Bill C-28
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(12) Subsection (6) is deemed to have
come into force on May 1, 1997.
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237. (1) Subsection 244(9) of the Act is
replaced by the following:
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Proof of
documents
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(9) An affidavit of an officer of the
Department of National Revenue, sworn
before a commissioner or other person
authorized to take affidavits, setting out that
the officer has charge of the appropriate
records and that a document annexed to the
affidavit is a document or true copy of a
document, or a print-out of an electronic
document, made by or on behalf of the
Minister or a person exercising a power of the
Minister or by or on behalf of a taxpayer, is
evidence of the nature and contents of the
document.
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(2) Subsections 244(13) to (15) of the Act
are replaced by the following:
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Proof of
documents
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(13) Every document purporting to have
been executed under, or in the course of the
administration or enforcement of, this Act
over the name in writing of the Minister, the
Deputy Minister of National Revenue or an
officer authorized to exercise a power or
perform a duty of the Minister under this Act
is deemed to have been signed, made and
issued by the Minister, the Deputy Minister or
the officer unless it has been called in question
by the Minister or by a person acting for the
Minister or Her Majesty.
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Mailing date
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(14) For the purposes of this Act, where any
notice or notification described in subsection
149.1(6.3), 152(3.1), 165(3) or 166.1(5) or
any notice of assessment or determination is
mailed, it shall be presumed to be mailed on
the date of that notice or notification.
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Date when
assessment
made
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(15) Where any notice of assessment or
determination has been sent by the Minister as
required by this Act, the assessment or
determination is deemed to have been made
on the day of mailing of the notice of the
assessment or determination .
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238. (1) The Act is amended by adding the
following after section 246:
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PART XVI.1 |
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TRANSFER PRICING |
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Definitions
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247. (1) The definitions in this subsection
apply in this section.
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``arm's length
allocation'' « attribution de pleine concurren- ce »
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``arm's length allocation'' means, in respect of
a transaction, an allocation of profit or loss
that would have occurred between the
participants in the transaction if they had
been dealing at arm's length with each
other.
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``arm's length
transfer
price'' « prix de transfert de pleine concurren- ce »
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``arm's length transfer price'' means, in
respect of a transaction, an amount that
would have been a transfer price in respect
of the transaction if the participants in the
transaction had been dealing at arm's length
with each other.
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``documentati
on- due date'' « date limite de production »
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``documentation-due date'' for a taxation year
or fiscal period of a person or partnership
means
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``qualifying
cost
contribution
arrange- ment'' « arrange- ment admissible de participation au coût »
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``qualifying cost contribution arrangement''
means an arrangement under which
reasonable efforts are made by the
participants in the arrangement to establish
a basis for contributing to, and to contribute
on that basis to, the cost of producing,
developing or acquiring any property, or
acquiring or performing any services, in
proportion to the benefits which each
participant is reasonably expected to derive
from the property or services, as the case
may be, as a result of the arrangement.
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``tax benefit'' « avantage fiscal »
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``tax benefit'' means a reduction, avoidance or
deferral of tax or other amount payable
under this Act or an increase in a refund of
tax or other amount under this Act.
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``transac- tion'' « opéra- tion »
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``transaction'' includes an arrangement or
event.
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``transfer
price'' « prix de transfert »
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``transfer price'' means, in respect of a
transaction, an amount paid or payable or an
amount received or receivable, as the case
may be, by a participant in the transaction
as a price, a rental, a royalty, a premium or
other payment for, or for the use, production
or reproduction of, property or as
consideration for services (including
services provided as an employee and the
insurance or reinsurance of risks) as part of
the transaction.
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``transfer
pricing capital
adjustment'' « redresse- ment de capital »
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``transfer pricing capital adjustment'' of a
taxpayer for a taxation year means the total
of
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``transfer
pricing capital
setoff
adjustment'' « redresse- ment compensa- toire de capital »
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``transfer pricing capital setoff adjustment'' of
a taxpayer for a taxation year means the
amount, if any, that would be the taxpayer's
transfer pricing capital adjustment for the
year if the references, in the definition
``transfer pricing capital adjustment'', to
``reduced'' were read as ``increased''.
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``transfer
pricing
income
adjustment'' « redresse- ment de revenu »
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``transfer pricing income adjustment'' of a
taxpayer for a taxation year means the total
of all amounts each of which is the amount,
if any, by which an adjustment made under
subsection (2) (other than an adjustment
included in determining a transfer pricing
capital adjustment of the taxpayer for a
taxation year) would result in an increase in
the taxpayer's income for the year or a
decrease in a loss of the taxpayer for the
year from a source if that adjustment were
the only adjustment made under subsection
(2).
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``transfer
pricing
income setoff
adjustment'' « redresse- ment compensa- toire de revenu »
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``transfer pricing income setoff adjustment''
of a taxpayer for a taxation year means the
total of all amounts each of which is the
amount, if any, by which an adjustment
made under subsection (2) (other than an
adjustment included in determining a
transfer pricing capital setoff adjustment of
the taxpayer for a taxation year) would
result in a decrease in the taxpayer's income
for the year or an increase in a loss of the
taxpayer for the year from a source if that
adjustment were the only adjustment made
under subsection (2).
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Transfer
pricing
adjustment
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(2) Where a taxpayer or a partnership and a
non-resident person with whom the taxpayer
or the partnership, or a member of the
partnership, does not deal at arm's length (or
a partnership of which the non-resident person
is a member) are participants in a transaction
or a series of transactions and
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any amounts that, but for this section and
section 245, would be determined for the
purposes of this Act in respect of the taxpayer
or the partnership for a taxation year or fiscal
period shall be adjusted (in this section
referred to as an ``adjustment'') to the
quantum or nature of the amounts that would
have been determined if,
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Penalty
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(3) A taxpayer (other than a taxpayer all of
whose taxable income for the year is exempt
from tax under Part I) is liable to a penalty for
a taxation year equal to 10% of the amount
determined under paragraph (a) in respect of
the taxpayer for the year, where
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is greater than
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Contempora- neous documenta- tion
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(4) For the purposes of subsection (3) and
the definition ``qualifying cost contribution
arrangement'' in subsection (1), a taxpayer or
a partnership is deemed not to have made
reasonable efforts to determine and use arm's
length transfer prices or arm's length
allocations in respect of a transaction or not to
have participated in a transaction that is a
qualifying cost contribution arrangement,
unless the taxpayer or the partnership, as the
case may be,
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Partner's
gross revenue
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(5) For the purpose of subparagraph
(3)(b)(i), where a taxpayer is a member of a
partnership in a taxation year, the taxpayer's
gross revenue for the year as a member of the
partnership from any activities carried on by
means of the partnership is deemed to be that
proportion of the amount that would be the
partnership's gross revenue from the activities
if it were a taxpayer (to the extent that amount
does not include amounts received or
receivable from other partnerships of which
the taxpayer is a member in the year), for a
fiscal period of the partnership that ends in the
year, that
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is of
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and where the income and loss of the
partnership from its activities are nil for the
period, the income of the partnership from its
activities for the period is deemed to be
$1,000,000 for the purpose of determining a
taxpayer's share of the partnership's income
from its activities for the purpose of this
subsection.
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Deemed
member of
partnership
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(6) For the purposes of this section, where
a person is a member of a partnership that is a
member of another partnership,
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Exclusion for
loans to
subsidiary
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(7) Subsection (2) does not apply to a
transaction that is a loan referred to in
subsection 17(3).
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Provisions not
applicable
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(8) Where subsection (2) would, if this Act
were read without reference to sections 67 and
68 and subsections 69(1) and (1.2), apply to
adjust an amount under this Act, sections 67
and 68 and subsections 69(1) and (1.2) shall
not apply to determine the amount if
subsection (2) is applied to adjust the amount.
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Anti- avoidance
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(9) For the purposes of determining a
taxpayer's gross revenue under subparagraph
(3)(b)(i) and subsection (5), a transaction or
series of transactions is deemed not to have
occurred, if one of the purposes of the
transaction or series was to increase the
taxpayer's gross revenue for the purpose of
subsection (3).
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No adjustment
unless
appropriate
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(10) An adjustment (other than an
adjustment that results in or increases a
transfer pricing capital adjustment or a
transfer pricing income adjustment of a
taxpayer for a taxation year) shall not be made
under subsection (2) unless, in the opinion of
the Minister, the circumstances are such that
it would be appropriate that the adjustment be
made.
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