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

Act current to 2017-09-27 and last amended on 2017-07-01. Previous Versions

Marginal note:Tax payable in respect of advantage
  •  (1) A custodian of a retirement compensation arrangement shall pay a tax under this Part for a calendar year if, in the year, an advantage in relation to the arrangement is extended to, or is received or receivable by, an RCA trust under the arrangement, a specified beneficiary of the arrangement or any person who does not deal at arm’s length with the specified beneficiary.

  • Marginal note:Amount of tax payable

    (2) The amount of tax payable in respect of an advantage described in subsection (1) is

    • (a) in the case of a benefit, the fair market value of the benefit;

    • (b) in the case of a loan or an indebtedness, the amount of the loan or indebtedness; and

    • (c) in the case of an RCA strip, the amount of the RCA strip.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 2012, c. 31, s. 45.
Marginal note:Joint liability

 If a custodian of a retirement compensation arrangement is liable to pay a tax under section 207.61 or 207.62, a specified beneficiary of the arrangement is jointly and severally, or solidarily, liable for that tax to the extent that the specified beneficiary participated in, assented to or acquiesced in the making of, the transaction or event or series of transactions or events that resulted in the liability.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 2012, c. 31, s. 45.
Marginal note:Waiver of tax payable

 If a person would otherwise be liable to pay a tax under this Part because of any of sections 207.61 to 207.63, the Minister may waive or cancel all or part of the liability if the Minister considers it just and equitable to do so having regard to all the circumstances, including

  • (a) whether the tax arose as a consequence of reasonable error; and

  • (b) the extent to which the transaction or event or series of transactions or events that gave rise to the tax also gave rise to another tax under this Act.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 2012, c. 31, s. 45.
Marginal note:Deemed distribution

 For the purposes of the definition refundable tax in subsection 207.5(1), tax paid under section 207.61 or 207.62 by a custodian of a retirement compensation arrangement out of property held in connection with the arrangement is deemed to be a distribution under the arrangement for the taxation year in which the tax is paid to the extent that the tax has not been refunded, waived or cancelled.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 2012, c. 31, s. 45.
Marginal note:Tax payable
  •  (1) Every custodian of a retirement compensation arrangement shall pay a tax under this Part for each taxation year of an RCA trust under the arrangement equal to the amount, if any, by which the refundable tax of the arrangement at the end of the year exceeds the refundable tax of the arrangement at the end of the immediately preceding taxation year, if any.

  • Marginal note:Refund

    (2) Where the custodian of a retirement compensation arrangement has filed a return under this Part for a taxation year within three years after the end of the year, the Minister

    • (a) may, on sending the notice of assessment for the year or a notification that no tax is payable for the year, refund without application an amount equal to the amount, if any, by which the refundable tax of the arrangement at the end of the immediately preceding year exceeds the refundable tax of the arrangement at the end of the year; and

    • (b) shall, with all due dispatch, make such a refund after sending the notice of assessment if application for it has been made in writing by the custodian within three years after the day of sending of a notice of an original assessment for the year or of a notification that no tax is payable for the year.

  • Marginal note:Payment of tax

    (3) Every custodian of a retirement compensation arrangement shall, within 90 days after the end of each taxation year of an RCA trust under the arrangement,

    • (a) file with the Minister a return for the year under this Part in prescribed form and containing prescribed information, without notice or demand therefor;

    • (b) estimate in the return the amount of tax, if any, payable by the custodian under this Part for the year; and

    • (c) pay to the Receiver General the amount of tax, if any, payable by the custodian under this Part for the year.

  • Marginal note:Provisions applicable to Part

    (4) Subsections 150(2) and 150(3), sections 152 and 158, subsections 161(1) and 161(11), sections 162 to 167 and Division J of Part I are applicable to this Part with such modifications as the circumstances require.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 1987, c. 46, s. 62;
  • 2010, c. 25, s. 63.

