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(3) Section 211.1 of the Act is amended by
adding the following after subsection (3):
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| Short taxation
year
|
(4) Where a taxation year of a life insurer is
less than 51 weeks, the values of A and D in
subsection (3) for the year are that proportion
of those values otherwise so determined that
the number of days in the year (other than
February 29) is of 365.
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(4) Subsections (1) to (3) apply to the 1992
and subsequent taxation years.
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214. (1) Section 211.3 of the Act is
replaced by the following:
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| Instalments
|
211.3 (1) Every life insurer shall, in respect
of each of its taxation years, pay to the
Receiver General on or before the last day of
each month in the year, an amount equal to
1/12 of the lesser of
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(a) the amount estimated by the insurer to
be the annualized tax payable under this
Part by it for the year, and
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(b) the annualized tax payable under this
Part by the insurer for the immediately
preceding taxation year.
|
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| Annualized
tax payable
|
(2) For the purposes of subsections (1) and
211.5(2), the annualized tax payable under
this Part by a life insurer for a taxation year is
the amount determined by the formula
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(365/A) x B
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where
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A is
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(a) if the year is less than 357 days, the
number of days in the year (other than
February 29), and
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B is the tax payable under this Part by the
insurer for the year.
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(2) Subsection (1) applies to taxation
years that begin after 1995.
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215. (1) Section 211.5 of the Act is
renumbered as subsection 211.5(1) and is
amended by adding the following:
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| Interest on
instalments
|
(2) For the purposes of subsection 161(2)
and section 163.1 as they apply to this Part, a
life insurer is, in respect of a taxation year,
deemed to have been liable to pay, on or before
the last day of each month in the year, an
instalment equal to 1/12 of the lesser of
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(a) the annualized tax payable under this
Part by the insurer for the year, and
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(b) the annualized tax payable under this
Part by the insurer for the immediately
preceding taxation year.
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(2) Subsection (1) applies to taxation
years that begin after 1995.
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216. (1) Paragraph 212(1)(j) of the Act is
replaced by the following:
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| Benefits
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(j) any benefit described in any of
subparagraphs 56(1)(a)(iii) to (vi), any
amount described in paragraph 56(1)(x) or
(z) (other than an amount transferred under
circumstances in which subsection 207.6(7)
applies) or the purchase price of an interest
in a retirement compensation arrangement;
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(2) Subsection 212(9) of the Act is
replaced by the following:
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| Exemptions
|
(9) Where
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(a) a dividend or interest is received by a
trust from a non-resident-owned
investment corporation,
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(b) an amount (in this subsection referred to
as the ``royalty payment'') is received by a
trust as, on account of, in lieu of payment of
or in satisfaction of, a royalty on or in
respect of a copyright in respect of the
production or reproduction of any literary,
dramatic, musical or artistic work, or
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(c) interest is received by a mutual fund
trust maintained primarily for the benefit of
non-resident persons
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and a particular amount is paid or credited to
a non-resident person as income of or from the
trust and can reasonably be regarded as having
been derived from the dividend, interest or
royalty payment, as the case may be, no tax is
payable because of paragraph (1)(c) as a
consequence of the payment or crediting of
the particular amount if no tax would have
been payable under this Part in respect of the
dividend, interest or royalty payment, as the
case may be, if it had been paid directly to the
non-resident person instead of to the trust.
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(3) Subsection (1) applies to amounts paid
or credited after 1995.
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(4) Subsection (2) applies to amounts paid
or credited after April 1995 to non-resident
persons.
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217. (1) Subsection 216(4) of the Act is
replaced by the following:
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| Optional
method of
payment
|
(4) Where a non-resident person or, in the
case of a partnership, each non-resident
person who is a member of the partnership
files with the Minister an undertaking in
prescribed form to file within 6 months after
the end of a taxation year a return of income
under Part I for the year as permitted by this
section, a person who is otherwise required by
subsection 215(3) to remit in the year, in
respect of the non-resident person or the
partnership, an amount to the Receiver
General in payment of tax on rent on real
property or on a timber royalty may elect
under this section not to remit under that
subsection, and if that election is made, the
elector shall,
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(a) when any amount is available out of the
rent or royalty received for remittance to the
non-resident person or the partnership, as
the case may be, deduct 25% of the amount
available and remit the amount deducted to
the Receiver General on behalf of the
non-resident person or the partnership on
account of the tax under this Part; and
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(b) if the non-resident person or, in the case
of a partnership, a non-resident person who
is a member of the partnership
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(i) does not file a return for the year in
accordance with the undertaking, or
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|
(ii) does not pay under this section the tax
the non-resident person or member is
liable to pay for the year within the time
provided for payment,
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pay to the Receiver General, on account of
the non-resident person's or the
partnership's tax under this Part, on the
expiration of the time for filing or payment,
as the case may be, the full amount that the
elector would otherwise have been required
to remit in the year in respect of the rent or
royalty minus the amounts that the elector
has remitted in the year under paragraph (a)
in respect of the rent or royalty.
