Technical Tax Amendments Act, 2012 (S.C. 2013, c. 34)
Full Document:
Assented to 2013-06-26
295. (1) The Act is amended by adding the following after section 143.3 of the Act, as enacted by subsection 294(1):
Expenditure — Limit for Contingent Amount
Marginal note:Definitions
143.4 (1) The following definitions apply in this section.
“contingent amount”
« montant éventuel »
“contingent amount”, of a taxpayer at any time (other than a time at which the taxpayer is a bankrupt), includes an amount to the extent that the taxpayer, or another taxpayer that does not deal at arm’s length with the taxpayer, has a right to reduce the amount at that time.
“expenditure”
« dépense »
“expenditure”, of a taxpayer, means an expense, expenditure or outlay made or incurred by the taxpayer, or a cost or capital cost of property acquired by the taxpayer.
“right to reduce”
« droit de réduire »
“right to reduce” means a right to reduce or eliminate an amount in respect of an expenditure at any time, including, for greater certainty, a right to reduce that is contingent upon the occurrence of an event, or in any other way contingent, if it is reasonable to conclude, having regard to all the circumstances, that the right will become exercisable.
“taxpayer”
« contribuable »
“taxpayer” includes a partnership.
Marginal note:Limitation of amount of expenditure
(2) For the purposes of this Act, if in a taxation year of a taxpayer an expenditure of the taxpayer occurs, the amount of the expenditure at any time is the lesser of
(a) the amount of the expenditure at the time calculated under this Act without reference to this section, and
(b) the least amount of the expenditure calculated by reducing the amount of the expenditure determined under paragraph (a) by the amount that is the amount, if any, by which
(i) the total of all amounts each of which is a contingent amount of the taxpayer in the year in respect of the expenditure
exceeds
(ii) the total of all amounts each of which is
(A) an amount paid by the taxpayer to obtain a right to reduce an amount in respect of the expenditure, or
(B) a limited-recourse amount for the purposes of paragraph 143.2(6)(b) that reduces the expenditure under subsection 143.2(6) to the extent that the amount is also a contingent amount described in subparagraph (i) in respect of the expenditure.
Marginal note:Payment of contingent amount
(3) For the purposes of this Act, if in a particular taxation year, a taxpayer pays all or a portion of a contingent amount referred to in paragraph (2)(b) that reduces the amount of the taxpayer’s expenditure referred to in paragraph (2)(a), the portion of the contingent amount paid by the taxpayer in the particular year for the purpose of earning income, and to that extent only, is deemed
(a) to have been incurred by the taxpayer in the particular year;
(b) to have been incurred for the same purpose and to have the same character as the expenditure so reduced; and
(c) to have become payable by the taxpayer in respect of the particular year.
Marginal note:Subsequent years
(4) Subject to subsection (6), if at any time in a taxation year that is after a taxation year in which an expenditure of the taxpayer occurred, the taxpayer, or another taxpayer not dealing at arm’s length with the taxpayer, has a right to reduce an amount in respect of the expenditure (in this subsection and subsection (5) referred to as the “prior expenditure”) that would, if the taxpayer or the other taxpayer had had the right to reduce in a particular taxation year that ended before the time, have resulted in subsection (2) applying in the particular taxation year to reduce or eliminate the amount of the prior expenditure, the taxpayer’s subsequent contingent amount in respect of the prior expenditure, as determined under subsection (5), is deemed, to the extent subsection (2) and this subsection have not previously applied in respect of the expenditure,
(a) to be an amount received by the taxpayer at the time in the course of earning income from a business or property from a person described in subparagraph 12(1)(x)(i); and
(b) to be an amount referred to in subparagraph 12(1)(x)(iv).
Marginal note:Subsequent contingent amount
(5) For the purposes of subsection (4), a taxpayer’s subsequent contingent amount in respect of a prior expenditure of the taxpayer is the amount, if any, by which
(a) the maximum amount by which the amount (in this subsection referred to as the “particular amount”) in respect of the prior expenditure may be reduced pursuant to a right to reduce the particular amount
exceeds
(b) the amount, if any, paid to obtain the right to reduce the particular amount.
Marginal note:Anti-avoidance
(6) If a taxpayer, or another taxpayer that does not deal at arm’s length with the taxpayer, has a right to reduce an amount in respect of an expenditure of the taxpayer in a taxation year that is after the taxation year in which the expenditure otherwise occurred, determined without reference to subsection (3), the taxpayer is deemed to have the right to reduce in the taxation year in which that expenditure otherwise occurred if it is reasonable to conclude having regard to all the circumstances that one of the purposes for having the right to reduce after the end of the year in which the expenditure otherwise occurred was to avoid the application of subsection (2) to the amount of the expenditure.
Marginal note:Assessments
(7) Notwithstanding subsections 152(4) to (5), such assessments, determinations and redeterminations may be made as are necessary to give effect to this section.
(2) Subsection (1) applies in respect of taxation years that end on or after March 16, 2011.
296. (1) Paragraph (d) of the definition revenu gagné in subsection 146(1) of the French version of the Act is replaced by the following:
d) soit, dans le cas d’un contribuable visé au paragraphe 115(2), le total qui serait calculé en application de l’alinéa 115(2)e) à son égard pour l’année compte non tenu du renvoi à l’alinéa 56(1)n) au sous-alinéa 115(2)e)(ii), ni du sous-alinéa 115(2)e)(iv), à l’exception de toute partie de ce total qui est incluse, en application de l’alinea c), dans le total calculé selon la présente définition ou qui est exonérée de l’impôt sur le revenu au Canada par l’effet d’une disposition d’un accord ou convention fiscal conclu avec un autre pays et ayant force de loi au Canada,
(2) Subparagraph (d)(i) of the definition “earned income” in subsection 146(1) of the English version of the Act is replaced by the following:
(i) that paragraph were read without reference to subparagraph 115(2)(e)(iv), and
(3) Paragraph (f) of the definition “earned income” in subsection 146(1) of the Act is replaced by the following:
(f) an amount deductible under paragraph 60(b), or deducted under paragraph 60(c.2), in computing the taxpayer’s income for the year,
(4) Paragraph (h) of the definition “earned income” in subsection 146(1) of the Act is replaced by the following:
(h) the portion of an amount included under subparagraph (a)(ii) or (c)(ii) in determining the taxpayer’s earned income for the year because of paragraph 14(1)(b)
(5) Subsection 146(8.1) of the Act is replaced by the following:
Marginal note:Deemed receipt of refund of premiums
(8.1) If a payment out of or under a registered retirement savings plan of a deceased annuitant to the annuitant’s legal representative would have been a refund of premiums if it had been paid under the plan to an individual who is a beneficiary (as defined in subsection 108(1)) under the deceased’s estate, the payment is, to the extent it is so designated jointly by the legal representative and the individual in prescribed form filed with the Minister, deemed to be received by the individual (and not by the legal representative) at the time it was so paid as a benefit that is a refund of premiums.
(6) Subparagraph 146(10.1)(b)(ii) of the Act is replaced by the following:
(ii) paragraphs 38(a) and (b) are to be read as if the fraction set out in each of those paragraphs were replaced by the word “all”.
(7) Subsections (1) and (2) apply to the 1993 and subsequent taxation years.
(8) Subsection (3) applies to the 1997 and subsequent taxation years.
(9) Subsection (4) applies to amounts included in computing income for taxation years in respect of business fiscal periods that end after February 27, 2000.
(10) Subsection (5) is deemed to have come into force on January 1, 1989, except that, before 1999, subsection 146(8.1) of the Act, as enacted by subsection (5), is to be read as follows:
(8.1) Such portion of an amount paid in a taxation year out of or under a registered retirement savings plan of a deceased annuitant to the annuitant’s legal representative as, had that portion been paid under the plan to an individual who is a beneficiary (as defined in subsection 108(1)) under the deceased’s estate, would have been a refund of premiums is, to the extent it is so designated jointly by the legal representative and the individual in prescribed form filed with the Minister, deemed to be received by the individual in the year as a benefit that is a refund of premiums.
297. (1) The definition “quarter” in subsection 146.01(1) of the Act is repealed.
(2) Subsection 146.01(8) of the Act is repealed.
(3) Subsections (1) and (2) apply in respect of the 2002 and subsequent taxation years.
298. (1) Subsection 146.1(2) of the Act is amended by adding the following after paragraph (g.2):
(g.3) the plan provides that an individual is permitted to be designated as a beneficiary under the plan, and that a contribution to the plan in respect of an individual who is a beneficiary under the plan is permitted to be made, only if
(i) in the case of a designation, the individual’s Social Insurance Number is provided to the promoter before the designation is made and either
(A) the individual is resident in Canada when the designation is made, or
(B) the designation is made in conjunction with a transfer of property into the plan from another registered education savings plan under which the individual was a beneficiary immediately before the transfer, and
(ii) in the case of a contribution, either
(A) the individual’s Social Insurance Number is provided to the promoter before the contribution is made and the individual is resident in Canada when the contribution is made, or
(B) the contribution is made by way of transfer from another registered education savings plan under which the individual was a beneficiary immediately before the transfer;
(2) Section 146.1 of the Act is amended by adding the following after subsection (2.2):
Marginal note:Social Insurance Number not required
(2.3) Notwithstanding paragraph (2)(g.3), an education savings plan may provide that an individual’s Social Insurance Number need not be provided in respect of
(a) a contribution to the plan, if the plan was entered into before 1999; and
(b) a designation of a non-resident individual as a beneficiary under the plan, if the individual was not assigned a Social Insurance Number before the designation is made.
(3) Subsections (1) and (2) are deemed to have come into force on January 1, 2004.
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