Technical Tax Amendments Act, 2012 (S.C. 2013, c. 34)
Full Document:
Assented to 2013-06-26
321. (1) Section 164 of the Act is amended by adding the following after subsection (1.5):
Marginal note:When subsection (1.52) applies
(1.51) Subsection (1.52) applies to a taxpayer for a taxation year if, at any time after the beginning of the year
(a) the taxpayer has, in respect of the tax payable by the taxpayer under this Part (and, if the taxpayer is a corporation, Parts I.3, VI, VI.1 and XIII.1) for the year, paid under any of sections 155 to 157 one or more instalments of tax;
(b) it is reasonable to conclude that the total amount of those instalments exceeds the total amount of taxes that will be payable by the taxpayer under those Parts for the year; and
(c) the Minister is satisfied that the payment of the instalments has caused or will cause undue hardship to the taxpayer.
Marginal note:Instalment refund
(1.52) If this subsection applies to a taxpayer for a taxation year, the Minister may refund to the taxpayer all or any part of the excess referred to in paragraph (1.51)(b).
Marginal note:Penalties, interest not affected
(1.53) For the purpose of the calculation of any penalty or interest under this Act, an instalment is deemed not to have been paid to the extent that all or any part of the instalment can reasonably be considered to have been refunded under subsection (1.52).
(2) Subsection 164(1.6) of the Act is repealed.
(3) The portion of subsection 164(3) of the Act before paragraph (a) is replaced by the following:
Marginal note:Interest on refunds and repayments
(3) If, under this section, an amount in respect of a taxation year (other than an amount, or a portion of the amount, that can reasonably be considered to arise from the operation of section 122.5 or 122.61) is refunded or repaid to a taxpayer or applied to another liability of the taxpayer, the Minister shall pay or apply interest on it at the prescribed rate for the period that begins on the day that is the latest of the days referred to in the following paragraphs and that ends on the day on which the amount is refunded, repaid or applied:
(4) Paragraph 164(5)(g) of the Act is repealed.
(5) Subsection (2) is deemed to have come into force on March 21, 2003.
(6) Subsection (3) applies in respect of forms filed after March 20, 2003.
(7) Subsection (4) applies to taxation years that begin after October 31, 2011.
322. Subsection 170(2) of the Act is repealed.
323. Section 176 of the Act is repealed.
324. (1) Paragraph (g) of the definition “financial institution” in subsection 181(1) of Act is replaced by the following:
(g) a corporation
(i) listed in the schedule, or
(ii) all or substantially all of the assets of which are shares or indebtedness of financial institutions to which the corporation is related;
(2) Subsection (1) is deemed to have come into force on December 23, 1997, but in applying paragraph (g) of the definition “financial institution” in subsection 181(1) of the Act, as enacted by subsection (1), in respect of taxation years that end before December 20, 2002, that paragraph is to be read as follows:
(g) prescribed, or listed in the schedule;
325. (1) Subparagraph 181.2(3)(g)(i) of the Act is replaced by the following:
(i) the total of all amounts (other than amounts owing to the member or to other corporations that are members of the partnership) that would, if this paragraph and paragraphs (b) to (d) and (f) applied to partnerships in the same way that they apply to corporations, be determined under those paragraphs in respect of the partnership at the end of its last fiscal period that ends at or before the end of the year
(2) Paragraph 181.2(3)(g) of the Act, as amended by subsection (1), is replaced by the following:
(g) the total of all amounts, each of which is the amount, if any, in respect of a partnership in which the corporation held a membership interest at the end of the year, either directly or indirectly through another partnership, determined by the formula
(A – B) × C/D
where
- A
- is the total of all amounts that would be determined under paragraphs (b) to (d) and (f) in respect of the partnership for its last fiscal period that ends at or before the end of the year if
(a) those paragraphs applied to partnerships in the same manner that they apply to corporations, and
(b) those amounts were computed without reference to amounts owing by the partnership
(i) to any corporation that held a membership interest in the partnership either directly or indirectly through another partnership, or
(ii) to any partnership in which a corporation described in subparagraph (i) held a membership interest either directly or indirectly through another partnership,
- B
- is the partnership’s deferred unrealized foreign exchange losses at the end of the period,
- C
- is the share of the partnership’s income or loss for the period to which the corporation is entitled either directly or indirectly through another partnership, and
- D
- is the partnership’s income or loss for the period
(3) Paragraph 181.2(3)(i) of the Act is replaced by the following:
(i) the amount of any deficit deducted in computing its shareholders’ equity (including, for this purpose, the amount of any provision for the redemption of preferred shares) at the end of the year,
(4) Paragraph 181.2(4)(d.1) of the Act is replaced by the following:
(d.1) a loan or advance to, or a bond, debenture, note, mortgage, hypothecary claim or similar obligation of, a partnership each member of which was, throughout the year,
(i) another corporation (other than a financial institution) that was not exempt from tax under this Part (otherwise than because of paragraph 181.1(3)(d)), or
(ii) another partnership described in this paragraph,
(5) Subsection 181.2(5) of the Act is replaced by the following:
Marginal note:Value of interest in partnership
(5) For the purposes of subsection (4) and this subsection, the carrying value at the end of a taxation year of an interest of a corporation or of a partnership (each of which is referred to in this subsection as the “member”) in a particular partnership is deemed to be the member’s specified proportion, for the particular partnership’s last fiscal period that ends at or before the end of the taxation year, of the amount that would, if the particular partnership were a corporation, be the particular partnership’s investment allowance at the end of that fiscal period.
(6) Subsections (1) and (5) apply to taxation years that begin after December 20, 2002.
(7) Subsection (2) applies to the 2012 and subsequent taxation years.
(8) Subsection (3) applies to taxation years that begin after 1995.
(9) Subsection (4) applies to the 2004 and subsequent taxation years.
(10) In applying paragraphs 181.2(4)(b), (c) and (d.1) of the Act to a particular corporation in respect of an asset that is a loan or an advance to, or an obligation of, another corporation or partnership that the particular corporation holds at the end of a taxation year of the particular corporation that began before December 20, 2002, those paragraphs are to be read without reference to “(other than a financial institution)” and to “(other than financial institutions)” if, at the end of the taxation year,
(a) the particular corporation deals at arm’s length with the other corporation or the partnership, as the case may be; and
(b) the other corporation is a financial institution, or the partnership is not a partnership described in paragraph 181.2(4)(d.1) of the Act, as the case may be, solely because of section 324 and subsections 366(1) and (3) of this Act.
326. (1) Subparagraph 181.3(3)(a)(v) of the Act is replaced by the following:
(v) the amount of any deficit deducted in computing its shareholders’ equity (including, for this purpose, the amount of any provision for the redemption of preferred shares) at the end of the year, and
(2) Subparagraph 181.3(3)(b)(iv) of the Act is replaced by the following:
(iv) the amount of any deficit deducted in computing its shareholders’ equity (including, for this purpose, the amount of any provision for the redemption of preferred shares) at the end of the year;
(3) Subparagraph 181.3(3)(c)(v) of the Act is replaced by the following:
(v) the amount of any deficit deducted in computing its shareholders’ equity (including, for this purpose, the amount of any provision for the redemption of preferred shares) at the end of the year,
(4) Paragraph 181.3(3)(c) of the Act is amended by striking out “and” at the end of subparagraph (v), by adding “and” at the end of subparagraph (vi) and by adding the following after subparagraph (vi):
(vii) any amount recoverable through reinsurance, to the extent that it can reasonably be regarded as being included in the amount determined under subparagraph (iii) in respect of a claims reserve;
(5) Subparagraph 181.3(3)(d)(iv) of the Act is amended by striking out “and” at the end of clause (D) and by adding the following after clause (E):
(F) the total of all amounts each of which is an amount recoverable through reinsurance, to the extent that it can reasonably be regarded as being included in the amount determined under clause (A) in respect of a claims reserve; and
(6) Subsections (1) to (5) apply to taxation years that begin after 1995.