PART XI.4Tax on Excess EPSP Amounts

Marginal note:Excess EPSP amount
  •  (1) In this Part, excess EPSP amount, of a specified employee for a taxation year in respect of an employer, means the amount determined by the formula

    A – (20% × B)

    where

    A
    is the portion of the total of all amounts paid by the employer of the specified employee (or by a corporation with which the employer does not deal at arm’s length) to a trust governed by an employees profit sharing plan that is allocated for the year to the specified employee; and
    B
    is the specified employee’s total income for the year from an office or employment with the employer computed without reference to paragraph 6(1)(d) and sections 7 and 8.
  • Marginal note:Tax payable

    (2) If a specified employee has an excess EPSP amount for a taxation year, the specified employee shall pay a tax for the year equal to the amount determined by the formula

    (A + B) × C

    where

    A
    is the highest individual percentage for the year;
    B
    is
    • (a) if the specified employee is resident in Quebec at the end of the year, 0%,

    • (b) if the specified employee is resident in a province other than Quebec at the end of the year, the highest percentage rate of tax, including surtaxes but not taxes that are limited to a maximum amount, imposed by the province for the year on the income of an individual who is a resident of the province, or

    • (c) in any other case, 14%; and

    C
    is the total of all excess EPSP amounts of the specified employee for the year.
  • Marginal note:Waiver or cancellation

    (3) If a specified employee would otherwise be liable to pay a tax under subsection (2), the Minister may waive or cancel all or part of the liability if the Minister considers it just and equitable to do so having regard to all the circumstances.

  • Marginal note:Return and payment of tax

    (4) Every person who is liable to pay tax under this Part for a taxation year shall

    • (a) on or before the person’s filing-due date for the year, file with the Minister a return for the year under this Part in prescribed form and containing prescribed information; and

    • (b) on or before the person’s balance-due day for the year, pay to the Receiver General the amount of tax payable under this Part by the person for the year.

  • Marginal note:Provisions applicable to this Part

    (5) Subsections 150(2) and (3), sections 152, 155 to 156.1, 158 to 160.1, 161 and 161.2 to 167 and Division J of Part I apply to this Part with any modifications that the circumstances require.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 2012, c. 31, s. 46;
  • 2016, c. 7, s. 62.

PART XIITax in Respect of Certain Royalties, Taxes, Lease Rentals, Etc., Paid to a Government by a Tax Exempt Person

 [Repealed, 2003, c. 28, s. 15(1)]

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. R.S., 1985, c. 1 (5th Supp.), s. 208;
  • 1994, c. 7, Sch. II, s. 169;
  • 1997, c. 25, s. 58;
  • 2003, c. 15, s. 125, c. 28, s. 15.

PART XII.1Tax on Carved-out Income

Marginal note:Definitions
  •  (1) For the purposes of this Part,

    carved-out income

    revenus miniers et pétroliers

    carved-out income of a person for a taxation year from a carved-out property means the amount, if any, by which

    • (a) the person’s income for the year attributable to the property computed under Part I on the assumption that in computing income no deduction was allowed under section 20, subdivision e of Division B of Part I or section 104,

    exceeds the total of

    • (b) the amount deducted under subsection 66.4(2) in computing the person’s income for the year to the extent that it may reasonably be considered to be attributable to the property, and

    • (c) to the extent that the property is an interest in a bituminous sands deposit or oil shale deposit, the amount deducted under subsection 66.2(2) in computing the person’s income for the year to the extent that it can reasonably be considered to be attributable to the cost of that interest; (revenus miniers et pétroliers)

    carved-out property

    bien restreint

    carved-out property of a person means

    • (a) a Canadian resource property where

      • (i) all or substantially all of the amount that the person is or may become entitled to receive in respect of the property may reasonably be considered to be limited to a maximum amount or to an amount determinable by reference to a stated quantity of production from a mineral resource or an accumulation of petroleum, natural gas or related hydrocarbons,

      • (ii) the period of time during which the person’s interest in the income attributable to the property may reasonably be expected to continue is

        • (A) where the property is a head lease or may reasonably be considered to derive from a head lease, less than the lesser of 10 years and the remainder of the term of the head lease, and

        • (B) in any other case, less than 10 years,

      • (iii) the person’s interest in the income attributable to the property, expressed as a percentage of production for any period, may reasonably be expected to be reduced substantially,

        • (A) where the property is a head lease or may reasonably be considered to derive from a head lease, at any time before

          • (I) the expiration of a period of 10 years commencing when the property was acquired, or

          • (II) the expiration of the term of the head lease,

        whichever occurs first, and

        • (B) in any other case, at any time before the expiration of a period of 10 years commencing when the property was acquired, or

      • (iv) another person has a right under an arrangement to acquire, at any time, the property or a portion thereof or a similar property from the person and it is reasonable to consider that one of the main reasons for the arrangement, or any series of transactions or events that includes the arrangement, was to reduce or postpone tax that would, but for this subparagraph, be payable under this Part, or

    • (b) an interest in a partnership or trust that holds a Canadian resource property where it is reasonable to consider that one of the main reasons for the existence of the interest is to reduce or postpone the tax that would, but for this paragraph, be payable under this Part,

    but does not include

    • (c) an interest, or for civil law a right, in respect of a property that was acquired by the person solely in consideration of the person’s undertaking under an agreement to incur Canadian exploration expense or Canadian development expense in respect of the property and, where the agreement so provides, to acquire gas or oil well equipment (as defined in subsection 1104(2) of the Income Tax Regulations) in respect of the property,

    • (c.1) an interest, or for civil law a right, in respect of a property that was retained by the person under an agreement under which another person obtained an absolute or conditional right to acquire another interest, or for civil law another right, in respect of the property, if the other interest or right is not carved-out property of the other person because of paragraph (c),

    • (d) a particular property acquired by the person under an arrangement solely as consideration for the sale of a Canadian resource property (other than a property that, immediately before the sale was a carved-out property of the person) that relates to the particular property except where it is reasonable to consider that one of the main reasons for the arrangement, or any series of transactions or events that includes the arrangement, was to reduce or postpone tax that would, but for this paragraph, be payable under this Act,

    • (e) a property retained or reserved by the person out of a Canadian resource property (other than a property that, immediately before the transaction by which the retention or reservation is made, was a carved-out property of the person) that was disposed of by the person except where it is reasonable to consider that one of the main reasons for the retention or reservation, or any series of transactions or events in which the property or interest was retained or reserved, was to reduce or postpone tax that would, but for this paragraph, be payable under this Act,

    • (f) a property acquired by the person from a taxpayer with whom the person did not deal at arm’s length at the time of the acquisition and the property was acquired by the taxpayer or a person with whom the taxpayer did not deal at arm’s length

      • (i) pursuant to an agreement in writing to do so entered into before July 20, 1985, or

      • (ii) under the circumstances described in this paragraph or paragraph (d) or (e),

      except where it is reasonable to consider that one of the main reasons for the acquisition of the property, or any series of transactions or events in which the property was acquired, was to reduce or postpone tax that would, but for this paragraph, be payable under this Act,

    • (f.1) where the taxable income of the person is exempt from tax under Part I, a property of the person that

      • (i) does not relate to property of a person whose taxable income is not exempt from tax under Part I, and

      • (ii) is not, and does not relate to, property that was at any time a carved-out property of any other person, or

    • (g) a prescribed property; (bien restreint)

    head lease

    bail initial

    head lease means a contract under which

    • (a) Her Majesty in right of Canada or a province grants, or

    • (b) an owner in fee simple, other than Her Majesty in right of Canada or a province, grants for a period of not less than 10 years

    any right, licence or privilege to explore for, drill for or take petroleum, natural gas or related hydrocarbons in Canada or to prospect, explore, drill or mine for minerals in a mineral resource in Canada; (bail initial)

    term

    durée

    term of a head lease includes all renewal periods in respect of the head lease. (durée)

  • Marginal note:Tax

    (2) Every person shall pay a tax under this Part for each taxation year equal to 45% of the total of the person’s carved-out incomes for the year from carved-out properties.

  • Marginal note:Return

    (3) Every person liable to pay tax under this Part for a taxation year shall file with the Minister, not later than the day on or before which the person is or would be, if the person were liable to pay tax under Part I for the year, required under section 150 to file a return of the person’s income for the year under Part I, a return for the year under this Part in prescribed form containing an estimate of the amount of tax payable by the person under this Part for the year.

  • Marginal note:Payment of tax

    (4) Where a person is liable to pay tax for a taxation year under this Part, the person shall pay in respect of the year, to the Receiver General

    • (a) on or before the last day of each month in the year, an amount equal to 1/12 of the amount of tax payable by the person under this Part for the year; and

    • (b) the remainder, if any, of the tax payable by the person under this Part for the year, on or before the person’s balance-due day for the year.

  • Marginal note:Provisions applicable to Part

    (5) Subsections 150(2) and 150(3) and sections 152, 158 and 159, subsections 161(1), 161(2) and 161(11), sections 162 to 167 and Division J of Part I are applicable to this Part with such modifications as the circumstances require.

  • Marginal note:Partnerships

    (6) For the purposes of subsection 209(1), a partnership shall be deemed to be a person and its taxation year shall be deemed to be its fiscal period.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. R.S., 1985, c. 1 (5th Supp.), s. 209;
  • 1994, c. 7, Sch. II, s. 170, c. 21, s. 95;
  • 1997, c. 25, s. 59;
  • 2003, c. 15, s. 126, c. 28, s. 16;
  • 2013, c. 34, s. 156.
 
Date modified: