Technical Tax Amendments Act, 2012 (S.C. 2013, c. 34)
Full Document:
Assented to 2013-06-26
67. (1) Section 92 of the Act is amended by adding the following after subsection (1.1):
Marginal note:Adjustment re adjusted cost base
(1.2) There is to be added in computing the adjusted cost base to a taxpayer of a share of the capital stock of a foreign affiliate of the taxpayer any amount required by paragraph 93(4)(b) to be so added.
(2) Subsection (1) is deemed to have come into force on February 28, 2004.
68. (1) The portion of subsection 93(1) of the Act before paragraph (b) is replaced by the following:
Marginal note:Election re disposition of share of foreign affiliate
93. (1) For the purposes of this Act, if a corporation resident in Canada elects, in accordance with prescribed rules, in respect of any share of the capital stock of a particular foreign affiliate of the corporation that is disposed of, at any time, by the corporation (referred to in this subsection as the “disposing corporation”) or by another foreign affiliate (referred to in this subsection as the “disposing affiliate”) of the corporation,
(a) the amount (referred to in this subsection as the “elected amount”) designated by the corporation in its election not exceeding the amount that would, in the absence of this subsection, be the gain of the disposing corporation or disposing affiliate, as the case may be, from the disposition of the share, is deemed
(i) to have been a dividend received on the share from the particular affiliate by the disposing corporation or disposing affiliate, as the case may be, immediately before that time, and
(ii) not to have been received by the disposing corporation or disposing affiliate, as the case may be, as proceeds of disposition in respect of the disposition of the share; and
(2) The portion of paragraph 93(1)(b) of the French version of the Act before subparagraph (i), as enacted by Part 2, is replaced by the following:
b) en cas d’application du paragraphe 40(3) à la société cédante ou la société affiliée cédante, selon le cas, relativement à l’action, le montant réputé en vertu de ce paragraphe être le gain de cette société tiré de la disposition de l’action est réputé, sauf pour l’application de l’alinéa 53(1)a), être égal à l’excédent du montant visé au sous-alinéa (i) sur celui visé au sous-alinéa (ii) :
(3) Subsection 93(1.1) of the Act is replaced by the following:
Marginal note:Application of subsection (1.11)
(1.1) Subsection (1.11) applies if
(a) a particular foreign affiliate of a corporation resident in Canada disposes at any time of a share (referred to in this paragraph and subsection (1.11) as the “disposed share”) of the capital stock of another foreign affiliate of the corporation and the particular affiliate would, in the absence of subsections (1) and (1.11), have a capital gain from the disposition of the disposed share; or
(b) a corporation resident in Canada would, in the absence of subsections (1) and (1.11), be deemed under subsection 40(3), because of an election under subsection 90(3) or subparagraph 5901(2)(b)(i) of the Income Tax Regulations, to have realized a gain from a disposition at any time of a share (referred to in subsection (1.11) as the “disposed share”) of the capital stock of a foreign affiliate of the corporation.
Marginal note:Deemed election
(1.11) If this subsection applies, the corporation resident in Canada referred to in subsection (1.1) is deemed
(a) to have made an election, at the time referred to in subsection (1.1), under subsection (1) in respect of the disposition of the disposed share; and
(b) to have designated, in the election, the prescribed amount in respect of the disposition of the disposed share.
(4) Subsections 93(2) to (2.3) of the Act are replaced by the following:
Marginal note:Application of subsection (2.01)
(2) Subsection (2.01) applies if
(a) a particular corporation (referred to in subparagraph (2.01)(b)(ii) as the “vendor”, as the context requires) resident in Canada has a particular loss, determined without reference to this section, from the disposition by it at any time (referred to in subsection (2.01) as the “disposition time”) of a share (referred to in subsection (2.01) as the “affiliate share”) of the capital stock of a foreign affiliate of the particular corporation; or
(b) a foreign affiliate (referred to in subparagraph (2.01)(b)(ii) as the “vendor”) of a particular corporation resident in Canada has a particular loss, determined without reference to this section, from the disposition by it at any time (referred to in subsection (2.01) as the “disposition time”) of a share (referred to in subsection (2.01) as the “affiliate share”) of the capital stock of another foreign affiliate of the particular corporation that is not excluded property.
Marginal note:Loss limitation on disposition of share of foreign affiliate
(2.01) If this subsection applies, the amount of the particular loss referred to in paragraph (2)(a) or (b) is deemed to be the greater of
(a) the amount determined by the formula
A – (B – C)
where
- A
- is the amount of the particular loss determined without reference to this section,
- B
- is the total of all amounts each of which is an amount received before the disposition time, in respect of an exempt dividend on the affiliate share or on a share for which the affiliate share was substituted, by
(i) the particular corporation referred to in subsection (2),
(ii) another corporation that is related to the particular corporation,
(iii) a foreign affiliate of the particular corporation, or
(iv) a foreign affiliate of another corporation that is related to the particular corporation, and
- C
- is the total of
(i) the total of all amounts each of which is the amount by which a loss (determined without reference to this section), from a previous disposition by a corporation, or a foreign affiliate described in the description of B, of the affiliate share or a share for which the affiliate share was substituted, was reduced under this paragraph in respect of the exempt dividends referred to in the description of B,
(ii) the total of all amounts each of which is twice the amount by which an allowable capital loss (determined without reference to this section), of a corporation or a foreign affiliate described in the description of B, from a previous disposition by a partnership of the affiliate share or a share for which the affiliate share was substituted, was reduced under paragraph (2.11)(a) in respect of the exempt dividends referred to in the description of B,
(iii) the total of all amounts each of which is the amount by which a loss (determined without reference to this section), from a previous disposition by a corporation, or a foreign affiliate described in the description of B, of an interest in a partnership, was reduced under paragraph (2.21)(a) in respect of the exempt dividends referred to in the description of B, and
(iv) the total of all amounts each of which is twice the amount by which an allowable capital loss (determined without reference to this section), of a corporation, or a foreign affiliate described in the description of B, from a previous disposition by a partnership of an interest in another partnership, was reduced under paragraph (2.31)(a) in respect of the exempt dividends referred to in the description of B, and
(b) the lesser of
(i) the portion of the particular loss, determined without reference to this section, that can reasonably be considered to be attributable to a fluctuation in the value of a currency other than Canadian currency relative to Canadian currency, and
(ii) the amount determined in respect of the vendor that is
(A) if the particular loss is a capital loss, the amount of a gain (other than a specified gain) that
(I) was made within 30 days before or after the disposition time by the vendor and that
1. is deemed under subsection 39(2) to be a capital gain of the vendor for the taxation year that includes the time the gain was made from the disposition of currency other than Canadian currency, and
2. is in respect of the settlement or extinguishment of a foreign currency debt that was issued or incurred by the vendor within 30 days before or after the acquisition of the affiliate share by the vendor and that was, at all times at which it was a debt obligation of the vendor owing to a person or partnership that dealt, at all times during which the foreign currency debt was outstanding, at arm’s length with the particular corporation and can reasonably be considered to have been issued or incurred in relation to the acquisition of the affiliate share, or
(II) is a capital gain realized within 30 days before or after the disposition time by the vendor under an agreement that
1. was entered into by the vendor within 30 days before or after the acquisition of the affiliate share by the vendor with a person or partnership that dealt, at all times during which the agreement was in force, at arm’s length with the particular corporation,
2. provides for the purchase, sale or exchange of currency, and
3. can reasonably be considered to have been entered into by the vendor for the principal purpose of hedging the foreign exchange exposure arising in connection with the acquisition of the affiliate share, or
(B) in any other case, the amount of a gain (other than a specified gain or a capital gain) that was realized within 30 days before or after the disposition time by the vendor that is included in computing the income of the vendor for the taxation year that includes the time the gain was realized and
(I) that is in respect of the settlement or extinguishment of a foreign currency debt that
1. was issued or incurred by the vendor within 30 days before or after the acquisition of the affiliate share by the vendor,
2. was, at all times at which it was a debt obligation of the vendor owing to a person or partnership that dealt, at all times during which the foreign currency debt was outstanding, at arm’s length with the particular corporation, and
3. can reasonably be considered to have been issued or incurred in relation to the acquisition of the affiliate share, or
(II) under an agreement that
1. was entered into by the vendor within 30 days before or after the acquisition of the affiliate share by the vendor with a person or partnership that dealt, at all times during which the agreement was in force, at arm’s length with the particular corporation,
2. provides for the purchase, sale or exchange of currency, and
3. can reasonably be considered to have been entered into by the vendor for the principal purpose of hedging the foreign exchange exposure arising in connection with the acquisition of the affiliate share.
