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(B) the taxpayer's income for the year
from a business carried on either alone
or as a partner actively engaged in the
business, and
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(ii) where the taxpayer is in attendance at
a designated educational institution or a
secondary school at which the taxpayer is
enrolled in an educational program, the
least of
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(B) $375 times the number of weeks in
the year during which the taxpayer is in
attendance at the institution or school,
and
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(C) the amount, if any, by which the
amount that would, if this Act were
read without reference to this section,
be the taxpayer's income for the year
exceeds the total determined under
subparagraph (i) in respect of the
taxpayer for the year.
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(3) Subsections (1) and (2) apply to the
2000 and subsequent taxation years.
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44. (1) Subparagraph 66(4)(a)(i) of the
Act is replaced by the following:
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(i) the total of the foreign exploration and
development expenses incurred by the
taxpayer
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(A) before the end of the year,
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(B) at a time at which the taxpayer was
resident in Canada, and
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(C) where the taxpayer became
resident in Canada before the end of
the year, after the last time (before the
end of the year) that the taxpayer
became resident in Canada,
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(2) The portion of paragraph 66(4)(b) of
the Act before subparagraph (ii) is replaced
by the following:
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(b) of that total, the greater of
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(i) the amount, if any, claimed by the
taxpayer not exceeding 10% of the
amount determined under paragraph (a)
in respect of the taxpayer for the year, and
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(3) Subparagraph 66(4)(b)(ii) of the Act is
replaced by the following:
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(A) the part of the taxpayer's income
for the year, determined without
reference to this subsection and
subsection 66.21(4), that can
reasonably be regarded as attributable
to
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(I) the production of petroleum or
natural gas from natural
accumulations outside Canada or
from oil or gas wells outside
Canada, or
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(II) the production of minerals from
mines outside Canada,
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(B) the taxpayer's income for the year
from royalties in respect of a natural
accumulation of petroleum or natural
gas outside Canada, an oil or gas well
outside Canada or a mine outside
Canada, determined without reference
to this subsection and subsection
66.21(4), and
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(C) all amounts each of which is an
amount, in respect of a foreign
resource property that has been
disposed of by the taxpayer, equal to
the amount, if any, by which
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(I) the amount included in
computing the taxpayer's income
for the year by reason of subsection
59(1) in respect of the disposition
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(II) the total of all amounts each of
which is that portion of an amount
deducted under subsection 66.7(2)
in computing the taxpayer's income
for the year that
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1. can reasonably be considered
to be in respect of the foreign
resource property, and
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2. cannot reasonably be
considered to have reduced the
amount otherwise determined
under clause (A) or (B) in respect
of the taxpayer for the year.
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(4) Section 66 of the Act is amended by
adding the following after subsection (4):
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| Country-by-c
ountry FEDE
allocations
|
(4.1) For greater certainty, the portion of an
amount deducted under subsection (4) in
computing a taxpayer's income for a taxation
year that can reasonably be considered to be in
respect of specified foreign exploration and
development expenses of the taxpayer in
respect of a country is considered to apply to
a source in that country.
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| Method of
allocation
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(4.2) For the purpose of subsection (4.1),
where a taxpayer has incurred specified
foreign exploration and development
expenses in respect of two or more countries,
an allocation to each of those countries for a
taxation year shall be determined in a manner
that is
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(a) reasonable having regard to all the
circumstances, including the level and
timing of
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(i) the taxpayer's specified foreign
exploration and development expenses
in respect of the country, and
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(ii) the profits or gains to which those
expenses relate; and
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(b) not inconsistent with the allocation
made under subsection (4.1) for the
preceding taxation year.
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| FEDE
deductions
where change
of individual's
residence
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(4.3) Where at any time in a taxation year an
individual becomes or ceases to be resident in
Canada,
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(a) subsection (4) applies to the individual
as if the year were the period or periods in
the year throughout which the individual
was resident in Canada; and
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(b) for the purpose of applying subsection
(4), subsection (13.1) does not apply to the
individual for the year.
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(5) Subsection 66(5) of the Act is replaced
by the following:
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| Dealers
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(5) Subsections (3) and (4) and sections 59,
64, 66.1, 66.2, 66.21, 66.4 and 66.7 do not
apply in computing the income for a taxation
year of a taxpayer (other than a
principal-business corporation) whose
business includes trading or dealing in rights,
licences or privileges to explore for, drill for
or take minerals, petroleum, natural gas or
other related hydrocarbons.
