| Withholding
and
remittance of
tax
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215. (1) When a person pays, credits or
provides, or is deemed to have paid, credited
or provided, an amount on which an income
tax is payable under this Part, or would be so
payable if this Part were read without
reference to subsection 216.1(1), the person
shall, notwithstanding any agreement or law
to the contrary, deduct or withhold from it the
amount of the tax and forthwith remit that
amount to the Receiver General on behalf of
the non-resident person on account of the tax
and shall submit with the remittance a
statement in prescribed form.
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(2) Subsection 215(5) of the Act is
replaced by the following:
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| Regulations
reducing
deduction or
withholding
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(5) The Governor in Council may make
regulations in respect of any non-resident
person or class of non-resident persons to
whom any amount is paid or credited as, on
account of, in lieu of payment of or in
satisfaction of, any amount described in any of
paragraphs 212(1)(h), (j) to (m) and (q)
reducing the amount otherwise required by
any of subsections (1) to (3) to be deducted or
withheld from the amount so paid or credited.
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(3) Subsection (1) applies to amounts
paid, credited or provided after 2000.
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(4) Subsection (2) applies after April
1997.
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175. (1) The Act is amended by adding the
following after section 216:
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| Alternative re:
acting
services
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216.1 (1) No tax is payable under this Part
on any amount described in subsection
212(5.1) that is paid, credited or provided to a
non-resident person in a taxation year if the
person
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(a) files with the Minister, on or before the
person's filing-due date for the year, a
return of income under Part I for the year;
and
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(b) elects in the return to have this section
apply for the year.
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| Deemed Part I
payment
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(2) If in respect of a particular amount paid,
credited or provided in a taxation year, a
non-resident person has complied with
paragraphs (1)(a) and (b), any amount
deducted or withheld and remitted to the
Receiver General on behalf of the person on
account of tax under subsection 212(5.1) in
respect of the particular amount is deemed to
have been paid on account of the person's tax
under Part I.
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| Deemed
election and
restriction
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(3) Where a corporation payment (within
the meaning assigned by subsection 212(5.2))
has been made to a non-resident corporation in
respect of an actor and at any time the
corporation makes an actor payment (within
the meaning assigned by subsection 212(5.2))
to or for the benefit of the actor, if the
corporation makes an election under
subsection (1) for the taxation year in which
the corporation payment is made, the actor is
deemed to make an election under subsection
(1) for the taxation year of the actor in which
the corporation makes the actor payment.
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(2) Subsection (1) applies to the 2001 and
subsequent taxation years.
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176. (1) The Act is amended by adding the
following after section 218.1:
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| Branch
interest tax
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218.2 (1) Every authorized foreign bank
shall pay a tax under this Part for each taxation
year equal to 25% of its taxable interest
expense for the year.
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| Taxable
interest
expense
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(2) The taxable interest expense of an
authorized foreign bank for a taxation year is
15% of the amount, if any, by which
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(a) the total of all amounts on account of
interest that are deducted under section 20.2
in computing the bank's income for the year
from its Canadian banking business
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exceeds
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(b) the total of all amounts that are included
in paragraph (a) and that are in respect of a
liability of the bank to another person or
partnership.
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| Where tax not
payable
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(3) No tax is payable under this Part for a
taxation year by an authorized foreign bank if
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(a) the bank is resident in a country with
which Canada has a tax treaty at the end of
the year; and
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(b) no tax similar to the tax under this Part
would be payable in that country for the
year by a bank resident in Canada carrying
on business in that country during the year.
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| Rate
limitation
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(4) Notwithstanding any other provision of
this Act, the reference in subsection (1) to 25%
shall, in respect of a taxation year of an
authorized foreign bank that is resident in a
country with which Canada has a tax treaty on
the last day of the year, be read as a reference
to,
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(a) if the treaty specifies the maximum rate
of tax that Canada may impose under this
Part for the year on residents of that country,
that rate;
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(b) if the treaty does not specify a maximum
rate as described in paragraph (a) but does
specify the maximum rate of tax that
Canada may impose on a payment of
interest in the year by a person resident in
Canada to a related person resident in that
country, that rate; and
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(c) in any other case, 25%.
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| Provisions
applicable to
Part
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(5) Sections 150 to 152, 158, 159, 160.1 and
161 to 167 and Division J of Part I apply to this
Part with any modifications that the
circumstances require.
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(2) Subsection (1) applies to taxation
years that end after June 27, 1999.
