Technical Tax Amendments Act, 2012 (S.C. 2013, c. 34)
Full Document:
Assented to 2013-06-26
342. (1) Subsections 210.2(1.1) and (2) of the Act are replaced by the following:
Marginal note:Amateur athlete trusts
(2) Notwithstanding subsection 210(2), a trust shall pay a tax under this Part in respect of a particular taxation year of the trust equal to 56.25% of the amount that is required by subsection 143.1(2) to be included in computing the income under Part I for a taxation year of a beneficiary under the trust, if
(a) the beneficiary is at any time in the particular taxation year a designated beneficiary under the trust; and
(b) the particular taxation year ends in that taxation year of the beneficiary.
(2) The portion of subsection 210.2(3) of the French version of the Act before the formula is replaced by the following:
Marginal note:Crédit d’impôt remboursable aux bénéficiaires résidant au Canada
(3) Dans le cas où une partie du revenu d’une fiducie pour une année d’imposition est incluse, en application du paragraphe 104(13) ou 105(2), dans le calcul du revenu en vertu de la partie I d’une personne qui n’a été bénéficiaire étranger ou assimilé de la fiducie à aucun moment de l’année ou dans la partie du revenu d’une personne non-résidente qui est soumise, par application du paragraphe 2(3), à l’impôt payable en vertu de la partie I et n’en est pas exonérée par un traité fiscal — sauf s’il s’agit d’une personne qui, à un moment de l’année, serait un bénéficiaire étranger ou assimilé de la fiducie si l’article 210 s’appliquait compte non tenu de l’alinéa a) de la définition de bénéficiaire étranger ou assimilé à cet article —, le montant, calculé selon la formule ci-après, attribué à la personne par la fiducie dans sa déclaration pour l’année en vertu de la présente partie est réputé payé le quatre-vingt-dixième jour suivant la fin de l’année d’imposition de la fiducie au titre de l’impôt payable en vertu de la partie I par cette personne pour l’année d’imposition de celle-ci au cours de laquelle l’année d’imposition de la fiducie se termine :
(3) Paragraph 210.2(3)(b) of the English version of the Act is replaced by the following:
(b) the income of a non-resident person (other than a person who, at any time in the year, would be a designated beneficiary under the trust if section 210 were read without reference to paragraph (a) of the definition “designated beneficiary” in that section) that is subject to tax under Part I by reason of subsection 2(3) and is not exempt from tax under Part I by reason of a provision contained in a tax treaty,
(4) Subsections (1) to (3) apply to the 1996 and subsequent taxation years, except that
(a) in applying the portion of subsection 210.2(3) of the French version of the Act before the formula, as enacted by subsection (2), for the 1996 and 1997 taxation years, the reference to “un traité fiscal” is to be read as a reference to “un accord ou une convention fiscal ayant force de loi au Canada et conclu entre le gouvernement du Canada et le gouvernement d’un pays étranger”; and
(b) in applying paragraph 210.2(3)(b) of the English version of the Act, as enacted by subsection (3), for the 1996 and 1997 taxation years the reference to “treaty” is to be read as a reference to “convention or agreement with another country that has the force of law in Canada”.
343. (1) Subsection 211.7(1) of the Act is amended by adding the following in alphabetical order:
“qualifying exchange”
« échange admissible »
“qualifying exchange” means an exchange by a taxpayer of an approved share, that is part of a series of Class A shares of the capital stock of a corporation, for another approved share, that is part of another series of Class A shares of the capital stock of the corporation, if
(a) the only consideration received by the taxpayer on the exchange is the other share; and
(b) the rights in respect of the series are identical except for the portion of the reserve (within the meaning assigned by subsection 204.8(1)) of the corporation that is attributable to each series.
(2) Section 211.7 of the Act is amended by adding the following after subsection (2):
Marginal note:Exchangeable shares
(3) For the purposes of this Part and Part X.3, if an approved share of the capital stock of a corporation (referred to in this subsection as the “new share”) has been issued in exchange for another approved share (referred to in this subsection as the “original share”) in a qualifying exchange, the new share is deemed not to have been issued on the exchange and is deemed to have been issued at the time the corporation issued the original share.
