Global Minimum Tax Act

Marginal note:Definition of transaction

• 67 (1) In this section and section 102, a transaction includes an arrangement or event.

• Marginal note:Tax liability — property transferred not at arm’s length

  (2) If at any time a person transfers property, either directly or indirectly, by means of a trust or by any other means to another person with which the transferor was not, at that time, dealing at arm’s length, the transferee and transferor are jointly and severally, or solidarily, liable to pay under this Act an amount equal to the lesser of

  • (a) the amount determined by the formula

    A − (B − C)

    where

    A

    is the amount, if any, by which the fair market value of the property at that time exceeds the fair market value at that time of the consideration given by the transferee for the transfer of the property,

    B

    is the total of all amounts, if any, the transferee was assessed under paragraph 97.44(1)(b) of the Customs Act, subsection 325(2) of the Excise Tax Act, subsection 160(2) of the Income Tax Act, subsection 297(3) of the Excise Act, 2001, subsection 161(1) of the Greenhouse Gas Pollution Pricing Act, subsection 80(3) of the Underused Housing Tax Act, subsection 150(4) of the Select Luxury Items Tax Act or subsection 52(5) of the Digital Services Tax Act in respect of the property, and

    C

    is the amount paid by the transferor in respect of the amount determined for B, and

  • (b) the total of all amounts each of which is

    • (i) an amount that the transferor is liable to pay under this Act in respect of

      • (A) the fiscal year that includes that time, or

      • (B) any preceding fiscal year, or

    • (ii) interest or penalties (other than amounts referred to in subparagraph (i)) for which the transferor is liable at that time.

• Marginal note:Limitation

  (3) Subsection (2) does not limit the liability of the transferor under any other provision of this Act or the liability of the transferee for the interest that the transferee is liable to pay under this Act on an assessment in respect of the amount that the transferee is liable to pay because of that subsection.

• Marginal note:Fair market value of undivided interest or right

  (4) For the purposes of this section, the fair market value at any time of an undivided interest in, or for civil law an undivided right in, a property that is expressed as a proportionate interest or right in that property is deemed to be equal to the same proportion of the fair market value of that property at that time.

• Marginal note:Assessment

  (5) Despite subsection 85(1), the Minister may at any time assess a transferee in respect of any amount payable because of this section, and this Part applies to the transferee with any modifications that the circumstances require.

• Marginal note:Rules applicable

  (6) If a transferor and transferee become, because of subsection (2), jointly and severally, or solidarily, liable in respect of part or all of the liability of the transferor under this Act, the following rules apply:

  • (a) a payment by the transferee on account of the transferee’s liability discharges, to the extent of the payment, the joint liability; and

  • (b) a payment by the transferor on account of the transferor’s liability discharges the transferee’s liability only to the extent that the payment operates to reduce the transferor’s liability to an amount less than the amount in respect of which the transferee is, because of subsection (2), jointly and severally, or solidarily, liable.

• Marginal note:Anti-avoidance rules

  (7) For the purposes of subsections (1) to (6), if a person (referred to in this section as the “transferor”) transfers property, either directly or indirectly, by means of a trust or by any other means whatever to another person (referred to in this section as the “transferee”) in a transaction or as part of a series of transactions, the following rules apply:

  • (a) the transferor is deemed to not be dealing at arm’s length with the transferee at all times in the transaction or series of transactions if

    • (i) the transferor and the transferee do not deal at arm’s length at any time during the period beginning immediately before the transaction or series of transactions and ending immediately after the transaction or series of transactions, and

    • (ii) it is reasonable to conclude that one of the purposes of undertaking or arranging the transaction or series of transactions is to avoid joint and several, or solidary, liability of the transferee and the transferor under this section for an amount payable under this Act;

  • (b) an amount that the transferor is liable to pay under this Act (including, for greater certainty, an amount that the transferor is liable to pay under this section, regardless of whether the Minister has made an assessment under subsection (5) in respect of that amount) is deemed to have become payable in the fiscal year in which the property is transferred, if it is reasonable to conclude that one of the purposes of the transfer of the property is to avoid the payment of a future amount payable under this Act by the transferor or transferee; and

  • (c) the amount determined for A in paragraph (2)(a) is deemed to be the greater of

    • (i) the amount otherwise determined for A in paragraph (2)(a) without reference to this paragraph, and

    • (ii) the amount determined by the formula

      A − B

      where

      A

      is the fair market value of the property at the time of the transfer, and

      B

      is

      • (A) the lowest fair market value of the consideration (that is held by the transferor) given for the property at any time during the period beginning immediately before the transaction or series of transactions and ending immediately after the transaction or series of transactions, or

      • (B) if the consideration is in a form that is cancelled or extinguished during the period referred to in clause (A),

        • (I) the amount that is the lower of the amount determined under clause (A) and the fair market value during that period of any property, other than property that is cancelled or extinguished during the period, that is substituted for the consideration referred to in clause (A), or

        • (II) if no property is substituted for the consideration referred to in clause (A), other than property that is cancelled or extinguished during the period, nil.