Budget Implementation Act, 2009 (S.C. 2009, c. 2)
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Assented to 2009-03-12
PART 1AMENDMENTS IN RESPECT OF INCOME TAX
R.S., c. 1 (5th Supp.)Income Tax Act
59. (1) Paragraph 157(1.2)(a) of the Act is replaced by the following:
(a) for which the amount determined under subsection (1.3) for the taxation year, or for the preceding taxation year, does not exceed $500,000;
(2) Subsection (1) applies to taxation years ending after 2008, except that for taxation years that end in 2009, paragraph 157(1.2)(a) of the Act, as enacted by subsection (1), shall be read as follows:
(a) for which
(i) the amount determined under subsection (1.3) for the taxation year does not exceed the amount that is the total of $400,000 and that proportion of $100,000 that the number of days in the taxation year that are in 2009 is of the number of days in the taxation year, or
(ii) the amount determined under subsection (1.3) for the preceding taxation year does not exceed $400,000;
60. (1) Section 162 of the Act is amended by adding the following after subsection (7):
Marginal note:Late filing penalty — prescribed information returns
(7.01) Every person (other than a registered charity) or partnership who fails to file, when required by this Act or the regulations, one or more information returns of a type prescribed for the purpose of this subsection is liable to a penalty equal to the greater of $100 and
(a) where the number of those information returns is less than 51, $10 multiplied by the number of days, not exceeding 100, during which the failure continues;
(b) where the number of those information returns is greater than 50 and less than 501, $15 multiplied by the number of days, not exceeding 100, during which the failure continues;
(c) where the number of those information returns is greater than 500 and less than 2,501, $25 multiplied by the number of days, not exceeding 100, during which the failure continues;
(d) where the number of those information returns is greater than 2,500 and less than 10,001, $50 multiplied by the number of days, not exceeding 100, during which the failure continues; and
(e) where the number of those information returns is greater than 10,000, $75 multiplied by the number of days, not exceeding 100, during which the failure continues.
Marginal note:Failure to file in appropriate manner — prescribed information returns
(7.02) Every person (other than a registered charity) or partnership who fails to file, in the manner required by the regulations, one or more information returns of a type prescribed for the purpose of this subsection is liable to a penalty equal to
(a) where the number of those information returns is greater than 50 and less than 251, $250;
(b) where the number of those information returns is greater than 250 and less than 501, $500;
(c) where the number of those information returns is greater than 500 and less than 2,501, $1,500;
(d) where the number of those information returns is greater than 2,500, $2,500; and
(e) in any other case, nil.
(2) Section 162 of the Act is amended by adding the following after subsection (7.1):
Marginal note:Failure to file in appropriate manner — return of income
(7.2) Every person who fails to file a return of income for a taxation year as required by subsection 150.1(2.1) is liable to a penalty equal to $1,000.
(3) Subsection (1) applies to returns required to be filed after 2009.
(4) Subsection (2) applies to taxation years that end after 2010 except that, in its application to the 2011 and 2012 taxation years, the reference to $1,000 in subsection 162(7.2) of the Act, as enacted by subsection (2), is to be read as
(a) $250, for the 2011 taxation year; and
(b) $500, for the 2012 taxation year.
61. (1) Clause 181.3(1)(c)(ii)(B) of the Act is repealed.
(2) Subsection (1) applies to taxation years that begin after September 2006.
62. (1) Paragraph 188.1(3.2)(c) of the Act is replaced by the following:
(c) each of those shares is deemed to have a fair market value, at the particular time, equal to the fair market value, at the particular time, of a share of the class issued by the corporation, determined without reference to this subsection.
(2) Section 188.1 of the Act is amended by adding the following after subsection (3.2):
Marginal note:Where subsection (3.5) applies
(3.3) Subsection (3.5) applies to a private foundation at a particular time in a taxation year if
(a) at the particular time, a person (in this subsection and subsection (3.5) referred to as an “insider” of the private foundation) that is the private foundation, or is a relevant person in respect of the private foundation, is a beneficiary under a trust;
(b) at or before the particular time
(i) the insider acquired an interest in or under the trust, or
(ii) the trust acquired a property;
(c) it may reasonably be considered that a purpose of the acquisition described in paragraph (b) was to hold, directly or indirectly, shares of a class of the capital stock of a corporation (referred to in subsection (3.5) as the “subject corporation”);
(d) the shares described in paragraph (c) would, if they were held by the insider, cause the private foundation to have a divestment obligation percentage for the taxation year; and
(e) at the particular time, the insider holds the interest described in subparagraph (b)(i), or the trust holds the property described in subparagraph (b)(ii), as the case may be.
