Technical Tax Amendments Act, 2012 (S.C. 2013, c. 34)
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Assented to 2013-06-26
PART 1AMENDMENTS IN RESPECT OF OFFSHORE INVESTMENT FUND PROPERTY AND NON-RESIDENT TRUSTS
R.S., c. 1 (5th Supp.)Income Tax Act
11. (1) The portion of paragraph 107(4.1)(b) of the Act before subparagraph (i) is replaced by the following:
(b) subsection 75(2) was applicable, or would have been applicable if subsection 75(3) were read without reference to its paragraph (c.2), at a particular time in respect of any property of
(2) Subsection (1) applies to distributions made after August 27, 2010.
12. (1) The portion of subsection 108(3) of the Act before paragraph (a) is replaced by the following:
Marginal note:Income of a trust in certain provisions
(3) For the purposes of the definitions “income interest” in subsection (1), “lifetime benefit trust” in subsection 60.011(1) and “exempt foreign trust” in subsection 94(1), the income of a trust is its income computed without reference to the provisions of this Act and, for the purposes of the definition “pre-1972 spousal trust” in subsection (1) and paragraphs 70(6)(b) and (6.1)(b), 73(1.01)(c) and 104(4)(a), the income of a trust is its income computed without reference to the provisions of this Act, minus any dividends included in that income
(2) The portion of subsection 108(7) of the Act before paragraph (a) is replaced by the following:
Marginal note:Interests acquired for consideration
(7) For the purposes of paragraph 53(2)(h), subparagraph (c)(i) of the definition “exempt amount” in subsection 94(1), subsection 107(1), paragraph (j) of the definition “excluded right or interest” in subsection 128.1(10) and paragraph (b) of the definition “personal trust” in subsection 248(1),
(3) Subsection (1) applies to trust taxation years that begin after 2000.
(4) Subsection (2) applies to taxation years that end after 2006. That subsection also applies to each earlier taxation year of a trust to which subsection 94(1) of the Act, as enacted by section 7, applies and each taxation year of a beneficiary under the trust in which one of those earlier taxation years of the trust ends.
13. (1) Subsection 122(2) of the Act is amended by adding the following after paragraph (d):
(d.1) was not a trust to which a contribution (as defined by section 94 as it reads for taxation years that end after 2006) was made after June 22, 2000;
(2) Subsection (1) applies to trust taxation years that begin after 2002.
14. (1) Section 128.1 of the Act is amended by adding the following after subsection (1):
Marginal note:Trusts subject to subsection 94(3)
(1.1) Paragraph (1)(b) does not apply, at a time in a trust’s particular taxation year, to the trust if the trust is resident in Canada for the particular taxation year for the purpose of computing its income.
(2) Subsection (1) applies to trust taxation years that end after 2006. Subsection (1) also applies to each earlier taxation year of a trust to which subsection 94(1) of the Act, as enacted by section 7, applies.
15. (1) Paragraph 152(4)(b) of the Act is amended by striking out “or” at the end of subparagraph (v), by adding “or” at the end of subparagraph (vi) and by adding the following after subparagraph (vi):
(vii) is made to give effect to the application of any of sections 94, 94.1 and 94.2;
(2) Subsection (1) applies to taxation years that end after March 4, 2010.
16. (1) Section 160 of the Act is amended by adding the following after subsection (2):
Marginal note:Assessment
(2.1) The Minister may at any time assess a taxpayer in respect of any amount payable because of paragraph 94(3)(d) or (e) or subsection 94(17) and the provisions of this Division (including, for greater certainty, the provisions in respect of interest payable) apply, with any modifications that the circumstances require, in respect of an assessment made under this section as though it had been made under section 152 in respect of taxes payable under this Part.
(2) The portion of subsection 160(3) of the Act before paragraph (b) is replaced by the following:
Marginal note:Discharge of liability
(3) If a particular taxpayer has become jointly and severally liable with another taxpayer under this section or because of paragraph 94(3)(d) or (e) or subsection 94(17) in respect of part or all of a liability under this Act of the other taxpayer,
(a) a payment by the particular taxpayer on account of that taxpayer’s liability shall to the extent of the payment discharge their liability; but
(3) Subsections (1) and (2) apply to assessments made after 2006, except that
(a) subsection 160(2.1) of the Act, as enacted by subsection (1), and the portion of subsection 160(3) of the Act before its paragraph (a), as enacted by subsection (2), are to be read without reference to “or subsection 94(17)” in their application to taxation years that end before March 5, 2010; and
(b) if subsection 94(1) of the Act, as enacted by section 7, applies to a taxation year of a taxpayer that ends before 2007, subsection (1) applies to assessments made on or after the first day of the first such taxation year of the taxpayer to which that subsection 94(1) applies.
17. (1) Paragraph (c) of the description of A in subsection 162(10.1) of the French version of the Act is replaced by the following:
c) si la déclaration est à produire en application de l’article 233.2 à l’égard d’une fiducie, 5% du total des montants représentant chacun la juste valeur marchande, au moment où il a été fait, d’un apport que la personne ou la société de personnes a fait à la fiducie avant la fin de la dernière année d’imposition de celle-ci pour laquelle la déclaration doit être produite,
(2) Paragraph (d) of the description of A in subsection 162(10.1) of the English version of the Act is replaced by the following:
(d) if the return is required to be filed under section 233.2 in respect of a trust, 5% of the total of all amounts each of which is the fair market value, at the time it was made, of a contribution of the person or partnership made to the trust before the end of the last taxation year of the trust in respect of which the return is required,
(3) Section 162 of the Act is amended by adding the following after subsection (10.1):
Marginal note:Application to trust contributions
(10.11) In paragraph (d) of the description of A in subsection (10.1), subsections 94(1), (2) and (9) apply.
(4) Subsections (1) to (3) apply to returns in respect of taxation years that end after 2006. Those subsections also apply to returns in respect of an earlier taxation year of a taxpayer if subsection 94(1) of the Act, as enacted by section 7, applies to that earlier taxation year of the taxpayer.
18. (1) Paragraph 163(2.4)(b) of the Act is replaced by the following:
(b) if the return is required to be filed under section 233.2 in respect of a trust, the greater of
(i) $24,000, and
(ii) 5% of the total of all amounts each of which is the fair market value, at the time it was made, of a contribution of the person or partnership made to the trust before the end of the last taxation year of the trust in respect of which the return is required;
(2) Section 163 of the Act is amended by adding the following after subsection (2.4):
Marginal note:Application to trust contributions
(2.41) In subparagraph (2.4)(b)(ii), subsections 94(1), (2) and (9) apply.
(3) Subsections (1) and (2) apply to taxation years that end after 2006. Those subsections also apply to returns in respect of an earlier taxation year of a taxpayer if subsection 94(1) of the Act, as enacted by section 7, applies to that earlier taxation year of the taxpayer.
19. (1) Subsection 215(1) of the Act is replaced by the following:
Marginal note:Withholding and remittance of tax
215. (1) When a person pays, credits or provides, or is deemed to have paid, credited or provided, an amount on which an income tax is payable under this Part, or would be so payable if this Act were read without reference to subparagraph 94(3)(a)(viii) and to subsection 216.1(1), the person shall, notwithstanding any agreement or law to the contrary, deduct or withhold from it the amount of the tax and forthwith remit that amount to the Receiver General on behalf of the non-resident person on account of the tax and shall submit with the remittance a statement in prescribed form.
(2) Subsection (1) applies to trust taxation years that end after 2006. Subsection (1) also applies to each earlier taxation year of a trust to which subsection 94(1) of the Act, as enacted by section 7, applies.
20. (1) Section 216 of the Act is amended by adding the following after subsection (4):
Marginal note:Optional method of payment
(4.1) If a trust is deemed by subsection 94(3) to be resident in Canada for a taxation year for the purpose of computing the trust’s income for the year, a person who is otherwise required by subsection 215(3) to remit in the year, in respect of the trust, an amount to the Receiver General in payment of tax on rent on real or immovable property or on a timber royalty may elect in prescribed form filed with the Minister under this subsection not to remit under subsection 215(3) in respect of amounts received after the election is made, and if that election is made, the elector shall,
(a) when any amount is available out of the rent or royalty received for remittance to the trust, deduct 25% of the amount available and remit the amount deducted to the Receiver General on behalf of the trust on account of the trust’s tax under Part I; and
(b) if the trust does not file a return for the year as required by section 150, or does not pay the tax that the trust is liable to pay under Part I for the year within the time required by that Part, on the expiration of the time for filing or payment, as the case may be, pay to the Receiver General, on account of the trust’s tax under Part I, the amount by which the full amount that the elector would otherwise have been required to remit in the year in respect of the rent or royalty exceeds the amounts that the elector has remitted in the year under paragraph (a) in respect of the rent or royalty.
(2) Subsection (1) applies to trust taxation years that end after 2006, except that
(a) it also applies to each earlier taxation year of a trust to which subsection 94(1) of the Act, as enacted by section 7, applies; and
(b) an election referred to in subsection 216(4.1) of the Act, as enacted by subsection (1), is deemed to have been filed with the Minister of National Revenue on a timely basis if it is filed with the Minister of National Revenue on or before the trust’s filing-due date for the trust’s taxation year that includes the day on which this Act receives royal assent.
21. (1) The definitions “specified beneficiary” and “specified foreign trust” in subsection 233.2(1) of the Act are repealed.