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(6) The portion of subsection 66(11.4) of
the Act after paragraph (c) is replaced by
the following:
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for the purposes of subsection (4) and sections
66.2, 66.21 and 66.4, except as those
provisions apply for the purposes of section
66.7, the property is deemed not to have been
acquired by the corporation or partnership
before that time and is deemed to have been
acquired by it at that time, except that, where
the property has been disposed of by it before
that time and not reacquired by it before that
time, the property is deemed to have been
acquired by the corporation or partnership
immediately before it disposed of the
property.
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(7) The portion of subsection 66(12.4) of
the Act before paragraph (a) is replaced by
the following:
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| Limitation of
FEDE
|
(12.4) Where, as a result of a transaction
that occurs after May 6, 1974, an amount
becomes receivable by a taxpayer at a
particular time in a taxation year and the
consideration given by the taxpayer for the
amount receivable is property (other than a
foreign resource property) or services, the
original cost of which to the taxpayer can
reasonably be regarded as having been
primarily foreign exploration and
development expenses of the taxpayer (or
would have been so regarded if they had been
incurred by the taxpayer after 1971 and the
definition ``foreign exploration and
development expenses'' in subsection (15)
were read without reference to paragraph (k)
of that definition), the following rules apply:
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(8) Paragraph 66(12.4)(b) of the Act is
replaced by the following:
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(b) where the amount receivable exceeds
the total of the taxpayer's foreign
exploration and development expenses
incurred before that time to the extent that
those expenses were not deducted or
deductible, as the case may be, in
computing the taxpayer's income for a
preceding taxation year, there shall be
included in the amount referred to in
paragraph 59(3.2)(a) the amount, if any, by
which the amount receivable exceeds the
total of
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(i) the taxpayer's foreign exploration and
development expenses incurred before
that time to the extent that those expenses
were not deducted or deductible, as the
case may be, in computing the taxpayer's
income for a preceding taxation year, and
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(ii) the amount, designated by the
taxpayer in prescribed form filed with the
taxpayer's return of income for the year,
not exceeding the portion of the amount
receivable for which the consideration
given by the taxpayer was property (other
than a foreign resource property) or
services, the original cost of which to the
taxpayer can reasonably be regarded as
having been primarily
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(A) specified foreign exploration and
development expenses in respect of a
country, or
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(B) foreign resource expenses in
respect of a country; and
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(9) Section 66 of the Act is amended by
adding the following after subsection
(12.4):
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| Limitations of
foreign
resource
expenses
|
(12.41) Where a particular amount
described in subsection (12.4) becomes
receivable by a taxpayer at a particular time,
there shall at that time be included in the value
determined for G in the definition
``cumulative foreign resource expense'' in
subsection 66.21(1) in respect of the taxpayer
and a country the amount designated under
subparagraph (12.4)(b)(ii) by the taxpayer in
respect of the particular amount and the
country.
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| Partnerships
|
(12.42) For the purposes of subsections
(12.4) and (12.41), where a person or
partnership is a member of a particular
partnership and a particular amount described
in subsection (12.4) becomes receivable by
the particular partnership in a fiscal period of
the particular partnership,
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(a) the member's share of the particular
amount is deemed to be an amount that
became receivable by the member at the
end of the fiscal period; and
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(b) the amount deemed by paragraph (a) to
be an amount receivable by the member is
deemed to be an amount
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(i) that is described in subsection (12.4)
in respect of the member, and
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(ii) that has the same attributes for the
member as it did for the particular
partnership.
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(10) Subsection 66(13.1) of the Act is
replaced by the following:
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| Short taxation
year
|
(13.1) Where a taxpayer has a taxation year
that is less than 51 weeks, the amount
determined in respect of the year under each
of subparagraph (4)(b)(i), paragraph
66.2(2)(c), subparagraph (b)(i) of the
definition ``global foreign resource limit'' in
subsection 66.21(1), subparagraph
66.21(4)(a)(i), clause 66.21(4)(a)(ii)(B) and
paragraphs 66.4(2)(b) and 66.7(2.3)(a), (4)(a)
and (5)(a) shall not exceed that proportion of
the amount otherwise determined that the
number of days in the year is of 365.
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(11) The definitions ``original owner''
and ``predecessor owner'' in subsection
66(15) of the Act are replaced by the
following:
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``original
owner''
« propriétaire
obligé »
|
``original owner'' of a Canadian resource
property or a foreign resource property
means a person
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(a) who owned the property and disposed
of it to a corporation that acquired it in
circumstances in which subsection
29(25) of the Income Tax Application
Rules or subsection 66.7(1), (2), (2.3),
(3), (4) or (5) applies, or would apply if
the corporation had continued to own the
property, to the corporation in respect of
the property, and
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(b) who would, but for subsection
66.7(12), (13), (13.1) or (17), as the case
may be, be entitled in computing that
person's income for a taxation year that
ends after that person disposed of the
property to a deduction under section 29
of the Income Tax Application Rules or
subsection (2), (3) or (4), 66.1(2) or (3),
66.2(2), 66.21(4) or 66.4(2) of this Act in
respect of expenses described in
subparagraph 29(25)(c)(i) or (ii) of that
Act, Canadian exploration and
development expenses, foreign resource
pool expenses, Canadian exploration
expenses, Canadian development
expenses or Canadian oil and gas
property expenses incurred by the person
before the person disposed of the
property;
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``predecessor
owner''
« propriétaire
antérieur »
|
``predecessor owner'' of a Canadian resource
property or a foreign resource property
means a corporation
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(a) that acquired the property in
circumstances in which subsection
29(25) of the Income Tax Application
Rules or subsection 66.7(1), (2), (2.3),
(3), (4) or (5) applies, or would apply if
the corporation had continued to own the
property, to the corporation in respect of
the property,
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(b) that disposed of the property to
another corporation that acquired it in
circumstances in which subsection
29(25) of the Income Tax Application
Rules or subsection 66.7(1), (2), (2.3),
(3), (4) or (5) applies, or would apply if
the other corporation had continued to
own the property, to the other corporation
in respect of the property, and
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|
(c) that would, but for subsection
66.7(14), (15), (15.1) or (17), as the case
may be, be entitled in computing its
income for a taxation year ending after it
disposed of the property to a deduction
under subsection 29(25) of the Income
Tax Application Rules or subsection
66.7(1), (2), (2.3), (3), (4) or (5) in respect
of expenses incurred by an original
owner of the property;
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|
(12) Paragraph (c) of the definition
``Canadian resource property'' in
subsection 66(15) of the Act is replaced by
the following:
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(c) any oil or gas well in Canada or any
real property in Canada the principal
value of which depends on its petroleum
or natural gas content (but not including
any depreciable property),
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|
(13) Paragraph (f) of the definition
``Canadian resource property'' in
subsection 66(15) of the Act is replaced by
the following:
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(f) any real property in Canada the
principal value of which depends on its
mineral resource content (but not
including any depreciable property), or
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|
(14) Paragraph (b) of the definition
``foreign exploration and development
expenses'' in subsection 66(15) of the Act is
replaced by the following:
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|
(b) any expense incurred by the taxpayer
for the purpose of determining the
existence, location, extent or quality of a
mineral resource outside Canada,
including any expense incurred in the
course of
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(ii) carrying out geological,
geophysical or geochemical surveys,
|
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|
(iii) drilling by rotary, diamond,
percussion or other method, or
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|
(iv) trenching, digging test pits and
preliminary sampling,
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|
(15) The definition ``foreign exploration
and development expenses'' in subsection
66(15) of the Act is amended by striking out
the word ``or'' at the end of paragraph (h)
and by adding the following after
paragraph (i):
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|
(j) an expenditure that is the cost, or any
part of the cost, to the taxpayer of any
depreciable property of a prescribed class
that was acquired after December 21,
2000,
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(k) foreign resource expenses in respect
of a country, or
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|
(l) an expenditure made after February
27, 2000 by the taxpayer unless the
expenditure was made
|
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|
(i) pursuant to an agreement in writing
made by the taxpayer before February
28, 2000,
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|
(ii) for the acquisition of foreign
resource property by the taxpayer, or
|
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|
(A) enhancing the value of foreign
resource property that the taxpayer
owned at the time the expenditure
was incurred or that the taxpayer
had a reasonable expectation of
owning after that time, or
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|
(B) assisting in evaluating whether
a foreign resource property is to be
acquired by the taxpayer;
|
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|
(16) Subsection 66(15) of the Act is
amended by adding the following in
alphabetical order:
|
|
``specified
foreign
exploration
and
development
expense''
« frais
d'exploration
et
d'aménageme
nt à l'étranger
déterminés »
|
``specified foreign exploration and
development expense'' of a taxpayer in
respect of a country (other than Canada)
means an amount that is included in the
taxpayer's foreign exploration and
development expenses and that is
|
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|
(a) a drilling or exploration expense,
including any general geological or
geophysical expense, incurred by the
taxpayer on or in respect of exploring or
drilling for petroleum or natural gas in
that country,
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|
(a.1) an expense incurred by the taxpayer
after December 21, 2000 (otherwise than
pursuant to an agreement in writing made
before December 22, 2000) for the
purpose of determining the existence,
location, extent or quality of a mineral
resource in that country, including any
expense incurred in the course of
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|