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Vol. 137, No. 7 — February 15, 2003 Exemption from Approval for Certain Investments in Intragroup Service Entities (Bank Act) RegulationsStatutory Authority Bank Act Sponsoring Department Department of Finance REGULATORY IMPACT ANALYSIS STATEMENT Exemption from Approval for Certain Investments in Intragroup Service Entities (Bank Act) Regulations Exemption from Approval for Certain Investments in Intragroup Service Entities (Cooperative Credit Associations) Regulations Exemption from Approval for Certain Investments in Intragroup Service Entities (Life Companies and Insurance Holding Companies) Regulations Exemption from Approval for Certain Investments in Intragroup Service Entities (Trust and Loan Companies) Regulations Description The Canadian financial services sector has been undergoing rapid change for the better part of a decade. In 1996, the federal government created the Task Force on the Future of the Canadian Financial Services Sector to review and advise on the nature of change taking place in the sector. In 1998, the Task Force issued a report which included numerous conclusions and recommendations. These findings were carefully reviewed by committees of both the House of Commons and the Senate. These committees largely endorsed the findings of the Task Force. Based on the work of the Task Force and the parliamentary committees, the federal government issued a policy paper in June 1999 entitled Reforming Canada's Financial Services Sector: A Framework for the Future. This document served as the policy foundation for Bill C-8, An Act to Establish the Financial Consumer Agency of Canada and to Amend Certain Acts in Relation to Financial Institutions (FCA Act). Bill C-8 received Royal Assent on June 14, 2001. The FCA Act provides for significant amendments to the laws governing federal financial institutions. As an integrated package, the amendments brought about by the FCA Act promote efficiency and growth in the financial services sector, foster domestic competition, empower and protect consumers of financial services, and improve the regulatory environment for financial institutions. A key characteristic of the FCA Act is the use of regulations to provide a more flexible regulatory framework for the financial sector. This allows the Government to make modest policy adjustments to the framework in response to significant changes taking place in the global environment in which financial institutions operate. Many regulations are being proposed or modified in order to achieve this policy objective of creating a more flexible regulatory regime. The remaining amendments bring existing regulations in line with changes made to the financial institutions statutes under the FCA Act. This is the eleventh package of regulations that has been brought forward to complete the policy intent of the FCA Act. The first eight groups of regulations were published in the Canada Gazette, Part II, on October 24, 2001, November 21, 2001, March 13, 2002, April 10, 2002, July 31, 2002, June 19, 2002, July 31, 2002, and October 9, 2002, respectively. The ninth and tenth packages were pre-published in the Canada Gazette, Part I, on November 30, 2002, and December 21, 2002, respectively. This document discusses the regulatory impact of the following proposed new regulations:
These technical regulations clarify that banks and certain other federally regulated financial institutions (FRFIs) may invest in entities solely engaged in lending activities exclusively to members of the FRFI's group (e.g. intra-group lending) without applying for the Superintendent's or the Minister's approval of the investment. It is expected that around 10 regulations will be brought forward for publication within the next few months. These remaining regulations will complete the policy package envisaged by the June 1999 policy paper and the FCA Act. Alternatives The enclosed regulations are required in order to bring the policy intent underlying the FCA Act into effect. They are required to round out the implementation the new policy framework, as outlined in the description. As such, no alternatives to the regulations were considered. Benefits and Costs The enclosed regulations are integral to the overall policy objectives of the FCA Act. As such, their cost-benefit justification cannot be separated from the overall costs and benefits of the legislative package itself. The FCA Act provides an improved regulatory structure that balances the competing interests of stakeholders. While individual legislative measures may impose some burden on a particular stakeholder group, there are overall net benefits for all stakeholders. For example, — Consumers benefit from strengthened consumer protection measures, a more transparent complaints handling process, and the advantages brought about by increased competition. — Financial institutions may face modestly increased regulation through enhanced regulatory rules and a strengthened consumer protection regime. However, they benefit from greater organizational flexibility and broader powers. The creation of the Financial Consumer Agency of Canada (FCAC) is expected to have an annual budget of about $7 million, the cost of which will be passed on to financial institutions in the form of allocated assessment. — The Office of the Superintendent of Financial Institutions (OSFI) may face moderately increased regulatory challenges as a result of provisions intended to encourage new entrants, but the potential cost is offset by improved prudential regulatory powers and increased competition. The exact cost implications for OSFI of the legislative package are not easily calculable. The transfer of responsibility for administering the consumer provisions of the financial institutions legislation to the FCAC will reduce OSFI's costs. The relaxed new entrant requirements may increase OSFI's workload and costs, some of which will be borne by the new entrants. However, the streamlined approval process will reduce the cost of regulation and cost burden directly borne by financial institutions. In all, it is expected that OSFI's cost of regulation will not increase