Income Tax Regulations

806.2 For the purposes of the definition participating debt interest in subsection 212(3) of the Act, an obligation is a prescribed obligation if it is an indexed debt obligation and no amount payable in respect of it is

• (a) contingent or dependent upon the use of, or production from, property in Canada; or

• (b) computed by reference to

  • (i) revenue, profit, cash flow, commodity price or any other similar criterion, other than a change in the purchasing power of money, or

  • (ii) dividends paid or payable to shareholders of any class of shares.