• 81. (1) For the purposes of the Income Tax Act and the Canada Disability Savings Act, specified RDSP events are deemed to have occurred, in the order that they actually occurred, on December 31, 2008 and not on the day or days that they actually occurred.

• (2) For the purposes of subsection (1), “specified RDSP event” means an event occurring after 2008 and before March 3, 2009 that

  • (a) establishes a “disability savings plan” as defined in subsection 146.4(1) of the Income Tax Act;

  • (b) satisfies conditions in subsection 146.4(2) of the Income Tax Act;

  • (c) establishes a “registered disability savings plan” as defined in subsection 146.4(1) of the Income Tax Act for a beneficiary who is, in respect of the 2008 taxation year, a “DTC-eligible individual” as defined in subsection 146.4(1) of the Income Tax Act and who was resident in Canada at the end of that year;

  • (d) is the making of any contribution to the registered disability savings plan;

  • (e) satisfies the requirement in paragraph 3(b) of the Canada Disability Savings Regulations; or

  • (f) is the taking of any other action to ensure that the registered disability savings plan is validly established and contributions to the plan are validly made.

2008, c. 28Budget Implementation Act, 2008

82. The descriptions of A and B in subsection 19(5) of the Budget Implementation Act, 2008 are replaced by the following:

C.R.C., c. 945Income Tax Regulations

• 83. (1) Paragraph 202(2)(h) of the Income Tax Regulations is replaced by the following:

  • (h) a payment to which paragraph 212(1)(p) of the Act applies,

• (2) Subsection (1) applies to the 2009 and subsequent taxation years.

• 84. (1) Subsection 204(3) of the Regulations is amended by striking out “or” at the end of paragraph (d.1), by adding “or” at the end of paragraph (e) and by adding the following after paragraph (e):

  • (f) governed by a TFSA or by an arrangement that is deemed by paragraph 146.2(9)(a) of the Act to be a TFSA.

• (2) Subsection (1) applies to the 2009 and subsequent taxation years.

• 85. (1) Subsection 209(1) of the Regulations is replaced by the following:

  • 209. (1) A person who is required by section 200, 201, 202, 204, 208, 212, 214, 215, 217 or 218, subsection 223(2) or section 228, 229, 230, 232, 233 or 234 to make an information return shall forward to each taxpayer to whom the return relates two copies of the portion of the return that relates to that taxpayer.

• (2) Subsection (1) applies to the 2009 and subsequent taxation years.

• 86. (1) Section 214 of the Regulations is amended by adding the following after subsection (5):

  • (6) Where an amount may be deducted under subsection 146(8.92) of the Act in computing the income of a deceased annuitant under a registered retirement savings plan, the issuer of the plan shall make an information return in prescribed form in respect of the amount.

• (2) Subsection (1) applies after 2008.

• 87. (1) Section 215 of the Regulations is amended by adding the following after subsection (5):

  • (6) Where an amount may be deducted under subsection 146.3(6.3) of the Act in computing the income of a deceased annuitant under a registered retirement income fund, the carrier of the fund shall make an information return in prescribed form in respect of the amount.

• (2) Subsection (1) applies after 2008.

• 88. (1) Subsection 221(2) of the Regulations is replaced by the following:

  • (2) Where in any taxation year a reporting person (other than a registered investment) claims that a share of its capital stock issued by it, or an interest as a beneficiary under it, is a qualified investment under section 146, 146.1, 146.3, 204, 205 or 207.01 of the Act, the reporting person shall, in respect of the year and within 90 days after the end of the year, make an information return in prescribed form.

• (2) Subsection (1) applies to the 2009 and subsequent taxation years.

• 89. (1) Section 223 of the Regulations and the heading before it are replaced by the following:

  TFSAs

  • 223. (1) An issuer of a TFSA shall make an information return for each calendar year in prescribed form in respect of the TFSA.

  • (2) An issuer of a TFSA who makes a payment of an amount that is required because of paragraph 146.2(9)(b) of the Act to be included in computing the income of a taxpayer for a taxation year shall make an information return in prescribed form.

  • (3) An issuer of a TFSA that governs a trust shall notify the holder of the TFSA in prescribed form and manner before March of a calendar year if, at any time during the preceding calendar year,

    • (a) the trust acquires or disposes of property that is a non-qualified investment for the trust; or

    • (b) property held by the trust becomes or ceases to be a non-qualified investment for the trust.

• (2) Subsection (1) applies to the 2009 and subsequent taxation years.

• 90. (1) Paragraph 304(1)(a) of the Regulations is replaced by the following:

  • (a) an annuity contract that is, or is issued pursuant to, an arrangement described in any of paragraphs 148(1)(a) to (b.2) and (d) of the Act;

• (2) Subsection (1) applies to annuity contracts issued after 2008.

• 91. (1) Subsection 400(1) of the Regulations is replaced by the following:

  • 400. (1) In applying the definition “taxable income earned in the year in a province” in subsection 124(4) of the Act for a corporation’s taxation year

    • (a) the prescribed rules referred to in that definition are the rules in this Part; and

    • (b) the amount determined under those prescribed rules means the total of all amounts each of which is the taxable income of the corporation earned in the taxation year in a particular province as determined under this Part.

