Technical Tax Amendments Act, 2012 (S.C. 2013, c. 34)
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Assented to 2013-06-26
PART 5OTHER AMENDMENTS TO THE INCOME TAX ACT AND RELATED LEGISLATION
R.S., c. 1 (5th Supp.)Income Tax Act
212. (1) Paragraph 75(3)(b) of the Act is replaced by the following:
(b) by an employee life and health trust, an employee trust, a private foundation that is a registered charity, a related segregated fund trust (within the meaning assigned by paragraph 138.1(1)(a)), a trust described by paragraph (a.1) of the definition “trust” in subsection 108(1), or a trust described by paragraph 149(1)(y);
(2) Subsection (1) applies to taxation years that begin after October 31, 2011.
213. (1) The Act is amended by adding the following after section 75.1:
Marginal note:Rules applicable with respect to “qualifying trust annuity”
75.2 If an amount paid to acquire a qualifying trust annuity with respect to a taxpayer was deductible under paragraph 60(l) in computing the taxpayer’s income,
(a) any amount that is paid out of or under the annuity at any particular time after 2005 and before the death of the taxpayer is deemed to have been received out of or under the annuity at the particular time by the taxpayer, and not to have been received by any other taxpayer; and
(b) if the taxpayer dies after 2005
(i) an amount equal to the fair market value of the annuity at the time of the taxpayer’s death is deemed to have been received, immediately before the taxpayer’s death, by the taxpayer out of or under the annuity, and
(ii) for the purpose of subsection 70(5), the annuity is to be disregarded in determining the fair market value (immediately before the taxpayer’s death) of the taxpayer’s interest in the trust that is the annuitant under the annuity.
(2) Subsection (1) is deemed to have come into force on January 1, 2006.
214. (1) Subparagraph 80.04(6)(a)(ii) of the Act is replaced by the following:
(ii) on or before the later of
(A) the expiry of the 90-day period commencing on the day of mailing of an assessment of tax payable under this Part or a notification that no tax is payable under this Part, as the case may be, for a taxation year or fiscal period described in clause (i)(A) or (B), as the case may be, and
(B) if the debtor is an individual (other than a trust) or a testamentary trust, the day that is one year after the taxpayer’s filing-due date for the year;
(2) Subsection (1) applies for taxation years that end after February 21, 1994.
215. (1) The Act is amended by adding the following after section 80.1:
Marginal note:Application
80.2 (1) Subsections (2) to (13) apply if
(a) in a taxation year, a taxpayer, under the terms of a contract, pays to a person (referred to in this section as the “recipient”) an amount (referred to in this section as the “specified amount”) that may reasonably be considered to be received by the recipient as a reimbursement of, or a contribution or an allowance in respect of, an amount (referred to in this section as the “original amount”)
(i) that was described by paragraph 18(1)(m) and was paid or payable by the recipient, or
(ii) that was, in respect of the recipient, an amount described by paragraph 12(1)(o);
(b) the original amount is paid or became payable or receivable in a taxation year or fiscal period of the recipient that begins before 2007; and
(c) the taxpayer is resident in Canada or carries on business in Canada when the specified amount is paid.
Marginal note:Rules relating to time of payment
(2) If the specified amount is paid in a taxation year of the taxpayer that begins before 2008, the eligible portion of the specified amount, referred to in subsection (11), is deemed to be a payment described by paragraph 18(1)(m). If, however, the specified amount is paid in a taxation year of the taxpayer that begins after 2007, the specified amount is deemed, for the purpose of applying this section to the taxpayer, to be nil.
Marginal note:Applying paragraph 18(1)(m)
(3) For the purpose of applying paragraph 18(1)(m) for the taxpayer’s taxation year in which the specified amount was paid, the amount to which that paragraph applies is to be determined for that taxation year
(a) if the taxpayer was in existence at the time the original amount became receivable by a person referred to in subparagraph 12(1)(o)(i) or became payable to a person referred to in subparagraph 18(1)(m)(i), as if the specified amount were paid by the taxpayer at that time; and
(b) in any other case, as if
(i) the taxpayer were in existence and had a calendar taxation year at the time the original amount became receivable by a person referred to in subparagraph 12(1)(o)(i) or became payable to a person referred to in subparagraph 18(1)(m)(i), and
(ii) the specified amount were paid by the taxpayer at that time.
