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

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Regulations are current to 2022-09-11 and last amended on 2022-06-23. Previous Versions

PART XXIVInsurers (continued)

Mean Canadian Investment Fund

  •  (1) For the purposes of this Part, the mean Canadian investment fund of an insurer for a particular taxation year is the total of

    • (a) 50% of the total of

      • (i) its Canadian investment fund at the end of the particular year, and

      • (ii) either,

        • (A) if the insurer is resident in Canada, its Canadian investment fund at the end of its preceding taxation year, or

        • (B) if the insurer is non-resident, its Canadian investment fund at the end of its preceding taxation year determined as if its attributed surplus for that preceding taxation year were its attributed surplus for the particular year, and

    • (b) the insurer’s cash-flow adjustment for the particular year.

Cash-flow Adjustment

  • (2) An insurer’s cash-flow adjustment for a taxation year is the amount equal to

    • (a) if the year ended two months or more after it began, the positive or negative amount determined by the formula

      50% x (A - B / C)

      where

      A
      is the total of all amounts each of which is the amount determined under subsection (3) in respect of a full month in the year (or in respect of the part of the month that ends after the last full month in the year, if that part is greater than 15 days),
      B
      is the total of all amounts each of which is the amount determined in respect of a full month in the year (or in respect of the part of the month that ends after the last full month in the year, if that part is greater than 15 days) by the formula

      D x (1 + 2E)

      where

      D
      is the amount determined under subsection (3) in respect of the month or part of the month, and
      E
      is the number of months in the year that ended before the beginning of the month or part of the month, and
      C
      is the number of full months in the year (plus 1, if the year ends more than 15 days after the end of the last full month in the year); and
    • (b) if the year ended less than two months after it began, nil.

Amounts Paid and Received

  • (3) The amount determined in respect of an insurer for a particular month or part of a month (in this subsection referred to as a “month”) in a taxation year is the positive or negative amount determined by the formula

    G - H

    where

    G
    is the total of all amounts each of which is
    • (a) the amount of a premium or consideration received by the insurer in the month in respect of a contract of insurance (including a settlement annuity) entered into in the course of carrying on its insurance businesses in Canada,

    • (b) an amount received by the insurer in the month in respect of interest on or a repayment in respect of a policy loan made under a life insurance policy in Canada, or

    • (c) an amount received by the insurer in the month in respect of reinsurance (other than reinsurance undertaken to effect a transfer of a business in respect of which subsection 138(11.5), (11.92) or (11.94) of the Act applies) arising in the course of carrying on its insurance businesses in Canada; and

    H
    is the total of all amounts each of which is
    • (a) the amount of a claim or benefit (including a payment under an annuity or settlement annuity, a payment of a policy dividend and an amount paid on a lapsed or terminated policy), a refund of premiums, a premium or a commission paid by the insurer in the month under a contract of insurance in the course of carrying on its insurance businesses in Canada,

    • (b) the amount of a policy loan made by the insurer in the month under a life insurance policy in Canada, or

    • (c) an amount paid by the insurer in the month in respect of reinsurance (other than reinsurance undertaken to effect a transfer of a business in respect of which subsection 138(11.5), (11.92) or (11.94) of the Act applies) in the course of carrying on its insurance businesses in Canada.

  • (4) A reference to a month in this section means

    • (a) if an insurer’s taxation year does not begin on the first day of a calendar month and the insurer elects to have this paragraph apply for the year, the period beginning on the day in a calendar month that has the same calendar number as the particular day on which the taxation year began and ending

      • (i) on the day immediately before the day in the next calendar month that has the same calendar number as the particular day, or

      • (ii) if the next calendar month does not have a day that has the same calendar number as the particular day, the last day of that next calendar month; and

    • (b) in any other case, a calendar month.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/90-661, s. 10
  • SOR/94-686, s. 55(F)
  • SOR/2000-413, s. 7

PART XXVSpecial T1 Tax Table for Individuals

  •  (1) For the purposes of subsection 117(6) of the Act,

    • (a) $55,605, adjusted for each taxation year after 1989 in the manner set out in subsection 117.1(1) of the Act, is the prescribed amount; and

    • (b) an “individual of a prescribed class” for a taxation year is

      • (i) an estate or trust,

      • (ii) an individual who was a non-resident person throughout the year, other than an individual

        • (A) whose amount taxable for the year was from

          • (I) the duties of an office or employment performed in one province,

          • (II) the carrying on of a business in one province, or

          • (III) any combination of sources described in subclauses (I) and (II) if all of those sources are located in one province, and

        • (B) who was not subject to any other provision of this subsection,

      • (iii) an individual who, on the last day of the year, resided in a province and had income for the year from a business with a permanent establishment, as defined in subsection 2600(2), outside the province,

      • (iv) an individual whose tax otherwise payable for the year under Part I of the Act is reduced by virtue of any of the following provisions of the Act:

        • (A) subsection 117(7),

        • (B) section 121,

        • (C) section 122.3, or

        • (D) section 126,

      • (v) an individual who makes an election in respect of the year under subsection 119(1) of the Act,

      • (vi) an individual eligible to pay tax at a reduced rate pursuant to subsection 40(7) of the Income Tax Application Rules, on a payment made to him in the year, or

      • (vii) an individual who makes an election in respect of the year under subsection 110.4(2) of the Act.

  • (2) For the purposes of subsection 117(6) of the Act, a table of the tax payable for a taxation year shall be prepared in accordance with the following rules:

    • (a) the table shall be divided into ranges of amounts taxable not exceeding $10 each and shall specify the tax payable in respect of each range;

    • (b) the tax payable on an amount taxable within any range referred to in paragraph (a) shall be equal to the tax payable thereon for the year computed under subsection 117(2) of the Act and, where applicable, adjusted annually pursuant to section 117.1 of the Act; and

    • (c) the tax payable referred to in paragraph (b) shall be calculated as if the amount taxable is equal to the average of the highest and lowest amounts taxable in the range and, where the resulting tax payable is not a multiple of one dollar, it shall be rounded to the nearest multiple of one dollar or, if it is equidistant from two such multiples, to the higher thereof.

  • (3) For the purposes of subsection 117(6) of the Act, a table of the additional tax for income not earned in a province, the individual surtax and the refundable Quebec abatement for a taxation year shall be prepared in accordance with the following rules:

    • (a) the table shall be divided into ranges of tax payable not exceeding $2 each and shall specify, in respect of each range,

      • (i) the individual surtax payable,

      • (ii) where applicable, the additional tax for income not earned in a province, and

      • (iii) where applicable, the refundable Quebec abatement,

      on every amount of tax payable within that range;

    • (b) the tax payable referred to in paragraph (a) is the tax payable determined by the table prepared pursuant to subsection (2) less the allowable non-refundable credits under sections 118 to 118.9 of the Act;

    • (c) the individual surtax in respect of an amount of tax payable within any range referred to in paragraph (a) shall be the amount that is equal to the surtax thereon computed under subsection 180.1(1) of the Act;

    • (d) the additional tax for income not earned in a province in respect of an amount of tax payable within any range referred to in paragraph (a) shall be the amount that is equal to the tax determined thereon under subsection 120(1) of the Act;

    • (e) the refundable Quebec abatement in respect of an amount of tax payable within any range referred to in paragraph (a) shall be the amount that is equal to the abatement determined under subsection 120(2) of the Act and in accordance with section 27 of the Federal-Provincial Fiscal Arrangements and Federal Post-Secondary Education and Health Contributions Act;

    • (f) the amount referred to in paragraph (c) or (d) shall be calculated as if the tax payable is equal to the average of the highest and lowest amounts in the range and, where the resulting amount is not a multiple of one dollar, it shall be rounded to the nearest multiple of one dollar or, if it is equidistant from two such multiples, to the higher thereof; and

    • (g) the amount referred to in paragraph (e) shall be calculated as if the tax payable is equal to the average of the highest and lowest amounts in the range and, where the resulting amount is not a multiple of one tenth of one dollar, it shall be rounded to the nearest multiple of one tenth of one dollar or, if it is equidistant from two such multiples, to the higher thereof.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/80-162, s. 2
  • SOR/81-449, s. 1
  • SOR/83-757, s. 1
  • SOR/85-277, s. 1
  • SOR/86-159, s. 1
  • SOR/87-535, s. 1
  • SOR/89-475, s. 1
  • SOR/90-262, s. 1
  • SOR/94-686, ss. 48, 50(F)

 In this Part, amount taxable has the meaning assigned by subsection 117(2) of the Act.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/81-449, s. 1
  • SOR/83-757, s. 2
  • SOR/89-475, s. 2

PART XXVIIncome Earned in a Province by an Individual

Interpretation

  •  (1) In applying the definition income earned in the year in a province in subsection 120(4) of the Act for an individual’s taxation year

    • (a) the prescribed rules referred to in that definition are the rules in this Part; and

    • (b) the amount determined under those prescribed rules means the total of all amounts each of which is the individual’s income earned in the taxation year in a particular province as determined under this Part.

  • (2) In this Part, permanent establishment means a fixed place of business of the individual, including an office, a branch, a mine, an oil well, a farm, a timberland, a factory, a workshop or a warehouse, and

    • (a) where an individual carries on business through an employee or agent, established in a particular place, who has general authority to contract for his employer or principal or who has a stock of merchandise owned by his employer or principal from which he regularly fills orders which he receives, the individual shall be deemed to have a permanent establishment in that place;

    • (b) where an individual uses substantial machinery or equipment in a particular place at any time in a taxation year he shall be deemed to have a permanent establishment in that place; and

    • (c) the fact that an individual has business dealings through a commission agent, broker or other independent agent or maintains an office solely for the purchase of merchandise, shall not of itself be held to mean that the individual has a permanent establishment.

  • (3) [Repealed, SOR/81-267, s. 3]

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/78-772, s. 3
  • SOR/81-267, s. 3
  • SOR/94-686, s. 20(F)
  • 2009, c. 2, s. 103
  • SOR/2010-93, s. 18(F)

Residents of Canada

  •  (1) If an individual resides in a particular province on the last day of a taxation year and has no income for the taxation year from a business with a permanent establishment outside the province, the individual’s income earned in the taxation year in the particular province is the individual’s income for the taxation year.

  • (2) If an individual resides in a particular province on the last day of a taxation year and has income for the taxation year from a business with a permanent establishment outside the particular province, the individual’s income earned in the taxation year in the particular province is the amount, if any, by which

    • (a) the individual’s income for the taxation year

    exceeds

    • (b) the total of all amounts each of which is the individual’s income for the taxation year from carrying on a business that is earned in a province other than the particular province or in a country other than Canada, determined in accordance with this Part.

  • (3) If an individual, who resides in Canada on the last day of a taxation year and who has carried on business in a particular province at any time in the taxation year, does not reside in the particular province on the last day of the taxation year, the individual’s income earned in the taxation year in the particular province is the individual’s income for the taxation year from carrying on business earned in the particular province, determined in accordance with this Part.

  • (4) If an individual resides in Canada on the last day of a taxation year and carried on business in another country at any time in the taxation year, the individual’s income earned in the taxation year in that other country is the individual’s income for the taxation year from carrying on business earned in the other country, determined in accordance with this Part.

  • (5) In this section, a reference to the “last day of a taxation year” is deemed to be a reference to

    • (a) the “last day in the year on which the individual resided in Canada”, in the case of an individual who resided in Canada at any time in the year but ceased to reside in Canada before the end of the year; and

    • (b) the “day in the year on which the individual would have ceased to reside in Canada, if the Act were read without reference to paragraphs 250(1)(d.1) and (f) of the Act,”, in the case of a particular individual described in paragraph 250(1)(d.1) of the Act, or of another individual who is a spouse, common-law partner or child of the particular individual, who

      • (i) was resident in Canada at any time in the year,

      • (ii) would have ceased to be resident in Canada before the end of the year, if the Act were read without reference to paragraphs 250(1)(d.1) and (f) of the Act, and

      • (iii) is, pursuant to paragraph 250(1)(d.1) or (f) of the Act, deemed to have been resident in Canada throughout the year.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/81-799, s. 1
  • SOR/2001-188, s. 4
  • SOR/2007-116, s. 7
  • SOR/2010-93, s. 19
 
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