
(c)the individual’s Social Insurance Number (or if the individual had not, before the death, been assigned a Social Insurance Number, such other information as is acceptable to the Minister) is provided in the estate’s return of income under Part I for the taxation year that includes that time and for each of its earlier taxation years that ended after 2015,
(d)the estate designates itself as the graduated rate estate of the individual in its return of income under Part I for its first taxation year that ends after 2015, and
(e)no other estate designates itself as the graduated rate estate of the individual in a return of income under Part I for a taxation year that ends after 2015; (succession assujettie à l’imposition à taux progressifs)
grandfathered sharemeans
(a)a share of the capital stock of a corporation issued after 8:00 p.m