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

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Regulations are current to 2022-09-22 and last amended on 2022-06-23. Previous Versions

PART LIIIInstalment Base

[
  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/88-165, s. 25(F)
]

Individuals

 For the purposes of subsections 155(2), 156(3) and 161(9) of the Act, the instalment base of an individual for a taxation year is the amount by which

  • (a) the individual’s tax payable under Part I of the Act for the year, determined before taking into consideration the specified future tax consequences for the year,

exceeds

  • (b) the amount deemed by subsection 120(2) of the Act to have been paid on account of the individual’s tax under Part I of the Act for the year, determined before taking into consideration the specified future tax consequences for the year.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/78-325, s. 1
  • SOR/81-855, s. 1
  • SOR/85-696, s. 15
  • SOR/86-1092, s. 15
  • SOR/88-165, s. 26(F)
  • SOR/99-92, s. 1

Corporations Under Part I of the Act

[
  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/94-686. s. 79(F)
]
  •  (1) Subject to subsections (6) and (8), for the purposes of subsections 157(4) and 161(9) of the Act, the first instalment base of a corporation for a particular taxation year means the product obtained when the aggregate of

    • (a) the tax payable under Part I of the Act by the corporation for its taxation year preceding the particular year, and

    • (b) the total of the taxes payable by the corporation under Parts VI, VI.1 and XIII.1 of the Act for its taxation year preceding the particular year

    is multiplied by the ratio that 365 is of the number of days in that preceding year.

  • (2) Subject to subsections (6) and (8), for the purposes of subsections 157(4) and 161(9) of the Act, the second instalment base of a corporation for a particular taxation year means the amount of the first instalment base of the corporation for the taxation year immediately preceding the particular year.

  • (3) For the purposes of subsection (1), where the number of days in the taxation year of a corporation immediately preceding the particular taxation year referred to therein is less than 183, the amount determined for the corporation under that subsection shall be the greater of

    • (a) the amount otherwise determined for it under subsection (1); and

    • (b) the amount that would be determined for it under subsection (1) if the reference in that subsection to “its taxation year preceding the particular year” were read as a reference to “its last taxation year, preceding the particular year, in which the number of days exceeds 182”.

  • (4) Notwithstanding subsections (1) and (2), for the purposes of subsections 157(4) and 161(9) of the Act,

    • (a) where a particular taxation year of a new corporation that was formed as a result of an amalgamation (within the meaning assigned by section 87 of the Act) is its first taxation year,

      • (i) its first instalment base for the particular year means the total of all amounts each of which is equal to the product obtained when the total of

        • (A) the tax payable under Part I of the Act, and

        • (B) the total of the taxes payable under Parts VI, VI.1 and XIII.1 of the Act

        by a predecessor corporation (as defined in section 87 of the Act) for its last taxation year is multiplied by the ratio that 365 is to the number of days in that year, and

      • (ii) its second instalment base for the particular year means the aggregate of all amounts each of which is an amount equal to the amount of the first instalment base of a predecessor corporation for its last taxation year; and

    • (b) where a particular taxation year of a new corporation referred to in paragraph (a) is its second taxation year,

      • (i) its first instalment base for the particular year means

        • (A) where the number of days in its first taxation year is greater than 182, the amount that would, but for this subsection, be determined under subsection (1) for the year, and

        • (B) in any other case, the greater of the amount that would, but for this subsection, be determined under subsection (1) for the year and its first instalment base for its first taxation year, and

      • (ii) its second instalment base for the particular year means the amount of the first instalment base of the new corporation for its first taxation year.

  • (5) For the purposes of subsection (4), where the number of days in the last taxation year of a predecessor corporation is less than 183, the amount determined under subparagraph (4)(a)(i) in respect of the predecessor corporation shall be the greater of

    • (a) the amount otherwise determined under subparagraph (4)(a)(i) in respect of the predecessor corporation; and

    • (b) the amount of the first instalment base of the predecessor corporation for its last taxation year.

  • (6) Subject to subsection (7), where a subsidiary within the meaning of subsection 88(1) of the Act is winding up, and, at a particular time in the course of the winding up, all or substantially all of the property of the subsidiary has been distributed to a parent within the meaning of subsection 88(1) of the Act, the following rules apply:

    • (a) there shall be added to the amount of the parent’s first instalment base for its taxation year that includes the particular time the amount of the subsidiary’s first instalment base for its taxation year that includes the particular time;

    • (b) there shall be added to the amount of the parent’s second instalment base for its taxation year that includes the particular time the amount of the subsidiary’s second instalment base for its taxation year that includes the particular time;

    • (c) there shall be added to the amount of the parent’s first instalment base for its taxation year immediately following its taxation year referred to in paragraph (a) the amount that is the proportion of the subsidiary’s first instalment base for its taxation year referred to in paragraph (a) that

      • (i) the number of complete months that ended at or before the particular time in the taxation year of the parent that includes the particular time

      is of

      • (ii) 12; and

    • (d) there shall be added to the amount of the parent’s second instalment base for its taxation year immediately following its taxation year referred to in paragraph (a) the amount of the subsidiary’s first instalment base for its taxation year that includes the particular time.

  • (7) The amount of an instalment of tax for the taxation year referred to in paragraphs (6)(a) and (b) that a parent is deemed under subsection 161(4.1) of the Act to have been liable to pay before the particular time referred to in subsection (6) shall be determined as if subsection (6) were not applicable in respect of a distribution of property described in that subsection occurring after the day on or before which the instalment was required to be paid.

  • (8) Subject to subsection (9), if at a particular time a corporation (in this subsection referred as the “transferor”) has disposed of all or substantially all of its property to another corporation with which it was not dealing at arm’s length (in this subsection and subsection (9) referred to as the “transferee”) and subsection 85(1), (2) or 142.7(3) of the Act applied in respect of the disposition of any of the property, the following rules apply:

    • (a) there shall be added to the amount of the transferee’s first instalment base for its taxation year that includes the particular time the amount of the transferor’s first instalment base for its taxation year that includes the particular time;

    • (b) there shall be added to the amount of the transferee’s second instalment base for its taxation year that includes the particular time the amount of the transferor’s second instalment base for its taxation year that includes the particular time;

    • (c) there shall be added to the amount of the transferee’s first instalment base for its taxation year immediately following its taxation year referred to in paragraph (a) the amount that is the proportion of the transferor’s first instalment base for its taxation year referred to in paragraph (a) that

      • (i) the number of complete months that ended at or before the particular time in the taxation year of the transferee that includes the particular time

      is of

      • (ii) 12; and

    • (d) there shall be added to the amount of the transferee’s second instalment base for its taxation year immediately following its taxation year referred to in paragraph (a) the amount of the transferor’s first instalment base for its taxation year that includes the particular time.

  • (9) The amount of an instalment of tax for the taxation year referred to in paragraphs (8)(a) and (b) that a transferee is deemed under subsection 161(4.1) of the Act to have been liable to pay before the particular time referred to in subsection (8) shall be determined as if subsection (8) were not applicable in respect of a disposition of property described in that subsection occurring after the day on or before which the instalment was required to be paid.

  • (10) For the purpose of this section, tax payable under Part I, VI or XIII.1 of the Act by a corporation for a taxation year means the corporation’s tax payable for the year under the relevant Part, determined before taking into consideration the specified future tax consequences for the year.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/78-325, s. 2
  • SOR/81-855, s. 1
  • SOR/84-948, s. 14
  • SOR/85-696, s. 16
  • SOR/88-165, s. 27
  • SOR/89-409, s. 3
  • SOR/94-298, s. 1
  • SOR/94-686, s. 79(F)
  • SOR/99-92, s. 2
  • SOR/2009-302, s. 10

PART LIV[Repealed, SOR/2011-188, s. 21]

 [Repealed, SOR/2011-188, s. 21]

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/84-948, s. 15
  • SOR/88-165, s. 29(F)
  • SOR/94-686, s. 69(F)
  • SOR/2011-188, s. 21

 [Repealed, SOR/2011-188, s. 21]

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/2011-188, s. 21]

PART LVPrescribed Programs and Benefits

[
  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/95-298, s. 3
]

Canadian Home Insulation Program

 For the purposes of paragraphs 12(1)(u), 56(1)(s) and 212(1)(s) of the Act, the Canadian Home Insulation Program, as authorized and described in Vote 11a of Appropriation Act No. 3, 1977-78, as amended, Energy, Mines and Resources Vote 35, Main Estimates, 1981-82 as authorized by Appropriation Act No. 1, 1981-82, as amended, or the Canadian Home Insulation Program Act, is hereby prescribed to be a program of the Government of Canada relating to home insulation.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/78-348, s. 2
  • SOR/81-936, s. 5

Canada Oil Substitution Program

 For the purposes of paragraphs 12(1)(u), 56(1)(s) and 212(1)(s) of the Act, the Canada Oil Substitution Program, as authorized and described in paragraph (a) or (b) of Energy, Mines and Resources Vote 45, Main Estimates, 1981-82 as authorized by Appropriation Act No. 1, 1981-82, as amended, or the Oil Substitution and Conservation Act is hereby prescribed to be a program of the Government of Canada relating to energy conversion.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/81-936, s. 5

Benefits Under Government Assistance Programs

 For the purposes of subparagraph 56(1)(a)(vi) and paragraph 153(1)(m) of the Act, the following benefits are prescribed:

  • (a) benefits under the Labour Adjustment Benefits Act;

  • (b) benefits under programs to provide income assistance payments, established pursuant to agreements under section 5 of the Department of Labour Act; and

  • (c) benefits under programs to provide income assistance payments, administered pursuant to agreements under section 5 of the Department of Fisheries and Oceans Act.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/95-298, s. 4

Stabilization of Farm Income

  •  (1) For the purposes of the definition NISA Fund No. 2 in subsection 248(1) of the Act, a prescribed fund is Fonds 2 as defined under the Agri-Québec program established by La Financière agricole du Québec.

  • (2) For the purposes of the definition net income stabilization account in subsection 248(1) of the Act, a prescribed account is an account created under the Agri-Québec program established by La Financière agricole du Québec.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2011, c. 24, s. 86

PART LVIPrescribed Distributions

[
  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/2004-82, s. 1
]

 For the purpose of section 86.1 of the Act, the following distributions of shares are prescribed:

  • (a) the distribution by Active Biotech AB, on May 10, 1999, of shares of Wilhelm Sonesson AB;

  • (b) the distribution by Orckit Communications Ltd., on June 30, 2000, of shares of Tioga Technologies Ltd;

  • (c) the distribution by Electrolux AB, on June 12, 2006, of shares of Husqvarna AB;

  • (d) the distribution by Fiat S.p.A., on January 1, 2011 to its common shareholders, of common shares of Fiat Industrial S.p.A;

  • (e) the distribution by Foster’s Group Limited, on May 9, 2011 to its common shareholders, of common shares of Treasury Wine Estates Limited;

  • (f) the distribution by Telecom Corporation of New Zealand Limited, on November 30, 2011 to its common shareholders, of common shares of Chorus Limited;

  • (g) the distribution by Tyco International Ltd. of Switzerland, on September 28, 2012 to its common shareholders, of common shares of Pentair Ltd. of Switzerland;

  • (h) the distribution by Siemens AG, on July 5, 2013 to its common shareholders, of common shares of OSRAM Licht AG;

  • (i) the distribution by Brambles Limited, on December 18, 2013 to its common shareholders, of common shares of Recall Holdings Limited; and

  • (j) the distribution by BHP Billiton Limited, on May 24, 2015 to its common shareholders, of common shares of South32 Limited.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/94-686, s. 48
  • SOR/2004-82, s. 2
  • SOR/2011-188, s. 22
  • 2013, c. 40, s. 111
  • SOR/2015-170, s. 3
  • 2017, c. 33, s. 96

PART LVIIMedical Expense Tax Credit

[
  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2009, c. 2, s. 108
]

 For the purposes of paragraph 118.2(2)(m) of the Act, a device or equipment is prescribed if it is a

  • (a) wig made to order for an individual who has suffered abnormal hair loss owing to disease, medical treatment or accident;

  • (b) needle or syringe designed to be used for the purpose of giving an injection;

  • (c) device or equipment, including a replacement part, designed exclusively for use by an individual suffering from a severe chronic respiratory ailment or a severe chronic immune system disregulation, but not including an air conditioner, humidifier, dehumidifier, heat pump or heat or air exchanger;

  • (c.1) air or water filter or purifier for use by an individual who is suffering from a severe chronic respiratory ailment or a severe chronic immune system disregulation to cope with or overcome that ailment or disregulation;

  • (c.2) electric or sealed combustion furnace acquired to replace a furnace that is neither an electric furnace nor a sealed combustion furnace, where the replacement is necessary solely because of a severe chronic respiratory ailment or a severe chronic immune system disregulation;

  • (c.3) air conditioner acquired for use by an individual to cope with the individual’s severe chronic ailment, disease or disorder, to the extent of the lesser of $1,000 and 50% of the amount paid for the air conditioner;

  • (d) device or equipment designed to pace or monitor the heart of an individual who suffers from heart disease;

  • (e) orthopaedic shoe or boot or an insert for a shoe or boot made to order for an individual in accordance with a prescription to overcome a physical disability of the individual;

  • (f) power-operated guided chair installation, for an individual, that is designed to be used solely in a stairway;

  • (g) mechanical device or equipment designed to be used to assist an individual to enter or leave a bathtub or shower or to get on or off a toilet;

  • (h) hospital bed including such attachments thereto as may have been included in a prescription therefor;

  • (i) device that is exclusively designed to assist an individual in walking where the individual has a mobility impairment;

  • (j) external breast prosthesis that is required because of a mastectomy;

  • (k) teletypewriter or similar device, including a telephone ringing indicator, that enables a deaf or mute individual to make and receive telephone calls;

  • (l) optical scanner or similar device designed to be used by a blind individual to enable him to read print;

  • (l.1) device or software designed to be used by a blind individual, or an individual with a severe learning disability, to enable the individual to read print;

  • (m) power-operated lift or transportation equipment designed exclusively for use by, or for, a disabled individual to allow the individual access to different areas of a building or to assist the individual to gain access to a vehicle or to place the individual’s wheelchair in or on a vehicle;

  • (n) device designed exclusively to enable an individual with a mobility impairment to operate a vehicle;

  • (o) device or equipment, including a synthetic speech system, braille printer and large print-on-screen device, designed exclusively to be used by a blind individual in the operation of a computer;

  • (p) electronic speech synthesizer that enables a mute individual to communicate by use of a portable keyboard;

  • (q) device to decode special television signals to permit the script of a program to be visually displayed;

  • (q.1) a visual or vibratory signalling device, including a visual fire alarm indicator, for an individual with a hearing impairment;

  • (r) device designed to be attached to infants diagnosed as being prone to sudden infant death syndrome in order to sound an alarm if the infant ceases to breathe;

  • (s) infusion pump, including disposable peripherals, used in the treatment of diabetes or a device designed to enable a diabetic to measure the diabetic’s blood sugar level;

  • (s.1) blood coagulation monitor, including disposable peripherals, for use by an individual who requires anti-coagulation therapy;

  • (t) electronic or computerized environmental control system designed exclusively for the use of an individual with a severe and prolonged mobility restriction;

  • (u) extremity pump or elastic support hose designed exclusively to relieve swelling caused by chronic lymphedema;

  • (v) inductive coupling osteogenesis stimulator for treating non-union of fractures or aiding in bone fusion;

  • (w) talking textbook for use by an individual with a perceptual disability in connection with the individual’s enrolment at an educational institution in Canada, or a designated educational institution;

  • (x) Bliss symbol board, or similar device, designed to be used to help an individual who has a speech impairment communicate by selecting the symbols or spelling out words;

  • (y) Braille note-taker designed to be used by a blind individual to allow them to take notes (that can be read back to them or printed or displayed in Braille) with the help of a keyboard;

  • (z) page turner, designed to be used by an individual who has a severe and prolonged impairment that markedly restricts their ability to use their arms or hands to turn the pages of a book or other bound document;

  • (z.1) altered auditory feedback device designed to be used by an individual who has a speech impairment;

  • (z.2) electrotherapy device designed to be used by an individual with a medical condition or by an individual who has a severe mobility impairment;

  • (z.3) standing device designed to be used by an individual who has a severe mobility impairment to undertake standing therapy; and

  • (z.4) pressure pulse therapy device designed to be used by an individual who has a balance disorder.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/80-948, s. 1
  • SOR/85-696, s. 17
  • SOR/87-716, s. 1
  • SOR/90-809, s. 1
  • SOR/94-189, s. 1
  • SOR/99-387, s. 1
  • SOR/2001-4, s. 1
  • SOR/2007-212, s. 3
  • 2009, c. 2, s. 109
  • 2012, c. 19, s. 18
 
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