(3) Subsections (1) and (2) are deemed to have come into force on January 1, 2004.
344. (1) The portion of subsection 211.8(1) of the Act before paragraph (a) is replaced by the following:
Marginal note:Disposition of approved share
211.8 (1) If an approved share of the capital stock of a registered labour-sponsored venture capital corporation or a revoked corporation is, before the first discontinuation of its venture capital business, redeemed, acquired or cancelled by the corporation less than eight years after the day on which the share was issued (other than in circumstances described in subclause 204.81(1)(c)(v)(A)(I) or (III) or clause 204.81(1)(c)(v)(B) or (D) or other than if the share is a Class A share of the capital stock of the corporation that is exchanged for another Class A share of the capital stock of the corporation as part of a qualifying exchange) or any other share that was issued by any other labour-sponsored venture capital corporation is disposed of, the person who was the shareholder immediately before the redemption, acquisition, cancellation or disposition shall pay a tax under this Part equal to the lesser of
(2) Subparagraph (i) of the description of B in paragraph 211.8(1)(a) of the Act is amended by striking out “or” at the end of clause (A) and by replacing clause (B) with the following:
(B) more than five years after its issuance, or
(C) if the day that is five years after its issuance is in February or March of a calendar year, in February or on March 1st of that calendar year but not more than 31 days before that day,
(3) The description of B in paragraph 211.8(1)(a) of the Act is amended by adding the following after subparagraph (i):
(i.1) nil, where the share was issued by a registered labour-sponsored venture capital corporation or a revoked corporation, the original acquisition of the share was after March 5, 1996 and the redemption, acquisition or cancellation is in February or on March 1st of a calendar year but is not more than 31 days before the day that is eight years after the day on which the share was issued,
(4) Subsection (1) applies in respect of shares redeemed, acquired or cancelled after 2003.
(5) Subsections (2) and (3) apply to redemptions, acquisitions, cancellations and dispositions that occur after November 15, 1995.
345. (1) The Act is amended by adding the following after section 211.8:
Marginal note:Tax for failure to re-acquire certain shares
211.81 If a particular amount is payable under a prescribed provision of a provincial law for a taxation year of an individual as determined for the purposes of that provincial law (referred to in this section as the “relevant provincial year”), and an amount has been included in the computation of the labour-sponsored funds tax credit of the individual under subsection 127.4(6) in respect of an approved share that has been disposed of by a qualifying trust in respect of the individual, the individual shall pay a tax for the taxation year in which the relevant provincial year ends equal to the particular amount.
Marginal note:Return
211.82 (1) Every person that is liable to pay tax under this Part for a taxation year shall, not later than the day on or before which the person is required by section 150 to file a return of income for the year under Part I, file with the Minister a return for the year under this Part in prescribed form containing an estimate of the tax payable by the person for the year.
Marginal note:Provisions applicable to this Part
(2) Subsections 150(2) and (3), sections 152, 158 and 159, subsections 161(1) and (11), sections 162 to 167 and Division J of Part I apply to this Part, with any modifications that the circumstances require.
(2) Section 211.81 of the Act, as enacted by subsection (1), is deemed to have come into force on October 24, 2012.
(3) Section 211.82 of the Act, as enacted by subsection (1), applies to taxation years that end after October 24, 2012.
346. (1) Section 211.9 of the Act is repealed.
(2) Subsection (1) applies to taxation years that end after October 24, 2012.