(2) Subsections 233.2(2) and (3) of the Act are replaced by the following:
Marginal note:Rule of application
(2) In this section and paragraph 233.5(c.1), subsections 94(1), (2) and (10) to (13) apply, except that the reference to the expression “(other than restricted property)” in the definition “arm’s length transfer” in subsection 94(1) is to be read as a reference to the expression “(other than property to which paragraph 94(2)(g) applies but not including a unit of a mutual fund trust or of a trust that would be a mutual fund trust if section 4801 of the Income Tax Regulations were read without reference to paragraph 4801(b), a share of the capital stock of a mutual fund corporation, or a particular share of the capital stock of a corporation (other than a closely held corporation) which particular share is identical to a share that is, at the transfer time, of a class that is listed on a designated stock exchange)”.
(3) Subsection 233.2(4) of the Act is replaced by the following:
Marginal note:Filing information on foreign trusts
(4) A person shall file an information return in prescribed form, in respect of a taxation year of a particular trust (other than an exempt trust or a trust described in any of paragraphs (c) to (h) of the definition “exempt foreign trust” in subsection 94(1)) with the Minister on or before the person’s filing-due date for the person’s taxation year in which the particular trust’s taxation year ends if
(a) the particular trust is non-resident at a specified time in that taxation year of the particular trust;
(b) the person is a contributor, a connected contributor or a resident contributor to the particular trust; and
(c) the person
(i) is resident in Canada at that specified time, and
(ii) is not, at that specified time,
(A) a mutual fund corporation,
(B) an exempt person,
(C) a mutual fund trust,
(D) a trust described in any of paragraphs (a) to (e.1) of the definition “trust” in subsection 108(1),
(E) a registered investment,
(F) a trust in which all persons beneficially interested are persons described in clauses (A) to (E), or
(G) a contributor to the particular trust by reason only of being a contributor to another trust that is resident in Canada and is described in any of clauses (B) to (F).
Marginal note:Similar arrangements
(4.1) In this section and sections 162, 163 and 233.5, a person’s obligations under subsection (4) (except to the extent that they are waived in writing by the Minister) are to be determined as if a contributor described in paragraph (4)(b) were any person who had transferred or loaned property, an arrangement or entity were a non-resident trust throughout the calendar year that includes the time referred to in paragraph (a) and that calendar year were a taxation year of the arrangement or entity, if
(a) the person at any time, directly or indirectly, transferred or loaned the property to be held
(i) under the arrangement and the arrangement is governed by the laws of a country or a political subdivision of a country other than Canada or exists, was formed or organized, or was last continued under the laws of a country or a political subdivision of a country other than Canada, or
(ii) by the entity and the entity is a non-resident entity (as defined by subsection 94.1(2));
(b) the transfer or loan is not an arm’s length transfer;
(c) the transfer or loan is not solely in exchange for property that would be described in paragraphs (a) to (i) of the definition “specified foreign property” in subsection 233.3(1) if that definition were read without reference to paragraphs (j) to (q);
(d) the arrangement or entity is not a trust in respect of which the person would, if this Act were read without reference to this subsection, be required to file an information return for a taxation year that includes that time; and
(e) the arrangement or entity is, for a taxation year or fiscal period of the arrangement or entity that includes that time, not
(i) an exempt foreign trust (as defined in subsection 94(1)),
(ii) a foreign affiliate in respect of which the person is a reporting entity (within the meaning assigned by subsection 233.4(1)), or
(iii) an exempt trust.
(4) Subsections (1) to (3) apply to returns in respect of trust taxation years that end after 2006. Those subsections also apply to returns in respect of an earlier taxation year of a trust if subsection 94(1) of the Act, as enacted by section 7, applies to the trust for that earlier taxation year. However, the reference to “designated stock exchange” in subsection 233.2(2) of the Act, as enacted by subsection (2), is in its application to a time that is before December 14, 2007 to be read as a reference to “prescribed stock exchange”.
(5) A return required to be filed by a person because of subsection 233.2(4) of the Act, as enacted by subsection (3), is deemed to have been filed with the Minister of National Revenue on a timely basis if it is filed with the Minister of National Revenue on or before the person’s filing-due date for the person’s taxation year that includes the day on which this Act receives royal assent.
22. (1) Subparagraph (a)(iv) of the definition bien étranger déterminé in subsection 233.3(1) of the French version of the Act is replaced by the following:
(iv) la participation dans une fiducie non-résidente,
(2) Paragraph (d) of the definition “specified foreign property” in subsection 233.3(1) of the English version of the Act is replaced by the following:
(d) an interest in a non-resident trust,
(3) Subsections (1) and (2) apply to returns in respect of trust taxation years that end after 2006. Those subsections also apply to returns in respect of an earlier taxation year of a trust if subsection 94(1) of the Act, as enacted by section 7, applies to the trust for that earlier taxation year.
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