327. (1) Subsections 184(2) to (5) of the Act are replaced by the following:
Marginal note:Tax on excessive elections
(2) If a corporation has elected in accordance with subsection 83(2), 130.1(4) or 131(1) in respect of the full amount of any dividend payable by it on shares of any class of its capital stock (in this section referred to as the “original dividend”) and the full amount of the original dividend exceeds the portion of the original dividend deemed by that subsection to be a capital dividend or capital gains dividend, as the case may be, the corporation shall, at the time of the election, pay a tax under this Part equal to 3/5 of the excess.
Marginal note:Election to treat excess as separate dividend
(3) If, in respect of an original dividend payable at a particular time, a corporation would, but for this subsection, be required to pay a tax under this Part in respect of an excess referred to in subsection (2), and the corporation elects in prescribed manner on or before the day that is 90 days after the day of sending of the notice of assessment in respect of the tax that would otherwise be payable under this Part, the following rules apply:
(a) the portion of the original dividend deemed by subsection 83(2), 130.1(4) or 131(1) to be a capital dividend or capital gains dividend, as the case may be, is deemed for the purposes of this Act to be the amount of a separate dividend that became payable at the particular time;
(b) if the corporation identifies in its election any part of the excess, that part is, for the purposes of any election under subsection 83(2), 130.1(4) or 131(1) in respect of that part, and, where the corporation has so elected, for all purposes of this Act, deemed to be the amount of a separate dividend that became payable immediately after the particular time;
(c) the amount by which the excess exceeds any portion deemed by paragraph (b) to be a separate dividend for all purposes of this Act is deemed to be a separate taxable dividend that became payable at the particular time; and
(d) each person who held any of the issued shares of the class of shares of the capital stock of the corporation in respect of which the original dividend was paid is deemed
(i) not to have received any portion of the original dividend, and
(ii) to have received, at the time that any separate dividend determined under any of paragraphs (a) to (c) became payable, the proportion of that dividend that the number of shares of that class held by the person at the particular time is of the number of shares of that class outstanding at the particular time except that, for the purpose of Part XIII, the separate dividend is deemed to be paid on the day that the election in respect of this subsection is made.
Marginal note:Concurrence with election
(4) An election under subsection (3) is valid only if
(a) it is made with the concurrence of the corporation and all its shareholders
(i) who received or were entitled to receive all or any portion of the original dividend, and
(ii) whose addresses were known to the corporation; and
(b) either
(i) it is made on or before the day that is 30 months after the day on which the original dividend became payable, or
(ii) each shareholder described in subparagraph (a)(i) concurs with the election, in which case, notwithstanding subsections 152(4) to (5), any assessment of the tax, interest and penalties payable by each of those shareholders for any taxation year shall be made that is necessary to take the corporation’s election into account.
Marginal note:Exception for non-taxable shareholders
(5) If each person who, in respect of an election made under subsection (3), is deemed by subsection (3) to have received a dividend at a particular time is also, at the particular time, a person all of whose taxable income is exempt from tax under Part I,
(a) subsection (4) does not apply to the election; and
(b) the election is valid only if it is made on or before the day that is 30 months after the day on which the original dividend became payable.
(2) Subsection (1) applies to original dividends paid by a corporation after its 1999 taxation year, except that,
(a) the reference to “sending” in subsection 184(3) of the Act, as enacted by subsection (1), is to be read as a reference to “mailing” for notices of assessments sent before December 15, 2010; and
(b) for the purpose of subsection 184(5) of the Act, as enacted by subsection (1), an election made before the 90th day after the day on which this Act receives royal assent is deemed to have been made in a timely manner.
- Date modified: