Income Tax Act (R.S.C., 1985, c. 1 (5th Supp.))

Marginal note:Return and payment of tax

• 207.2 (1) Within 90 days after the end of each year, a taxpayer to whom this Part applies shall

  • (a) file with the Minister a return for the year under this Part in prescribed form and containing prescribed information, without notice or demand therefor;

  • (b) estimate in the return the amount of tax, if any, payable by it under this Part in respect of each month in the year; and

  • (c) pay to the Receiver General the amount of tax, if any, payable by it under this Part in respect of each month in the year.

• Marginal note:Liability of trustee

  (2) Where the trustee of a trust that is liable to pay tax under this Part does not remit to the Receiver General the amount of the tax within the time specified in subsection 207.2(1), the trustee is personally liable to pay on behalf of the trust the full amount of the tax and is entitled to recover from the trust any amount paid by the trustee as tax under this section.

• Marginal note:Provisions applicable to Part

  (3) Subsections 150(2) and 150(3), sections 152 and 158, subsections 161(1) and 161(11), sections 162 to 167 and Division J of Part I are applicable to this Part with such modifications as the circumstances require.

PART XI.2Tax in Respect of Dispositions of Certain Properties

Marginal note:Tax Payable by institution or public authority

207.3 Every institution or public authority that, at any time in a year, disposes of an object within 10 years after the object became an object described in subparagraph 39(1)(a)(i.1) shall pay a tax under this Part, in respect of the year, equal to 30% of the object’s fair market value at that time, unless the disposition was made to another institution or public authority that was, at that time, designated under subsection 32(2) of the Cultural Property Export and Import Act either generally or for a specified purpose related to that object.

Marginal note:Ecological gift — tax payable

• 207.31 (1) A charity, municipality in Canada or municipal or public body performing a function of government in Canada (each of which is referred to in this section as the “recipient”) shall, in respect of a property, pay a tax under this Part in respect of a taxation year if

  • (a) at any time in the year, the recipient

    • (i) disposes of the property, or

    • (ii) in the opinion of the Minister of the Environment, or a person designated by that Minister, changes the use of the property;

  • (b) the property is described in paragraph 110.1(1)(d) or in the definition total ecological gifts in subsection 118.1(1); and

  • (c) the disposition or change is made without the authorization of the Minister of the Environment or a person designated by that Minister.

• Marginal note:Ecological gift — amount of tax

  (2) The amount of tax to be paid under subsection (1) is equal to 50% of the amount that would be determined for the purposes of section 110.1 or 118.1, if this Act were read without reference to subsections 110.1(3) and 118.1(6), to be the fair market value of the property referred to in subsection (1) if the property were given to the recipient immediately before the disposition or change referred to in paragraph (1)(a).

Marginal note:Return and payment of tax

• 207.4 (1) Any institution, public authority, charity or municipality that is liable to pay a tax under subsection 207.3 or 207.31 in respect of a year shall, within 90 days after the end of the year,

  • (a) file with the Minister a return for the year under this Part in prescribed form and containing prescribed information without notice or demand therefor;

  • (b) estimate in the return the amount of tax payable by it under this Part in respect of the year; and

  • (c) pay to the Receiver General the amount of tax payable by it under this Part in respect of the year.

• Marginal note:Provisions applicable to Part

  (2) Subsections 150(2) and 150(3), sections 152 and 158, subsections 161(1) and 161(11), sections 162 to 167 and Division J of Part I are applicable to this Part with such modifications as the circumstances require.

PART XI.3Tax in Respect of Retirement Compensation Arrangements

Marginal note:Definitions

• 207.5 (1) In this Part,

  advantage

  advantage, in relation to a retirement compensation arrangement, means

  • (a) any benefit, loan or indebtedness that is conditional in any way on the existence of the arrangement, other than

    • (i) a benefit derived from the provision of administrative or investment services in respect of the arrangement,

    • (ii) a loan or an indebtedness the terms and conditions of which are terms and conditions that persons dealing at arm’s length with each other would have entered into, and

    • (iii) a payment out of or under the arrangement that is included in computing a taxpayer’s income under Part I, and

  • (b) a benefit that is an increase in the total fair market value of the subject property of the arrangement if it is reasonable to consider, having regard to all the circumstances, that the increase is attributable, directly or indirectly, to a transaction or event or a series of transactions or events one of the main purposes of which was to enable a person or a partnership to benefit from a provision of this Part, or from the exemption from tax under paragraph 149(1)(q.1), if the transaction, event or series

    • (i) would not have occurred in a normal commercial or investment context in which parties deal with each other at arm’s length and act prudently, knowledgeably and willingly, or

    • (ii) included a payment received as, on account or in lieu of, or in satisfaction of, a payment

      • (A) for services provided by a person who is, or does not deal at arm’s length with, a specified beneficiary of the arrangement, or

      • (B) of interest, of a dividend, of rent, of a royalty or of any other return on investment, or of proceeds of disposition, in respect of property (other than subject property of the arrangement) held by a person who is, or does not deal at arm’s length with, a specified beneficiary of the arrangement,

  • (c) a benefit that is income or a capital gain that is reasonably attributable, directly or indirectly, to

    • (i) a prohibited investment in respect of the arrangement,

    • (ii) an amount received by a specified beneficiary of the arrangement, or by a person who does not deal at arm’s length with the specified beneficiary, if it is reasonable to consider, having regard to all the circumstances, that the amount was paid in relation to, or would not have been paid but for, subject property of the arrangement and the amount was paid as, on account or in lieu of, or in satisfaction of, a payment

      • (A) for services provided by a person who is, or who does not deal at arm’s length with, the specified beneficiary, or

      • (B) of interest, of a dividend, of rent, of a royalty or of any other return on investment, or of proceeds of disposition,

  • (d) an RCA strip in respect of the arrangement, and

  • (e) a prescribed benefit; (avantage)

  excluded contribution

  excluded contribution means an amount paid or payable under a specified arrangement to obtain or renew a letter of credit or surety bond issued by a financial institution for the purposes of securing future retirement benefit payments out of or under the arrangement; (cotisation exclue)

  prohibited investment

  prohibited investment, for a retirement compensation arrangement at any time, means property (other than prescribed excluded property) that is at that time

  • (a) a debt of a specified beneficiary of the arrangement,

  • (b) a share of the capital stock of, an interest in, or a debt of

    • (i) a corporation, partnership or trust in which the specified beneficiary has a significant interest, or

    • (ii) a person or partnership that does not deal at arm’s length with, or is affiliated with, the specified beneficiary,

  • (c) an interest (or, for civil law, a right) in, or a right to acquire, a share, interest or debt described in paragraph (a) or (b), or

  • (d) prescribed property; (placement interdit)

  RCA strip

  RCA strip, in respect of a retirement compensation arrangement, means the amount of a reduction in the fair market value of subject property of the arrangement, if the value is reduced as part of a transaction or event or a series of transactions or events one of the main purposes of which is to enable a specified beneficiary of the arrangement, or a person or a partnership who does not deal at arm’s length with the specified beneficiary, to benefit from a provision of this Part or to obtain a benefit in respect of subject property of the arrangement or as a result of the reduction, but does not include an amount that is included in computing the income of the specified beneficiary or of an employer or former employer of the specified beneficiary; (somme découlant d’un dépouillement de CR)

  RCA trust

  RCA trust under a retirement compensation arrangement means

  • (a) any trust deemed by subsection 207.6(1) to be created in respect of subject property of the arrangement, and

  • (b) any trust governed by the arrangement; (fiducie de convention de retraite)

  refundable tax

  refundable tax of a retirement compensation arrangement at the end of a taxation year of an RCA trust under the arrangement means the amount, if any, by which the total of

  • (a) 50% of all contributions (other than an excluded contribution made on or after March 28, 2023) made under the arrangement while it was a retirement compensation arrangement and before the end of the year, and

  • (b) 50% of the amount, if any, by which

    • (i) the total of all amounts each of which is the income (determined as if this Act were read without reference to paragraph 82(1)(b)) of an RCA trust under the arrangement from a business or property for the year or a preceding taxation year or a capital gain of the trust for the year or a preceding taxation year,

    exceeds

    • (ii) the total of all amounts each of which is a loss of an RCA trust under the arrangement from a business or property for the year or a preceding taxation year or a capital loss of the trust for the year or a preceding taxation year,

  exceeds

  • (c) 50% of all amounts paid as distributions to one or more persons (including amounts that are required by paragraph 12(1)(n.3) to be included in computing the recipient’s income) under the arrangement while it was a retirement compensation arrangement and before the end of the year, other than a distribution paid where it is established, by subsequent events or otherwise, that the distribution was paid as part of a series of payments and refunds of contributions under the arrangement; (impôt remboursable)

  significant interest

  significant interest has the same meaning as in subsection 207.01(4); (participation notable)

  specified arrangement

  specified arrangement means a retirement compensation arrangement of which the primary purpose is to provide annual or more frequent periodic retirement benefit payments that are paid

  • (a) as supplemental benefits provided out of or under

    • (i) a registered pension plan,

    • (ii) a registered retirement savings plan,

    • (iii) a deferred profit sharing plan,

    • (iv) a pooled registered pension plan, or

    • (v) any combination of plans described in subparagraphs (i) to (iv), or

  • (b) under an arrangement that would, in the absence of subsection 147.1(8) and section 8504 of the Income Tax Regulations, substantially comply with the prescribed conditions for registration for a registered pension plan under section 8501 of those Regulations; (convention déterminée)

  specified beneficiary

  specified beneficiary, of a retirement compensation arrangement, means an individual who has an interest or a right in respect of the arrangement and who has or had a significant interest in an employer or former employer in respect of the arrangement; (bénéficiaire déterminé)

  subject property of a retirement compensation arrangement

  subject property of a retirement compensation arrangement means property that is held in connection with the arrangement. (bien déterminé d’une convention de retraite)

• Marginal note:Election

  (2) Despite the definition refundable tax in subsection 207.5(1), where the custodian of a retirement compensation arrangement so elects in the return under this Part for a taxation year of an RCA trust under the arrangement and all the subject property, if any, of the arrangement (other than a right to claim a refund under subsection 164(1) or 207.7(2)) at the end of the year consists only of cash, debt obligations, shares listed on a designated stock exchange, units of a mutual fund trust that are listed on a designated stock exchange, or any combination thereof, an amount equal to the total of

  • (a) the amount of that cash at the end of the year,

  • (b) the total of all amounts each of which is the greater of the principal amount of such a debt obligation outstanding at the end of the year and the fair market value of the obligation at the end of the year, and

  • (c) the fair market value of those shares or units at the end of the year

  shall be deemed for the purposes of this Part to be the refundable tax of the arrangement at the end of the year.

• Marginal note:Limitation on election

  (3) Subsection (2) does not apply in respect of an RCA trust if any part of a decline in the fair market value of subject property of the retirement compensation arrangement is reasonably attributable to a prohibited investment for, or an advantage in relation to, the RCA trust unless the Minister is satisfied that it is just and equitable to allow the election to be made, having regard to all the circumstances, in which case, the Minister may adjust the amount deemed by subsection (2) to be the refundable tax of the arrangement to take into account all or part of the decline in the fair market value of the subject property.