Economic Action Plan 2013 Act, No. 2 (S.C. 2013, c. 40)
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Assented to 2013-12-12
PART 1MEASURES RELATING TO INCOME TAX
R.S., c. 1 (5th Supp.)Income Tax Act
75. (1) Subsection 207.04(1) of the Act is replaced by the following:
Marginal note:Tax payable on prohibited or non-qualified investment
207.04 (1) The controlling individual of a registered plan that governs a trust shall pay a tax under this Part for a calendar year if, at any time in the year, the trust acquires property that is a prohibited investment, or a non-qualified investment, for the trust.
(2) Subsection 207.04(3) of the Act is replaced by the following:
Marginal note:Both prohibited and non-qualified investment
(3) For the purposes of this section and subsections 146(10.1), 146.2(6), 146.3(9) and 207.01(6), if a trust governed by a registered plan holds property at any time that is, for the trust, both a prohibited investment and a non-qualified investment, the property is deemed at that time not to be a non-qualified investment, but remains a prohibited investment, for the trust.
(3) Subsection 207.04(5) of the Act is repealed.
(4) Subsections (1) to (3) are deemed to have come into force on March 23, 2011.
76. (1) The portion of subsection 207.05(4) of the Act before paragraph (b) is replaced by the following:
Marginal note:Transitional rule
(4) If an individual so elects before March 2, 2013 in prescribed form, subsection (1) does not apply in respect of any advantage that is an amount included in the calculation of the transitional prohibited investment benefit of the individual for a taxation year provided that the transitional prohibited investment benefit
(a) is paid to the individual, from a RRIF or RRSP of the individual, on or before the later of April 2, 2013 and the day that is 90 days after the end of the taxation year; and
(2) Subsection (1) is deemed to have come into force on March 23, 2011.
77. (1) Subsection 207.06(2) of the Act is amended by striking out “and” at the end of paragraph (a), by adding “and” at the end of paragraph (b) and by adding the following after paragraph (b):
(c) the extent to which payments have been made from the person’s registered plan.
(2) Subsection 207.06(3) of the Act is repealed.
(3) Subsections (1) and (2) are deemed to have come into force on March 23, 2011.
78. (1) Section 207.061 of the Act is replaced by the following:
Marginal note:Income inclusion
207.061 A holder of a TFSA shall include in computing the holder’s income for a taxation year under Part I any portion of a distribution made in the year that is described in subparagraph (a)(ii) of the definition “specified distribution” in subsection 207.01(1) or subparagraph 207.06(1)(b)(ii) or that is specified by the Minister as part of an agreement to waive or cancel a liability for tax under this Part.
(2) Subsection (1) is deemed to have come into force on March 23, 2011.
79. The portion of subsection 207.07(1) of the Act before paragraph (a) is replaced by the following:
Marginal note:Return and payment of tax
207.07 (1) A person who is liable to pay tax under this Part for all or any part of a calendar year shall before July of the following calendar year
80. (1) The definition “labour-sponsored funds tax credit” in subsection 211.7(1) of the Act is amended by striking out “and” at the end of paragraph (a) and by replacing paragraph (b) with the following:
(b) if the original acquisition of the share occurred after 1995 and before March 2, 2017, the amount that would be determined under subsection 127.4(6) — as that subsection would apply in respect of a claim made by the taxpayer under subsection 127.4(2) in respect of the original acquisition if subsection 127.4(6) were read without reference to paragraphs 127.4(6)(b) and (d) — in respect of the share; and
(c) in any other case, nil.
(2) Subsection (1) is deemed to have come into force on March 21, 2013.
81. (1) Section 211.81 of the Act is replaced by the following:
Marginal note:Tax for failure to reacquire 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 amount deducted by the individual under subsection 127.4(2) in respect of the share.
(2) Subsection (1) is deemed to have come into force on October 24, 2012.
82. (1) Subparagraph 212.1(3)(b)(iv) of the English version of the Act is replaced by the following:
(iv) a partnership of which the taxpayer or a person described in one of subparagraphs (i) to (iii) is a majority-interest partner or a member of a majority-interest group of partners (as defined in subsection 251.1(3))
(2) Paragraph 212.1(3)(e) of the Act is replaced by the following:
(e) a “designated partnership” means a partnership of which either a majority-interest partner or every member of a majority-interest group of partners (as defined in subsection 251.1(3)) is a non-resident person; and
83. (1) Paragraph 214(3)(f) of the Act is replaced by the following:
(f) where subsection 104(13) would, if Part I were applicable, require any part of an amount payable by a trust in its taxation year to a beneficiary to be included in computing the income of the non-resident person who is a beneficiary of the trust, that part is deemed to be an amount paid or credited to that person as income of or from the trust
(i) on, or at, the earliest of
(A) the day on which the amount was paid or credited,
(B) the day that is 90 days after the end of the taxation year, and
(C) if the taxation year is deemed by subparagraph 128.1(4)(a)(i) to end after July 25, 2012, the time that is immediately before the end of the taxation year, and
(ii) not at any later time;
(2) Subsection (1) is deemed to have come into force on July 25, 2012.
84. (1) Subparagraph 219(1)(d)(ii) of the Act is replaced by the following:
(ii) an amount deductible because of paragraphs 111(1)(b) and 115(1)(d) in computing the corporation’s base amount,
(2) Subsection 219(1.1) of the Act is replaced by the following:
Marginal note:Excluded gains
(1.1) For the purposes of subsection (1), the definition “taxable Canadian property” in subsection 248(1) shall be read without reference to paragraphs (a) and (c) to (e) of that definition and as if the only options, interests or rights referred to in paragraph (f) of that definition were those in respect of property described in paragraph (b) of that definition.
(3) Subsection (1) applies to the 1998 and subsequent taxation years.
(4) Subsection (2) is deemed to have come into force on March 5, 2010.
85. (1) Paragraph 239(2.21)(b) of the Act is replaced by the following:
(b) who is an official to whom taxpayer information has been provided for a particular purpose under paragraph 241(4)(a), (d), (f), (f.1), (i), (j.1) or (j.2)
(2) Subsection 239(3) of the Act is replaced by the following:
Marginal note:Penalty on conviction
(3) If a person is convicted under this section, the person is not liable to pay a penalty imposed under any of sections 162, 163, 163.2 and 163.3 for the same contravention unless the penalty is assessed before the information or complaint giving rise to the conviction was laid or made.
(3) Subsection (2) comes into force on the later of the day on which this Act receives royal assent and January 1, 2014.
86. (1) The Act is amended by adding the following after section 239:
Marginal note:Definitions
239.1 (1) The definitions in subsection 163.3(1) apply in this section.
Marginal note:Offences
(2) Every person that, without lawful excuse, the proof of which lies on the person,
(a) uses an electronic suppression of sales device or a similar device or software in relation to records that are required to be kept by any person under section 230,
(b) acquires or possesses an electronic suppression of sales device, or a right in respect of an electronic suppression of sales device, that is, or is intended to be, capable of being used in relation to records that are required to be kept by any person under section 230,
(c) designs, develops, manufactures, possesses for sale, offers for sale, sells, transfers or otherwise makes available to another person an electronic suppression of sales device that is, or is intended to be, capable of being used in relation to records that are required to be kept by any person under section 230,
(d) supplies installation, upgrade or maintenance services for an electronic suppression of sales device that is, or is intended to be, capable of being used in relation to records that are required to be kept by any person under section 230, or
(e) participates in, assents to or acquiesces in the commission of, or conspires with any person to commit, an offence described in any of paragraphs (a) to (d),
is guilty of an offence and, in addition to any penalty otherwise provided, is liable on summary conviction to a fine of not less than $10,000 and not more than $500,000 or to imprisonment for a term not exceeding two years, or to both.
Marginal note:Prosecution on indictment
(3) Every person that is charged with an offence described in subsection (2) may, at the election of the Attorney General of Canada, be prosecuted on indictment and, if convicted, is, in addition to any penalty otherwise provided, liable to a fine of not less than $50,000 and not more than $1,000,000 or to imprisonment for a term not exceeding five years, or to both.
Marginal note:Penalty on conviction
(4) A person that is convicted of an offence under this section is not liable to pay a penalty imposed under any of sections 162, 163, 163.2 and 163.3 for the same action unless a notice of assessment for that penalty was issued before the information or complaint giving rise to the conviction was laid or made.
Marginal note:Stay of appeal
(5) If, in any appeal under this Act, substantially the same facts are at issue as those that are at issue in a prosecution under this section, the Minister may file a stay of proceedings with the Tax Court of Canada and, upon that filing, the proceedings before that Court are stayed pending final determination of the outcome of the prosecution.