Marginal note:Rules applicable
(3.4) For the purpose of subsections (3.3) and (3.5),
(a) interests (or, for civil law, rights), other than shares, of a trust in a corporation that entitle the trust to a right described in paragraph 251(5)(b) in respect of a class of the capital stock of the corporation, are deemed to be converted into shares of that class in the manner described by paragraph (3.2)(a); and
(b) if the amount of income or capital of the trust that a person may receive as a beneficiary under the trust depends on the exercise by any person of, or the failure by any person to exercise, a discretionary power, that person is deemed to have fully exercised, or to have failed to exercise, the power, as the case may be.
Marginal note:Avoidance of divestiture
(3.5) If this subsection applies to a private foundation at a particular time in respect of an interest of an insider of the private foundation in a trust, for the purposes of applying this section, subsection 149.1(1) and section 149.2,
(a) the insider is deemed to hold at the particular time, in addition to any shares of the capital stock of the subject corporation that it holds otherwise than because of this subsection, the number of shares, of the class of shares referred to in paragraph (3.3)(c), determined by the formula
A × B/C
where
- A
- is the number of shares of that class that are held, directly or indirectly, by the trust at the particular time,
- B
- is the total fair market value of all interests held by the insider in the trust at the particular time, and
- C
- is the total fair market value of all property held by the trust at the particular time;
(b) each of those shares is deemed to be a share that is issued by the subject corporation and outstanding and to continue to be held by the holder until such time as the holder no longer holds the interest or right; and
(c) each of those shares is deemed to have a fair market value, at the particular time, equal to the fair market value, at the particular time, of a share of the class issued by the subject corporation, determined without reference to this subsection.
(3) Subsections (1) and (2) apply to taxation years, of private foundations, that begin on or after February 26, 2008.
63. (1) Subparagraph 190.11(b)(ii) of the Act is repealed.
(2) Subsection (1) applies to taxation years that begin after September 2006.
64. (1) Subparagraph 190.13(c)(iv) of the Act is repealed.
(2) Subsection (1) applies to taxation years that begin after September 2006.
65. (1) The portion of the definition “SIFT partnership” in subsection 197(1) of the Act before paragraph (a) is replaced by the following:
“SIFT partnership”
« société de personnes intermédiaire de placement déterminée »
“SIFT partnership”, being a specified investment flow-through partnership, for any taxation year, means a partnership other than an excluded subsidiary entity (as defined in subsection 122.1(1)) for the taxation year that meets the following conditions at any time during the taxation year:
(2) Subsection (1) is deemed to have come into force on October 31, 2006.
66. (1) Paragraph (c.1) of the definition “qualified investment” in section 204 of the Act is replaced by the following:
(c.1) debt obligations that meet the following criteria, namely,
(i) any of
(A) the debt obligations had, at the time of acquisition by the trust, an investment grade rating with a prescribed credit rating agency,
(B) the debt obligations have an investment grade rating with a prescribed credit rating agency, or
(C) the debt obligations were acquired by the trust in exchange for debt obligations that satisfied the condition in clause (A) and as part of a proposal to, or an arrangement with, the creditors of the issuer of the debt obligations that has been approved by a court under the Bankruptcy and Insolvency Act or the Companies’ Creditors Arrangement Act, and
(ii) either
(A) the debt obligations were issued as part of a single issue of debt of at least $25 million, or
(B) in the case of debt obligations that are issued on a continuous basis under a debt issuance program, the issuer of the debt obligations had issued and outstanding debt under the program of at least $25 million,
(2) Subsection (1) applies in determining whether a property is, at any time after March 18, 2007, a qualified investment.
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