Income Tax Act (R.S.C., 1985, c. 1 (5th Supp.))

Act current to 2017-12-11 and last amended on 2017-07-01. Previous Versions

Marginal note:Refunds for federally registered LSVCCs
  •  (1) If a corporation is required, under subsections 204.82(3) and (4), to pay a tax and a penalty under this Part for a taxation year, it has no monthly deficiency throughout any period of 12 consecutive months (in this section referred to as the “second period”) that begins after the 12-month period in respect of which the tax became payable (in this section referred to as the “first period”) and it so requests in an application filed with the Minister in prescribed form, the Minister shall refund to it an amount equal to the total of the amount that was paid under subsection 204.82(3) and 80% of the amount that was paid under subsection 204.82(4) in respect of the first period on or before the later of

    • (a) the 30th day after receiving the application, and

    • (b) the 60th day after the end of the second period.

  • Marginal note:Refunds of amounts payable to provinces

    (2) Where

    • (a) the government of a province refunds, at any time, an amount to a corporation,

    • (b) the refund is of an amount that had been paid in satisfaction of a particular amount payable in a taxation year of the corporation, and

    • (c) tax was payable under subsection 204.82(5) or (6) by the corporation for a taxation year because the particular amount became payable,

    the corporation is deemed to have paid at that time an amount equal to the refund on account of its tax payable under this Part for the year.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 1994, c. 7, Sch. II, s. 164;
  • 1998, c. 19, s. 54;
  • 1999, c. 22, s. 70;
  • 2000, c. 19, s. 57.
Marginal note:Penalty

 Every corporation that for a taxation year issues an information return described in paragraph 204.81(6)(c) in respect of

  • (a) the issuance of a share when the corporation was a revoked corporation, or

  • (b) a subscription in respect of a share if the share is not issued on or before the day that is 180 days after the day the information return was issued,

is liable to a penalty for the year equal to the amount of the consideration for which the share was or was to be issued.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 1994, c. 7, Sch. II, s. 164.
Marginal note:Penalty tax where venture capital business discontinued

 Where, at a particular time in a taxation year, a particular corporation that is a registered labour-sponsored venture capital corporation or a revoked corporation first discontinues its venture capital business, the particular corporation shall pay a tax under this Part for the year equal to the total of all amounts each of which is the amount in respect of a Class A share of the capital stock of the particular corporation outstanding immediately before the particular time that is determined by the formula

A × B

where

A
is
  • (a) if the original acquisition of the share was before March 6, 1996 and less than five years before the particular time, 4% of the consideration received by the particular corporation for the issue of the share,

  • (b) if the original acquisition of the share was after March 5, 1996 and less than eight years before the particular time, 1.875% of the consideration received by the particular corporation for the issue of the share, and

  • (c) in any other case, nil; and

B
is
  • (a) if the original acquisition of the share was before March 6, 1996, the number obtained when the number of whole years throughout which the share was outstanding before the particular time is subtracted from five, and

  • (b) in any other case, the number obtained when the number of whole years throughout which the share was outstanding is subtracted from eight.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 2000, c. 19, s. 58.
Marginal note:Dissolution of federally registered LSVCCs
  •  (1) A registered labour-sponsored venture capital corporation or a revoked corporation that has issued any Class A shares shall send written notification of any proposed amalgamation, merger, liquidation or dissolution of the corporation to the Minister at least 30 days before the amalgamation, merger, liquidation or dissolution, as the case may be.

  • Marginal note:Dissolution of other LSVCCs

    (2) Where

    • (a) an amount (other than interest on an amount to which this subsection applies or an amount payable under or as a consequence of a prescribed provision of a law of a province) is payable to the government of a province by a corporation,

    • (b) the amount is payable as a consequence of the amalgamation or merger of the corporation with another corporation, the winding-up or dissolution of the corporation or the corporation ceasing to be registered under a law of the province,

    • (c) the corporation has been prescribed for the purpose of the definition approved share in subsection 127.4(1), and

    • (d) the corporation is not a registered labour-sponsored venture capital corporation or a revoked corporation,

    the corporation shall pay a tax under this Part for the taxation year in which the amount became payable equal to that amount.

  • Marginal note:Amalgamations and mergers

    (3) For the purposes of section 127.4, this Part and Part XII.5, where two or more corporations (each of which is referred to in this subsection as a “predecessor corporation”) amalgamate or merge to form one corporate entity (in this subsection referred to as the “new corporation”) and at least one of the predecessor corporations was, immediately before the amalgamation or merger, a registered labour-sponsored venture capital corporation or a revoked corporation,

    • (a) subject to paragraphs (d) and (e), the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation;

    • (b) where a predecessor corporation was authorized to issue a class of shares to which clause 204.81(1)(c)(ii)(C) applies, the new corporation is deemed to have received approval from the Minister of Finance to issue substantially similar shares at the time of the amalgamation or merger;

    • (c) where a share of a predecessor corporation (in this paragraph referred to as the “predecessor share”) is replaced on the amalgamation or merger by a new share of the new corporation,

      • (i) the new share

        • (A) is deemed not to have been issued on the amalgamation or merger, and

        • (B) is deemed to have been issued by the new corporation at the time the predecessor corporation issued the predecessor share, and

      • (ii) if the new share was issued to a person who acquired the predecessor share as a consequence of a transfer the registration of which by the predecessor corporation was permitted under paragraph 204.81(1)(c), the issuance of the new share is deemed to be in compliance with the conditions described in paragraph 204.81(1)(c);

    • (d) the Minister is deemed to have registered the new corporation for the purposes of this Part unless

      • (i) the new corporation is not governed by the Canada Business Corporations Act,

      • (ii) one or more of the predecessor corporations was a registered labour-sponsored venture capital corporation the venture capital business of which was discontinued before the amalgamation or merger,

      • (iii) one or more of the predecessor corporations was, immediately before the amalgamation or merger, a revoked corporation,

      • (iv) immediately after the amalgamation or merger, the articles of the new corporation do not comply with paragraph 204.81(1)(c),

      • (v) shares other than Class A shares of the capital stock of the new corporation were issued to any shareholder of the new corporation in satisfaction of any share (other than a share to which clause 204.81(1)(c)(ii)(B) or (C) applied) of a predecessor corporation,

      • (vi) immediately before the amalgamation or merger, one or more of the predecessor corporations is a corporation that has given notification under subsection 204.81(8.3) and one or more of the predecessor corporations is a registered labour-sponsored venture capital corporation that has not given notification under that subsection;

    • (e) where paragraph (d) does not apply, the new corporation is deemed to be a revoked corporation;

    • (f) subsection 204.82(1) does not apply to the new corporation; and

    • (g) subsection 204.82(2) shall, in its application to the new corporation, be read without reference to the words “that begins after the end of the corporation’s start-up period (or, where the corporation has no start-up period, that begins after the time the corporation first issues a Class A share)”.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 1994, c. 7, Sch. II, s. 164;
  • 1998, c. 19, s. 55;
  • 2000, c. 19, s. 59;
  • 2014, c. 20, s. 25.
 
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