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177. (1) Paragraph 219(1)(b) of the Act is
replaced by the following:
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(b) the amount deducted because of section
112 and paragraph 115(1)(e) in computing
the corporation's base amount,
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(2) Paragraph 219(1)(d) of the Act is
amended by replacing the reference to the
expression ``1/3 of the amount'' with a
reference to the expression ``the amount''.
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(3) Subsection 219(1.1) of the Act is
replaced by the following:
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| Excluded
gains
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(1.1) For the purpose of subsection (1), the
definition ``taxable Canadian property'' in
subsection 248(1) shall be read without
reference to paragraphs (a) and (c) to (k) of
that definition and as if the only interests or
options referred to in paragraph (l) of that
definition were those in respect of property
described in paragraph (b) of that definition.
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(4) Paragraph 219(2)(a) of the Act is
repealed.
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(5) Subsection (1) applies to the 1998 and
subsequent taxation years.
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(6) Subsection (2) applies to taxation
years that end after February 27, 2000
except that, for such taxation years that
ended before October 18, 2000, the
reference in paragraph 219(1)(d) of the Act,
as enacted by subsection (2), to the
expression ``the amount'' shall be read as a
reference to the expression ``1/2 of the
amount''.
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(7) Subsection (3) applies after October 1,
1996.
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(8) Subsection (4) applies to taxation
years that end after June 27, 1999.
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178. (1) Section 220 of the Act is amended
by adding the following after subsection
(4.4):
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| Security for
departure tax
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(4.5) If an individual who is deemed by
subsection 128.1(4) to have disposed of a
property (other than a right to a benefit under,
or an interest in a trust governed by, an
employee benefit plan) at any particular time
in a taxation year (in this section referred to as
the individual's ``emigration year'') elects, in
prescribed manner on or before the
individual's balance-due day for the
emigration year, that this subsection and
subsections (4.51) to (4.54) apply in respect of
the emigration year,
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(a) the Minister shall, until the individual's
balance-due day for a particular taxation
year that begins after the particular time,
accept adequate security furnished by or on
behalf of the individual on or before the
individual's balance-due day for the
emigration year for the lesser of
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(i) the amount determined by the formula
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A - B - [((A - B)/A) x C]
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A is the total amount of taxes under
Parts I and I.1 that would be payable
by the individual for the emigration
year if the exclusion or deduction of
each amount referred to in paragraph
161(7)(a) were not taken into
account,
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B is the total amount of taxes under
those Parts that would have been so
payable if each property (other than a
right to a benefit under, or an interest
in a trust governed by, an employee
benefit plan) deemed by subsection
128.1(4) to have been disposed of at
the particular time, and that has not
been subsequently disposed of before
the beginning of the particular year,
were not deemed by subsection
128.1(4) to have been disposed of by
the individual at the particular time,
and
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C is the total of all amounts deemed
under this or any other Act to have
been paid on account of the
individual's tax under this Part for the
emigration year, and
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(ii) if the particular year immediately
follows the emigration year, the amount
determined under subparagraph (i), and
in any other case, the amount determined
under this paragraph in respect of the
individual for the taxation year that
immediately precedes the particular
year, and
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(b) except for the purposes of subsections
161(2), (4) and (4.01),
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(i) interest under this Act for any period
that ends on the individual's balance-due
day for the particular year and throughout
which security is accepted by the
Minister, and
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(ii) any penalty under this Act computed
with reference to an individual's tax
payable for the year that was, without
reference to this paragraph, unpaid
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shall be computed as if the particular
amount for which adequate security has
been accepted under this subsection were
an amount paid by the individual on
account of the particular amount.
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| Deemed
security
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(4.51) If an individual (other than a trust)
elects under subsection (4.5) that that
subsection apply in respect of a taxation year,
for the purposes of this subsection and
subsections (4.5) and (4.52) to (4.54), the
Minister is deemed to have accepted at any
time after the election is made adequate
security for a total amount of taxes payable
under Parts I and I.1 by the individual for the
emigration year equal to the lesser of
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(a) the total amount of those taxes that
would be payable for the year by an inter
vivos trust resident in Canada (other than a
trust described in subsection 122(2)) the
taxable income of which for the year is
$50,000, and
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(b) the greatest amount for which the
Minister is required to accept security
furnished by or on behalf of the individual
under subsection (4.5) at that time in respect
of the emigration year,
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and that security is deemed to have been
furnished by the individual before the
individual's balance-due day for the
emigration year.
