Budget and Economic Statement Implementation Act, 2007 (S.C. 2007, c. 35)
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Assented to 2007-12-14
C.R.C., c. 385Canada Pension Plan Regulations
Marginal note:SOR/97-472, s. 1(2)
90. (1) Paragraphs 8(1.12)(a) and (b) of the Canada Pension Plan Regulations are replaced by the following:
(a) the average monthly withholding amount in respect of an employer for either the first or the second calendar year before the particular calendar year that includes that time is less than $3,000;
(b) throughout the 12-month period before that time, the employer has remitted, on or before the day on or before which the amounts were required to be remitted, all amounts each of which was required to be remitted under subsection 21(1) of the Act, under subsection 82(1) of the Employment Insurance Act, under Part IX of the Excise Tax Act or under subsection 153(1) of the Income Tax Act; and
(2) Subsection (1) applies in respect of amounts required to be deducted or withheld after 2007.
SOR/97-33Insurable Earnings and Collection of Premiums Regulations
Marginal note:SOR/97-472, s. 2(2)
91. (1) Paragraphs 4(3.1)(a) and (b) of the Insurable Earnings and Collection of Premiums Regulations are replaced by the following:
(a) the average monthly withholding amount in respect of an employer for either the first or the second calendar year before the particular calendar year that includes that time is less than $3,000;
(b) throughout the 12-month period before that time, the employer has remitted, on or before the day on or before which the amounts were required to be remitted, all amounts each of which was required to be remitted under subsection 82(1) of the Act, under subsection 21(1) of the Canada Pension Plan, under Part IX of the Excise Tax Act, or under subsection 153(1) of the Income Tax Act; and
(2) Subsection (1) applies in respect of amounts required to be deducted or withheld after 2007.
Coordinating Amendments
Marginal note:Bill C-10
92. Sections 93 to 100 apply if Bill C-10, introduced in the 2nd session of the 39th Parliament and entitled the Income Tax Amendments Act, 2006 (referred to in those sections as the “other Act”), receives royal assent.
93. (1) If this Act receives royal assent before the other Act receives royal assent, section 4 of the other Act is repealed.
(2) The definition “controlled foreign affiliate” in subsection 17(15) of the Income Tax Act, as enacted by subsection 10(3) of this Act, is replaced by the following:
“controlled foreign affiliate”
« société étrangère affiliée contrôlée »
“controlled foreign affiliate”, at any time, of a taxpayer resident in Canada, means a corporation that would, at that time, be a controlled foreign affiliate of the taxpayer within the meaning assigned by the definition “controlled foreign affiliate” in subsection 95(1) if the word “or” were added at the end of paragraph (a) of that definition and
(a) subparagraph (b)(ii) of that definition were read as “all of the shares of the capital stock of the foreign affiliate that are owned at that time by persons resident in Canada who do not deal at arm’s length with the taxpayer,”;
(b) subparagraph (b)(iv) of that definition were read as “all of the shares of the capital stock of the foreign affiliate that are owned at that time by persons resident in Canada who do not deal at arm’s length with any relevant Canadian shareholder;”; and
(c) that definition were read without reference to its paragraph (c).
(3) Subsection (2) applies to taxation years, of a foreign affiliate of a taxpayer, that begin after February 23, 1998, except that, in applying the definition “controlled foreign affiliate” in subsection 17(15) of the Income Tax Act, as enacted by subsection (2),
(a) for taxation years, of a foreign affiliate of a taxpayer, that begin after 2002 and on or before February 27, 2004, that definition is to be read as follows:
- “controlled foreign affiliate”
“controlled foreign affiliate” has the meaning that would be assigned by the definition “controlled foreign affiliate” in subsection 95(1) for taxation years, of a foreign affiliate of a taxpayer, that begin after 2002 and on or before February 27, 2004, if the word “or” were added at the end of paragraph (a) of that definition and
(a) subparagraph (b)(ii) of that definition were read as “all of the shares of the capital stock of the foreign affiliate that are owned at that time by persons resident in Canada who do not deal at arm’s length with the taxpayer,”;
(b) subparagraph (b)(iv) of that definition were read as “all of the shares of the capital stock of the foreign affiliate that are owned at that time by persons resident in Canada who do not deal at arm’s length with any relevant Canadian shareholder;”; and
(c) that definition were read without reference to its paragraph (c).
(b) for taxation years, of a foreign affiliate of a taxpayer, that begin after February 23, 1998 and before 2003, that definition is to be read as follows:
- “controlled foreign affiliate”
“controlled foreign affiliate” has the meaning that would be assigned by the definition “controlled foreign affiliate” in subsection 95(1) for taxation years, of a foreign affiliate of a taxpayer, that begin after February 23, 1998 and before 2003, if subparagraph (b)(iii) of that definition were read as “each share of the capital stock of a corporation that is owned at that time by the taxpayer and each share of the capital stock of a corporation that is owned at that time by any person resident in Canada with whom the taxpayer does not deal at arm’s length.”.
94. (1) If this Act receives royal assent before the other Act receives royal assent, subsection 19(2) of the other Act is repealed.
(2) The definition “controlled foreign affiliate” in subsection 95(1) of the Income Tax Act, as enacted by subsection 26(1) of this Act, is replaced by the following:
“controlled foreign affiliate”
« société étrangère affiliée contrôlée »
“controlled foreign affiliate”, at any time, of a taxpayer resident in Canada, means
(a) a foreign affiliate of the taxpayer that is, at that time, controlled by the taxpayer,
(b) a foreign affiliate of the taxpayer that would, at that time, be controlled by the taxpayer if the taxpayer owned
(i) all of the shares of the capital stock of the foreign affiliate that are owned at that time by the taxpayer,
(ii) all of the shares of the capital stock of the foreign affiliate that are owned at that time by persons who do not deal at arm’s length with the taxpayer,
(iii) all of the shares of the capital stock of the foreign affiliate that are owned at that time by the persons (each of whom is referred to in this definition as a “relevant Canadian shareholder”), in any set of persons not exceeding four (which set of persons shall be determined without ref-erence to the existence of or the absence of any relationship, connection or action in concert between those persons), who
(A) are resident in Canada,
(B) are not the taxpayer or a person described in subparagraph (ii), and
(C) own, at that time, shares of the capital stock of the foreign affiliate, and
(iv) all of the shares of the capital stock of the foreign affiliate that are owned at that time by persons who do not deal at arm’s length with any relevant Canadian shareholder, or
(c) a foreign affiliate of the taxpayer that is, at that time, a controlled foreign affiliate of the taxpayer because of paragraph 94.1(2)(h);
(3) Subsection (2) applies to taxation years, of a foreign affiliate of a taxpayer, that begin after 1995, except that
(a) for taxation years, of a foreign affiliate of a taxpayer, that begin after 2002 and on or before February 27, 2004, the definition “controlled foreign affiliate” in subsection 95(1) of the Income Tax Act, as enacted by subsection (2), is to be read as follows:
- “controlled foreign affiliate”
“controlled foreign affiliate”, at any time, of a taxpayer resident in Canada, means
(a) a foreign affiliate of the taxpayer that is, at that time, controlled
(i) by the taxpayer,
(ii) by the taxpayer and not more than four other persons resident in Canada, or
(iii) by not more than four persons resident in Canada, other than the taxpayer,
(b) a foreign affiliate of the taxpayer that would, at that time, be controlled by the taxpayer if the taxpayer owned
(i) all of the shares of the capital stock of the foreign affiliate that are owned at that time by the taxpayer,
(ii) all of the shares of the capital stock of the foreign affiliate that are owned at that time by persons who do not deal at arm’s length with the taxpayer,
(iii) all of the shares of the capital stock of the foreign affiliate that are owned at that time by the persons (each of whom is referred to in this definition as a “relevant Canadian shareholder”), in any set of persons not exceeding four (which set of persons shall be determined without ref-erence to the existence of or the absence of any relationship, connection or action in concert between those persons), who
(A) are resident in Canada,
(B) are not the taxpayer or a person described in subparagraph (ii), and
(C) own, at that time, shares of the capital stock of the foreign affiliate, and
(iv) all of the shares of the capital stock of the foreign affiliate that are owned at that time by persons who do not deal at arm’s length with any relevant Canadian shareholder, or
(c) a foreign affiliate of the taxpayer that is, at that time, a controlled foreign affiliate of the taxpayer because of paragraph 94.1(2)(h);
(b) for taxation years, of a foreign affiliate of a taxpayer, that begin after 1995 and before 2003, the definition “controlled foreign affiliate” in subsection 95(1) of the Income Tax Act, as enacted by subsection (2), is to be read as follows:
- “controlled foreign affiliate”
“controlled foreign affiliate”, at any time of a taxpayer resident in Canada, means a foreign affiliate of the taxpayer that
(a) is, at that time, controlled
(i) by the taxpayer,
(ii) by the taxpayer and not more than four other persons resident in Canada, or
(iii) by not more than four persons resident in Canada, other than the taxpayer, or
(b) would, at that time, be controlled by the taxpayer if the taxpayer owned
(i) each share of the capital stock of a corporation that is owned at that time by the taxpayer and each share of the capital stock of a corporation that is owned at that time by any of not more than four other persons resident in Canada,
(ii) each share of the capital stock of a corporation that is owned at that time by any of not more than four persons resident in Canada (other than the taxpayer), and
(iii) each share of the capital stock of a corporation that is owned at that time by the taxpayer and each share of the capital stock of a corporation that is owned at that time by any person with whom the taxpayer does not deal at arm’s length.
95. (1) Paragraph 95(2)(g.02) of the Act, as enacted by subsection 26(13) of this Act, is replaced by the following:
(g.02) in applying subsection 39(2) for the purpose of this subdivision (other than sections 94 to 94.4), the gains and losses of a foreign affiliate of a taxpayer in respect of excluded property are to be computed in respect of the taxpayer separately from the gains and losses of the foreign affiliate in respect of property that is not excluded property;
(2) Subsection (1) applies to taxation years, of a foreign affiliate of a taxpayer, that begin after 2002.
96. Paragraph 110.1(1)(a.1) of the Act, as enacted by subsection 30(1) of this Act, is replaced by the following:
Marginal note:Gifts of medicine
(a.1) the total of all amounts each of which is an amount, in respect of property that is the subject of an eligible medical gift made by the corporation in the taxation year or in any of the 5 preceding taxation years, determined by the formula
A × B/C
where
- A
- is the lesser of
(a) the cost to the corporation of the property, and
(b) 50 per cent of the amount, if any, by which the corporation’s proceeds of disposition of the property in respect of the gift exceeds the cost to the corporation of the property;
- B
- is the eligible amount of the gift; and
- C
- is the corporation’s proceeds of disposition of the property in respect of the gift.
97. (1) Subsections 179(1) to (3), (10), (16) to (19), (24) and (27) of the other Act and subsections 59(2), (3), (6) and (8) of this Act apply as though the other Act had received royal assent before this Act received royal assent.
(2) Subsection 268(1) of the other Act is repealed.
(3) If subsection 194(8) of the other Act comes into force, then, on the day on which this Act is assented to, the portion of paragraph (d) of the definition “fully exempt interest” in subsection 212(3) of the Income Tax Act before subparagraph (i), as enacted by subsection 59(3) of this Act, is replaced by the following:
(d) an amount paid or payable or credited under a securities lending arrangement that is deemed by subparagraph 260(8)(c)(i) to be a payment made by a borrower to a lender of interest, if
98. (1) If the other Act receives royal assent before this Act receives royal assent, section 63 and subsection 64(1) of this Act are repealed.
(2) On the later of the day on which the other Act receives royal assent and the day on which this Act receives royal assent, paragraph (b) of the definition “listed international agreement” in subsection 248(1) of the Income Tax Act, as enacted by subsection 187(11) of the other Act, is replaced by the following:
(b) a comprehensive tax information exchange agreement between Canada and another country or jurisdiction;
99. (1) The definition “qualified trust unit” in subsection 260(1) of the Act, as enacted by subsection 194(5) of the other Act, is replaced by the following:
“qualified trust unit”
« unité de fiducie déterminée »
“qualified trust unit” means a unit of a mutual fund trust that is listed on a stock exchange;
(2) If the other Act receives royal assent before subsection 66(2) of this Act comes into force, that subsection 66(2) is repealed and the words “Subsections (2) and (3) apply” in subsection 66(5) of this Act are replaced by “Subsection (3) applies”.
(3) Subparagraph 260(8)(c)(ii) of the Income Tax Act, as enacted by subsection 194(8) of the other Act, is replaced by the following:
(ii) is, to the extent of the amount of the interest, if any, paid in respect of the security, deemed, if the security is described in paragraph (c) of the definition “qualified security” in subsection (1), to have been payable on a security described in paragraph (a) of the definition “fully exempt interest” in subsection 212(3); and
(4) On the first day on which both subsection 260(10) of the Income Tax Act, as enacted by subsection 194(9) of the other Act, and subsection 260(10) of the Income Tax Act, as enacted by subsection 66(3) of this Act, are in force, subsection 260(10) of the Income Tax Act, as enacted by subsection 66(3) of this Act, is renumbered as subsection 260(9.1) and is repositioned accordingly if required.
100. (1) If the other Act receives royal assent before this Act receives royal assent, paragraph 68(2)(d) of this Act is repealed.
(2) Sections 17, 18, 69 and 87 of the other Act and section 68 of this Act apply as though the other Act had received royal assent before this Act received royal assent, and, on the day on which this Act is assented to, the references to “prescribed stock exchange” in the following provisions of the Income Tax Act, as enacted by those sections of the other Act, are replaced by references to “designated stock exchange”:
(a) paragraphs (b) and (c) of the definition “qualified person” in subsection 55(1), and subsection 55(6);
(b) the definitions “arm’s length transfer” and “excluded property” in subsection 94(1);
(c) the definitions “arm’s length interest” and “exempt interest” in subsection 94.1(1); and
(d) the definitions “readily obtainable fair market value” and “trading day” in subsection 94.2(1), and paragraph 94.2(2)(b).
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