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

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Regulations are current to 2023-01-25 and last amended on 2023-01-01. Previous Versions

PART LXXXVRegistered Pension Plans (continued)

Transfer — Defined Benefit to Money Purchase (continued)

Prescribed Amount (continued)

 [Repealed, SOR/2005-264, s. 30]

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/92-51, s. 7
  • SOR/2005-264, s. 30

Association of Benefits with Time Periods

 Where, for the purposes of Part LXXXIII or this Part or subsection 147.1(10) of the Act, it is necessary to associate benefits provided under a defined benefit provision of a pension plan with periods of time, the association shall be made in a manner acceptable to the Minister.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/92-51, s. 7

Minister’s Actions

 For the purposes of this Part, a waiver, extension of time or other modification of the requirements of this Part granted by the Minister or an approval by the Minister in respect of any matter is not effective unless it is in writing and expressly refers to the requirement that is modified or the matter in respect of which the approval is given.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/92-51, s. 7

PART LXXXVITaxable Capital Employed in Canada

 For the purposes of this Part and Part I.3 of the Act,

attributed surplus

attributed surplus of a non-resident insurer for a taxation year has the meaning assigned by subsection 2400(1); (surplus attribué)

Canadian assets

Canadian assets of a corporation that is a financial institution (as defined in subsection 181(1) of the Act) at any time in a taxation year means, in respect of the year, the amount, if any, by which

  • (a) the total of all amounts each of which is the amount at which an asset of the corporation (which asset is required, or, if the corporation were a bank to which the Bank Act applied, would be required, to be reflected in a return under subsection 223(1) of the Bank Act, as that Act read on May 31, 1992, if that return were prepared on a non-consolidated basis) would be shown on the corporation’s balance sheet at the end of the year if its balance sheet were prepared on a non-consolidated basis

exceeds

  • (b) the investment allowance of the corporation for the year determined under subsection 181.3(4) of the Act; (actif canadien)

  • (c) [Repealed, 2013, c. 33, s. 38]

Canadian premiums

Canadian premiums for a taxation year, in respect of an insurance corporation that was resident in Canada at any time in the year and throughout the year did not carry on a life insurance business, means the total of the insurance corporation’s net premiums for the year

  • (a) in respect of insurance on property situated in Canada, and

  • (b) in respect of insurance, other than on property, from contracts with persons resident in Canada,

and, for the purposes of this definition, net premiums has the same meaning as in subsection 403(2), and subsection 403(3) applies as if the references therein to “province” were read as references to “country”; (primes canadiennes)

Canadian reserve liabilities

Canadian reserve liabilities of an insurer as at the end of a taxation year has the meaning assigned by subsection 2400(1); ((passif de réserve canadienne))

contractual service margin

contractual service margin for a group of insurance contracts of an insurer, or a group of reinsurance contracts held by the insurer, at the end of a taxation year, has the same meaning as in subsection 138(12) of the Act; (marge sur services contractuels)

group of insurance contracts

group of insurance contracts of an insurer has the same meaning as in subsection 138(12) of the Act; (groupe de contrats d’assurance)

group of reinsurance contracts

group of reinsurance contracts held by an insurer has the same meaning as in subsection 138(12) of the Act; (groupe de contrats de réassurance)

group of segregated fund policies

group of segregated fund policies of an insurer has the same meaning as in subsection 138(12) of the Act; (groupe de polices à fonds réservé)

permanent establishment

permanent establishment has the same meaning as in subsection 400(2); (établissement stable)

policyholders’ liabilities

policyholders’ liabilities of an insurer at the end of a taxation year has the same meaning as in subsection 138(12) of the Act; (obligation envers les titulaires de polices)

reinsurance contract held amount

reinsurance contract held amount for a group of reinsurance contracts held by an insurer at the end of a taxation year has the same meaning as in subsection 138(12) of the Act; (montant au titre des contrats de réassurance détenus)

total assets

total assets of a corporation that is a financial institution (as defined in subsection 181(1) of the Act) at any time in a taxation year means, in respect of that year, the amount, if any, by which

  • (a) the total of all amounts each of which is the amount at which an asset of the corporation would be shown on the corporation’s balance sheet at the end of the year if its balance sheet were prepared on a non-consolidated basis

exceeds

  • (b) the investment allowance of the corporation for the year determined under subsection 181.3(4) of the Act; (actif total)

total premiums

total premiums for a taxation year, in respect of an insurance corporation that was resident in Canada at any time in the year and throughout the year did not carry on a life insurance business, means the total of the corporation’s net premiums for the year (as defined in subsection 403(2)) that are included in computing its income under Part I of the Act; (total des primes)

total reserve liabilities

total reserve liabilities of an insurer as at the end of a taxation year means the amount determined by the formula

A − A.1 + A.2 + A.3 − (0.9 × B) − (C − (0.9 × D))

where

A
is the total of the insurer’s liabilities and reserves including liabilities for segregated fund guarantees (other than policyholders’ liabilities or a liability for an obligation to pay a benefit under a segregated fund policy in respect of which subparagraphs 1406(b)(i) and (ii) apply) as at the end of the year in respect of insurance policies, as determined for the purposes of the Superintendent of Financial Institutions, if the insurer is required by law to report to the Superintendent of Financial Institutions, or, in any other case, the superintendent of insurance or other similar officer or authority of the province under the laws of which the insurer is incorporated;
A.1
is the total of all amounts each of which is the amount of an item reported by the insurer as an insurance contract asset as at the end of the year;
A.2
is the total of all amounts each of which is an amount of funds withheld as at the end of the year by the insurer in respect of the reinsurance of a risk under an insurance policy;
A.3
is the total of all amounts each which is an amount recoverable as at the end of the year by the insurer under a funds withheld arrangement in respect of the reinsurance of a risk by the insurer under an insurance policy;
B
is the total of all amounts each of which is the contractual service margin for a group of insurance contracts (other than a group of segregated fund policies) of the insurer at the end of the year;
C
is the total of all amounts each of which is an amount, in respect of a group of reinsurance contracts held by the insurer at the end of the year, that is
  • (a) the reinsurance contract held amount for the group, if there is no reinsurance contract held amount for the group that is in respect of the reinsurance of an obligation to pay a benefit under a segregated fund policy in respect of which subparagraphs 1406(b)(i) and (ii) apply, and

  • (b) in any other case, the amount that would be the reinsurance contract held amount for the group if the reinsurance contract held amount were determined excluding any portion that is in respect of the reinsurance of an obligation to pay a benefit under a segregated fund policy in respect of which subparagraphs 1406(b)(i) and (ii) apply; and

D
is the total of all amounts each of which is the amount, in respect of a group of reinsurance contracts held by the insurer at the end of the year, that is
  • (a) if no portion of the contractual service margin for the group is in respect of a risk under a segregated fund policy, the contractual service margin for the group, and

  • (b) in any other case, the amount that would be the contractual service margin for the group if the contractual service margin were determined excluding any portion that is in respect of the reinsurance of a risk under a segregated fund policy. (passif total de réserve)

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/94-298, s. 2
  • SOR/94-686, ss. 57(F), 79(F)
  • SOR/2000-413, s. 8
  • 2010, c. 25, s. 86
  • 2013, c. 33, s. 38
  • 2022, c. 19, s. 90

 For the purpose of determining the taxable capital employed in Canada of a corporation for a taxation year under subsection 181.2(1) of the Act, the prescribed proportion of the corporation’s taxable capital (as determined under Part I.3 of the Act) for the year is the amount determined by the formula

A × (B / C)

where

A
is the taxable capital (as determined under Part I.3 of the Act) of the corporation for the year,
B
is the total of all amounts each of which is the amount, determined in accordance with Part IV (or, in the case of an airline corporation, that would be so determined if the corporation had a permanent establishment in every province and if paragraphs 407(1)(a) and (b) were read without reference to the words “in Canada”), of the corporation’s taxable income earned in the year in a particular province or the amount of its taxable income that would, pursuant to that Part, be earned in the year in a province if all permanent establishments of the corporation in Canada were in a province, and
C
is the corporation’s taxable income for the year,

except that, where the corporation’s taxable income for the year is nil, the corporation shall, for the purposes of this section, be deemed to have a taxable income for the year of $1,000.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/94-298, s. 2
  • SOR/94-686, ss. 43(F)
  • 79(F)

 For the purposes of paragraph (b) of the definition Canadian surtax payable in subsection 125.3(4) of the Act, the prescribed proportion of the amount determined under section 123.2 of the Act in respect of a corporation for a taxation year is the amount determined by the formula

A × (B / C)

where

A
is the amount determined under section 123.2 of the Act in respect of the corporation for the year;
B
is
  • (a) where the corporation carried on a life insurance business at any time in the year, the corporation’s taxable capital (as determined under Part I.3 of the Act) for the year, and

  • (b) in any other case, the corporation’s taxable capital employed in Canada (as would be determined under Part I.3 of the Act if that Part were read without reference to paragraphs 181.3(1)(a) and (b) thereof) for the year; and

C
is the corporation’s taxable capital (as determined under Part I.3 of the Act) for the year.
  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/94-298, s. 2
  • SOR/94-686, s. 79(F)

 For the purposes of Part VI of the Act,

  • (a) Canadian assets of a corporation that is a financial institution (as defined in subsection 190(1) of the Act) at any time in a taxation year means, in respect of that year, the amount that would be determined under the definition Canadian assets in section 8600 in respect of the corporation for the year if the reference in that definition to “subsection 181(1)” were read as a reference to “subsection 190(1)” and paragraph (b) of that definition were read as follows:

    • “(b) the total determined under section 190.14 of the Act in respect of the corporation’s investments for the year in financial institutions related to it;”;

  • (b) total assets of a corporation that is a financial institution (as defined in subsection 190(1) of the Act) at any time in a taxation year means, in respect of that year, the amount that would be determined under the definition total assets in section 8600 in respect of the corporation for the year if the reference in that definition to “subsection 181(1)” were read as a reference to “subsection 190(1)” and paragraph (b) of that definition were read as follows:

    • “(b) the total determined under section 190.14 of the Act in respect of the corporation’s investments for the year in financial institutions related to it;”

  • (c) attributed surplus, Canadian reserve liabilities and total reserve liabilities have the same respective meanings as in section 8600.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/94-298, s. 2
  • SOR/94-686, s. 79(F)
  • 2013, c. 33, s. 39(E)

 [Repealed, 2013, c. 34, s. 411]

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/94-298, s. 2
  • SOR/94-686, s. 79(F)
  • SOR/98-571, s. 1
  • 2001, c. 22, s. 22
  • 2013, c. 34, s. 411
  •  (1) For the purposes of subclause 181.3(1)(c)(ii)(A)(II) and clause 190.11(b)(i)(B) of the Act, the amount prescribed in respect of a particular corporation for a taxation year ending at a particular time is the total of all amounts each of which is the amount determined in respect of a corporation that is, at the particular time, a foreign insurance subsidiary of the particular corporation, determined by the formula

    A − B

    where

    A
    is the amount determined by the formula

    C + D + (0.9 × E) − (0.9 × F) − G

    where

    C
    is the amount of the subsidiary’s long-term debt at the end of the subsidiary’s last taxation year ending at or before the particular time (in this subsection referred to as the “last taxation year”),
    D
    is the total amount at the end of the subsidiary’s last taxation year of the subsidiary’s
    • (a) capital stock (or, in the case of an insurance corporation incorporated without share capital, the amount of its members’ contributions),

    • (b) retained earnings,

    • (c) accumulated other comprehensive income,

    • (d) policyholders’ liabilities,

    • (e) contributed surplus, and

    • (f) any other surpluses,

    E
    is total of all amounts each of which is the contractual service margin for a group of insurance contracts of the subsidiary at the end of the subsidiary’s last taxation year other than a group of segregated fund policies,
    F
    is the total of all amounts each of which is the amount, in respect of a group of reinsurance contracts held by the subsidiary at the end of the subsidiary’s last taxation year, that is
    • (a) if no portion of the contractual service margin for the group is in respect of a risk under a segregated fund policy, the contractual service margin for the group, and

    • (b) in any other case, the amount that would be the contractual service margin for the group if the amount were determined excluding any portion that is in respect of the reinsurance of a risk under a segregated fund policy, and

    G
    is the amount of any deficit deducted in computing the subsidiary’s shareholders’ equity at the end of the subsidiary’s last taxation year; and
    B
    is the amount determined by the formula

    H + I

    where

    H
    is the total of all amounts each of which is the carrying value to its owner at the particular time for the taxation year that includes the particular time of a share of the subsidiary’s capital stock or its long-term debt that is owned at the particular time by
    • (a) the particular corporation,

    • (b) a subsidiary of the particular corporation,

    • (c) a corporation

      • (i) that is resident in Canada,

      • (ii) that carried on a life insurance business in Canada at any time in its taxation year ending at or before the particular time, and

      • (iii) that is

        • (A) a corporation of which the particular corporation is a subsidiary, or

        • (B) a subsidiary of a corporation described in clause (A), or

    • (d) a subsidiary of a corporation described in paragraph (c), and

    I
    is the total of all amounts each of which is an amount included under the description of A in respect of any surplus of the subsidiary contributed by a corporation described in paragraphs (a) to (d) of the description of H, other than an amount included under the description of H.
  • (2) For the purposes of subclause 181.3(1)(c)(ii)(A)(III) and clause 190.11(b)(i)(C) of the Act, the amount prescribed in respect of a particular corporation for a taxation year ending at a particular time is the total of all amounts each of which is the amount determined in respect of a corporation that is, at the particular time, a foreign insurance subsidiary of the particular corporation, determined by the formula

    A − B

    where

    A
    is the amount determined for B in subsection (1) in respect of the subsidiary, and
    B
    is the amount determined for A in subsection (1) in respect of the subsidiary.
  • (3) For the purposes of subclause 181.3(1)(c)(ii)(A)(V) and clause 190.11(b)(i)(E) of the Act, the amount prescribed in respect of a particular corporation for a taxation year ending at a particular time means the total of all amounts each of which would be the total reserve liabilities of a foreign insurance subsidiary of the particular corporation as at the end of the subsidiary’s last taxation year ending at or before the particular time if the subsidiary were required by law to report to the Superintendent of Financial Institutions for that year.

  • (4) The definitions in this subsection apply in this section.

    foreign insurance subsidiary

    foreign insurance subsidiary of a particular corporation at any time means a non-resident corporation that

    • (a) carried on a life insurance business throughout its last taxation year ending at or before that time,

    • (b) did not carry on a life insurance business in Canada at any time in its last taxation year ending at or before that time, and

    • (c) is at that time

      • (i) a subsidiary of the particular corporation, and

      • (ii) not a subsidiary of any corporation that

        • (A) is resident in Canada,

        • (B) carried on a life insurance business in Canada at any time in its last taxation year ending at or before that time, and

        • (C) is a subsidiary of the particular corporation. (filiale d’assurance étrangère)

    subsidiary

    subsidiary of a corporation (in this definition referred to as the parent corporation) means a corporation controlled by the parent corporation where shares of each class of the capital stock of the corporation having a fair market value of not less than 75% of the fair market value of all of the issued and outstanding shares of that class belong to

    • (a) the parent corporation,

    • (b) a corporation that is a subsidiary of the parent corporation, or

    • (c) any combination of corporations each of which is a corporation referred to in paragraph (a) or described in paragraph (b). (filiale)

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/96-475, s. 1
  • SOR/98-571, s. 2
  • SOR/2000-413, s. 9
  • 2022, c. 19, s. 91
 
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