Marginal note:Exception for certain partnership reimbursements
(4) Subsection (3) does not apply to a specified amount paid by a taxpayer if
(a) the recipient is a partnership;
(b) the original amount became receivable by a person referred to in subparagraph 12(1)(o)(i) or became payable to a person referred to in subparagraph 18(1)(m)(i), in a particular fiscal period of the partnership;
(c) the taxpayer is a member of the partnership at the end of the particular fiscal period; and
(d) the taxpayer paid the specified amount before the end of the taxation year of the taxpayer in which that particular fiscal period ends.
Marginal note:Specified amount deemed to be paid at end of taxation year
(5) A specified amount paid by the taxpayer to a partnership is deemed to have been paid on the last day of a particular taxation year of the taxpayer, and not at the time it was paid, if
(a) the taxpayer paid an amount to the partnership in the particular taxation year (referred to in this subsection as the “initial payment”);
(b) the initial payment was paid before September 17, 2004;
(c) the initial payment is an amount to which subsection (3) did not apply because of subsection (4);
(d) the taxpayer’s share of the original amount in respect of the initial payment is greater than the initial payment;
(e) the specified amount is equal to or less than the difference between the taxpayer’s share of the original amount in respect of the initial payment and the initial payment;
(f) the taxpayer elects in the taxpayer’s return of income for the taxpayer’s taxation year that includes the time at which the specified amount would, if this Act were read without reference to this subsection, have been paid, to have this subsection apply to the specified amount; and
(g) the specified amount is paid before 2006.
Marginal note:Inclusion in recipient’s income
(6) The recipient shall include in computing the recipient’s income for the taxation year or fiscal period in which the original amount was paid or became payable or receivable, the amount, if any, by which the eligible portion of the specified amount exceeds the portion of the original amount that was included in computing the income of the recipient for the taxation year or fiscal period because of paragraph 12(1)(o) or that was not deductible in computing the income of the recipient for the taxation year or fiscal period because of paragraph 18(1)(m).
Marginal note:Interpretation — portion of the original amount
(7) For the purpose of subsection (6), the portion of the original amount that was included in computing the income of the recipient or that was not deductible in computing the income of the recipient is the amount that would be included in computing the income of the recipient under paragraph 12(1)(o) or that would not be deductible in computing the income of the recipient under paragraph 18(1)(m), if the original amount were equal to the eligible portion of the specified amount.
Marginal note:Inclusion in recipient’s income
(8) The recipient shall include, in computing the recipient’s income for its taxation year or fiscal period in which the original amount was paid or became payable or receivable, the amount, if any, by which the specified amount exceeds the eligible portion of the specified amount.
Marginal note:Deduction by taxpayer
(9) Subject to paragraphs 18(1)(a) and (b), the taxpayer may deduct in computing the taxpayer’s income for the taxpayer’s taxation year in which the specified amount was paid, the amount, if any, by which the specified amount exceeds the eligible portion of the specified amount.
Marginal note:Specified amount deemed not to be payable or receivable
(10) Except for the purposes of this section and subparagraph 53(1)(e)(iv.1),
(a) the taxpayer is deemed not to have paid, and not to have been obligated to pay, the specified amount; and
(b) the recipient is deemed not to have received, and not to have been entitled to receive, the specified amount.
Marginal note:Eligible portion of a specified amount
(11) The eligible portion of a specified amount is
(a) an amount equal to the specified amount if
(i) the specified amount was paid before September 17, 2004,
(ii) the original amount is a tax imposed under a provincial law on the production of
(A) petroleum, natural gas or related hydrocarbons from a natural accumulation of petroleum or natural gas (other than a mineral resource) located in Canada, or from an oil or gas well located in Canada if the petroleum, natural gas or related hydrocarbons are not, before extraction, owned by the Crown in right of Canada or a province, or
(B) metals, minerals or coal from a mineral resource located in Canada if the metals, minerals or coal are not, before extraction, owned by the Crown in right of Canada or a province,
(iii) the specified amount does not exceed the taxpayer’s share of the original amount, or
(iv) the original amount is a prescribed amount; and
(b) the taxpayer’s share of the original amount, in any other case.
Marginal note:Taxpayer’s share of original amount
(12) A taxpayer’s share of an original amount in respect of a specified amount paid by the taxpayer to a recipient in respect of a property is the amount that may reasonably be considered to be the taxpayer’s share of the total of all amounts described in paragraph 12(1)(o) or 18(1)(m) in respect of the property, which share may not exceed the total of
(a) that proportion of the total of all amounts described in paragraph 12(1)(o) or 18(1)(m) in respect of the property that the taxpayer’s share of production from the property payable to the taxpayer as a royalty, which royalty is computed without reference to the costs of exploration or production, is of the total production from the property, and
(b) that proportion of the total of all amounts described in paragraph 12(1)(o) or 18(1)(m) in respect of the property (other than those amounts which the recipient has received or is entitled to receive as a reimbursement, contribution or allowance in respect of a royalty described in paragraph (a)) that the taxpayer’s share of the income from the property is of the total income from the property.
Marginal note:Reduction in original amount for Part XII of the regulations
(13) For the purpose of applying Part XII of the Income Tax Regulations, an original amount in respect of which a specified amount is received is deemed, for the taxation year in which the original amount was paid or became payable or receivable, not to include an amount equal to the eligible portion of the specified amount.
(2) Subsection (1) applies in respect of specified amounts paid after 2001.
(3) Where a person is liable to an amount of tax under Part I of the Act for a taxation year that exceeds the amount to which the person would be liable if section 80.2 of the Act applied as it read on December 31, 2001, the person is deemed, for the purpose of determining any interest or penalty payable by that person, to have paid the excess on that person’s balance-due day, if
(a) the person’s balance-due day for the taxation year was before September 17, 2004; and
(b) the excess was paid to the Receiver General before March 2005.
(4) Notwithstanding subsections 152(4) to (5) of the Act, all assessments, determinations, and redeterminations may be made as necessary to give effect to subsections (1) to (3).
216. (1) The portion of subsection 80.4(8) of the Act before paragraph (a) is replaced by the following:
Marginal note:Meaning of connected
(8) For the purposes of subsection (2), a person or partnership is connected with a shareholder of a corporation if that person or partnership does not deal at arm’s length with, or is affiliated with, the shareholder, unless, in the case of a person, that person is
(2) Subsection (1) applies in respect of loans made and indebtedness arising after October 31, 2011.
217. (1) Paragraph 81(1)(g.3) of the Act is replaced by the following:
Marginal note:Certain government funded trusts
(g.3) the amount that, but for this paragraph, would be the income of the taxpayer for the year if
(i) the taxpayer is the trust established under
(A) the 1986-1990 Hepatitis C Settlement Agreement entered into by Her Majesty in right of Canada and Her Majesty in right of each of the provinces,
(B) the Pre-1986/Post-1990 Hepatitis C Settlement Agreement entered into by Her Majesty in right of Canada, or
(C) the Indian Residential Schools Settlement Agreement entered into by Her Majesty in right of Canada on May 8, 2006, and
(ii) the only contributions made to the taxpayer before the end of the year are those provided for under the relevant Agreement described in subparagraph (i);
(2) Subsection 81(1) of the Act is amended by striking out “or” at the end of paragraph (q), by adding “or” at the end of paragraph (r) and by adding the following after paragraph (r):
Marginal note:Salary deferral leave plans
(s) an amount paid to the taxpayer in the year under an arrangement described in paragraph 6801(a) of the Income Tax Regulations to the extent that the amount may reasonably be considered to be attributable to amounts that
(i) were included in the taxpayer’s income for a preceding taxation year and were income, interest or other additional amounts, described in subparagraph 6801(a)(iv) of the Income Tax Regulations, and
(ii) were re-contributed by the taxpayer under the arrangement in a preceding taxation year.
