Budget Implementation Act, 2017, No. 2 (S.C. 2017, c. 33)
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Assented to 2017-12-14
PART 1Amendments to the Income Tax Act and to Related Legislation (continued)
C.R.C., c. 945Income Tax Regulations (continued)
86 (1) The portion of subsection 404(1) of the French version of the Regulations before paragraph (a) is replaced by the following:
404 (1) Malgré les paragraphes 402(3) et (4), le montant de revenu imposable qu’une banque est réputée avoir gagné au cours d’une année d’imposition dans une province où elle avait un établissement stable correspond au tiers du total des sommes suivantes :
(2) Paragraphs 404(1)(a) and (b) of the Regulations are replaced by the following:
(a) the proportion of its taxable income for the year that the total of the salaries and wages paid in the year by the bank to employees of its permanent establishment in the province is of the total of all salaries and wages paid in the year by the bank; and
(b) twice the proportion of its taxable income for the year that the total amount of loans and deposits of its permanent establishment in the province for the year is of the total amount of all loans and deposits of the bank for the year.
(3) Subsections 404(2) and (3) of the Regulations are replaced by the following:
(2) For the purposes of subsection (1), the amount of loans for a taxation year is 1/12 of the total of the amounts outstanding, on the loans made by the bank, at the close of business on the last day of each month in the year.
(3) For the purposes of subsection (1), the amount of deposits for a taxation year is 1/12 of the total of the amounts on deposit with the bank at the close of business on the last day of each month in the year.
(4) Subsections (1) to (3) are deemed to have come into force on September 16, 2016.
87 (1) The Regulations are amended by adding the following after section 404:
404.1 (1) Notwithstanding subsections 402(3) and (4), the amount of taxable income that is deemed to have been earned by a federal credit union in a taxation year in a province in which it had a permanent establishment is 1/3 of the total of
(a) the proportion of its taxable income for the year that the total of the salaries and wages paid in the year by the federal credit union to employees of its permanent establishment in the province is of the total of all salaries and wages paid in the year by the federal credit union, and
(b) twice the proportion of its taxable income for the year that the total amount of loans and deposits of its permanent establishment in the province for the year is of the total amount of all loans and deposits of the federal credit union for the year.
(2) For the purposes of subsection (1), the amount of loans for a taxation year is 1/12 of the total of the amounts outstanding, on the loans made by the federal credit union, at the close of business on the last day of each month in the year.
(3) For the purposes of subsection (1), the amount of deposits for a taxation year is 1/12 of the total of the amounts on deposit with the federal credit union at the close of business on the last day of each month in the year.
(4) For the purposes of subsections (2) and (3), loans and deposits do not include bonds, stocks, debentures, items in transit and deposits in favour of Her Majesty in right of Canada.
(2) Subsection (1) is deemed to have come into force on September 16, 2016.
88 (1) The portion of section 412 of the Regulations before paragraph (a) is replaced by the following:
412 If part of the business of a corporation for a taxation year, other than a corporation described in any of sections 403, 404, 404.1, 405, 406, 407, 408, 409, 410 and 411, consisted of operations normally conducted by a corporation described in one of those sections, the corporation and the Minister may agree to determine the amount of taxable income deemed to have been earned in the year in a particular province to be the total of the amounts computed
(2) Subsection (1) is deemed to have come into force on September 16, 2016.
89 (1) Paragraph 600(b) of the Regulations is replaced by the following:
(b) subsections 13(4), (7.4) and (29), 20(24), 44(1) and (6), 45(2) and (3), 50(1), 53(2.1), 56.4(13), 70(6.2), (9.01), (9.11), (9.21) and (9.31), 72(2), 73(1), 80.1(1), 82(3), 83(2), 91(1.4), 104(14), 107(2.001), 143(2), 146.01(7), 146.02(7), 164(6) and (6.1), 184(3), 251.2(6) and 256(9) of the Act;
(2) Subsection (1) is deemed to have come into force on July 12, 2013.
90 (1) Sections 806 and 806.1 of the Regulations are replaced by the following:
806 For the purposes of paragraph (c) of the definition fully exempt interest in subsection 212(3) of the Act, the Bank for International Settlements and the European Bank for Reconstruction and Development are prescribed.
(2) Subsection (1) is deemed to have come into force on January 1, 2008.
91 (1) Paragraph 1104(17)(a) of the Regulations is replaced by the following:
(a) the property is included in Class 43.1 because of its subparagraph (c)(i) or is described in any of subparagraphs d(vii) to (ix), (xi), (xiii), (xiv) and (xvi) of Class 43.1 and paragraph (a) of Class 43.2; and
(2) Subsection (1) applies in respect of property acquired for use after March 21, 2017 that has not been used or acquired for use before March 22, 2017.
92 (1) Paragraph 1219(1)(f) of the Regulations is replaced by the following:
(f) for the drilling or completion of a well for the project, other than
(i) a well that is, or can reasonably be expected to be, used for the installation of underground piping that is included in paragraph (d) of Class 43.1 or paragraph (b) of Class 43.2 in Schedule II, or
(ii) a well referred to in paragraph (h);
(2) Subsection 1219(1) of the Regulations is amended by adding “or” at the end of paragraph (g) and by adding the following after that paragraph:
(h) if at least 50% of the depreciable property to be used in the project, determined by reference to its capital cost, is described in subparagraph (d)(vii) of Class 43.1,
(i) for the drilling of a well, or
(ii) solely for the purpose of determining the extent and quality of a geothermal resource.
(3) Subparagraphs 1219(2)(b)(iv) and (v) of the Regulations are replaced by the following:
(iv) included in the capital cost of property that, but for this section, would be depreciable property (other than property that would be included in Class 14.1 of Schedule II), except as provided by paragraph (1)(b), (d), (e), (f), (g) or (h),
(v) included in the capital cost of property that, but for this section, would be property included in Class 14.1 of Schedule II, except as provided by any of paragraphs (1)(a) to (e) or subparagraph (h)(ii),
(4) Clause 1219(2)(b)(xi)(A) of the Regulations is replaced by the following:
(A) the construction, renovation or alteration of the property, except as provided by paragraph (1)(b), (f), (g) or (h), or
(5) Section 1219 of the Regulations is amended by adding the following after subsection (4):
(5) A Canadian renewable and conservation expense does not include an expense incurred by a taxpayer at any time that is in respect of a geothermal project
(a) that at that time is described in paragraph (1)(h); and
(b) in respect of which the taxpayer is not at that time in compliance with the requirements of all environmental laws, by-laws and regulations of
(i) Canada,
(ii) a province or a municipality in Canada, or
(iii) a municipal or public body performing a function of government in Canada.
(6) Subsections (1) to (5) apply in respect of expenses incurred after March 21, 2017.
93 The portion of paragraph 1401(5)(b) of the Regulations before subparagraph (i) is replaced by the following:
(b) if the policy is issued before 2017 and at a particular time after 2016 life insurance — in respect of a life, or two or more lives jointly insured, and in respect of which a particular schedule of premium or cost of insurance rates applies — is added to the policy or is term insurance that is converted into permanent life insurance within the policy, then that insurance is deemed to be a separate life insurance policy issued at the particular time unless
94 The definitions official receipt and other recipient of a gift in section 3500 of the Regulations are replaced by the following:
- official receipt
official receipt means a receipt for the purposes of paragraph 110.1(2)(a) or 118.1(2)(a) of the Act, containing information required by section 3501 or 3502; (reçu officiel)
- other recipient of a gift
other recipient of a gift means a person, to whom a gift is made by a taxpayer, referred to in any of paragraph 110.1(1)(c), subparagraph 110.1(2.1)(a)(ii) and paragraphs (a) and (d) of the definition qualified donee in subsection 149.1(1) of the Act; (autre bénéficiaire d’un don)
95 (1) The portion of subsection 4900(1) of the Regulations before paragraph (a) is replaced by the following:
4900 (1) For the purposes of paragraph (d) of the definition qualified investment in subsection 146(1) of the Act, paragraph (e) of the definition qualified investment in subsection 146.1(1) of the Act, paragraph (c) of the definition qualified investment in subsection 146.3(1) of the Act, paragraph (d) of the definition qualified investment in subsection 146.4(1) of the Act, paragraph (h) of the definition qualified investment in section 204 of the Act and paragraph (c) of the definition qualified investment in subsection 207.01(1) of the Act, each of the following investments is prescribed as a qualified investment for a plan trust at a particular time if at that time it is
(2) The portion of paragraph 4900(1)(g) of the Regulations before subparagraph (i) is replaced by the following:
(g) a bond, debenture, note or similar obligation (in this paragraph referred to as the “obligation”) issued by, or a deposit with, a credit union that has not at any time during the calendar year in which the particular time occurs granted any benefit or privilege to a person who is a connected person under the governing plan of the plan trust, as a result of the ownership by
(3) Subsection 4900(5) of the Regulations is replaced by the following:
(5) For the purposes of paragraph (e) of the definition qualified investment in subsection 146.1(1) of the Act, paragraph (d) of the definition qualified investment in subsection 146.4(1) of the Act and paragraph (c) of the definition qualified investment in subsection 207.01(1) of the Act, a property is prescribed as a qualified investment for a trust governed by a registered disability savings plan, a registered education savings plan or a TFSA at any time if at that time the property is an interest in a trust or a share of the capital stock of a corporation that was a registered investment for a trust governed by a registered retirement savings plan during the calendar year in which that time occurs or during the preceding year.
(4) The portion of subsection 4900(6) of the Regulations before paragraph (b) is replaced by the following:
(6) Subject to subsection (9), for the purposes of paragraph (d) of the definition qualified investment in subsection 146(1) of the Act, paragraph (e) of the definition qualified investment in subsection 146.1(1) of the Act and paragraph (c) of the definition qualified investment in subsection 146.3(1) of the Act, a property is prescribed as a qualified investment for a trust governed by a registered retirement savings plan, a registered education savings plan and a registered retirement income fund at any time if at that time the property is not a prohibited investment for the trust and is
(a) a share of the capital stock of an eligible corporation (as defined in subsection 5100(1));
(5) Subsection 4900(8) of the Regulations is repealed.
(6) Subsections 4900(12) and (13) of the Regulations are repealed.
(7) The portion of subsection 4900(14) of the Regulations before paragraph (a) is replaced by the following:
(14) For the purposes of paragraph (d) of the definition qualified investment in subsection 146(1) of the Act, paragraph (e) of the definition qualified investment in subsection 146.1(1) of the Act, paragraph (c) of the definition qualified investment in subsection 146.3(1) of the Act and paragraph (c) of the definition qualified investment in subsection 207.01(1) of the Act, a property is prescribed as a qualified investment for a trust governed by a RESP, RRIF, RRSP or TFSA at any time if, at the time the property was acquired by the trust, the property
(8) Subparagraph 4900(14)(a)(iii) of the Regulations is replaced by the following:
(iii) a qualifying share in respect of a specified cooperative corporation and the RESP, RRIF, RRSP or TFSA; and
(9) Subsection 4900(15) of the Regulations is replaced by the following:
(15) For the purposes of the definition prohibited investment in subsection 207.01(1) of the Act, property that is a qualified investment for a trust governed by a RESP, RRIF, RRSP or TFSA solely because of subsection (14) is prescribed property for the trust at any time if, at that time, the property is not described in any of subparagraphs (14)(a)(i) to (iii).
(10) Subsections (1) and (3) are deemed to have come into force on March 23, 2017.
(11) Subsections (2) and (4) to (9) apply in respect of
(a) any investment acquired after March 22, 2017; and
(b) any investment acquired before March 23, 2017 that ceases to be a qualified investment (as defined in subsection 146.1(1) of the Act) after March 22, 2017.
96 Section 5600 of the Regulations is amended by striking out “and” at the end of paragraph (h), by adding “and” at the end of paragraph (i) and by adding the following after paragraph (i):
(j) the distribution by BHP Billiton Limited, on May 24, 2015 to its common shareholders, of common shares of South32 Limited.
97 (1) Subsection 5907(1.07) of the Regulations is replaced by the following:
(1.07) For the purposes of paragraph (1.03)(a), a specified owner in respect of the particular corporation is not to be considered, under the relevant foreign tax law, to own less than all of the shares of the capital stock of another corporation that are considered to be owned for the purposes of the Act solely because the specified owner or the other corporation is not treated as a corporation under the relevant foreign tax law.
(2) Subsection 5907(8) of the Regulations is replaced by the following:
(8) For the purposes of computing the various amounts referred to in this section,
(a) the first taxation year of a foreign affiliate, of a corporation resident in Canada, that is formed as a result of a foreign merger (within the meaning assigned by subsection 87(8.1) of the Act) is deemed to have commenced at the time of the merger, and a taxation year of a predecessor corporation (within the meaning assigned by subsection 5905(3)) that would otherwise have ended after that time is deemed to have ended immediately before that time; and
(b) if subsection 91(1.2) of the Act applies at any particular time in respect of a foreign affiliate of a corporation, the various amounts are to be computed, in respect of attributed amounts for the stub period in respect of the particular time, as if
(i) the affiliate’s taxation year that would have included the particular time ended at the stub-period end time in respect of the particular time, and
(ii) all transactions or events, giving rise to attributed amounts, that occurred at the particular time, occurred at the stub-period end time in respect of the particular time.
(8.1) The following definitions apply in paragraph 5907(8)(b).
- attributed amounts
attributed amounts, for a stub period, in respect of a particular time referred to in paragraph (8)(b), of a foreign affiliate of a corporation, means
(a) the amounts of any income, gain or loss of the affiliate for the stub period that are relevant in determining amounts that are to be included or may be deducted under section 91 of the Act in respect of the affiliate for the particular stub period, in computing the income of the corporation;
(b) any portion of the affiliate’s capital gain or capital loss – from a disposition, in the stub period or at the particular time referred to in paragraph (8)(b), of a property that is not an excluded property – that is not described in paragraph (a); and
(c) any income or profits tax paid to the government of a country, in respect of amounts described in paragraph (a) or (b). (sommes attribuées)
- stub period
stub period, in respect of a particular time at which subsection 91(1.2) of the Act applies in respect of a foreign affiliate of a corporation, means a period that ends at the stub-period end time in respect of the particular time and begins immediately after the later of
(a) the last time, if any, before the particular time that subsection 91(1.2) applied in respect of the affiliate, and
(b) the end of the affiliate’s last taxation year before the particular time. (période tampon)
- stub-period end time
stub-period end time, in respect of a particular time at which subsection 91(1.2) of the Act applies in respect of a foreign affiliate of a corporation, means the time that is immediately before the particular time. (fin de la période tampon)
(3) Subsection (1) applies to income or profits tax paid, and amounts referred to in subsections 5907(1.1) and (1.2) of the Regulations, in respect of the income of a foreign affiliate of a corporation for taxation years of the foreign affiliate that end in taxation years of the corporation that end after October 24, 2012.
(4) Subsection (2) is deemed to have come into force on July 12, 2013, except that if at any time in the period that begins on July 12, 2013 and ends on September 7, 2017, subsection 91(1.2) of the Act (as enacted by subsection 28(1)) applies in respect of a taxpayer, and the taxpayer and all corporations that are connected persons (within the meaning assigned by paragraph (a) of the definition connected person in subsection 91(1.3) of the Act (as enacted by subsection 28(1))) to the taxpayer at the time file with the Minister an election in prescribed manner on or before the earliest of the filing-due date of the taxpayer and those corporations for their taxation year that includes the day on which this Act receives royal assent, for the taxpayer and those corporations, subsection (2) is deemed to have come into force on September 8, 2017 and not on July 12, 2013.
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