347. (1) Subparagraph 212(1)(b)(iv) of the Act, as it read immediately before it was amended by S.C. 2007, c. 35, s. 59(2), is replaced by the following:
(iv) interest payable to a person with whom the payer is dealing at arm’s length and to whom a certificate of exemption that is in force on the day the amount is paid or credited was issued under subsection (14),
(2) The portion of subparagraph 212(1)(b)(xii) of the Act, as it read immediately before it was amended by S.C. 2007, c. 35, s. 59(2), before clause (A) is replaced by the following:
(xii) interest payable by a lender under a securities lending arrangement, if the lender and the borrower deal with each other at arm’s length and the lender is a financial institution prescribed for the purpose of clause (iii)(D), or a registered securities dealer resident in Canada, on money provided to the lender either as collateral or as consideration for the particular security lent or transferred under the arrangement where
(3) Paragraph 212(1)(b) of the Act, as it read immediately before it was amended by S.C. 2007, c. 35, s. 59(2), is amended by striking out “and” at the end of subparagraph (xi), by adding “and” at the end of subparagraph (xii) and by adding the following after subparagraph (xii):
(xiii) an amount paid 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
(A) the securities lending arrangement was entered into by the borrower in the course of carrying on a business outside Canada, and
(B) the security that is transferred or lent to the borrower under the securities lending arrangement is described in paragraph (b) or (c) of the definition “qualified security” in subsection 260(1) and issued by a non-resident issuer;
(4) Paragraph 212(1)(b) of the Act, as amended by subsections (1) to (3), is replaced by the following:
Marginal note:Interest
(b) interest that
(i) is not fully exempt interest, and is paid or payable to a person with whom the payer is not dealing at arm’s length, or
(ii) is participating debt interest;
(5) Subparagraph 212(1)(b)(i) of the Act, as enacted by subsection (4), is replaced by the following:
(i) is not fully exempt interest and is paid or payable
(A) to a person with whom the payer is not dealing at arm’s length, or
(B) in respect of a debt or other obligation to pay an amount to a person with whom the payer is not dealing at arm’s length, or
(6) Subparagraph 212(1)(c)(ii) of the French version of the Act is replaced by the following:
(ii) peut raisonnablement être considérée, compte tenu des circonstances, y compris les modalités de la succession ou de l’acte de fiducie, comme la distribution d’un montant reçu par la succession ou la fiducie, ou comme une somme provenant d’un tel montant, au titre d’un dividende non imposable sur une action du capital-actions d’une société résidant au Canada;
(7) Subparagraph 212(1)(d)(iv) of the Act is replaced by the following:
(iv) unless paragraph (i) applies to the amount, made pursuant to an agreement between a person resident in Canada and a non-resident person under which the non-resident person agrees not to use or not to permit any other person to use any thing referred to in subparagraph (i) or any information referred to in subparagraph (ii), or
(8) Subparagraph 212(1)(d)(xi) of the Act is amended by striking out “or” at the end of clause (B) and by adding the following after clause (C):
(D) air navigation equipment utilized in the provision of services under the Civil Air Navigation Services Commercialization Act or computer software the use of which is necessary for the operation of that equipment that is used by the payer for no other purpose; or
(9) Paragraph 212(1)(d) of the Act is amended by striking out “or” at the end of subparagraph (x), by adding “or” at the end of subparagraph (xi) and by adding the following after subparagraph (xi):
(xii) an amount to which subsection (5) would apply if that subsection were read without reference to “to the extent that the amount relates to that use or reproduction”;
(10) Subsection 212(1) of the Act is amended by adding the following after paragraph (h):
Marginal note:Restrictive covenant amount
(i) an amount that would, if the non-resident person had been resident in Canada throughout the taxation year in which the amount was received or receivable, be required by paragraph 56(1)(m) or subsection 56.4(2) to be included in computing the non-resident person’s income for the taxation year;
(11) Section 212 of the Act is amended by adding the following after subsection (2):
Marginal note:Exempt dividends
(2.1) Subsection (2) does not apply to an amount paid or credited, by a borrower, under a securities lending arrangement if
(a) the amount is deemed by subparagraph 260(8)(c)(i) to be a dividend;
(b) the securities lending arrangement was entered into by the borrower in the course of carrying on a business outside Canada; and
(c) the security that is transferred or lent to the borrower under the securities lending arrangement is a share of a class of the capital stock of a non-resident corporation.
(12) Subsection 212(3) of the Act, as it read immediately before it was amended by S.C. 2007, c. 35, s. 59(3), is amended by adding “and” at the end of paragraph (a) and by repealing paragraph (b).
(13) Subsection 212(3) of the Act, as amended by subsection (12), is replaced by the following:
Marginal note:Interest — definitions
(3) The following definitions apply for the purpose of paragraph (1)(b).
“fully exempt interest”
« intérêts entièrement exonérés »
“fully exempt interest” means
(a) interest that is paid or payable on a bond, debenture, note, mortgage, hypothecary claim or similar debt obligation
(i) of, or guaranteed (otherwise than by being insured by the Canada Deposit Insurance Corporation) by, the Government of Canada,
(ii) of the government of a province,
(iii) of an agent of a province,
(iv) of a municipality in Canada or a municipal or public body performing a function of government in Canada,
(v) of a corporation, commission or association to which any of paragraphs 149(1)(d) to (d.6) applies, or
(vi) of an educational institution or a hospital if repayment of the principal amount of the obligation and payment of the interest is to be made, or is guaranteed, assured or otherwise specifically provided for or secured by the government of a province;
(b) interest that is paid or payable on a mortgage, hypothecary claim or similar debt obligation secured by, or on an agreement for sale or similar obligation with respect to, real property situated outside Canada or an interest in any such real property, or to immovables situated outside Canada or a real right in any such immovable, except to the extent that the interest payable on the obligation is deductible in computing the income of the payer under Part I from a business carried on by the payer in Canada or from property other than real or immovable property situated outside Canada;
(c) interest that is paid or payable to a prescribed international organization or agency; or
(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
(i) the securities lending arrangement was entered into by the borrower in the course of carrying on a business outside Canada, and
(ii) the security that is transferred or lent to the borrower under the securities lending arrangement is described in paragraph (b) or (c) of the definition “qualified security” in subsection 260(1) and issued by a non-resident issuer.
“participating debt interest”
« intérêts sur des créances participatives »
“participating debt interest” means interest (other than interest described in any of paragraphs (b) to (d) of the definition “fully exempt interest”) that is paid or payable on an obligation, other than a prescribed obligation, all or any portion of which interest is contingent or dependent on the use of or production from property in Canada or is computed by reference to revenue, profit, cash flow, commodity price or any other similar criterion or by reference to dividends paid or payable to shareholders of any class of shares of the capital stock of a corporation.
(14) Subsection 212(5) of the French version of the Act is replaced by the following:
Marginal note:Films cinématographiques
(5) Toute personne non-résidente doit payer un impôt sur le revenu de 25 % sur toute somme qu’une personne résidant au Canada lui verse ou porte à son crédit, ou est réputée, en vertu de la partie I, lui verser ou porter à son crédit, au titre ou en paiement intégral ou partiel d’un droit sur les oeuvres ci-après qui ont été ou doivent être utilisées ou reproduites au Canada, ou d’un droit d’utilisation de telles oeuvres, dans la mesure où la somme se rapporte à cette utilisation ou reproduction :
a) un film cinématographique;
b) un film, une bande magnétoscopique ou d’autres procédés de reproduction à utiliser pour la télévision, sauf ceux utilisés uniquement pour une émission d’information produite au Canada.
(15) The portion of subsection 212(5) of the English version of the Act after paragraph (b) is replaced by the following:
that has been, or is to be, used or reproduced in Canada to the extent that the amount relates to that use or reproduction.
(16) Subsection 212(9) of the Act is amended by striking out “or” at the end of paragraph (b), by adding “or” at the end of paragraph (c) and by adding the following after paragraph (c):
(d) a dividend or interest is received by a trust that is created under a reinsurance trust agreement
(i) to which a regulatory authority — being the Superintendent of Financial Institutions or a provincial regulatory authority having powers similar to those of the Superintendent — is a party, and
(ii) that accords with guidelines issued by the regulatory authority relating to reinsurance arrangements with unregistered insurers
(17) Subsection 212(13) of the Act is amended by striking out “or” at the end of paragraph (e), by adding “or” at the end of paragraph (f) and by adding the following after paragraph (f):
(g) an amount to which paragraph (1)(i) would apply if the amount paid or credited were paid or credited by a person resident in Canada, and that amount affects, or is intended to affect, in any way whatever,
(i) the acquisition or provision of property or services in Canada,
(ii) the acquisition or provision of property or services outside Canada by a person resident in Canada, or
(iii) the acquisition or provision outside Canada of a taxable Canadian property,
(18) Subsection 212(13.2) of the Act is replaced by the following:
Marginal note:Application of Part XIII tax — non-resident operates in Canada
(13.2) For the purposes of this Part, a particular non-resident person, who in a taxation year pays or credits to another non-resident person an amount other than an amount to which subsection (13) applies, is deemed to be a person resident in Canada in respect of the portion of the amount that is deductible in computing the particular non-resident person’s taxable income earned in Canada for any taxation year from a source that is neither a treaty-protected business nor a treaty-protected property.
(19) Subparagraph (b)(i) of the description of B in subsection 212(19) of the Act, as it read immediately before it was amended by S.C. 2007, c. 35, s. 59(6), is replaced by the following:
(i) 10 times the greatest amount determined, under the laws of the province or provinces in which the taxpayer is a registered securities dealer, to be the capital employed by the taxpayer at the end of the day, and
(20) Subsection (1) applies to the 1998 and subsequent taxation years.
(21) Subsection (2) applies to arrangements made after 2002.
(22) Subsections (3) and (11) apply to securities lending arrangements entered into after May 1995, except that, in their application to arrangements made before 2002, each reference to “subparagraph 260(8)(c)(i)” in subparagraph 212(1)(b)(xiii) and paragraph 212(2.1)(a) of the Act, as respectively enacted by subsections (3) and (11), is to be read as a reference to “subparagraph 260(8)(a)(i)”.
(23) Subsections (4) and (13) are deemed to have come into force on January 1, 2008.
(24) Subsection (5) applies to interest that is paid or payable by a person or partnership (referred to in this subsection as the “payer”) to a person or partnership (referred to in this subsection as the “recipient”) on or after March 16, 2011, unless
(a) the interest is paid in respect of a debt or obligation incurred by the payer before March 16, 2011; and
(b) the recipient acquired the entitlement to the interest as a consequence of an agreement or other arrangement entered into by the recipient, and evidenced in writing, before March 16, 2011.
(25) Subsection (7) applies to amounts paid or credited after October 7, 2003.
(26) Subsection (8) applies to payments made after July 2003.
(27) Subsections (9), (14) and (15) apply to the 2000 and subsequent taxation years.
(28) Subsections (10) and (17) apply to amounts paid or credited after October 7, 2003, except that the portion of paragraph 212(13)(g) of the Act before subparagraph (i), as enacted by subsection (17), is to be read as follows before July 16, 2010:
(g) an amount to which paragraph (1)(i) applies if that amount affects, or is intended to affect, in any way whatever,
(29) Subsection (12) applies to replacement obligations issued after 2000.
(30) Subsection (16) applies to amounts paid or credited after 2000.
(31) A written application made under subsection 227(6) of the Act in respect of a particular amount that has been paid to the Receiver General is deemed to be filed on time if
(a) the application is filed with the Minister of National Revenue within 180 days after the day on which this Act receives royal assent; and
(b) the particular amount is an amount on which tax would not be payable because of the application of subsection 212(9) of the Act, as amended by subsection (16), if that subsection 212(9) were read without reference to its paragraphs (a) to (c).
(32) Subsection (18) applies to amounts paid or credited under obligations entered into after December 20, 2002.
(33) Subsection (19) applies to securities lending arrangements entered into after May 28, 1993.
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