(2) Subsection (1) comes into force on the later of the day on which this Act receives royal assent and January 1, 2014.
87. (1) Subparagraphs 241(4)(d)(ix) and (x) of the Act are replaced by the following:
(ix) to an official of a department or agency of the Government of Canada or of a province as to the name, address, telephone number, occupation, size or type of business of a taxpayer, solely for the purpose of enabling that department or agency to obtain statistical data for research and analysis,
(x) to an official of the Canada Employment Insurance Commission or the Department of Employment and Social Development, solely for the purpose of the administration or enforcement of the Employment Insurance Act, an employment program of the Government of Canada (including, for greater certainty, any activity relating to a program for temporary foreign workers for which the administration or enforcement is the responsibility of the Minister of Employment and Social Development under the Immigration and Refugee Protection Regulations) or the evaluation or formation of policy for that Act or program,
(2) Paragraph 241(4)(j.1) of the Act is replaced by the following:
(j.1) provide taxpayer information to an official or a designated person solely for the purpose of permitting the making of an adjustment to a social assistance payment made on the basis of a means, needs or income test if the purpose of the adjustment is to take into account the amount determined for C in subsection 122.61(1) in respect of a person for a taxation year;
(j.2) provide information obtained under section 122.62 to an official of the government of a province solely for the purposes of the administration or enforcement of a prescribed law of the province;
88. (1) Section 247 of the Act is amended by adding the following after subsection (7):
Marginal note:Exclusion — certain guarantees
(7.1) Subsection (2) does not apply to adjust an amount of consideration paid, payable or accruing to a corporation resident in Canada (in this subsection referred to as the “parent”) in a taxation year of the parent for the provision of a guarantee to a person or partnership (in this subsection referred to as the “lender”) for the repayment, in whole or in part, of a particular amount owing to the lender by a non-resident person, if
(a) the non-resident person is a controlled foreign affiliate of the parent for the purposes of section 17 throughout the period in the year during which the particular amount is owing; and
(b) it is established that the particular amount would be an amount owing described in paragraph 17(8)(a) or (b) if it were owed to the parent.
(2) Subsection (1) applies to taxation years that begin after 1997 and in applying subsection 247(7.1) of the Act, as enacted by subsection (1), to taxation years that begin before February 24, 1998, section 17 of the Act is to be read as it read on January 24, 2005, except that if a taxpayer elects under this subsection in writing and files the election with the Minister of National Revenue on or before the taxpayer’s filing-due date for the taxation year that includes the day on which this Act receives royal assent,
(a) notwithstanding the time limitations in subsection 152(4) of the Act, the Minister of National Revenue may make such assessments, reassessments and determinations under Part I of the Act as are necessary to give effect to this subsection for a taxation year that ends before that day; and
(b) if the taxpayer so indicates in the election, subsection (1) does not apply to taxation years of the taxpayer that begin before December 22, 2012.
89. (1) The definition “trust” in subsection 248(1) of the Act is replaced by the following:
“trust”
« fiducie »
“trust” has the meaning assigned by subsection 104(1) and, unless the context otherwise requires, includes an estate;
(2) The definition “estate” in subsection 248(1) of the English version of the Act is replaced by the following:
“estate”
« succession »
“estate” has the meaning assigned by subsection 104(1) and includes, for civil law, a succession;
(3) Clause (e)(iii)(B) of the definition “automobile” in subsection 248(1) of the Act is replaced by the following:
(B) at least 30 kilometres outside the nearest point on the boundary of the nearest population centre, as defined by the last census dictionary published by Statistics Canada before the year, that has a population of at least 40,000 individuals as determined in the last census published by Statistics Canada before the year;
(4) The portion of the definition “majority interest partner” in subsection 248(1) of the Act before paragraph (a) is replaced by the following:
“majority-interest partner”
« associé détenant une participation majoritaire »
“majority-interest partner”, of a particular partnership at any time, means a person or partnership (in this definition referred to as the “taxpayer”)
(5) Subsection 248(1) of the Act is amended by adding the following in alphabetical order:
“derivative forward agreement”
« contrat dérivé à terme »
“derivative forward agreement”, of a taxpayer, means an agreement entered into by the taxpayer to purchase or sell a capital property if
(a) the term of the agreement exceeds 180 days or the agreement is part of a series of agreements with a term that exceeds 180 days,
(b) in the case of a purchase agreement, the difference between the fair market value of the property delivered on settlement, including partial settlement, of the agreement and the amount paid for the property is attributable, in whole or in part, to an underlying interest (including a value, price, rate, variable, index, event, probability or thing) other than
(i) revenue, income or cashflow in respect of the property over the term of the agreement, changes in the fair market value of the property over the term of the agreement, or any similar criteria in respect of the property, or
(ii) if the purchase price is denominated in the currency of a country other than Canada, changes in the value of the Canadian currency relative to that other currency, and
(c) in the case of a sale agreement,
(i) the difference between the sale price of the property and the fair market value of the property at the time the agreement is entered into by the taxpayer is attributable, in whole or in part, to an underlying interest (including a value, price, rate, variable, index, event, probability or thing) other than
(A) revenue, income or cashflow in respect of the property over the term of the agreement, changes in the fair market value of the property over the term of the agreement, or any similar criteria in respect of the property, or
(B) if the sale price is denominated in the currency of a country other than Canada, changes in the value of the Canadian currency relative to that other currency, and
(ii) the agreement is part of an arrangement that has the effect — or would have the effect if the agreements that are part of the arrangement and that were entered into by persons or partnerships not dealing at arm’s length with the taxpayer were entered into by the taxpayer instead of non-arm’s length persons or partnerships — of eliminating a majority of the taxpayer’s risk of loss and opportunity for gain or profit in respect of the property for a period of more than 180 days;
“LIA policy”
« police RAL »
“LIA policy” means a life insurance policy (other than an annuity) where
(a) a particular person or partnership becomes obligated after March 20, 2013 to repay an amount to another person or partnership (in this definition referred to as the “lender”) at a time determined by reference to the death of a particular individual whose life is insured under the policy, and
(b) the lender is assigned an interest in
(i) the policy, and
(ii) an annuity contract the terms of which provide that payments are to continue for a period that ends no earlier than the death of the particular individual;
“synthetic disposition arrangement”
« arrangement de disposition factice »
“synthetic disposition arrangement”, in respect of a property owned by a taxpayer, means one or more agreements or other arrangements that
(a) are entered into by the taxpayer or by a person or partnership that does not deal at arm’s length with the taxpayer,
(b) have the effect, or would have the effect if entered into by the taxpayer instead of the person or partnership, of eliminating all or substantially all the taxpayer’s risk of loss and opportunity for gain or profit in respect of the property for a definite or indefinite period of time, and
(c) can, in respect of any agreement or arrangement entered into by a person or partnership that does not deal at arm’s length with the taxpayer, reasonably be considered to have been entered into, in whole or in part, with the purpose of obtaining the effect described in paragraph (b);
“synthetic disposition period”
« période de disposition factice »
“synthetic disposition period”, of a synthetic disposition arrangement, means the definite or indefinite period of time during which the synthetic disposition arrangement has, or would have, the effect described in paragraph (b) of the definition “synthetic disposition arrangement” in this subsection;
“10/8 policy”
« police 10/8 »
“10/8 policy” means a life insurance policy (other than an annuity) where
(a) an amount is or may become
(i) payable, under the terms of a borrowing, to a person or partnership that has been assigned an interest in the policy or in an investment account in respect of the policy, or
(ii) payable (within the meaning assigned by the definition “amount payable” in subsection 138(12)) under a policy loan (as defined in subsection 148(9)) made in accordance with the terms and conditions of the policy, and
(b) either
(i) the return credited to an investment account in respect of the policy
(A) is determined by reference to the rate of interest on the borrowing or policy loan, as the case may be, described in paragraph (a), and
(B) would not be credited to the account if the borrowing or policy loan, as the case may be, were not in existence, or
(ii) the maximum amount of an investment account in respect of the policy is determined by reference to the amount of the borrowing or policy loan, as the case may be, described in paragraph (a);
(6) Subsection (3) applies to the 2013 and subsequent taxation years.
(7) Subsection (5) is deemed to have come into force on March 21, 2013, except that the definitions “LIA policy” and “10/8 policy” in subsection 248(1) of the Act, as amended by subsection (5), apply to taxation years that end after March 20, 2013.
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