Economic Action Plan 2014 Act, No. 2 (S.C. 2014, c. 39)
Full Document:
Assented to 2014-12-16
39. (1) The Act is amended by adding the following after section 122.71:
Subdivision a.3Child Fitness Tax Credit
Marginal note:Definitions
122.8 (1) The following definitions apply in this section.
“eligible fitness expense”
« dépense admissible pour activités physiques »
“eligible fitness expense” in respect of a qualifying child of an individual for a taxation year means the amount of a fee paid to a qualifying entity (other than an amount paid to a person that is, at the time the amount is paid, the individual’s spouse or common-law partner or another individual who is under 18 years of age) to the extent that the fee is attributable to the cost of registration or membership of the qualifying child in a prescribed program of physical activity and, for the purposes of this section, that cost
(a) includes the cost to the qualifying entity of the program in respect of its administration, instruction, rental of required facilities, and uniforms and equipment that are not available to be acquired by a participant in the program for an amount less than their fair market value at the time, if any, they are so acquired; and
(b) does not include
(i) the cost of accommodation, travel, food or beverages, or
(ii) any amount deductible under section 63 in computing any person’s income for any taxation year.
“qualifying child”
« enfant admissible »
“qualifying child” of an individual for a taxation year means a child of the individual who is, at the beginning of the year,
(a) under 16 years of age; or
(b) in the case where an amount is deductible under section 118.3 in computing any person’s tax payable under this Part for the year in respect of that child, under 18 years of age.
“qualifying entity”
« entité admissible »
“qualifying entity” means a person or partnership that offers one or more prescribed programs of physical activity.
“return of income”
« déclaration de revenu »
“return of income” filed by an individual for a taxation year means a return of income (other than a return of income filed under subsection 70(2) or 104(23), paragraph 128(2)(e) or subsection 150(4)) that is required to be filed for the year or that would be required to be filed if the individual had tax payable under this Part for the year.
Marginal note:Deemed overpayment
(2) An individual who files a return of income for a taxation year and who makes a claim under this subsection is deemed to have paid, at the end of the year, on account of tax payable under this Part for the year, an amount equal to the amount determined by the formula
A × B
where
- A
- is the appropriate percentage for the year; and
- B
- is the total of all amounts each of which is, in respect of a qualifying child of the individual for the year, the lesser of $1,000 and the amount determined by the formula
C – D
where
- C
- is the total of all amounts each of which is an amount paid in the year by the individual, or by the individual’s spouse or common law partner, that is an eligible fitness expense in respect of the qualifying child of the individual, and
- D
- is the total of all amounts that any person is or was entitled to receive, each of which relates to an amount included in computing the value of C in respect of the qualifying child that is the amount of a reimbursement, allowance or any other form of assistance (other than an amount that is included in computing the income for any taxation year of that person and that is not deductible in computing the taxable income of that person).
Marginal note:Child with disability
(3) An individual who files a return of income for a taxation year and who makes a claim under this subsection is deemed to have paid, in respect of a qualifying child of the individual, at the end of the year, on account of tax payable under this Part for the year, an amount equal to $500 multiplied by the appropriate percentage for the year, if
(a) the amount referred to in the description of B in subsection (2) is $100 or more; and
(b) an amount is deductible in respect of the qualifying child under section 118.3 in computing any person’s tax payable under this Part for the year.
Marginal note:Apportionment of overpayment
(4) If more than one individual is entitled to make a claim under this section for a taxation year in respect of a qualifying child, the total of all amounts deemed to have been paid shall not exceed the maximum amount that could be deemed to have been paid for the year by any one of those individuals in respect of that qualifying child if that individual were the only individual entitled to claim an amount for the year under this section in respect of that qualifying child. If the individuals cannot agree as to what portion of the maximum amount each can so claim, the Minister may fix the portions.
Marginal note:Effect of bankruptcy
(5) For the purposes of this subdivision, if an individual becomes bankrupt in a particular calendar year, notwithstanding subsection 128(2), any reference to the taxation year of the individual (other than in this subsection) is deemed to be a reference to the particular calendar year.
Marginal note:Part-year residents
(6) If an individual is resident in Canada throughout part of a taxation year and is non-resident throughout another part of the year, the total of the amounts that are deemed to be paid by the individual under subsection (2) and (3) for the year cannot exceed the lesser of
(a) the total of
(i) the amounts deemed to be paid under those subsections that can reasonably be considered as wholly applicable to the period or periods in the year throughout which the individual is not resident in Canada, computed as though that period or those periods were the whole taxation year, and
(ii) the amounts deemed to be paid under those subsections that can reasonably be considered as wholly applicable to the period or periods in the year throughout which the individual is resident in Canada, computed as though that period or those periods were the whole taxation year, and
(b) the total of the amounts that would have been deemed to have been paid under those subsections for the year had the individual been resident in Canada throughout the year.
Marginal note:Non-residents
(7) Subsections (2) and (3) do not apply in respect of a taxation year of an individual if the individual is, at no time in the year, resident in Canada, unless all or substantially all the individual’s income for the year is included in computing the individual’s taxable income earned in Canada for the year.
(2) Subsection (1) applies to the 2015 and subsequent taxation years.
40. (1) The Act is amended by adding the following before section 125.3:
Marginal note:Part XIII tax — eligible bank affiliate
125.21 There may be deducted in computing the tax payable under this Part for a taxation year by a particular corporation that is throughout the year an eligible Canadian bank (as defined in subsection 95(2.43)) the total of all amounts, each of which is the amount, if any, by which
(a) an amount paid under paragraph 212(1)(b) in respect of interest paid or credited in the year by the particular corporation in respect of an upstream deposit (as defined in subsection 95(2.43)) owing to a non-resident corporation that is, throughout the year, an eligible bank affiliate (as defined in subsection 95(2.43)) of the particular corporation
exceeds
(b) the total of all amounts each of which is a portion of the amount described in paragraph (a) that is available to the non-resident corporation or any other person or partnership at any time as a credit or reduction of, or deduction from, any amount otherwise payable to the government of a country other than Canada, or a political subdivision of that country, having regard to all available provisions of the laws of that country, or political subdivision, as the case may be, any tax treaty with that country and any other agreements entered into by that country or political subdivision.
(2) Subsection (1) applies in respect of taxation years that begin after October 2012.
41. (1) The definition “investor” in subsection 125.4(1) of the Act is repealed.
(2) The definitions “assistance” and “salary or wages” in subsection 125.4(1) of the Act are replaced by the following:
“assistance”
« montant d’aide »
“assistance” means an amount, other than a prescribed amount or an amount deemed under subsection (3) to have been paid, that would be included under paragraph 12(1)(x) in computing a taxpayer’s income for any taxation year if that paragraph were read without reference to
(a) subparagraphs 12(1)(x)(v) to (viii), if the amount were received
(i) from a person or partnership described in subparagraph 12(1)(x)(ii), or
(ii) in circumstances where clause 12(1)(x)(i)(C) applies; and
(b) subparagraphs 12(1)(x)(v) to (vii), in any other case.
“salary or wages”
« traitement ou salaire »
“salary or wages” does not include an amount
(a) described in section 7;
(b) determined by reference to profits or revenues; or
(c) paid to a person in respect of services rendered by the person at a time when the person was non-resident, unless the person was at that time a Canadian citizen.
(3) The definition “Canadian film or video production certificate” in subsection 125.4(1) of the Act is replaced by the following:
“Canadian film or video production certificate”
« certificat de production cinématographique ou magnétoscopique canadienne »
“Canadian film or video production certificate” means a certificate issued in respect of a production by the Minister of Canadian Heritage certifying that the production is a Canadian film or video production in respect of which that Minister is satisfied that, except where the production is a treaty co-production (as defined in subsection 1106(3) of the Income Tax Regulations), an acceptable share of revenues from the exploitation of the production in non-Canadian markets is, under the terms of any agreement, retained by
(a) a qualified corporation that owns or owned an interest in, or for civil law a right in, the production;
(b) a prescribed taxable Canadian corporation related to the qualified corporation; or
(c) any combination of corporations described in paragraph (a) or (b).
(4) The portion of the definition “labour expenditure” in subsection 125.4(1) of the Act before subparagraph (b)(i) is replaced by the following:
“labour expenditure”
« dépense de main-d’oeuvre »
“labour expenditure”, of a corporation for a taxation year in respect of a Canadian film or video production, means, in the case of a corporation that is not a qualified corporation for the taxation year, nil, and in the case of a corporation that is a qualified corporation for the taxation year, subject to subsection (2), the total of the following amounts to the extent that they are reasonable in the circumstances and included in the cost to, or in the case of depreciable property the capital cost to, the corporation, or any other person or partnership, of the production:
(a) the salary or wages directly attributable to the production that are incurred after 1994 and in the taxation year, or the preceding taxation year, by the corporation for the stages of production of the property, from the production commencement time to the end of the post-production stage, and paid by it in the taxation year or within 60 days after the end of the taxation year (other than amounts incurred in that preceding taxation year that were paid within 60 days after the end of that preceding taxation year),
(b) that portion of the remuneration (other than salary or wages and other than remuneration that relates to services rendered in the preceding taxation year and that was paid within 60 days after the end of that preceding taxation year) that is directly attributable to the production of property, that relates to services rendered after 1994 and in the taxation year, or that preceding taxation year, to the corporation for the stages of production, from the production commencement time to the end of the post-production stage, and that is paid by it in the taxation year or within 60 days after the end of the taxation year to
(5) The portion of the definition “qualified labour expenditure” in subsection 125.4(1) of the Act before paragraph (a) is replaced by the following:
“qualified labour expenditure”
« dépense de main-d’oeuvre admissible »
“qualified labour expenditure”, of a corporation for a taxation year in respect of a Canadian film or video production, means the lesser of
(6) The portion of the description of A in paragraph (b) of the definition “qualified labour expenditure” in subsection 125.4(1) of the Act before subparagraph (ii) is replaced by the following:
- A
- is 60% of the amount by which
(i) the total of all amounts each of which is an expenditure by the corporation in respect of the production that is included in the cost to, or in the case of depreciable property the capital cost to, the corporation or any other person or partnership of the production at the end of the taxation year,
exceeds
(7) Subsection 125.4(1) of the Act is amended by adding the following in alphabetical order:
“production commencement time”
« début de la production »
“production commencement time”, in respect of a Canadian film or video production, means the earlier of
(a) the time at which principal photography of the production begins, and
(b) the latest of
(i) the time at which a qualified corporation that has an interest in, or for civil law a right in, the production, or the parent of the corporation, first makes an expenditure for salary or wages or other remuneration for activities, of scriptwriters, that are directly attributable to the development by the corporation of script material of the production,
(ii) the time at which the corporation or the parent of the corporation acquires a property, on which the production is based, that is a published literary work, screenplay, play, personal history or all or part of the script material of the production, and
(iii) two years before the date on which principal photography of the production begins.
“script material”
« texte »
“script material”, in respect of a production, means written material describing the story on which the production is based and, for greater certainty, includes a draft script, an original story, a screen story, a narration, a television production concept, an outline or a scene-by-scene schematic, synopsis or treatment.
(8) The portion of subsection 125.4(2) of the Act before paragraph (b) is replaced by the following:
Marginal note:Rules governing labour expenditures of corporation
(2) For the purposes of the definitions “labour expenditure” and “qualified labour expenditure” in subsection (1),
(a) remuneration does not include remuneration
(i) determined by reference to profits or revenues, or
(ii) in respect of services rendered by a person at a time when the person was non-resident, unless the person was at that time a Canadian citizen;
(9) Subsection 125.4(2) of the Act is amended by striking out “and” at the end of paragraph (b), by adding “and” at the end of paragraph (c) and by adding the following after paragraph (c):
(d) an expenditure incurred in respect of a film or video production by a qualified corporation (in this paragraph referred to as the “co-producer”) in respect of goods supplied or services rendered by another qualified corporation to the co-producer in respect of the production is not a labour expenditure to the co-producer or, for the purpose of applying this section to the co-producer, a cost or capital cost of the production.
(10) Subsection 125.4(4) of the Act is replaced by the following:
Marginal note:Exception
(4) This section does not apply to a Canadian film or video production if the production — or an interest in a person or partnership that has, directly or indirectly, an interest in, or for civil law a right in, the production — is a tax shelter investment for the purpose of section 143.2.
(11) Subsection 125.4(6) of the Act is replaced by the following:
Marginal note:Revocation of certificate
(6) If an omission or incorrect statement was made for the purpose of obtaining a Canadian film or video production certificate in respect of a production, or if the production is not a Canadian film or video production,
(a) the Minister of Canadian Heritage may
(i) revoke the certificate, or
(ii) if the certificate was issued in respect of productions included in an episodic television series, revoke the certificate in respect of one or more episodes in the series;
(b) for greater certainty, for the purposes of this section, the expenditures and cost of production in respect of productions included in an episodic television series that relate to an episode in the series in respect of which a certificate has been revoked are not attributable to a Canadian film or video production; and
(c) for the purpose of subparagraph (3)(a)(i), a certificate that has been revoked is deemed never to have been issued.
(12) Section 125.4 of the Act is amended by adding the following after subsection (6):
Marginal note:Guidelines
(7) The Minister of Canadian Heritage shall issue guidelines respecting the circumstances under which the conditions in the definition “Canadian film or video production certificate” in subsection (1) are satisfied. For greater certainty, those guidelines are not statutory instruments as defined in the Statutory Instruments Act.
(13) Subsections (1) and (10) apply
(a) to taxation years that end after November 14, 2003; and
(b) in respect of a film or video production in respect of which a corporation has, in a return of income filed before November 14, 2003, claimed an amount under subsection 125.4(3) of the Act in respect of a labour expenditure incurred after 1997.
(14) Subsections (2) and (4) to (9) apply
(a) to film or video productions for which the production commencement time of the corporation (or, if there is more than one qualified corporation in respect of the production, of all such corporations) is on or after November 14, 2003; and
(b) to a corporation in respect of a film or video production for which the production commencement time of any corporation is before November 14, 2003
(i) if the earliest labour expenditure of the corporation (or, if there is more than one qualified corporation in respect of the production, of all those corporations) in respect of the production is made after 2003, or
(ii) if the corporation elects (or, if there is more than one qualified corporation in respect of the production, all those corporations jointly elect), in writing, and the election is filed with the Minister of National Revenue on or before the earliest filing-due date of any qualified corporation in respect of the production for that corporation’s taxation year that includes the day on which this Act receives royal assent, and the earliest labour expenditure of all such qualified corporations in respect of the production is made
(A) after the last taxation year of any such corporation that ended before November 14, 2003, or
(B) if the first taxation year of all such corporations includes November 14, 2003, in that taxation year.
(15) The earliest labour expenditure referred to in subsection (14) is to be determined under the provisions of subsections 125.4(1) and (2) of the Act that would apply if subsections (2) and (4) to (9) had not been enacted.
(16) Subsection (3) applies in respect of film or video productions in respect of which certificates are issued by the Minister of Canadian Heritage after December 20, 2002, except that, in respect of those film or video productions in respect of which certificates are issued by the Minister of Canadian Heritage before 2004, the definition “Canadian film or video production certificate” in subsection 125.4(1) of the Act, as enacted by subsection (3), is to be read as follows:
- “Canadian film or video production certificate”
“Canadian film or video production certificate” means a certificate issued in respect of a production by the Minister of Canadian Heritage
(a) certifying that the production is a Canadian film or video production in respect of which that Minister is satisfied that, except where the production is a treaty co-production (as defined in subsection 1106(3) of the Income Tax Regulations), an acceptable share of revenues from the exploitation of the production in non-Canadian markets is, under the terms of any agreement, retained by
(i) a qualified corporation that owns or owned an interest in, or for civil law a right in, the production,
(ii) a prescribed taxable Canadian corporation related to the qualified corporation, or
(iii) any combination of corporations described in subparagraph (i) or (ii); and
(b) estimating amounts relevant for the purpose of determining the amount deemed under subsection (3) to have been paid in respect of the production.
(17) Subsection (11) is deemed to have come into force on November 15, 2003.
(18) Subsection (12) applies in respect of film or video productions in respect of which certificates are issued by the Minister of Canadian Heritage after December 20, 2002.
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