Marginal note:Specified gain
(2.02) For the purposes of clauses (2.01)(b)(ii)(A) and (B), a “specified gain” means a gain in respect of the settlement or extinguishment of a foreign currency debt referred to in sub-subclause (2.01)(b)(ii)(A)(I)2 or subclause (2.01)(b)(ii)(B)(I), as the case may be, or that arises under a particular agreement referred to in subclause (2.01)(b)(ii)(A)(II) or (B)(II), if the particular corporation, or any person or partnership with which the particular corporation was not — at any time during which the foreign currency debt was outstanding or the particular agreement was in force, as the case may be — dealing at arm’s length, entered into an agreement that may reasonably be considered to have been entered into for the principal purpose of hedging any foreign exchange exposure arising in connection with the foreign currency debt or the particular agreement.
Marginal note:Application of subsection (2.11)
(2.1) Subsection (2.11) applies if
(a) a particular corporation resident in Canada has a particular allowable capital loss, determined without reference to this section, from the disposition at any time (referred to in subsection (2.11) as the “disposition time”) by a partnership (referred to in subsections (2.11) and (2.12) as the “disposing partnership”) of a share (referred to in subsection (2.11) as the “affiliate share”) of the capital stock of a foreign affiliate of the particular corporation; or
(b) a foreign affiliate of a particular corporation resident in Canada has a particular allowable capital loss, determined without reference to this section, from the disposition at any time (referred to in subsection (2.11) as the “disposition time”) by a partnership (referred to in subsections (2.11) and (2.12) as the “disposing partnership”) of a share (referred to in subsection (2.11) as the “affiliate share”) of the capital stock of another foreign affiliate of the particular corporation that would not be excluded property of the affiliate if the affiliate had owned the share immediately before the disposition time.
Marginal note:Loss limitation on disposition of foreign affiliate share by a partnership
(2.11) If this subsection applies, the amount of the particular allowable capital loss referred to in paragraph (2.1)(a) or (b) is deemed to be the greater of
(a) the amount determined by the formula
A – (B – C)
where
- A
- is the amount of the particular allowable capital loss determined without reference to this section,
- B
- is ½ of the total of all amounts each of which is an amount received before the disposition time, in respect of an exempt dividend on the affiliate share or on a share for which the affiliate share was substituted, by
(i) the particular corporation referred to in subsection (2.1),
(ii) another corporation that is related to the particular corporation,
(iii) a foreign affiliate of the particular corporation, or
(iv) a foreign affiliate of another corporation that is related to the particular corporation, and
- C
- is the total of
(i) the total of all amounts each of which is ½ of the amount by which a loss (determined without reference to this section), from a previous disposition by a corporation, or a foreign affiliate described in the description of B, of the affiliate share or a share for which the affiliate share was substituted, was reduced under paragraph (2.01)(a) in respect of the exempt dividends referred to in the description of B,
(ii) the total of all amounts each of which is the amount by which an allowable capital loss (determined without reference to this section), of a corporation or a foreign affiliate described in the description of B, from a previous disposition by a partnership of the affiliate share or a share for which the affiliate share was substituted, was reduced under this paragraph in respect of the exempt dividends referred to in the description of B,
(iii) the total of all amounts each of which is ½ of the amount by which a loss (determined without reference to this section), from a previous disposition by a corporation, or a foreign affiliate described in the description of B, of an interest in a partnership, was reduced under paragraph (2.21)(a) in respect of the exempt dividends referred to in the description of B, and
(iv) the total of all amounts each of which is the amount by which an allowable capital loss (determined without reference to this section), of a corporation, or a foreign affiliate described in the description of B, from a previous disposition by a partnership of an interest in another partnership, was reduced under paragraph (2.31)(a) in respect of the exempt dividends referred to in the description of B, and
(b) the lesser of
(i) the portion of the particular allowable capital loss, determined without reference to this section, that can reasonably be considered to be attributable to a fluctuation in the value of a currency other than Canadian currency relative to Canadian currency, and
(ii) ½ of the amount determined in respect of the particular corporation, or the foreign affiliate (that is referred to in paragraph (2.1)(b)) of the particular corporation, that is the amount of a gain (other than a specified gain) that
(A) was made within 30 days before or after the disposition time by the disposing partnership to the extent that the gain is reasonably attributable to the particular corporation or the foreign affiliate, as the case may be, and that
(I) is deemed under subsection 39(2) to be a capital gain of the disposing partnership for the taxation year that includes the time the gain was made from the disposition of currency other than Canadian currency, and
(II) is in respect of the settlement or extinguishment of a foreign currency debt that
1. was issued or incurred by the disposing partnership within 30 days before or after the acquisition of the affiliate share by the disposing partnership,
2. was, at all times at which it was a debt obligation of the disposing partnership, owing to a person or partnership that dealt, at all times during which the foreign currency debt was outstanding, at arm’s length with the particular corporation, and
3. can reasonably be considered to have been issued or incurred in relation to the acquisition of the affiliate share, or
(B) is a capital gain (to the extent that the capital gain is reasonably attributable to the particular corporation or the foreign affiliate, as the case may be) realized within 30 days before or after the disposition time by the disposing partnership under an agreement that
(I) was entered into by the disposing partnership, within 30 days before or after the acquisition of the affiliate share by the disposing partnership, with a person or partnership that dealt, at all times during which the agreement was in force, at arm’s length with the particular corporation,
(II) provides for the purchase, sale or exchange of currency, and
(III) can reasonably be considered to have been entered into by the disposing partnership for the principal purpose of hedging the foreign exchange exposure arising in connection with the acquisition of the affiliate share.
