Income Tax Act

Marginal note:Excess EPSP amount

• 207.8 (1) In this Part, excess EPSP amount, of a specified employee for a taxation year in respect of an employer, means the amount determined by the formula

  A – (20% × B)

  where

  A

  is the portion of the total of all amounts paid by the employer of the specified employee (or by a corporation with which the employer does not deal at arm’s length) to a trust governed by an employees profit sharing plan that is allocated for the year to the specified employee; and

  B

  is the specified employee’s total income for the year from an office or employment with the employer computed without reference to paragraph 6(1)(d) and sections 7 and 8.

• Marginal note:Tax payable

  (2) If a specified employee has an excess EPSP amount for a taxation year, the specified employee shall pay a tax for the year equal to the amount determined by the formula

  (A + B) × C

  where

  A

  is the highest individual percentage for the year;

  B

  is

  • (a) if the specified employee is resident in Quebec at the end of the year, 0%,

  • (b) if the specified employee is resident in a province other than Quebec at the end of the year, the highest percentage rate of tax, including surtaxes but not taxes that are limited to a maximum amount, imposed by the province for the year on the income of an individual who is a resident of the province, or

  • (c) in any other case, the percentage (rounded to the nearest half percentage, or where it is equidistant from two such consecutive half percentages, to the higher of the two) determined by the formula

    E × F

    where

    E

    is the highest individual percentage for the year, and

    F

    is the percentage referred to in subsection 120(1); and

  C

  is the total of all excess EPSP amounts of the specified employee for the year.

• Marginal note:Waiver or cancellation

  (3) If a specified employee would otherwise be liable to pay a tax under subsection (2), the Minister may waive or cancel all or part of the liability if the Minister considers it just and equitable to do so having regard to all the circumstances.

• Marginal note:Return and payment of tax

  (4) Every person who is liable to pay tax under this Part for a taxation year shall

  • (a) on or before the person’s filing-due date for the year, file with the Minister a return for the year under this Part in prescribed form and containing prescribed information; and

  • (b) on or before the person’s balance-due day for the year, pay to the Receiver General the amount of tax payable under this Part by the person for the year.

• Marginal note:Provisions applicable to this Part

  (5) Subsections 150(2) and (3), sections 152, 155 to 156.1, 158 to 160.1, 161 and 161.2 to 167 and Division J of Part I apply to this Part with any modifications that the circumstances require.