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|
(2) Subsection (1) applies to amounts paid
or credited after November 1991.
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|
218. The heading ``ADDITIONAL TAX
ON CORPORATIONS (OTHER THAN
CANADIAN CORPORATIONS)
CARRYING ON BUSINESS IN
CANADA'' before section 219 of the Act is
replaced by the following:
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|
219. (1) Subsection 219(1) of the Act is
replaced by the following:
|
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| Additional tax
|
219. (1) Every corporation that is
non-resident in a taxation year shall, on or
before its filing-due date for the year, pay a tax
under this Part for the year equal to 25% of the
amount, if any, by which the total of
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(a) the corporation's taxable income earned
in Canada for the year (in this subsection
referred to as the corporation's ``base
amount''),
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|
(b) the amount deducted because of section
112 and paragraph 115(1)(d.1) in
computing the corporation's base amount,
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|
(c) the amount deducted under paragraph
20(1)(v.1) in computing the corporation's
base amount, other than any portion of the
amount so deducted that was deductible
because of the membership of the
corporation in a partnership,
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|
(d) 1/3 of the amount, if any, by which the
total of all amounts each of which is a
taxable capital gain of the corporation for
the year from a disposition of a taxable
Canadian property exceeds the total of all
amounts each of which is
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(i) an allowable capital loss of the
corporation for the year from a
disposition of a taxable Canadian
property, or
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|
(ii) an amount deductible because of
paragraphs 111(1)(b) and 115(1)(e) in
computing the corporation's base
amount,
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|
(e) the total of all amounts each of which
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|
|
(i) is an amount in respect of a grant or
credit that can reasonably be considered
to have been received by the corporation
in the year as a reimbursement or
repayment of, or as indemnification or
compensation for, an amount deducted
because of
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|
(A) paragraph (j), as it read in its
application to the 1995 taxation year,
in computing the amount determined
under this subsection for a preceding
taxation year that began before 1996,
or
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|
(B) paragraph (k) in computing the
amount determined under this
subsection for the year or for a
preceding taxation year that began
after 1995, and
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(ii) was not included in computing the
corporation's base amount for any
taxation year,
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|
(f) where, at any time in the year, the
corporation has made one or more
dispositions described in paragraph (l) of
qualified property, the total of all amounts
each of which is an amount in respect of one
of those dispositions equal to the amount, if
any, by which the fair market value of the
qualified property at the time of the
disposition exceeds the corporation's
proceeds of disposition of the property, and
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|
(g) the amount, if any, claimed for the
immediately preceding taxation year under
paragraph (j) by the corporation,
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|
exceeds the total of
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(h) that proportion of the total of
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(i) the total of the taxes payable under
Parts I, I.3 and VI for the year by the
corporation, determined without
reference to subsection (1.1), and
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|
(ii) the total of the income taxes payable
to the government of a province for the
year by the corporation, determined
without reference to subsection (1.1),
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|
that the corporation's base amount is of the
amount that would, if this Act were read
without reference to subsection (1.1), be the
corporation's base amount,
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|
(i) the total of all amounts each of which is
the amount of interest or a penalty paid by
the corporation in the year
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|
(ii) on or in respect of an income tax
payable by it to the government of a
province under a law of the province
relating to income tax,
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|
to the extent that the interest or penalty was
not deductible in computing its base
amount for any taxation year,
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|
(j) where the corporation was carrying on
business in Canada at the end of the year, the
amount claimed by the corporation for the
year, not exceeding the amount prescribed
to be its allowance for the year in respect of
its investment in property in Canada,
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|
(k) the portion of the total of all amounts,
each of which is an amount by which the
corporation's base amount is increased
because of paragraph 12(1)(o) or 18(1)(l.1)
or (m) or subsection 69(6) or (7), that is not
deductible under paragraph (h) or (j), and
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|
(l) where the corporation has at any time in
the year disposed of property (in this
paragraph and paragraph (f) referred to as
``qualified property'') used by it
immediately before that time for the
purpose of gaining or producing income
from a business carried on by it in Canada
to a Canadian corporation (in this paragraph
referred to as the ``purchaser corporation'')
that was, immediately after the disposition,
a qualified related corporation of the
corporation for consideration that includes
a share of the capital stock of the purchaser
corporation, the total of all amounts each of
which is an amount in respect of a
disposition in the year of a qualified
property equal to the amount, if any, by
which
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|
(i) the fair market value of the qualified
property at the time of the disposition
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|
(ii) the amount, if any, by which the
paid-up capital in respect of the issued
and outstanding shares of the capital
stock of the purchaser corporation
increased because of the disposition, and
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|
(iii) the fair market value, at the time of
receipt, of the consideration (other than
shares) given by the purchaser
corporation for the qualified property.