  • (1.1) In this Part, a corporation’s taxable income for a taxation year is equal to the total of

    • (a) the corporation’s taxable income for the taxation year (determined without reference to this subsection) or the corporation’s taxable income earned in Canada for the taxation year, as the case may be, and

    • (b) the positive or negative amount determined by the formula

      A – B

      where

      A

      is the total of all amounts that are, because of the application of section 33.1 of the Act, not required to be added in computing the corporation’s income for the taxation year, and

      B

      is the total of all amounts that are, because of the application of section 33.1 of the Act, not allowed to be deducted in computing the corporation’s income for the taxation year.

• (2) Subsection 400(2) of the Regulations is amended by adding the following after paragraph (e):

  • (e.1) if, but for this paragraph, a corporation would not have a permanent establishment, the corporation is deemed to have a permanent establishment at the place designated in its incorporating documents or bylaws as its head office or registered office;

• (3) Subsections (1) and (2) apply to the 2009 and subsequent taxation years.

• 92. (1) Section 401 of the Regulations is replaced by the following:

  401. This Part applies to determine the amount of taxable income of a corporation earned in a taxation year in a particular province.

• (2) Subsection (1) applies to the 2009 and subsequent taxation years.

• 93. (1) The heading before section 402.1 and sections 402.1 and 402.2 of the Regulations are replaced by the following:

  Central Paymaster

  • 402.1 (1) In this Part, if an individual (referred to in this section as the “employee”) is employed by a person (referred to in this section as the “employer”) and performs a service in a particular province for the benefit of or on behalf of a corporation that is not the employer, an amount that may reasonably be regarded as equal to the amount of salary or wages earned by the employee for the service (referred to in this section as the “particular salary”) is deemed to be salary paid by the corporation to an employee of the corporation in the corporation’s taxation year in which the particular salary is paid if

    • (a) at the time the service is performed,

      • (i) the corporation and the employer do not deal at arm’s length, and

      • (ii) the corporation has a permanent establishment in the particular province;

    • (b) the service

      • (i) is performed by the employee in the normal course of the employee’s employment by the employer,

      • (ii) is performed for the benefit of or on behalf of the corporation in the ordinary course of a business carried on by the corporation, and

      • (iii) is of a type that could reasonably be expected to be performed by employees of the corporation in the ordinary course of the business referred to in subparagraph (ii); and

    • (c) the amount is not otherwise included in the aggregate, determined for the purposes of this Part, of the salaries and wages paid by the corporation.

  • (2) In this Part, an amount deemed under subsection (1) to be salary paid by a corporation to an employee of the corporation for a service performed in a particular province is deemed to have been paid,

    • (a) if the service was performed at one or more permanent establishments of the corporation in the particular province, to an employee of the permanent establishment or establishments; or

    • (b) if paragraph (a) does not apply, to an employee of any other permanent establishment (as is reasonably determined in the circumstances) of the corporation in the particular province.

  • (3) In determining under this Part the amount of salaries and wages paid in a year by an employer, there shall be deducted the total of all amounts each of which is a particular salary paid by the employer in the year.

  • (4) Despite subparagraph (1)(a)(i), this section applies to a corporation and an employer that deal at arm’s length if the Minister determines that the corporation and the employer have entered into an arrangement the purpose of which is to reduce, through the provision of services as described in subsection (1), the total amount of income tax payable by the corporation under a law of the particular province referred to in subsection (1).

  • (5) For the purposes of this section, a partnership is deemed to be a corporation and the corporation’s taxation year is deemed to be the partnership’s fiscal period.

• (2) Subsection (1) applies to the 2009 and subsequent taxation years.

• 94. (1) Section 403 of the Regulations is amended by adding the following after subsection (3):

  • (4) For the purposes of subsection (1), if in a taxation year an insurance corporation has no permanent establishment in a particular country other than Canada, but provides insurance on property in the particular country or has a contract for insurance, other than on property, with a person resident in the particular country, each net premium for the taxation year in respect of the insurance is deemed to be a net premium in respect of insurance on property situated in, or from contracts with persons resident in, as the case may be, the province in Canada or country other than Canada in which is situated the permanent establishment of the corporation to which the net premium is reasonably attributable in the circumstances.

• (2) Subsection (1) applies to the 2009 and subsequent taxation years.

• 95. (1) Subsection 413(1) of the Regulations is replaced by the following:

  • 413. (1) In this Part, if a corporation is not resident in Canada, “salaries and wages paid in the year” by the corporation does not include salaries and wages paid to employees of a permanent establishment outside Canada.

• (2) Subsection (1) applies to the 2009 and subsequent taxation years.

• 96. (1) The Regulations are amended by adding the following after section 413:

  International Banking Centre Exception

  413.1 Despite any other provision in this Part, a corporation’s taxable income earned in a taxation year in a particular province is equal to the total of

  • (a) the corporation’s taxable income earned in the taxation year in the particular province (determined without reference to this section), and

  • (b) the positive or negative amount determined by the formula

    A – B

    where

    A

    is the total of all amounts that are, because of the application of section 33.1 of the Act to a business carried on in a branch or office situated in the particular province, not allowed to be deducted in computing the corporation’s income for the taxation year, and

    B

    is the total of all amounts that are, because of the application of section 33.1 of the Act to a business carried on in a branch or office situated in the particular province, not required to be added in computing the corporation’s income for the taxation year.

• (2) Subsection (1) applies to the 2009 and subsequent taxation years.

• 97. (1) The heading before section 414 and sections 414 and 415 of the Regulations are replaced by the following:

  Provincial SIFT Tax Rate

  • 414. (1) The following definitions apply in this section.

    “general corporate income tax rate”

    “general corporate income tax rate”, in a province for a taxation year, means

    • (a) for Quebec, 0%;

    • (b) for the Newfoundland offshore area, the highest percentage rate of tax imposed under the laws of Newfoundland and Labrador on the taxable income of a public corporation earned in the taxation year in Newfoundland and Labrador;

    • (c) for the Nova Scotia offshore area, the highest percentage rate of tax imposed under the laws of Nova Scotia on the taxable income of a public corporation earned in the taxation year in Nova Scotia; and

    • (d) for each other province, the highest percentage rate of tax imposed under the laws of the province on the taxable income of a public corporation earned in the taxation year in the province. (taux général d’imposition du revenu des sociétés)

    “province”

    “province” includes the Newfoundland offshore area and the Nova Scotia offshore area. (province)

    “taxable SIFT distributions”

    “taxable SIFT distributions”, for a taxation year, means

    • (a) in the case of a SIFT trust, its non-deductible distributions amount for the taxation year; and

    • (b) in the case of a SIFT partnership, its taxable non-portfolio earnings for the taxation year. (montant des distributions imposables)

  • (2) In determining the amount of a SIFT trust’s or SIFT partnership’s taxable SIFT distributions for a taxation year earned in a province

    • (a) except as provided in paragraph (b), this Part applies in respect of the SIFT trust or SIFT partnership as though

      • (i) each reference to “corporation” (other than in the expression “subsidiary controlled corporation”) were read as a reference to “SIFT trust” or “SIFT partnership”, as the case may be,

      • (ii) each reference to “taxable income” were read as a reference to “taxable SIFT distributions”,

      • (iii) each reference to “its incorporating documents or bylaws” were read as a reference to “the agreement governing the SIFT trust” or “the agreement governing the SIFT partnership”, as the case may be, and

      • (iv) “subsidiary controlled corporation” in respect of a SIFT trust or a SIFT partnership meant a corporation more than 50% of the issued share capital of which (having full voting rights under all circumstances) belongs to the SIFT trust or SIFT partnership, as the case may be; and

    • (b) subsection 400(1), section 401, subsections 402(1) and (2) and sections 403 to 413 do not apply.

  • (3) Subject to subsection (4), in applying the definition “provincial SIFT tax rate” in subsection 248(1) of the Act in respect of a SIFT trust or SIFT partnership for a taxation year, the prescribed amount determined in respect of the SIFT trust or SIFT partnership for the taxation year is

    • (a) if the SIFT trust or SIFT partnership has no permanent establishment in a province in the taxation year, 0.10;

    • (b) if the SIFT trust or SIFT partnership has a permanent establishment in a province in the taxation year and has no permanent establishment outside that province in the taxation year, the decimal fraction equivalent of the general corporate income tax rate in the province for the taxation year; and

    • (c) if the SIFT trust or SIFT partnership has a permanent establishment in the taxation year in a province, and has a permanent establishment outside that province in the taxation year, the amount, expressed as a decimal fraction, determined by the formula

      A + B

      where

      A

      is the total of all amounts, if any, each of which is in respect of a province in which the SIFT trust or SIFT partnership has a permanent establishment in the taxation year and is determined by the formula

      C/D × E

      where

      C

      is its taxable SIFT distributions for the taxation year earned in the province,

      D

      is its total taxable SIFT distributions for the taxation year, and

      E

      is the decimal fraction equivalent of the general corporate income tax rate in the province for the taxation year, and

      B

      is the amount determined by the formula

      (1 – F/D) × 0.1

      where

      F

      is the total of all amounts each of which is an amount determined under the description of C in the description of A in respect of a province in which the SIFT trust or SIFT partnership has a permanent establishment in the taxation year.

  • (4) If a SIFT trust or a SIFT partnership has a permanent establishment in Quebec in a taxation year, paragraph (a) of the definition “general corporate income tax rate” in subsection (1) does not apply in determining the prescribed amount under subsection (3) in respect of the SIFT trust or the SIFT partnership for the taxation year for the purposes of applying the definition “provincial SIFT tax rate” in determining:

    • (a) in the case of the SIFT partnership, the amount of a dividend deemed by paragraph 96(1.11)(b) of the Act to have been received by it in the taxation year; and

    • (b) in the case of the SIFT trust, the amount of its taxable SIFT trust distributions for the taxation year.

• (2) Subsection (1) applies to the 2007 and subsequent taxation years, except that paragraph 414(4)(b), as enacted by subsection (1), shall not apply for the taxation years of a SIFT trust that end before February 3, 2009.