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Income Tax Regulations (C.R.C., c. 945)

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Regulations are current to 2022-07-13 and last amended on 2022-06-23. Previous Versions

PART XXVIIncome Earned in a Province by an Individual (continued)

Non-Residents

  •  (1) Subject to subsection (2), if an individual does not reside in Canada at any time in a taxation year, the individual’s income earned in the taxation year in a province is the total of

    • (a) the portion of the taxpayer’s income from an office or employment that is included in the taxpayer’s taxable income earned in Canada for the taxation year under subparagraph 115(1)(a)(i) of the Act and that is reasonably attributable to the duties performed by the taxpayer the province; and

    • (b) the taxpayer’s income for the taxation year from carrying on business earned in the province, determined in accordance with this Part.

  • (2) Where the aggregate of the amounts of an individual’s income as determined under subsection (1) for all provinces for a taxation year exceeds the aggregate of the amounts of his income described in subparagraphs 115(1)(a)(i) and (ii) of the Act, the amount of his income earned in the taxation year in a particular province shall be that proportion of his income so described that the amount of his income earned in the taxation year in the province as determined under subsection (1) is of the aggregate of all such amounts.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/2010-93, s. 20

Income from Business

  •  (1) Where, in a taxation year, an individual had a permanent establishment in a particular province or a country other than Canada and had no permanent establishment outside that province or country, the whole of his income from carrying on business for the year shall be deemed to have been earned therein.

  • (2) Where, in a taxation year, an individual had no permanent establishment in a particular province or country other than Canada, no part of his income for the year from carrying on business shall be deemed to have been earned therein.

  • (3) Except as otherwise provided, where, in a taxation year, an individual had a permanent establishment in a particular province or in a particular country other than Canada and had a permanent establishment outside that particular province or particular country, the amount of the individual’s income for the taxation year from carrying on business that is deemed to have been earned in the particular province or particular country is half of the total of

    • (a) that proportion of the individual’s income for the year from carrying on business that the gross revenue for the fiscal period that ends in the taxation year that is reasonably attributable to the permanent establishment in the particular province or particular country is of the individual’s total gross revenue for that period from the business; and

    • (b) that proportion of the individual’s income for the taxation year from carrying on business that the total of all amounts that are salaries and wages paid in the fiscal period that ends in the taxation year to employees of the permanent establishment in the particular province or particular country is of the total of all amounts that are salaries and wages paid in that period to employees of the business.

  • (4) For the purpose of determining the gross revenue for the year reasonably attributable to the permanent establishment in a particular province or country other than Canada within the meaning of paragraph (3)(a), the following rules shall apply:

    • (a) where the destination of a shipment of merchandise to a customer to whom the merchandise is sold is in the particular province or country, the gross revenue derived therefrom shall be attributable to the permanent establishment in the province or country;

    • (b) except as provided in paragraph (c), where the destination of a shipment of merchandise to a customer to whom the merchandise is sold is in a province or country other than Canada in which the taxpayer has no permanent establishment, if the person negotiating the sale may reasonably be regarded as being attached to the permanent establishment in the particular province or country, the gross revenue derived therefrom shall be attributable to that permanent establishment;

    • (c) where the destination of a shipment of merchandise to a customer to whom the merchandise is sold is in a country other than Canada in which the taxpayer has no permanent establishment,

      • (i) if the merchandise was produced or manufactured, or produced and manufactured, entirely in the particular province by the taxpayer, the gross revenue derived therefrom shall be attributable to the permanent establishment in the province, or

      • (ii) if the merchandise was produced or manufactured, or produced and manufactured, partly in the particular province and partly in another place by the taxpayer, the gross revenue derived therefrom attributable to the permanent establishment in the province shall be that proportion thereof that the salaries and wages paid in the year to employees of the permanent establishment in the province where the merchandise was partly produced or manufactured (or partly produced and manufactured) is of the aggregate of the salaries and wages paid in the year to employees of the permanent establishments where the merchandise was produced or manufactured (or produced and manufactured);

    • (d) where a customer to whom merchandise is sold instructs that shipment be made to some other person and the customer’s office with which the sale was negotiated is located in the particular province or country, the gross revenue derived therefrom shall be attributable to the permanent establishment in the province or country;

    • (e) except as provided in paragraph (f), where a customer to whom merchandise is sold instructs that shipment be made to some other person and the customer’s office with which the sale was negotiated is located in a province or country other than Canada in which the taxpayer has no permanent establishment, if the person negotiating the sale may reasonably be regarded as being attached to the permanent establishment in the particular province or country, the gross revenue derived therefrom shall be attributable to that permanent establishment;

    • (f) where a customer to whom merchandise is sold instructs that shipment be made to some other person and the customer’s office with which the sale was negotiated is located in a country other than Canada in which the taxpayer has no permanent establishment,

      • (i) if the merchandise was produced or manufactured, or produced and manufactured, entirely in the particular province by the taxpayer, the gross revenue derived therefrom shall be attributable to the permanent establishment in the province, or

      • (ii) if the merchandise was produced or manufactured, or produced and manufactured, partly in the particular province and partly in another place by the taxpayer, the gross revenue derived therefrom attributable to the permanent establishment in the province shall be that proportion thereof that the salaries and wages paid in the year to employees of the permanent establishment in the province where the merchandise was partly produced or manufactured (or partly produced and manufactured) is of the aggregate of the salaries and wages paid in the year to employees of the permanent establishments where the merchandise was produced or manufactured (or produced and manufactured);

    • (g) where gross revenue is derived from services rendered in the particular province or country, the gross revenue shall be attributable to the permanent establishment in the province or country;

    • (h) where gross revenue is derived from services rendered in a province or country other than Canada in which the taxpayer has no permanent establishment, if the person negotiating the contract may reasonably be regarded as being attached to the permanent establishment of the taxpayer in the particular province or country, the gross revenue shall be attributable to that permanent establishment;

    • (i) where standing timber or the right to cut standing timber is sold and the timber limit on which the timber is standing is in the particular province or country, the gross revenue from such sale shall be attributable to the permanent establishment of the taxpayer in the province or country; and

    • (j) where land is a permanent establishment of the taxpayer in the particular province, the gross revenue which arises from leasing the land shall be attributable to that permanent establishment.

  • (5) Where an individual pays a fee to another person under an agreement pursuant to which that other person or employees of that other person perform services for the individual that would normally be performed by employees of the individual, the fee so paid shall be deemed to be salary paid by the individual and that part of the fee that may reasonably be regarded as payment in respect of services rendered at a particular permanent establishment of the individual shall be deemed to be salary paid to an employee of that permanent establishment.

  • (6) For the purposes of subsection (5), a fee does not include a commission paid to a person who is not an employee of the individual.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/94-686, s. 81(F)
  • SOR/2011-195, s. 7

Bus and Truck Operators

 Notwithstanding subsections 2603(3) and (4), the amount of income that shall be deemed to have been earned in a particular province or country other than Canada by an individual from carrying on the business of transportation of goods or passengers (other than by the operation of a railway, ships or an airline service) is 1/2 of the aggregate of

  • (a) that proportion of his income therefrom for the year that the number of miles travelled by his vehicles in the province or country in the fiscal period ending in the year is of the total number of miles travelled by his vehicles in that period; and

  • (b) that proportion of his income therefrom for the year that the aggregate of salaries and wages paid in the fiscal period ending in the year to employees of the permanent establishment in the province or country is of the aggregate of all salaries and wages paid in that period to employees of the business.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/94-686, s. 81(F)

More than One Business

 Where an individual operates more than one business, the provisions of sections 2603 and 2604 shall be applied in respect of each business and the amount of income for the year from carrying on business earned in a particular province or country in the year is the aggregate of the amounts so determined.

Limitations of Business Income

  •  (1) If, in the case of an individual to whom section 2601 applies, the total of the amounts otherwise determined to be the individual’s income for a taxation year from carrying on business that is earned in all provinces and countries other than Canada is greater than the individual’s income for the year, the individual’s income for the year from carrying on business earned in a particular province or country other than Canada is deemed to be that proportion of the individual’s income for the year that

    • (a) the individual’s income for the year from carrying on business in the particular province or country as otherwise determined

    is of

    • (b) that total.

  • (2) If section 114 of the Act applies in respect of an individual for a taxation year, the following rules apply:

    • (a) the portion of subsection (1) before paragraph (a) is to be read as follows in respect of the individual for the year:

      • 2606 (1) If, in the case of an individual to whom section 2601 applies, the total of the amounts otherwise determined to be the individual’s income for a taxation year from carrying on business that is earned in all provinces and countries other than Canada is greater than the individual’s taxable income for the year, the individual’s income for the year from carrying on business earned in a particular province or country other than Canada is deemed to be that proportion of the individual’s taxable income for the year that

    • (b) for the purpose of this Part, the individual’s income for the year from carrying on a business in any place shall be computed by reference only to the income from that business that is included in computing the individual’s taxable income for the year.

  • (3) For the purposes of sections 2603 to 2605, where an individual’s taxable income for the taxation year is computed in accordance with section 115 of the Act,

    • (a) a reference to a “business” shall be deemed to refer only to a business that was wholly or partly carried on in Canada;

    • (b) a reference to “income for the year from carrying on business” shall be deemed to refer only to income for the year from carrying on a business in Canada, as determined for the purposes of section 115 of the Act;

    • (c) a reference to “salaries and wages paid in the year” shall be deemed to be a reference to salaries and wages paid to employees of his permanent establishments in Canada; and

    • (d) a reference to “total gross revenue for the year” from the business shall be deemed to be a reference to total gross revenue reasonably attributable to his permanent establishments in Canada.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/2009-302, s. 9
  • SOR/2011-195, s. 8(F)

Dual Residence

 Where an individual was resident in more than one province on the last day of the taxation year, for the purposes of this Part, he shall be deemed to have resided on that day only in that province which may reasonably be regarded as his principal place of residence.

Sift Trusts

 For the purposes of this Part, if the individual is a SIFT trust, a reference to income earned in a taxation year shall be read as a reference to the amount that would, if this Part were read without reference to this section, be the amount, if any, by which its income for the taxation year exceeds its taxable SIFT trust distributions for the taxation year.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2007, c. 29, s. 31

PART XXVIIGroup Term Life Insurance Benefits

Definitions & Interpretation

Definitions

  •  (1) The definitions in this subsection apply in this Part.

    lump-sum premium

    lump-sum premium in relation to a group term life insurance policy means a premium for insurance under the policy on the life of an individual where all or part of the premium is for insurance that is (or would be if the individual survived) in respect of a period that ends more than 13 months after the earlier of the day on which the premium becomes payable and the day on which it is paid. (prime globale)

    paid-up premium

    paid-up premium in relation to a group term life insurance policy means a premium for insurance under the policy on the life of an individual where the insurance is for the remainder of the lifetime of the individual and no further premiums will be payable for the insurance. (prime d’assurance libérée)

    premium category

    premium category in relation to term insurance provided under a group term life insurance policy means,

    • (a) where the premium rate applicable in respect of term insurance on the life of an individual depends on the group to which the individual belongs, any of the groups for which a premium rate is established, and

    • (b) in any other case, all individuals on whose lives term insurance is in effect under the policy,

    and, for the purpose of this definition, a single premium rate is deemed to apply for all term insurance under a policy in respect of periods in 1994, and where individuals are divided into separate groups solely on the basis of their age, sex, or both, the groups are deemed to be a single group for which a premium rate is established. (catégorie de primes)

    term insurance

    term insurance in relation to an individual and a group term life insurance policy means insurance under the policy on the life of the individual, other than insurance in respect of which a lump-sum premium has become payable or been paid. (assurance temporaire)

Accidental Death Insurance
  • (2) For greater certainty, a premium for insurance on the life of an individual does not include an amount for accidental death insurance.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/97-494, s. 1

Prescribed Benefit

  •  (1) Subject to subsection (2), for the purpose of subsection 6(4) of the Act, the amount prescribed for a taxation year in respect of insurance under a group term life insurance policy on the life of a taxpayer is the total of

    • (a) the taxpayer’s term insurance benefit under the policy for the calendar year in which the taxation year ends,

    • (b) the taxpayer’s prepaid insurance benefit under the policy for that calendar year, and

    • (c) the total of all sales and excise taxes payable in respect of premiums paid under the policy in that calendar year for insurance on the life of the taxpayer, other than

      • (i) taxes paid, directly or by way of reimbursement, by the taxpayer, and

      • (ii) taxes in respect of premiums for term insurance that, if the taxpayer were to die, would be paid otherwise than

        • (A) to the taxpayer,

        • (B) for the benefit of the taxpayer,

        • (C) as a benefit that the taxpayer desired to have conferred on any person.

Bankrupt Individual
  • (2) Where a taxpayer who has become a bankrupt has two taxation years ending in a calendar year, for the purpose of subsection 6(4) of the Act, the amount prescribed for the first taxation year in respect of insurance under a group term life insurance policy on the life of the taxpayer is nil.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/97-494, s. 1
 
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