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| Limit
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(4.52) Notwithstanding subsections (4.5)
and (4.51), the Minister is deemed at any time
not to have accepted security under subsection
(4.5) in respect of an individual's emigration
year for any amount greater than the amount,
if any, by which
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(a) the total amount of taxes that would be
payable by the individual under Parts I and
I.1 for the year if the exclusion or deduction
of each amount referred to in paragraph
161(7)(a), in respect of which the day
determined under paragraph 161(7)(b) is
after that time, were not taken into account
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exceeds
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(b) the total amount of taxes that would be
determined under paragraph (a) if this Act
were read without reference to subsection
128.1(4).
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| Inadequate
security
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(4.53) Subject to subsection (4.7), if it is
determined at any particular time that security
accepted by the Minister under subsection
(4.5) is not adequate to secure the particular
amount for which it was furnished by or on
behalf of an individual,
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(a) subject to a subsequent application of
this subsection, the security shall be
considered after the particular time to
secure only the amount for which it is
adequate security at the particular time;
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(b) the Minister shall notify the individual
in writing of the determination and shall
accept adequate security, for all or any part
of the particular amount, furnished by or on
behalf of the individual within 90 days after
the day of notification; and
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(c) any security accepted in accordance
with paragraph (b) is deemed to have been
accepted by the Minister under subsection
(4.5) on account of the particular amount at
the particular time.
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| Extension of
time
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(4.54) If in the opinion of the Minister it
would be just and equitable to do so, the
Minister may at any time extend
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(a) the time for making an election under
subsection (4.5);
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(b) the time for furnishing and accepting
security under subsection (4.5); or
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(c) the 90-day period for the acceptance of
security under paragraph (4.53)(b).
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| Security for
tax on
distributions
of taxable
Canadian
property to
non-resident
beneficiaries
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(4.6) Where
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(a) solely because of the application of
subsection 107(5), paragraphs 107(2)(a) to
(c) do not apply to a distribution by a trust
in a particular taxation year (in this section
referred to as the trust's ``distribution
year'') of taxable Canadian property, and
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(b) the trust elects, in prescribed manner on
or before the trust's balance-due day for the
distribution year, that this subsection and
subsections (4.61) to (4.63) apply in respect
of the distribution year,
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the following rules apply:
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(c) the Minister shall, until the trust's
balance-due day for a subsequent taxation
year, accept adequate security furnished by
or on behalf of the trust on or before the
trust's balance-due day for the distribution
year for the lesser of
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(i) the amount determined by the formula
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A - B - [((A - B)/A) x C]
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A is the total amount of taxes under
Parts I and I.1 that would be payable
by the trust for the distribution year if
the exclusion or deduction of each
amount referred to in paragraph
161(7)(a) were not taken into
account,
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B is the total amount of taxes under
those Parts that would have been so
payable if the rules in subsection
107(2) (other than the election
referred to in that subsection) had
applied to each disposition by the
trust in the distribution year of
property (other than property
subsequently disposed of before the
beginning of the subsequent year) to
which paragraph (a) applies, and
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C is the total of all amounts deemed
under this or any other Act to have
been paid on account of the trust's tax
under this Part for the distribution
year, and
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(ii) where the subsequent year
immediately follows the distribution
year, the amount determined under
subparagraph (i), and in any other case,
the amount determined under this
paragraph in respect of the trust for the
taxation year that immediately precedes
the subsequent year, and
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(d) except for the purposes of subsections
161(2), (4) and (4.01),
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(i) interest under this Act for any period
that ends on the trust's balance-due day
for the subsequent year and throughout
which security is accepted by the
Minister, and
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(ii) any penalty under this Act computed
with reference to the trust's tax payable
for the year that was, without reference to
this paragraph, unpaid
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shall be computed as if the particular
amount for which adequate security has
been accepted under this subsection were
an amount paid by the trust on account of
the particular amount.
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| Limit
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(4.61) Notwithstanding subsection (4.6),
the Minister is deemed at any time not to have
accepted security under that subsection in
respect of a trust's distribution year for any
amount greater than the amount, if any, by
which
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(a) the total amount of taxes that would be
payable by the trust under Parts I and I.1 for
the year if the exclusion or deduction of
each amount referred to in paragraph
161(7)(a), in respect of which the day
determined under paragraph 161(7)(b) is
after that time, were not taken into account
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exceeds
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