Marginal note:Specified gain
(2.12) For the purposes of subparagraph (2.11)(b)(ii), a “specified gain” means a gain in respect of the settlement or extinguishment of a foreign currency debt referred to in subclause (2.11)(b)(ii)(A)(II), or that arises under a particular agreement referred to in clause (2.11)(b)(ii)(B), if the disposing partnership, or any person or partnership with which the particular corporation was not — at any time during which the foreign currency debt was outstanding or the particular agreement was in force, as the case may be — dealing at arm’s length, entered into an agreement that may reasonably be considered to have been entered into for the principal purpose of hedging any foreign exchange exposure arising in connection with the foreign currency debt or the particular agreement.
Marginal note:Application of subsection (2.21)
(2.2) Subsection (2.21) applies if
(a) a particular corporation (referred to in subparagraph (2.21)(b)(ii) as the “vendor”, as the context requires) resident in Canada has a particular loss, determined without reference to this section, from the disposition by it at any time (referred to in subsection (2.21) as the “disposition time”) of an interest (referred to in subsection (2.21) as the “partnership interest”) in a partnership that has a direct or indirect interest, or, for civil law, a direct or indirect right, in shares (referred to in subsection (2.21) as the “affiliate shares”) of the capital stock of a foreign affiliate of the particular corporation; or
(b) a foreign affiliate (referred to in subparagraph (2.21)(b)(ii) as the “vendor”) of a particular corporation resident in Canada has a particular loss, determined without reference to this section, from the disposition by it at any time (referred to in subsection (2.21) as the “disposition time”) of an interest (referred to in subsection (2.21) as the “partnership interest”) in a partnership that has a direct or indirect interest, or, for civil law, a direct or indirect right, in shares (referred to in subsection (2.21) as the “affiliate shares”) of the capital stock of another foreign affiliate of the particular corporation that would not be excluded property of the affiliate if the affiliate had owned the shares immediately before the disposition time.
Marginal note:Loss limitation on disposition of partnership that has foreign affiliate shares
(2.21) If this subsection applies, the amount of the particular loss referred to in paragraph (2.2)(a) or (b) is deemed to be the greater of
(a) the amount determined by the formula
A – (B – C)
where
- A
- is the amount of the particular loss determined without reference to this section,
- B
- is the total of all amounts each of which is an amount received before the disposition time, in respect of an exempt dividend on affiliate shares or on shares for which affiliate shares were substituted, by
(i) the particular corporation referred to in subsection (2.2),
(ii) another corporation that is related to the particular corporation,
(iii) a foreign affiliate of the particular corporation, or
(iv) a foreign affiliate of another corporation that is related to the particular corporation, and
- C
- is the total of
(i) the total of all amounts each of which is the amount by which a loss (determined without reference to this section), from a previous disposition by a corporation, or a foreign affiliate described in the description of B, of the affiliate shares or shares for which the affiliate shares were substituted, was reduced under paragraph (2.01)(a) in respect of the exempt dividends referred to in the description of B,
(ii) the total of all amounts each of which is twice the amount by which an allowable capital loss (determined without reference to this section), of a corporation or a foreign affiliate described in the description of B, from a previous disposition by a partnership of the affiliate shares or shares for which the affiliate shares were substituted, was reduced under paragraph (2.11)(a) in respect of the exempt dividends referred to in the description of B,
(iii) the total of all amounts each of which is the amount by which a loss (determined without reference to this section), from a previous disposition by a corporation, or a foreign affiliate described in the description of B, of an interest in a partnership, was reduced under this paragraph in respect of the exempt dividends referred to in the description of B, and
(iv) the total of all amounts each of which is twice the amount by which an allowable capital loss (determined without reference to this section), of a corporation, or a foreign affiliate described in the description of B, from a previous disposition by a partnership of an interest in another partnership, was reduced under paragraph (2.31)(a) in respect of the exempt dividends referred to in the description of B, and
(b) the lesser of
(i) the portion of the particular loss, determined without reference to this section, that can reasonably be considered to be attributable to a fluctuation in the value of a currency other than Canadian currency relative to Canadian currency, and
(ii) the amount determined in respect of the vendor that is
(A) if the particular loss is a capital loss, the amount of a gain (other than a specified gain) that
(I) was made within 30 days before or after the disposition time by the vendor and that
1. is deemed under subsection 39(2) to be a capital gain of the vendor for the taxation year that includes the time the gain was made from the disposition of currency other than Canadian currency, and
2. is in respect of the settlement or extinguishment of a foreign currency debt that was issued or incurred by the vendor within 30 days before or after the acquisition of the partnership interest by the vendor and that was, at all times at which it was a debt obligation of the vendor owing to a person or partnership that dealt, at all times during which the foreign currency debt was outstanding, at arm’s length with the particular corporation and can reasonably be considered to have been issued or incurred in relation to the acquisition of the partnership interest, or
(II) is a capital gain realized within 30 days before or after the disposition time by the vendor under an agreement that
1. was entered into by the vendor within 30 days before or after the acquisition of the partnership interest by the vendor with a person or partnership that dealt, at all times during which the agreement was in force, at arm’s length with the particular corporation,
2. provides for the purchase, sale or exchange of currency, and
3. can reasonably be considered to have been entered into by the vendor for the principal purpose of hedging the foreign exchange exposure arising in connection with the acquisition of the partnership interest, or
(B) in any other case, the amount of a gain (other than a specified gain or a capital gain) that was realized within 30 days before or after the disposition time by the vendor that is included in computing the income of the vendor for the taxation year that includes the time the gain was realized and
(I) that is in respect of the settlement or extinguishment of a foreign currency debt that
1. was issued or incurred by the vendor within 30 days before or after the acquisition of the partnership interest by the vendor,
2. was, at all times at which it was a debt obligation of the vendor owing to a person or partnership that dealt, at all times during which the foreign currency debt was outstanding, at arm’s length with the particular corporation, and
3. can reasonably be considered to have been issued or incurred in relation to the acquisition of the partnership interest, or
(II) under an agreement that
1. was entered into by the vendor within 30 days before or after the acquisition of the partnership interest by the vendor with a person or partnership that dealt, at all times during which the agreement was in force, at arm’s length with the particular corporation,
2. provides for the purchase, sale or exchange of currency, and
3. can reasonably be considered to have been entered into by the vendor for the principal purpose of hedging the foreign exchange exposure arising in connection with the acquisition of the partnership interest.