|
|
| Excluded
gains
|
(1.1) For the purposes of subsection (1),
paragraph 115(1)(b) shall be read without
reference to subparagraphs (i) and (iii) to (xii).
|
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|
|
(2) Subsection 219(8) of the Act is
replaced by the following:
|
|
| Meaning of
``qualified
related
corporation''
|
(8) For the purposes of this Part, a
corporation is a ``qualified related
corporation'' of a particular corporation if it is
resident in Canada and all of the issued and
outstanding shares (other than directors'
qualifying shares) of its capital stock (having
full voting rights under all circumstances) are
owned by
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|
(a) the particular corporation,
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|
(b) a subsidiary wholly-owned corporation
of the particular corporation,
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|
(c) a corporation of which the particular
corporation is a subsidiary wholly-owned
corporation,
|
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|
|
(d) a subsidiary wholly-owned corporation
of a corporation of which the particular
corporation is also a subsidiary
wholly-owned corporation, or
|
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|
|
(e) any combination of corporations each of
which is a corporation described in
paragraph (a), (b), (c) or (d),
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|
and, for the purpose of this subsection, a
subsidiary wholly-owned corporation of a
particular corporation includes any subsidiary
wholly-owned corporation of a corporation
that is a subsidiary wholly-owned corporation
of the particular corporation.
|
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|
(3) Subsections (1) and (2) apply to
taxation years that begin after 1995 except
that, in its application to taxation years that
began in 1996, the reference in paragraph
219(1)(g) of the Act, as enacted by
subsection (1), to ``paragraph (j)'' shall be
read as a reference to ``paragraph (h), as it
read in its application to the 1995 taxation
year, or paragraph (j)''.
|
|
|
|
220. (1) Section 219.1 of the Act is
replaced by the following:
|
|
| Corporate
emigration
|
219.1 Where a taxation year of a
corporation is deemed by paragraph
128.1(4)(a) to have ended at any time, the
corporation shall, on or before its filing-due
date for the year, pay a tax under this Part for
the year equal to 25% of the amount, if any, by
which
|
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|
|
(a) the fair market value of all the property
owned by the corporation immediately
before that time
|
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|
|
exceeds the total of
|
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|
|
(b) the paid-up capital in respect of all the
issued and outstanding shares of the capital
stock of the corporation immediately before
that time,
|
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|
|
(c) all amounts (other than amounts payable
by the corporation in respect of dividends
and amounts payable under this section)
each of which is a debt owing by the
corporation, or an obligation of the
corporation to pay an amount, that is
outstanding at that time, and
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|
(d) where a tax was payable by the
corporation under subsection 219(1) or this
section for a preceding taxation year that
began before 1996 and after the corporation
last became resident in Canada, 4 times the
total of all amounts that would, but for
sections 219.2 and 219.3 and any
agreement or convention between the
Government of Canada and the government
of any other country that has the force of law
in Canada, have been so payable.
|
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|
|
(2) Subsection (1) applies to the 1996 and
subsequent taxation years.
|
|
|
|
220.1 (1) Section 219.3 of the Act is
replaced by the following:
|
|
| Effect of tax
treaty
|
219.3 For the purpose of section 219.1,
where an agreement or convention between
the Government of Canada and the
government of another country that has the
force of law in Canada provides that the rate
of tax imposed on a dividend paid by a
corporation resident in Canada to a
corporation resident in the other country that
owns all of the shares of the capital stock of the
corporation resident in Canada shall not
exceed a specified rate, the reference in
section 219.1 to ``25%'' shall, in respect of a
corporation that ceased to be resident in
Canada and to which the agreement or
convention applies at the beginning of its first
taxation year after its taxation year that is
deemed by paragraph 128.1(4)(a) to have
ended, be read as a reference to the specified
rate unless it can reasonably be concluded that
one of the main reasons that the corporation
became resident in the other country was to
reduce the amount of tax payable under this
Part or Part XIII.
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