Income Tax Amendments Act, 2000 (S.C. 2001, c. 17)

Marginal note:Consideration for foreign resource property

• 59. (1) Where a taxpayer has disposed of a foreign resource property, there shall be included in computing the taxpayer’s income for a taxation year the amount, if any, by which

  • (a) the portion of the taxpayer’s proceeds of disposition from the disposition of the property that becomes receivable in the year

  exceeds

  • (b) the total of

    • (i) all amounts each of which is an outlay or expense made or incurred by the taxpayer for the purpose of making the disposition that was not otherwise deductible for the purposes of this Part, and

    • (ii) where the property is a foreign resource property in respect of a country, the amount designated under this subparagraph in prescribed form filed with the taxpayer’s return of income for the year in respect of the disposition.

• Marginal note:Partnerships

  (1.1) Where a taxpayer is a member of a partnership in a fiscal period of the partnership, the taxpayer’s share of the amount that would be included under subsection (1) in respect of a disposition of a foreign resource property in computing the partnership’s income for a taxation year if the partnership were a person, the fiscal period were a taxation year, subsection (1) were read without reference to subparagraph (1)(b)(ii) and section 96 were read without reference to paragraph 96(1)(d) is deemed to be proceeds of disposition that become receivable by the taxpayer at the end of the fiscal period in respect of a disposition of the property by the taxpayer.

• (c.1) any amount referred to in subsection 66.21(3);

• Definition of “proceeds of disposition”

  (5) In this section, “proceeds of disposition” has the meaning assigned by section 54.

• Marginal note:CPP/QPP contributions on self-employed earnings

  (e) 1/2 of the lesser of

  • (i) the total of all amounts each of which is an amount payable by the taxpayer in respect of self-employed earnings for the year as a contribution under the Canada Pension Plan or under a provincial pension plan within the meaning assigned by section 3 of that Act, and

  • (ii) the maximum amount of such contributions payable by the taxpayer for the year under the plan;

• (a) by the taxpayer, where the taxpayer is described in subsection (2) and the supporting person of the child for the year is a person described in clause (i)(D) of the description of C in the formula in that subsection, or

• (ii) the total of all amounts each of which is the annual child care expense amount in respect of an eligible child of the taxpayer for the year

A 

is the total of all amounts each of which is the periodic child care expense amount in respect of an eligible child of the taxpayer for the year, and

A 

is the total of all amounts each of which is the periodic child care expense amount in respect of an eligible child of the taxpayer for the year, and

• (c) any such expenses paid in the year for a child’s attendance at a boarding school or camp to the extent that the total of those expenses exceeds the product obtained when the periodic child care expense amount in respect of the child for the year is multiplied by the number of weeks in the year during which the child attended the school or camp, and

• (b) all amounts that are included, or that would, but for paragraph 81(1)(a) or subsection 81(4), be included, because of section 6 or 7 or paragraph 56(1)(n), (o) or (r), in computing the taxpayer’s income,

“annual child care expense amount”

« montant annuel de frais de garde d’enfants »

“annual child care expense amount”, in respect of an eligible child of a taxpayer for a taxation year, means

• (a) $10,000, where the child is a person in respect of whom an amount may be deducted under section 118.3 in computing a taxpayer’s tax payable under this Part for the year, and

• (b) where the child is not a person referred to in paragraph (a),

  • (i) $7,000, where the child is under 7 years of age at the end of the year, and

  • (ii) $4,000, in any other case;

“periodic child care expense amount”

« montant périodique de frais de garde d’enfants »

“periodic child care expense amount”, in respect of an eligible child of a taxpayer for a taxation year, means 1/40 of the annual child care expense amount in respect of the child for the year;

• (C) attend a designated educational institution or a secondary school at which the taxpayer is enrolled in an educational program, or

• (b) 2/3 of the total of

  • (i) the total of all amounts each of which is

    • (A) an amount included under section 5, 6 or 7 or paragraph 56(1)(n), (o) or (r) in computing the taxpayer’s income for the year, or

    • (B) the taxpayer’s income for the year from a business carried on either alone or as a partner actively engaged in the business, and

  • (ii) where the taxpayer is in attendance at a designated educational institution or a secondary school at which the taxpayer is enrolled in an educational program, the least of

    • (A) $15,000,

    • (B) $375 times the number of weeks in the year during which the taxpayer is in attendance at the institution or school, and

    • (C) the amount, if any, by which the amount that would, if this Act were read without reference to this section, be the taxpayer’s income for the year exceeds the total determined under subparagraph (i) in respect of the taxpayer for the year.

• (i) the total of the foreign exploration and development expenses incurred by the taxpayer

  • (A) before the end of the year,

  • (B) at a time at which the taxpayer was resident in Canada, and

  • (C) where the taxpayer became resident in Canada before the end of the year, after the last time (before the end of the year) that the taxpayer became resident in Canada,

• (b) of that total, the greater of

  • (i) the amount, if any, claimed by the taxpayer not exceeding 10% of the amount determined under paragraph (a) in respect of the taxpayer for the year, and

• (ii) the total of

  • (A) the part of the taxpayer’s income for the year, determined without reference to this subsection and subsection 66.21(4), that can reasonably be regarded as attributable to

    • (I) the production of petroleum or natural gas from natural accumulations outside Canada or from oil or gas wells outside Canada, or

    • (II) the production of minerals from mines outside Canada,

  • (B) the taxpayer’s income for the year from royalties in respect of a natural accumulation of petroleum or natural gas outside Canada, an oil or gas well outside Canada or a mine outside Canada, determined without reference to this subsection and subsection 66.21(4), and

  • (C) all amounts each of which is an amount, in respect of a foreign resource property that has been disposed of by the taxpayer, equal to the amount, if any, by which

    • (I) the amount included in computing the taxpayer’s income for the year by reason of subsection 59(1) in respect of the disposition

    exceeds

    • (II) the total of all amounts each of which is that portion of an amount deducted under subsection 66.7(2) in computing the taxpayer’s income for the year that

      1. can reasonably be considered to be in respect of the foreign resource property, and

      2. cannot reasonably be considered to have reduced the amount otherwise determined under clause (A) or (B) in respect of the taxpayer for the year.

• Marginal note:Country-by-country FEDE allocations

  (4.1) For greater certainty, the portion of an amount deducted under subsection (4) in computing a taxpayer’s income for a taxation year that can reasonably be considered to be in respect of specified foreign exploration and development expenses of the taxpayer in respect of a country is considered to apply to a source in that country.

• Marginal note:Method of allocation

  (4.2) For the purpose of subsection (4.1), where a taxpayer has incurred specified foreign exploration and development expenses in respect of two or more countries, an allocation to each of those countries for a taxation year shall be determined in a manner that is

  • (a) reasonable having regard to all the circumstances, including the level and timing of

    • (i) the taxpayer’s specified foreign exploration and development expenses in respect of the country, and

    • (ii) the profits or gains to which those expenses relate; and

  • (b) not inconsistent with the allocation made under subsection (4.1) for the preceding taxation year.

• Marginal note:FEDE deductions where change of individual’s residence

  (4.3) Where at any time in a taxation year an individual becomes or ceases to be resident in Canada,

  • (a) subsection (4) applies to the individual as if the year were the period or periods in the year throughout which the individual was resident in Canada; and

  • (b) for the purpose of applying subsection (4), subsection (13.1) does not apply to the individual for the year.

• Marginal note:Dealers

  (5) Subsections (3) and (4) and sections 59, 64, 66.1, 66.2, 66.21, 66.4 and 66.7 do not apply in computing the income for a taxation year of a taxpayer (other than a principal-business corporation) whose business includes trading or dealing in rights, licences or privileges to explore for, drill for or take minerals, petroleum, natural gas or other related hydrocarbons.

for the purposes of subsection (4) and sections 66.2, 66.21 and 66.4, except as those provisions apply for the purposes of section 66.7, the property is deemed not to have been acquired by the corporation or partnership before that time and is deemed to have been acquired by it at that time, except that, where the property has been disposed of by it before that time and not reacquired by it before that time, the property is deemed to have been acquired by the corporation or partnership immediately before it disposed of the property.

• Marginal note:Limitation of FEDE

  (12.4) Where, as a result of a transaction that occurs after May 6, 1974, an amount becomes receivable by a taxpayer at a particular time in a taxation year and the consideration given by the taxpayer for the amount receivable is property (other than a foreign resource property) or services, the original cost of which to the taxpayer can reasonably be regarded as having been primarily foreign exploration and development expenses of the taxpayer (or would have been so regarded if they had been incurred by the taxpayer after 1971 and the definition “foreign exploration and development expenses” in subsection (15) were read without reference to paragraph (k) of that definition), the following rules apply:

• (b) where the amount receivable exceeds the total of the taxpayer’s foreign exploration and development expenses incurred before that time to the extent that those expenses were not deducted or deductible, as the case may be, in computing the taxpayer’s income for a preceding taxation year, there shall be included in the amount referred to in paragraph 59(3.2)(a) the amount, if any, by which the amount receivable exceeds the total of

  • (i) the taxpayer’s foreign exploration and development expenses incurred before that time to the extent that those expenses were not deducted or deductible, as the case may be, in computing the taxpayer’s income for a preceding taxation year, and

  • (ii) the amount, designated by the taxpayer in prescribed form filed with the taxpayer’s return of income for the year, not exceeding the portion of the amount receivable for which the consideration given by the taxpayer was property (other than a foreign resource property) or services, the original cost of which to the taxpayer can reasonably be regarded as having been primarily

    • (A) specified foreign exploration and development expenses in respect of a country, or

    • (B) foreign resource expenses in respect of a country; and

• Marginal note:Limitations of foreign resource expenses

  (12.41) Where a particular amount described in subsection (12.4) becomes receivable by a taxpayer at a particular time, there shall at that time be included in the value determined for G in the definition “cumulative foreign resource expense” in subsection 66.21(1) in respect of the taxpayer and a country the amount designated under subparagraph (12.4)(b)(ii) by the taxpayer in respect of the particular amount and the country.

• Marginal note:Partnerships

  (12.42) For the purposes of subsections (12.4) and (12.41), where a person or partnership is a member of a particular partnership and a particular amount described in subsection (12.4) becomes receivable by the particular partnership in a fiscal period of the particular partnership,

  • (a) the member’s share of the particular amount is deemed to be an amount that became receivable by the member at the end of the fiscal period; and

  • (b) the amount deemed by paragraph (a) to be an amount receivable by the member is deemed to be an amount

    • (i) that is described in subsection (12.4) in respect of the member, and

    • (ii) that has the same attributes for the member as it did for the particular partnership.

• Marginal note:Short taxation year

  (13.1) Where a taxpayer has a taxation year that is less than 51 weeks, the amount determined in respect of the year under each of subparagraph (4)(b)(i), paragraph 66.2(2)(c), subparagraph (b)(i) of the definition “global foreign resource limit” in subsection 66.21(1), subparagraph 66.21(4)(a)(i), clause 66.21(4)(a)(ii)(B) and paragraphs 66.4(2)(b) and 66.7(2.3)(a), (4)(a) and (5)(a) shall not exceed that proportion of the amount otherwise determined that the number of days in the year is of 365.

“original owner”

« propriétaire obligé »

“original owner” of a Canadian resource property or a foreign resource property means a person

• (a) who owned the property and disposed of it to a corporation that acquired it in circumstances in which subsection 29(25) of the Income Tax Application Rules or subsection 66.7(1), (2), (2.3), (3), (4) or (5) applies, or would apply if the corporation had continued to own the property, to the corporation in respect of the property, and

• (b) who would, but for subsection 66.7(12), (13), (13.1) or (17), as the case may be, be entitled in computing that person’s income for a taxation year that ends after that person disposed of the property to a deduction under section 29 of the Income Tax Application Rules or subsection (2), (3) or (4), 66.1(2) or (3), 66.2(2), 66.21(4) or 66.4(2) of this Act in respect of expenses described in subparagraph 29(25)(c)(i) or (ii) of that Act, Canadian exploration and development expenses, foreign resource pool expenses, Canadian exploration expenses, Canadian development expenses or Canadian oil and gas property expenses incurred by the person before the person disposed of the property;

“predecessor owner”

« propriétaire antérieur »

“predecessor owner” of a Canadian resource property or a foreign resource property means a corporation

• (a) that acquired the property in circumstances in which subsection 29(25) of the Income Tax Application Rules or subsection 66.7(1), (2), (2.3), (3), (4) or (5) applies, or would apply if the corporation had continued to own the property, to the corporation in respect of the property,

• (b) that disposed of the property to another corporation that acquired it in circumstances in which subsection 29(25) of the Income Tax Application Rules or subsection 66.7(1), (2), (2.3), (3), (4) or (5) applies, or would apply if the other corporation had continued to own the property, to the other corporation in respect of the property, and

• (c) that would, but for subsection 66.7(14), (15), (15.1) or (17), as the case may be, be entitled in computing its income for a taxation year ending after it disposed of the property to a deduction under subsection 29(25) of the Income Tax Application Rules or subsection 66.7(1), (2), (2.3), (3), (4) or (5) in respect of expenses incurred by an original owner of the property;

• (c) any oil or gas well in Canada or any real property in Canada the principal value of which depends on its petroleum or natural gas content (but not including any depreciable property),

• (f) any real property in Canada the principal value of which depends on its mineral resource content (but not including any depreciable property), or

• (b) any expense incurred by the taxpayer for the purpose of determining the existence, location, extent or quality of a mineral resource outside Canada, including any expense incurred in the course of

  • (i) prospecting,

  • (ii) carrying out geological, geophysical or geochemical surveys,

  • (iii) drilling by rotary, diamond, percussion or other method, or

  • (iv) trenching, digging test pits and preliminary sampling,

• (j) an expenditure that is the cost, or any part of the cost, to the taxpayer of any depreciable property of a prescribed class that was acquired after December 21, 2000,

• (k) foreign resource expenses in respect of a country, or

• (l) an expenditure made after February 27, 2000 by the taxpayer unless the expenditure was made

  • (i) pursuant to an agreement in writing made by the taxpayer before February 28, 2000,

  • (ii) for the acquisition of foreign resource property by the taxpayer, or

  • (iii) for the purpose of

    • (A) enhancing the value of foreign resource property that the taxpayer owned at the time the expenditure was incurred or that the taxpayer had a reasonable expectation of owning after that time, or

    • (B) assisting in evaluating whether a foreign resource property is to be acquired by the taxpayer;

“specified foreign exploration and development expense”

« frais d’exploration et d’aménagement à l’étranger déterminés »

“specified foreign exploration and development expense” of a taxpayer in respect of a country (other than Canada) means an amount that is included in the taxpayer’s foreign exploration and development expenses and that is

• (a) a drilling or exploration expense, including any general geological or geophysical expense, incurred by the taxpayer on or in respect of exploring or drilling for petroleum or natural gas in that country,

• (a.1) an expense incurred by the taxpayer after December 21, 2000 (otherwise than pursuant to an agreement in writing made before December 22, 2000) for the purpose of determining the existence, location, extent or quality of a mineral resource in that country, including any expense incurred in the course of

  • (i) prospecting,

  • (ii) carrying out geological, geophysical or geochemical surveys,

  • (iii) drilling by rotary, diamond, percussion or other methods, or

  • (iv) trenching, digging test pits and preliminary sampling,

• (b) a prospecting, exploration or development expense incurred by the taxpayer before December 22, 2000 (or after December 21, 2000 pursuant to an agreement in writing made before December 22, 2000) in searching for minerals in that country,

• (c) the cost to the taxpayer of the taxpayer’s foreign resource property in respect of that country,

• (d) an annual payment made by the taxpayer in a taxation year of the taxpayer for the preservation of a foreign resource property in respect of that country,

• (e) an amount deemed by subsection 21(2) or (4) to be a foreign exploration and development expense incurred by the taxpayer, to the extent that it can reasonably be considered to relate to an amount that, without reference to this paragraph and paragraph (f), would be a specified foreign exploration and development expense in respect of that country, or

• (f) subject to section 66.8, the taxpayer’s share of the specified foreign exploration and development expenses of a partnership incurred in respect of that country in a fiscal period of the partnership if, at the end of that period, the taxpayer was a member of the partnership.

• Marginal note:Other definitions

  (15.1) The definitions in subsections 66.1(6), 66.2(5), 66.21(1), 66.4(5) and 66.5(2) apply in this section.

• Marginal note:Members of partnerships

  (18) For the purposes of this section, subsection 21(2), sections 59.1 and 66.1 to 66.7, paragraph (d) of the definition “investment expense” in subsection 110.6(1) and the descriptions of C and D in subsection 211.91(1), where a person’s share of an outlay or expense made or incurred by a partnership in a fiscal period of the partnership is included in respect of the person under paragraph (d) of the definition “foreign exploration and development expenses” in subsection (15), paragraph (h) of the definition “Canadian exploration expense” in subsection 66.1(6), paragraph (f) of the definition “Canadian development expense” in subsection 66.2(5), paragraph (e) of the definition “foreign resource expense” in subsection 66.21(1) or paragraph (b) of the definition “Canadian oil and gas property expense” in subsection 66.4(5), the portion of the outlay or expense so included is deemed, except for the purposes of applying the definitions “foreign exploration and development expenses”, “Canadian exploration expense”, “Canadian development expense”, “foreign resource expense” and “Canadian oil and gas property expense” in respect of the person, to be made or incurred by the person at the end of that fiscal period.