Marginal note:Specified gain
(2.22) For the purposes of clauses (2.21)(b)(ii)(A) and (B), a “specified gain” means a gain in respect of the settlement or extinguishment of a foreign currency debt referred to in sub-subclause (2.21)(b)(ii)(A)(I)2 or subclause (2.21)(b)(ii)(B)(I), as the case may be, or that arises under a particular agreement referred to in subclause (2.21)(b)(ii)(A)(II) or (B)(II), if the particular corporation, or any person or partnership with which the particular corporation was not — at any time during which the foreign currency debt was outstanding or the particular agreement was in force, as the case may be — dealing at arm’s length, entered into an agreement that may reasonably be considered to have been entered into for the principal purpose of hedging any foreign exchange exposure arising in connection with the foreign currency debt or the particular agreement.
Marginal note:Application of subsection (2.31)
(2.3) Subsection (2.31) applies if
(a) a particular corporation resident in Canada has a particular allowable capital loss, determined without reference to this section, from the disposition at any time (referred to in subsection (2.31) as the “disposition time”) by a particular partnership of an interest (referred to in subsection (2.31) as the “partnership interest”) in another partnership that has a direct or indirect interest, or, for civil law, a direct or indirect right, in shares (referred to in subsection (2.31) as the “affiliate shares”) of the capital stock of a foreign affiliate of the particular corporation; or
(b) a foreign affiliate of a particular corporation resident in Canada has a particular allowable capital loss, determined without reference to this section, from the disposition at any time (referred to in subsection (2.31) as the “disposition time”) by a particular partnership of an interest (referred to in subsection (2.31) as the “partnership interest”) in another partnership that has a direct or indirect interest, or, for civil law, a direct or indirect right, in shares (referred to in subsection (2.31) as the “affiliate shares”) of the capital stock of a foreign affiliate of the particular corporation that would not be excluded property of the affiliate if the affiliate had owned the shares immediately before the disposition time.
Marginal note:Loss limitation on disposition by a partnership of an indirect interest in foreign affiliate shares
(2.31) If this subsection applies, the amount of the particular allowable capital loss referred to in paragraph (2.3)(a) or (b) is deemed to be the greater of
(a) the amount determined by the formula
A – (B – C)
where
- A
- is the amount of the particular allowable capital loss determined without reference to this section,
- B
- is ½ of the total of all amounts each of which is an amount received before the disposition time, in respect of an exempt dividend on the affiliate shares or on shares for which the affiliate shares were substituted, by
(i) the particular corporation referred to in subsection (2.3),
(ii) another corporation that is related to the particular corporation,
(iii) a foreign affiliate of the particular corporation, or
(iv) a foreign affiliate of another corporation that is related to the particular corporation, and
- C
- is the total of
(i) the total of all amounts each of which is ½ of the amount by which a loss (determined without reference to this section), from a previous disposition by a corporation, or a foreign affiliate described in the description of B, of the affiliate shares or shares for which the affiliate shares were substituted, was reduced under paragraph (2.01)(a) in respect of the exempt dividends referred to in the description of B,
(ii) the total of all amounts each of which is the amount by which an allowable capital loss (determined without reference to this section), of a corporation or a foreign affiliate described in the description of B, from a previous disposition by a partnership of the affiliate shares or shares for which the affiliate shares were substituted, was reduced under paragraph (2.11)(a) in respect of the exempt dividends referred to in the description of B,
(iii) the total of all amounts each of which is ½ of the amount by which a loss (determined without reference to this section), from a previous disposition by a corporation, or a foreign affiliate described in the description of B, of an interest in a partnership, was reduced under paragraph (2.21)(a) in respect of the exempt dividends referred to in the description of B, and
(iv) the total of all amounts each of which is the amount by which an allowable capital loss (determined without reference to this section), of a corporation, or a foreign affiliate described in the description of B, from a previous disposition by a partnership of an interest in another partnership, was reduced under this paragraph in respect of the exempt dividends referred to in the description of B, and
(b) the lesser of
(i) the portion of the particular allowable capital loss, determined without reference to this section, that can reasonably be considered to be attributable to a fluctuation in the value of a currency other than Canadian currency relative to Canadian currency, and
(ii) ½ of the amount determined in respect of the particular corporation, or the foreign affiliate (that is referred to in paragraph (2.3)(b)), of the particular corporation, that is the amount of a gain (other than a specified gain) that
(A) was made within 30 days before or after the disposition time by the particular partnership to the extent that the gain is reasonably attributable to the particular corporation or the foreign affiliate, as the case may be, and that
(I) is deemed under subsection 39(2) to be a capital gain of the particular partnership for the taxation year that includes the time the gain was made from the disposition of currency other than Canadian currency, and
(II) is in respect of the settlement or extinguishment of a foreign currency debt that
1. was issued or incurred by the particular partnership within 30 days before or after the acquisition of the partnership interest by the particular partnership,
2. was, at all times at which it was a debt obligation of the particular partnership, owing to a person or partnership that dealt, at all times during which the foreign currency debt was outstanding, at arm’s length with the particular corporation, and
3. can reasonably be considered to have been issued or incurred in relation to the acquisition of the partnership interest, or
(B) is a capital gain (to the extent that the capital gain is reasonably attributable to the particular corporation or the foreign affiliate, as the case may be) realized within 30 days before or after the disposition time by the particular partnership under an agreement that
(I) was entered into by the particular partnership, within 30 days before or after the acquisition of the partnership interest by the particular partnership, with a person or partnership that dealt, at all times during which the agreement was in force, at arm’s length with the particular corporation,
(II) provides for the purchase, sale or exchange of currency, and
(III) can reasonably be considered to have been entered into by the particular partnership for the principal purpose of hedging the foreign exchange exposure arising in connection with the acquisition of the partnership interest.
Marginal note:Specified gain
(2.32) For the purposes of subparagraph (2.31)(b)(ii), a “specified gain” means a gain in respect of the settlement or extinguishment of a foreign currency debt referred to in subclause (2.31)(b)(ii)(A)(II), or that arises under a particular agreement referred to in clause (2.31)(b)(ii)(B), if the particular partnership, or any person or partnership with which the particular corporation was not — at any time during which the foreign currency debt was outstanding or the particular agreement was in force, as the case may be — dealing at arm’s length, entered into an agreement that may reasonably be considered to have been entered into for the principal purpose of hedging any foreign exchange exposure arising in connection with the foreign currency debt or the particular agreement.
(5) The portion of subsection 93(3) of the Act before paragraph (b) is replaced by the following:
Marginal note:Exempt dividends
(3) For the purposes of subsections (2.01), (2.11), (2.21) and (2.31),
(a) a dividend received by a corporation resident in Canada is an exempt dividend to the extent of the amount in respect of the dividend that is deductible from the income of the corporation for the purpose of computing the taxable income of the corporation because of any of paragraphs 113(1)(a) to (c); and
(6) Subsection 93(4) of the Act is replaced by the following:
Marginal note:Loss on disposition of shares of foreign affiliate
(4) If a taxpayer resident in Canada or a foreign affiliate (which taxpayer or foreign affiliate is referred to in this subsection as the “transferee”) of the taxpayer has acquired shares of the capital stock of one or more foreign affiliates (each referred to in this subsection as an “acquired affiliate”) of the taxpayer on a disposition of shares (such shares disposed of being referred to in this subsection as the “disposed shares”) of the capital stock of any other foreign affiliate of the taxpayer (other than, where the transferee is a foreign affiliate of the taxpayer, a disposition of shares that are, immediately before the acquisition, excluded property of the transferee or a disposition to which subsection 40(3.4) applies), the following rules apply:
(a) the capital loss, if any, of the transferee from the disposition, is deemed to be nil; and
(b) in computing the adjusted cost base to the transferee of a share of a particular class of the capital stock of an acquired affiliate that is owned by the transferee immediately after the disposition, there is to be added the amount determined by the formula
[(A – B) × C/D]/E
where
- A
- is the total of all amounts each of which is the cost amount to the transferee, immediately before the disposition, of a disposed share,
- B
- is the total of
(i) the total of all amounts each of which is the proceeds of disposition of a disposed share, and
(ii) the total of all amounts in respect of the computation of losses of the transferee from the dispositions of the disposed shares, each of which is, in respect of the disposition of a disposed share, the amount by which the amount for A in the formula in paragraph (2.01)(a) exceeds the amount determined by that formula,
- C
- is the fair market value, immediately after the disposition, of all shares of the particular class owned, immediately after the disposition, by the transferee,
- D
- is the fair market value, immediately after the disposition, of all shares owned, immediately after the disposition, by the transferee of the capital stock of all acquired affiliates, and
- E
- is the number of shares of the particular class that are owned by the transferee immediately after the disposition.
(7) Subsections (1) and (2) apply in respect of elections in respect of dispositions that occur after August 19, 2011. However, subsections (1) and (2) do not apply in respect of the determination of the income earned or realized of a foreign affiliate of a corporation under paragraph 55(5)(d) of the Act unless paragraph 55(5)(d) of the Act, as enacted by subsection 62(1), applies in respect of that determination.
(8) Subsection (3) applies to dispositions of shares of the capital stock of a foreign affiliate of a corporation that occur after August 19, 2011. However, if the corporation
(a) has elected under paragraph 79(2)(a), then subsection (3) also applies to dispositions of shares of the capital stock of all foreign affiliates of the corporation that occur after December 20, 2002 and on or before August 19, 2011 as if paragraph 93(1.1)(b) of the Act, as enacted by subsection (3), were read as follows:
(b) a corporation resident in Canada would, in the absence of subsections (1) and (1.11), be deemed under subsection 40(3), because of an election under subparagraph 5901(2)(b)(i) of the Income Tax Regulations, to have realized a gain from a disposition at any time of a share (referred to in subsection (1.11) as the “disposed share”) of the capital stock of a foreign affiliate of the corporation.
(b) has not elected under paragraph 79(2)(a) but elects in writing under this paragraph and files the election with the Minister of National Revenue on or before the day that is the later of the corporation’s filing-due date for the corporation’s taxation year that includes the day on which this Act receives royal assent and the day that is one year after the day on which this Act receives royal assent, then subsection 93(1.1) of the Act, as enacted by subsection (3), is to be read as follows in respect of any disposition of shares of the capital stock of a foreign affiliate of the corporation that occurs after February 27, 2004 and on or before August 19, 2011:
(1.1) If at any time shares of the capital stock of a foreign affiliate of a corporation resident in Canada are disposed of by another foreign affiliate of the corporation, the corporation is deemed
(a) to have made an election at that time under subsection (1) in respect of each of those shares; and
(b) to have designated, in the election, the amount prescribed in respect of each of those shares.
(9) Subsection (4) applies in respect of losses of a corporation resident in Canada, or of foreign affiliates of such a corporation, in respect of dispositions (referred to in paragraphs (a) and (c) as “relevant dispositions” in respect of the corporation) of shares and partnership interests that occur after February 27, 2004. However,
(a) subject to paragraph (c), in respect of relevant dispositions in respect of the corporation that occur before August 19, 2012, the Act is to be read without reference to its subsections 93(2.02), (2.12), (2.22) and (2.32), as enacted by subsection (4), and
(i) if the corporation does not elect under subparagraph (ii),
(A) paragraph 93(2.01)(b) of the Act, as enacted by subsection (4), is to be read as follows:
(b) the total of the following amounts determined in respect of the particular corporation, or the foreign affiliate (that is referred to in paragraph (2)(b)) of the particular corporation, as the case may be,
(i) the amount of the gain that is included in the determination made under subsection 39(2) of the capital gain or capital loss of the particular corporation or the foreign affiliate, as the case may be, for the taxation year that includes the time the gain was made from the disposition of currency of a country other than Canada if the gain is in respect of
(A) the settlement or extinguishment of an obligation of the particular corporation or the foreign affiliate, as the case may be, that can reasonably be considered to have been issued or incurred in relation to the acquisition of the affiliate share by the particular corporation or the foreign affiliate, as the case may be, or
(B) if that taxation year began on or before August 19, 2011 (in the case of the particular corporation) or ended on or before August 19, 2011 (in the case of the foreign affiliate), the redemption, acquisition or cancellation of a share of the capital stock of the particular corporation or the foreign affiliate, as the case may be, that can reasonably be considered to have been issued in relation to the acquisition of the affiliate share by the particular corporation or the foreign affiliate, as the case may be, and
(ii) the amount of any gain realized by the particular corporation or the foreign affiliate, as the case may be, under an agreement that provides for the purchase, sale or exchange of currency, or from the disposition of a currency, which agreement or currency, as the case may be, can reasonably be considered to have been entered into or acquired, by the particular corporation or the foreign affiliate, as the case may be, for the principal purpose of hedging the foreign exchange exposure arising in connection with the acquisition of the affiliate share.
(B) paragraph 93(2.11)(b) of the Act, as enacted by subsection (4), is to be read as follows:
(b) ½ of the total of the following amounts determined in respect of the particular corporation, or the foreign affiliate (that is referred to in paragraph (2.1)(b)) of the particular corporation, as the case may be:
(i) the amount of the gain of the particular corporation, the foreign affiliate or the disposing partnership (to the extent that the gain is reasonably attributable to the particular corporation or the foreign affiliate, as the case may be) that is included in the determination made under subsection 39(2) of the capital gain or capital loss of the particular corporation, the foreign affiliate or the disposing partnership, as the case may be, for the taxation year that includes the time the gain was made from the disposition of currency of a country other than Canada if the gain is in respect of
(A) the settlement or extinguishment of an obligation of the particular corporation, the foreign affiliate or the disposing partnership, as the case may be, that can reasonably be considered to have been issued or incurred in relation to the acquisition of the affiliate share by the disposing partnership, or
(B) if that taxation year began on or before August 19, 2011 (in the case of the particular corporation) or ended on or before August 19, 2011 (in the case of the foreign affiliate), the redemption, acquisition or cancellation of a share of the capital stock of the particular corporation or the foreign affiliate, as the case may be, that can reasonably be considered to have been issued in relation to the acquisition of the affiliate share by the disposing partnership, and
(ii) the amount of any gain realized by the disposing partnership (to the extent that the gain is reasonably attributable to the particular corporation or the foreign affiliate, as the case may be), the particular corporation or the foreign affiliate, as the case may be, under an agreement that provides for the purchase, sale or exchange of currency, or from the disposition of a currency, which agreement or currency, as the case may be, can reasonably be considered to have been entered into or acquired, by the disposing partnership, the particular corporation or the foreign affiliate, as the case may be, for the principal purpose of hedging the foreign exchange exposure arising in connection with the acquisition of the affiliate share.
(C) paragraph 93(2.21)(b) of the Act, as enacted by subsection (4), is to be read as follows:
(b) the total of the following amounts determined in respect of the particular corporation, or the foreign affiliate (that is referred to in paragraph (2.2)(b)) of the particular corporation, as the case may be:
(i) the amount of the gain of the particular corporation, the foreign affiliate or the partnership (to the extent that the gain is reasonably attributable to the particular corporation or the foreign affiliate, as the case may be) that is included in the determination made under subsection 39(2) of the capital gain or capital loss of the particular corporation, the foreign affiliate or the partnership, as the case may be, for the taxation year that includes the time the gain was made from the disposition of currency of a country other than Canada if the gain is in respect of
(A) the settlement or extinguishment of an obligation of the particular corporation, the foreign affiliate or the partnership, as the case may be, that can reasonably be considered to have been issued or incurred in relation to the acquisition of the affiliate shares, or
(B) if that taxation year began on or before August 19, 2011 (in the case of the particular corporation) or ended on or before August 19, 2011 (in the case of the foreign affiliate), the redemption, acquisition or cancellation of a share of the particular corporation or the foreign affiliate, as the case may be, or of an interest in the partnership that can reasonably be considered to have been issued in relation to the acquisition of the affiliate shares, and
(ii) the amount of any gain realized by the particular corporation or the foreign affiliate, as the case may be, under an agreement that provides for the purchase, sale or exchange of currency, or from the disposition of a currency, which agreement or currency, as the case may be, can reasonably be considered to have been entered into or acquired by the particular corporation, the foreign affiliate or the partnership, as the case may be, for the principal purpose of hedging the foreign exchange exposure arising in connection with the acquisition of the affiliate shares.
(D) paragraph 93(2.31)(b) of the Act, as enacted by subsection (4), is to be read as follows:
(b) ½ of the total of the following amounts determined in respect of the particular corporation, or the foreign affiliate (that is referred to in paragraph (2.3)(b)) of the particular corporation, as the case may be:
(i) the amount of the gain of the particular corporation, the foreign affiliate or the particular partnership (to the extent that the gain is reasonably attributable to the particular corporation or the foreign affiliate, as the case may be) that is included in the determination made under subsection 39(2) of the capital gain or capital loss of the particular corporation, the foreign affiliate or the particular partnership, as the case may be, for the taxation year that includes the time the gain was made from the disposition of currency of a country other than Canada if the gain is in respect of
(A) the settlement or extinguishment of an obligation of the particular corporation, the foreign affiliate, the particular partnership or the other partnership, as the case may be, that can reasonably be considered to have been issued or incurred in relation to the acquisition of the affiliate shares, or
(B) if that taxation year began on or before August 19, 2011 (in the case of the particular corporation) or ended on or before August 19, 2011 (in the case of the foreign affiliate), the redemption, acquisition or cancellation of a share of the particular corporation or the foreign affiliate, as the case may be, or an interest in the particular partnership or the other partnership, as the case may be, that can reasonably be considered to have been issued in relation to the acquisition of the affiliate shares, and
(ii) the amount of any gain realized by a partnership (to the extent that the gain is reasonably attributable to the particular corporation or the foreign affiliate, as the case may be), by the particular corporation or the foreign affiliate, as the case may be, under an agreement that provides for the purchase, sale or exchange of currency, or from the disposition of a currency, which agreement or currency, as the case may be, can reasonably be considered to have been entered into or acquired by the partnership, the particular corporation or the foreign affiliate, as the case may be, for the principal purpose of hedging the foreign exchange exposure arising in connection with the acquisition of the affiliate shares.
(E) if the corporation has elected under subsection 70(32), the references to “August 19, 2011” in clauses 93(2.01)(b)(i)(B), (2.11)(b)(i)(B), (2.21)(b)(i)(B) and (2.31)(b)(i)(B) of the Act in the read-as texts in clauses (A), (B), (C) and (D), respectively, are, in respect of the foreign affiliates referred to in those clauses of the Act, to be read as references to “June 30, 2011”,
(ii) if the corporation elects in writing under this subparagraph in respect of all relevant dispositions in respect of the corporation and files the election with the Minister of National Revenue on or before the day that is the later of the corporation’s filing-due date for the corporation’s taxation year that includes the day on which this Act receives royal assent and the day that is one year after the day on which this Act receives royal assent,
(A) in respect of subsection 93(2.01) of the Act, as enacted by subsection (4),
(I) the formula in paragraph (a) of that subsection 93(2.01) is, in respect of all relevant dispositions in respect of the corporation, to be read as follows:
A – (B – C) + D
(II) paragraph (a) of that subsection 93(2.01) is, in respect of all relevant dispositions in respect of the corporation, to be read as if it contained a description of D that reads as follows:
- D
- is the lesser of
(i) the amount, if any, by which the amount determined for B exceeds the amount determined for C, and
(ii) the total of the following amounts determined in respect of the particular corporation, or the foreign affiliate (that is referred to in paragraph (2)(b)) of the particular corporation, as the case may be,
(A) the amount of the gain that is included in the determination made under subsection 39(2) of the capital gain or capital loss of the particular corporation or the foreign affiliate, as the case may be, for the taxation year that includes the time the gain was made from the disposition of currency of a country other than Canada if the gain is in respect of
(I) the settlement or extinguishment of an obligation of the particular corporation or the foreign affiliate, as the case may be, that can reasonably be considered to have been issued or incurred in relation to the acquisition of the affiliate share by the particular corporation or the foreign affiliate, as the case may be, or
(II) if that taxation year began on or before August 19, 2011 (in the case of the particular corporation) or ended on or before August 19, 2011 (in the case of the foreign affiliate), the redemption, acquisition or cancellation of a share of the capital stock of the particular corporation or the foreign affiliate, as the case may be, that can reasonably be considered to have been issued in relation to the acquisition of the affiliate share by the particular corporation or the foreign affiliate, as the case may be, and
(B) the amount of any gain realized by the particular corporation or the foreign affiliate, as the case may be, under an agreement that provides for the purchase, sale or exchange of currency, or from the disposition of a currency, which agreement or currency, as the case may be, can reasonably be considered to have been entered into or acquired, by the particular corporation or the foreign affiliate, as the case may be, for the principal purpose of hedging the foreign exchange exposure arising in connection with the acquisition of the affiliate share.
(III) if the corporation has elected under subsection 70(32), the reference to “August 19, 2011” in subclause (ii)(A)(II) of that description of D is, in respect of the foreign affiliate referred to in that subclause, to be read as a reference to “June 30, 2011”,
(IV) paragraph (b) of that subsection 93(2.01) is, in respect of all relevant dispositions in respect of the corporation, to be read as follows:
(b) nil.
(B) in respect of subsection 93(2.11) of the Act, as enacted by subsection (4),
(I) the formula in paragraph (a) of that subsection 93(2.11) is, in respect of all relevant dispositions in respect of the corporation, to be read as follows:
A – (B – C) + D
(II) paragraph (a) of that subsection 93(2.11) is, in respect of all relevant dispositions in respect of the corporation, to be read as if it contained a description of D that reads as follows:
- D
- is the lesser of
(i) the amount, if any, by which the amount determined for B exceeds the amount determined for C, and
(ii) ½ of the total of the following amounts determined in respect of the particular corporation, or the foreign affiliate (that is referred to in paragraph (2.1)(b)) of the particular corporation, as the case may be:
(A) the amount of the gain of the particular corporation, the foreign affiliate or the disposing partnership (to the extent that the gain is reasonably attributable to the particular corporation or the foreign affiliate, as the case may be) that is included in the determination made under subsection 39(2) of the capital gain or capital loss of the particular corporation, the foreign affiliate or the disposing partnership, as the case may be, for the taxation year that includes the time the gain was made from the disposition of currency of a country other than Canada if the gain is in respect of
(I) the settlement or extinguishment of an obligation of the particular corporation, the foreign affiliate or the disposing partnership, as the case may be, that can reasonably be considered to have been issued or incurred in relation to the acquisition of the affiliate share by the disposing partnership, or
(II) if that taxation year began on or before August 19, 2011 (in the case of the particular corporation) or ended on or before August 19, 2011 (in the case of the foreign affiliate), the redemption, acquisition or cancellation of a share of the capital stock of the particular corporation or the foreign affiliate, as the case may be, that can reasonably be considered to have been issued in relation to the acquisition of the affiliate share by the disposing partnership, and
(B) the amount of any gain realized by the disposing partnership (to the extent that the gain is reasonably attributable to the particular corporation or the foreign affiliate, as the case may be), the particular corporation or the foreign affiliate, as the case may be, under an agreement that provides for the purchase, sale or exchange of currency, or from the disposition of a currency, which agreement or currency, as the case may be, can reasonably be considered to have been entered into or acquired, by the disposing partnership, the particular corporation or the foreign affiliate, as the case may be, for the principal purpose of hedging the foreign exchange exposure arising in connection with the acquisition of the affiliate share.
(III) if the corporation has elected under subsection 70(32), the reference to “August 19, 2011” in subclause (ii)(A)(II) of that description of D is, in respect of the foreign affiliate referred to in that subclause, to be read as a reference to “June 30, 2011”, and
(IV) paragraph (b) of that subsection 93(2.11) is, in respect of all relevant dispositions in respect of the corporation, to be read as follows:
(b) nil.
(C) in respect of subsection 93(2.21) of the Act, as enacted by subsection (4),
(I) the formula in paragraph (a) of that subsection 93(2.21) is, in respect of all relevant dispositions in respect of the corporation, to be read as follows:
A – (B – C) + D
(II) paragraph (a) of that subsection 93(2.21) is, in respect of all relevant dispositions in respect of the corporation, to be read as if it contained a description of D that reads as follows:
- D
- is the lesser of
(i) the amount, if any, by which the amount determined for B exceeds the amount determined for C, and
(ii) the total of the following amounts determined in respect of the particular corporation, or the foreign affiliate (that is referred to in paragraph (2.2)(b)) of the particular corporation, as the case may be:
(A) the amount of the gain of the particular corporation, the foreign affiliate or the partnership (to the extent that the gain is reasonably attributable to the particular corporation or the foreign affiliate, as the case may be) that is included in the determination made under subsection 39(2) of the capital gain or capital loss of the particular corporation, the foreign affiliate or the partnership, as the case may be, for the taxation year that includes the time the gain was made from the disposition of currency of a country other than Canada if the gain is in respect of
(I) the settlement or extinguishment of an obligation of the particular corporation, the foreign affiliate or the partnership, as the case may be, that can reasonably be considered to have been issued or incurred in relation to the acquisition of the affiliate shares, or
(II) if that taxation year began on or before August 19, 2011 (in the case of the particular corporation) or ended on or before August 19, 2011 (in the case of the foreign affiliate), the redemption, acquisition or cancellation of a share of the particular corporation or the foreign affiliate, as the case may be, or of an interest in the partnership that can reasonably be considered to have been issued in relation to the acquisition of the affiliate shares, and
(B) the amount of any gain realized by the particular corporation or the foreign affiliate, as the case may be, under an agreement that provides for the purchase, sale or exchange of currency, or from the disposition of a currency, which agreement or currency, as the case may be, can reasonably be considered to have been entered into or acquired by the particular corporation, the foreign affiliate or the partnership, as the case may be, for the principal purpose of hedging the foreign exchange exposure arising in connection with the acquisition of the affiliate shares.
(III) if the corporation has elected under subsection 70(32), the reference to “August 19, 2011” in subclause (ii)(A)(II) of that description of D is, in respect of the foreign affiliate referred to in that subclause, to be read as a reference to “June 30, 2011”, and
(IV) paragraph (b) of that subsection 93(2.21) is, in respect of all relevant dispositions in respect of the corporation, to be read as follows:
(b) nil.
(D) in respect of subsection 93(2.31) of the Act, as enacted by subsection (4),
(I) the formula in paragraph (a) of that subsection 93(2.31) is, in respect of all relevant dispositions in respect of the corporation, to be read as follows:
A – (B – C) + D
(II) paragraph (a) of that subsection 93(2.31) is, in respect of all relevant dispositions in respect of the corporation, to be read as if it contained a description of D that reads as follows:
- D
- is the lesser of
(i) the amount, if any, by which the amount determined for B exceeds the amount determined for C, and
(ii) ½ of the total of the following amounts determined in respect of the particular corporation, or the foreign affiliate (that is referred to in paragraph (2.3)(b)) of the particular corporation, as the case may be:
(A) the amount of the gain of the particular corporation, the foreign affiliate or the particular partnership (to the extent that the gain is reasonably attributable to the particular corporation or the foreign affiliate, as the case may be) that is included in the determination made under subsection 39(2) of the capital gain or capital loss of the particular corporation, the foreign affiliate or the particular partnership, as the case may be, for the taxation year that includes the time the gain was made from the disposition of currency of a country other than Canada if the gain is in respect of
(I) the settlement or extinguishment of an obligation of the particular corporation, the foreign affiliate, the particular partnership or the other partnership, as the case may be, that can reasonably be considered to have been issued or incurred in relation to the acquisition of the affiliate shares, or
(II) if that taxation year began on or before August 19, 2011 (in the case of the particular corporation) or ended on or before August 19, 2011 (in the case of the foreign affiliate), the redemption, acquisition or cancellation of a share of the particular corporation or the foreign affiliate, as the case may be, or an interest in the particular partnership or the other partnership, as the case may be, that can reasonably be considered to have been issued in relation to the acquisition of the affiliate shares, and
(B) the amount of any gain realized by a partnership (to the extent that the gain is reasonably attributable to the particular corporation or the foreign affiliate, as the case may be), by the particular corporation or the foreign affiliate, as the case may be, under an agreement that provides for the purchase, sale or exchange of currency, or from the disposition of a currency, which agreement or currency, as the case may be, can reasonably be considered to have been entered into or acquired by the partnership, the particular corporation or the foreign affiliate, as the case may be, for the principal purpose of hedging the foreign exchange exposure arising in connection with the acquisition of the affiliate shares.
(III) if the corporation has elected under subsection 70(32), the reference to “August 19, 2011” in subclause (ii)(A)(II) of that description of D is, in respect of the foreign affiliate referred to in that subclause, to be read as a reference to “June 30, 2011”, and
(IV) paragraph (b) of that subsection 93(2.31) is, in respect of all relevant dispositions in respect of the corporation, to be read as follows:
(b) nil.
(b) if the corporation elects in writing under this paragraph in respect of all losses of the corporation, and of all foreign affiliates of the corporation, in respect of dispositions (referred to in this paragraph as “pertinent dispositions” in respect of the corporation) of shares and partnership interests that occur on or before February 27, 2004 and files the election with the Minister of National Revenue on or before the day that is the later of the corporation’s filing-due date for the corporation’s taxation year that includes the day on which this Act receives royal assent and the day that is one year after the day on which this Act receives royal assent,
(i) subsections 93(2) and (2.01) — and if paragraph (c) applies, subsection 93(2.02) — of the Act, as enacted by subsection (4), with the modifications described in paragraph (a) (if applicable) being taken into account, also apply in respect of all pertinent dispositions in respect of the corporation that occur after 1994 and on or before February 27, 2004, except that the references to “twice” in that subsection 93(2.01), are,
(A) for taxation years of the corporation that end before February 28, 2000, to be read as references to “4/3 of”, and
(B) for taxation years of the corporation that include February 28, 2000 or October 17, 2000 or that begin after February 28, 2000 and end before October 17, 2000, to be read as references to “the fraction that is the reciprocal of the fraction in paragraph 38(a), as amended by S.C. 2001, c. 17, that applies to the taxpayer for the year, multiplied by”, and
(ii) subsections 93(2.1), (2.11), (2.2), (2.21), (2.3) and (2.31) — and if paragraph (c) applies, subsections 93(2.12), (2.22) and (2.32) — of the Act, as enacted by subsection (4), with the modifications described in paragraph (a) (if applicable) being taken into account, also apply in respect of all pertinent dispositions in respect of the corporation that occur after November 1999 and on or before February 27, 2004, except that the references to “twice” in those subsections 93(2.11), (2.21) and (2.31), are,
(A) for taxation years of the corporation that end before February 28, 2000, to be read as references to “4/3 of”, and
(B) for taxation years of the corporation that include February 28, 2000 or October 17, 2000 or that begin after February 28, 2000 and end before October 17, 2000, to be read as references to “the fraction that is the reciprocal of the fraction in paragraph 38(a), as amended by S.C. 2001, c. 17, that applies to the taxpayer for the year, multiplied by”; and
(c) if the corporation elects in writing under this paragraph in respect of all relevant dispositions in respect of the corporation that occur before August 19, 2012 and files the election with the Minister of National Revenue on or before the day that is the later of the corporation’s filing-due date for the corporation’s taxation year that includes the day on which this Act receives royal assent and the day that is one year after the day on which this Act receives royal assent, paragraph (a) does not apply in respect of all those relevant dispositions.
(10) Subsection (5) applies if subsection 93(2.01) of the Act, as enacted by subsection (4), applies, except that,
(a) where that subsection 93(2.01) applies but subsection 93(2.11) of the Act, as enacted by subsection (4), does not apply, the portion of subsection 93(3) of the Act before paragraph (a), as enacted by subsection (5), is to be read as follows:
(3) For the purposes of subsection (2.01),
(b) in respect of dispositions that occur on or before August 19, 2011, paragraph 93(3)(a) of the Act, as enacted by subsection (5), is to be read as follows:
(a) a dividend received by a corporation resident in Canada is an exempt dividend to the extent of the amount in respect of the dividend that is deductible from the income of the corporation for the purposes of computing the taxable income of the corporation because of paragraph 113(1)(a), (b) or (c); and
(11) Subsection (6) applies to acquisitions of shares of the capital stock of a foreign affiliate of a taxpayer that occur after February 27, 2004. However, if
(a) the acquisition occurs on or before August 19, 2011, the portion of subsection 93(4) of the Act before paragraph (a), as enacted by subsection (6), is to be read as follows:
(4) If a taxpayer resident in Canada or a foreign affiliate (which taxpayer or foreign affiliate is referred to in this subsection as the “transferee”) of the taxpayer has acquired shares of the capital stock of one or more foreign affiliates (each referred to in this subsection as an “acquired affiliate”) of the taxpayer on a disposition of shares (such shares disposed of being referred to in this subsection as the “disposed shares”) of the capital stock of any other foreign affiliate of the taxpayer (other than a disposition to which subsection 40(3.4) applies), the following rules apply:
(b) the taxpayer has elected under paragraph (8)(b), subsection (6), with the portion of subsection 93(4) of the Act before paragraph (a), as enacted by that subsection, being read as required by paragraph (a), applies to all acquisitions of shares of the capital stock of all foreign affiliates of the taxpayer that occur after 1994.
- Date modified: