VIII, s. 44, c. 21, s. 481995, c. 3, s. 31, c. 21, ss. 61, 661996, c. 21, s. 191998, c. 19, ss. 19, 1292000, c. 12, s. 142, c. 19, s. 162001, c. 17, ss. 83, 2412007, c. 2, s. 16, c. 35, ss. 28, 1102008, c. 28, s. 112009, c. 2, s. 28, c. 31, s. 32010, c. 25, s. 192012, c. 31, s. 232013, c. 34, ss. 12, 123, 2362014, c. 39, s. 282015, c. 36, s. 62016, c. 12, s. 382017, c. 33, s. 372021, c. 23, s. 142022, c. 19, s. 15
110(0.1)The following definitions apply in this section.consolidated financial statementsconsolidated financial statementshas the same meaning as in subsection 233.8(1). (états financiers consolidés)specified personspecified person, at any time, means a qualifying person that meets the following conditions:(a)it is not a Canadian-controlled private corporation;(b)if the qualifying person is a member of a group that annually prepares consolidated financial statements, the total consolidated group revenue reflected in the last consolidated financial statements of the group presented to shareholders or unitholders — of the member of the group that would be theultimate parent entity, as defined in subsection 233.8(1), of the group if the group were amultinational enterprise group, as defined in subsection 233.8(1) — before that time exceeds $500 million; and(c)if paragraph (b) does not apply, it has gross revenue in excess of $500 million based on(i)the amounts reflected in the financial statements of the qualifying person presented to the shareholders or unitholders of the qualifying person for the last fiscal period of the qualifying person that ended before that time,(ii)if subparagraph (i) does not apply, the amounts reflected in the financial statements of the qualifying person presented to the shareholders or unitholders of the qualifying person for the last fiscal period of the qualifying person that ended before the end of the last fiscal period referred to in subparagraph (i), and(iii)if subparagraph (i) does not apply and financial statements were not presented as described in subparagraph (ii), the amounts that would have been reflected in the annual financial statements of the qualifying person for the last fiscal period of the qualifying person that ended before that time, if such statements had been prepared in accordance with generally accepted accounting principles. (personne déterminée)vesting yearvesting year, of a security to be acquired under an agreement, means(a)if the agreement specifies the calendar year in which the taxpayer’s right to acquire the security first becomes exercisable (otherwise than as a consequence of an event that is not reasonably foreseeable at the time the agreement is entered into), that calendar year; and(b)in any other case, the calendar year in which the right to acquire the security would become exercisable if the agreement had specified that all identical rights to acquire securities become exercisable on a pro rata basis over the period that(i)begins on the day that the agreement was entered into, and(ii)ends on the day that is the earlier of(A)the day that is 60 months after the day the agreement is entered into, and(B)the last day that the right to acquire the security could become exercisable under the agreement. (année de dévolution)Marginal note:Deductions permitted(1)For the purpose of computing the taxable income of a taxpayer for a taxation year, there may be deducted such of the following amounts as are applicableMarginal note:Employee options(d)an amount equal to 1/2 of the amount of the benefit deemed by subsection 7(1) to have been received by the taxpayer in the year in respect of a security (other than a security that is a non-qualified security) that a particular qualifying person has agreed after February 15, 1984 to sell or issue under an agreement, in respect of the transfer or other disposition of rights under the agreement or as a result of the death of the taxpayer because the taxpayer immediately before death owned a right to acquire the security under the agreement, if(i)the security was acquired under the agreement(A)by the taxpayer or a person not dealing at arm’s length with the taxpayer in circumstances described in paragraph 7(1)(c), or(B)in the case of a benefit deemed by paragraph 7(1)(e) to have been received by the taxpayer, within the first taxation year of the graduated rate estate of the taxpayer, by(I)the graduated rate estate of the taxpayer,(II)a person who is abeneficiary(as defined in subsection 108(1)) under the graduated rate estate of the taxpayer, or(III)a person in whom the rights of the taxpayer under the agreement have vested as a result of the death,(i.1)the security(A)is a prescribed share at the time of its sale or issue, as the case may be,(B)would have been a prescribed share if it were issued or sold to the taxpayer at the time the taxpayer disposed of rights under the agreement,(B.1)in the case of a benefit deemed by paragraph 7(1)(e) to have been received by the taxpayer, would have been a prescribed share if it were issued or sold to the taxpayer immediately before the death of the taxpayer,(C)would have been a unit of a mutual fund trust at the time of its sale or issue if those units issued by the trust that were not identical to the security had not been issued,(D)would have been a unit of a mutual fund trust if(I)it were issued or sold to the taxpayer at the time the taxpayer disposed of rights under the agreement, and(II)those units issued by the trust that were not identical to the security had not been issued, or(E)in the case of a benefit deemed by paragraph 7(1)(e) to have been received by the taxpayer, would have been a unit of a mutual fund trust if(I)it were issued or sold to the taxpayer immediately before the death of the taxpayer, and(II)those units issued by the trust that were not identical to the security had not been issued,(ii)where rights under the agreement were not acquired by the taxpayer as a result of a disposition of rights to which subsection 7(1.4) applied,(A)the amount payable by the taxpayer to acquire the security under the agreement is not less than the amount by which(I)the fair market value of the security at the time the agreement was madeexceeds(II)the amount, if any, paid by the taxpayer to acquire the right to acquire the security, and(B)at the time immediately after the agreement was made, the taxpayer was dealing at arm’s length with(I)the particular qualifying person,(II)each other qualifying person that, at the time, was an employer of the taxpayer and was not dealing at arm’s length with the particular qualifying person, and(III)the qualifying person of which the taxpayer had, under the agreement, a right to acquire a security, and(iii)where rights under the agreement were acquired by the taxpayer as a result of one or more dispositions to which subsection 7(1.4) applied,(A)the amount payable by the taxpayer to acquire the security under the agreement is not less than the amount that was included, in respect of the security, in the amount determined under subparagraph 7(1.4)(c)(ii) with respect to the most recent of those dispositions,(B)at the time immediately after the agreement the rights under which were the subject of the first of those dispositions (in this subparagraph referred to as the “original agreement”) was made, the taxpayer was dealing at arm’s length with(I)the qualifying person that made the original agreement,(II)each other qualifying person that, at the time, was an employer of the taxpayer and was not dealing at arm’s length with the qualifying person that made the original agreement, and(III)the qualifying person of which the taxpayer had, under the original agreement, a right to acquire a security,(C)the amount that was included, in respect of each particular security that the taxpayer had a right to acquire under the original agreement, in the amount determined under subparagraph 7(1.4)(c)(iv) with respect to the first of those dispositions was not less than the amount by which(I)the fair market value of the particular security at the time the original agreement was madeexceeded(II)the amount, if any, paid by the taxpayer to acquire the right to acquire the security, and(D)for the purpose of determining if the condition in paragraph 7(1.4)(c) was satisfied with respect to each of the particular dispositions following the first of those dispositions,(I)the amount that was included, in respect of each particular security that could be acquired under the agreement the rights under which were the subject of the particular disposition, in the amount determined under subparagraph 7(1.4)(c)(iv) with respect to the particular dispositionwas not less than(II)the amount that was included, in respect of the particular security, in the amount determined under subparagraph 7(1.4)(c)(ii) with respect to the last of those dispositions preceding the particular disposition;Marginal note:Charitable donation of employee option securities(d.01)subject to subsection (2.1), if the taxpayer disposes of a security acquired in the year by the taxpayer under an agreement referred to in subsection 7(1) by making a gift of the security to a qualified donee, an amount in respect of the disposition of the security equal to 1/2 of the lesser of the benefit deemed by paragraph 7(1)(a) to have been received by the taxpayer in the year in respect of the acquisition of the security and the amount that would have been that benefit had the value of the security at the time of its acquisition by the taxpayer been equal to the value of the security at the time of the disposition, if(i)the security is a security described in subparagraph 38(a.1)(i),(ii)[Repealed, 2002, c. 9, s. 33(1)](iii)the gift is made in the year and on or before the day that is 30 days after the day on which the taxpayer acquired the security, and(iv)the taxpayer is entitled to a deduction under paragraph (d) in respect of the acquisition of the security;Marginal note:Idem(d.1)where the taxpayer(i)is deemed, under paragraph 7(1)(a) by virtue of subsection 7(1.1), to have received a benefit in the year in respect of a share acquired by the taxpayer after May 22, 1985,(ii)has not disposed of the share (otherwise than as a consequence of the taxpayer’s death) or exchanged the share within two years after the date the taxpayer acquired it, and(iii)has not deducted an amount under paragraph 110(1)(d) in respect of the benefit in computing the taxpayer’s taxable income for the year,an amount equal to 1/2 of the amount of the benefit;Marginal note:Prospector’s and grubstaker’s shares(d.2)where the taxpayer has, under paragraph 35(1)(d), included an amount in the taxpayer’s income for the year in respect of a share received after May 22, 1985, an amount equal to 1/2 of that amount unless that amount is exempt from income tax in Canada by reason of a provision contained in a tax convention or agreement with another country that has the force of law in Canada;Marginal note:Employer’s shares(d.3)where the taxpayer has, under subsection 147 (10.4), included an amount in computing the taxpayer’s income for the year, an amount equal to 1/2 of that amount;Marginal note:Employer deduction — non-qualified securities(e)an amount equal to the amount of the benefit in respect of employment with the taxpayer deemed by subsection 7(1) to have been received by an individual in the year in respect of a non-qualified security that the taxpayer (or a qualifying person that does not deal at arm’s length with the taxpayer) has agreed to sell or issue under an agreement with the individual, if(i)the taxpayer is a qualifying person,(ii)at the time the agreement was entered into, the individual was an employee of the taxpayer,(iii)the amount is not claimed as a deduction in computing the taxable income of another qualifying person,(iv)an amount would have been deductible in computing the taxable income of the individual under paragraph (d) if the security were not a non-qualified security,(v)in the case of an individual who is not resident in Canada throughout the year, the benefit deemed by subsection 7(1) to have been received by the individual was included in computing the taxable income earned in Canada of the individual for the year, and(vi)the notification requirements in subsection (1.9) are met in respect of the security;Marginal note:Deductions for payments(f)any social assistance payment made on the basis of a means, needs or income test and included because of clause 56(1)(a)(i)(A) or paragraph 56(1)(u) in computing the taxpayer’s income for the year or any amount that is(i)an amount exempt from income tax in Canada because of a provision contained in a tax convention or agreement with another country that has the force of law in Canada,(ii)compensation received under an employees’ or workers’ compensation law of Canada or a province in respect of an injury, disability or death, except any such compensation received by a person as the employer or former employer of the person in respect of whose injury, disability or death the compensation was paid,(iii)income from employment with a prescribed international organization,(iv)the taxpayer’s income from employment with a prescribed international non-governmental organization, where the taxpayer(A)was not, at any time in the year, a Canadian citizen,(B)was a non-resident person immediately before beginning that employment in Canada, and(C)if the taxpayer is resident in Canada, became resident in Canada solely for the purpose of that employment, or(v)the lesser of(A)the employment income earned by the taxpayer as a member of the Canadian Forces, or as a police officer, while serving on a deployed international operational mission (as determined by the Minister of National Defence, the Minister of Public Safety and Emergency Preparedness or by a person designated by either Minister), and(B)the employment income that would have been so earned by the taxpayer if the taxpayer had been paid at the maximum rate of pay that applied, from time to time during the mission, to a Lieutenant-Colonel (General Service Officers) of the Canadian Forces,to the extent that it is included in computing the taxpayer’s income for the year;Marginal note:Financial assistance(g)any amount that(i)is received by the taxpayer in the year under a program referred to in subparagraph 56(1)(r)(ii) or (iii), a program established under the authority of theDepartment of Employment and Social Development Actor a prescribed program,(ii)is financial assistance for the payment of tuition fees of the taxpayer that are not included in computing an amount deductible under subsection 118.5(1) in computing the taxpayer’s tax payable under this Part for any taxation year,(iii)is included in computing the taxpayer’s income for the year, and(iv)is not otherwise deductible in computing the taxpayer’s taxable income for the year;(h)35 per cent of the total of all benefits (in this paragraph referred to as “U.S. social security benefits”) that are received by the taxpayer in the taxation year and to which paragraph 5 of Article XVIII of theConvention between Canada and the United States of America with respect to Taxes on Income and on Capitalas set out in Schedule I to theCanada-United States Tax Convention Act, 1984, S.C. 1984, c. 20, applies, if(i)the taxpayer has continuously during a period that begins before 1996 and ends in the taxation year, been resident in Canada, and has received U.S. social security benefits in each taxation year that ends in that period, or(ii)in the case where the benefits are payable to the taxpayer in respect of a deceased individual,(A)the taxpayer was, immediately before the deceased individual’s death, the deceased individual’s spouse or common-law partner,(B)the taxpayer has continuously during a period that begins at the time of the deceased individual’s death and ends in the taxation year, been resident in Canada,(C)the deceased individual was, in respect of the taxation year in which the deceased individual died, a taxpayer described in subparagraph (i), and(D)in each taxation year that ends in a period that begins before 1996 and that ends in the taxation year, the taxpayer, the deceased individual, or both of them, received U.S. social security benefits.(i)[Repealed, 1994, c. 7, Sch