(3) Subsection (1) applies to the 2006 and subsequent taxation years, except that for the 2006 taxation year, subparagraph 81(1)(g.3)(i) of the Act, as enacted by subsection (1), is to be read as follows:
(i) the taxpayer is the trust established under
(A) the 1986-1990 Hepatitis C Settlement Agreement entered into by Her Majesty in right of Canada and Her Majesty in right of each of the provinces, or
(B) the Pre-1986/Post-1990 Hepatitis C Settlement Agreement entered into by Her Majesty in right of Canada, and
(4) Subsection (2) applies to the 2000 and subsequent taxation years.
218. (1) Clause 82(1)(a)(ii)(B) of the Act, as it read immediately before its repeal by S.C. 2007, c. 2, s. 44(1), is replaced by the following:
(B) where the taxpayer is an individual, the total of all amounts each of which is, or is deemed by paragraph 260(12)(b) to have been, an amount paid by the taxpayer in the year and deemed by subsection 260(5.1) to have been received by another person as a taxable dividend,
(2) The portion of subsection 82(1) of the Act before paragraph (c) is replaced by the following:
Marginal note:Taxable dividends received
82. (1) In computing the income of a taxpayer for a taxation year, there shall be included the total of the following amounts:
(a) the amount, if any, by which
(i) the total of all amounts, other than eligible dividends and amounts described in paragraph (c), (d) or (e), received by the taxpayer in the taxation year from corporations resident in Canada as, on account of, in lieu of payment of or in satisfaction of, taxable dividends,
exceeds
(ii) if the taxpayer is an individual, the total of all amounts each of which is, or is deemed by paragraph 260(12)(b) to have been, paid by the taxpayer in the taxation year and deemed by subsection 260(5.1) to have been received by another person as a taxable dividend (other than an eligible dividend);
(a.1) the amount, if any, by which
(i) the total of all amounts, other than amounts included in computing the income of the taxpayer because of paragraph (c), (d) or (e), received by the taxpayer in the taxation year from corporations resident in Canada as, on account of, in lieu of payment of or in satisfaction of, eligible dividends,
exceeds
(ii) if the taxpayer is an individual, the total of all amounts each of which is, or is deemed by paragraph 260(12)(b) to have been, paid by the taxpayer in the taxation year and deemed by subsection 260(5.1) to have been received by another person as an eligible dividend;
(b) if the taxpayer is an individual, other than a trust that is a registered charity, the total of
(i) 25% of the amount determined under paragraph (a) in respect of the taxpayer for the taxation year, and
(ii) the product of the amount determined under paragraph (a.1) in respect of the taxpayer for the taxation year multiplied by
(A) for taxation years that end after 2005 and before 2010, 45%,
(B) for the 2010 taxation year, 44%,
(C) for the 2011 taxation year, 41%, and
(D) for taxation years that end after 2011, 38%;
(3) Subsection 82(1.1) of the Act is replaced by the following:
Marginal note:Limitation as to paragraph (1)(c)
(1.1) An amount shall be included in the amounts described in paragraph (1)(c) in respect of a taxable dividend received at any time as part of a dividend rental arrangement only if that dividend was received on a share acquired before that time and after April, 1989.
(4) Subsection (1) applies
(a) to amounts paid in respect of arrangements made after 2001, except that, in its application to amounts paid in respect of an arrangement made before December 21, 2002, clause 82(1)(a)(ii)(B) of the Act, as enacted by subsection (1), is to be read without reference to the expression “or is deemed by paragraph 260(12)(b) to have been” unless an election referred to in paragraph 358(34)(b) has been made in respect of the arrangement; and
(b) to amounts paid in respect of arrangements made after November 2, 1998 and before 2002, if the parties to the arrangement have made the election referred to in paragraph 358(34)(b), except that in its application to those arrangements, the reference to “subsection 260(5.1)” in clause 82(1)(a)(ii)(B) of the Act, as enacted by subsection (1), is to be read as a reference to “subsection 260(5)”.
(5) Subsections (2) and (3) apply to amounts received or paid after 2005.
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