substantially. Each of the regulations included in this and subsequent packages is intended to implement a specific aspect of the overall policy structure introduced by the FCA Act. The regulations may either be beneficial, cost/benefit neutral, or impose a burden on one or more relevant stakeholder groups. Since the weighing of costs and benefits has been done at the legislative level, the regulations must be examined in light of their contribution to the balance of the overall policy framework that was approved in the FCA Act. Consultation The FCA Act and its related regulations are part of a policy development process dating back to 1996. At every stage of the process, stakeholders have been consulted. More recently, working drafts of the enclosed regulation were shared with stakeholders and, wherever feasible, their comments have been reflected in revisions. The following organizations were consulted: — Action Réseau Consommateur (Fédération nationale des associations de consommateurs du Québec) — Bourse de Montréal — Canadian Bankers Association — Canadian Community Reinvestment Coalition — Canadian Life and Health Insurance Association — Canadian Securities Administrators — ComTel (TelPay) — Consumers' Association of Canada — CPA Stakeholders Advisory Council — Credit Union Central of Canada — Democracy Watch — Fédération des caisses Desjardins — Insurance Bureau of Canada — Insurance Consumer's Group — Interac Association — Investment Dealers Association of Canada — Investment Funds Institute of Canada — Mutual Fund Dealers Association — National Anti-Poverty Organization — Option Consommateurs — Public Interest Advocacy Centre — Service d'aide aux consommateurs/Consumer Aid Services Compliance and Enforcement The Office of the Superintendent of Financial Institutions will be responsible for ensuring compliance with prudential aspects of the regulations. The Financial Consumer Agency of Canada will be responsible for ensuring compliance with consumer-related regulations. Gerry Salembier, Director, Financial Institutions Division, Financial Sector Policy Branch, Department of Finance, L'Esplanade Laurier, East Tower, 15th Floor, 140 O'Connor Street, Ottawa, Ontario K1A 0G5, (613) 992-1631 (Telephone), (613) 943-1334 (Facsimile). Notice is hereby given that the Governor in Council, pursuant to paragraphs 474(b) (see footnote a) , 522.23(b) (see footnote b) and 936(b) (see footnote c) and section 978 (see footnote d) of the Bank Act (see footnote e) , proposes to make the annexed Exemption from Approval for Certain Investments in Intragroup Service Entities (Bank Act) Regulations. Interested persons may make representations with respect to the proposed Regulations within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Mr. Gerry Salembier, Financial Sector Policy Branch, Department of Finance, L'Esplanade Laurier, 15th Floor, East Tower, 140 O'Connor Street, Ottawa, Ontario, K1A 0G5. Ottawa, February 13, 2003 EILEEN BOYD Assistant Clerk of the Privy Council
Exemption from Approval for Certain Investments in Intragroup Service Entities (Cooperative Credit Associations) RegulationsStatutory Authority Cooperative Credit Associations Act Sponsoring Department Department of Finance REGULATORY IMPACT ANALYSIS STATEMENT For the Regulatory Impact Analysis Statement, see Exemption from Approval for Certain Investments in Intragroup Service Entities (Bank Act) Regulations. Notice is hereby given that the Governor in Council, pursuant to paragraph 396(b) (see footnote f) and section 463 (see footnote g) of the Cooperative Credit Associations Act (see footnote h) , proposes to make the annexed Exemption from Approval for Certain Investments in Intragroup Service Entities (Cooperative Credit Associations) Regulations. Interested persons may make representations with respect to the proposed Regulations within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part 1, and the date of publication of this notice, and be addressed to Mr. Gerry Salembier, Financial Sector Policy Branch, Department of Finance, L'Esplanade Laurier, 15th Floor, East Tower, 140 O'Connor Street, Ottawa, Ontario, K1A 0G5. Ottawa, February 13, 2003 EILEEN BOYD Assistant Clerk of the Privy Council
Exemption from Approval for Certain Investments in Intragroup Service Entities (Life Companies and Insurance Holding Companies) RegulationsStatutory Authority Insurance Companies Act Sponsoring Department Department of Finance REGULATORY IMPACT ANALYSIS STATEMENT For the Regulatory Impact Analysis Statement, see Exemption from Approval for Certain Investments in Intragroup Service Entities (Bank Act) Regulations. Notice is hereby given that the Governor in Council, pursuant to paragraphs 501(b) (see footnote i) and 977(b) (see footnote j) and section 1021 (see footnote k) of the Insurance Companies Act (see footnote l) , proposes to make the annexed Exemption from Approval for Certain Investments in Intragroup Service Entities (Life Companies and Insurance Holding Companies) Regulations. Interested persons may make representations with respect to the proposed Regulations within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Mr. Gerry Salembier, Financial Sector Policy Branch, Department of Finance, L'Esplanade Laurier, 15th Floor, East Tower, 140 O'Connor Street, Ottawa, Ontario, K1A 0G5. Ottawa, February 13, 2003 EILEEN BOYD Assistant Clerk of the Privy Council
Exemption from Approval for Certain Investments in Intragroup Service Entities (Trust and Loan Companies) RegulationsStatutory Authority Trust and Loan Companies Act Sponsoring Department Department of Finance REGULATORY IMPACT ANALYSIS STATEMENT For the Regulatory Impact Analysis Statement, see Exemption from Approval for Certain Investments in Intragroup Service Entities (Bank Act) Regulations. Notice is hereby given that the Governor in Council, pursuant to paragraph 459(b) (see footnote m) and section 531 (see footnote n) of the Trust and Loan Companies Act (see footnote o) , proposes to make the annexed Exemption from Approval for Certain Investments in Intragroup Service Entities (Trust and Loan Companies) Regulations. Interested persons may make representations with respect to the proposed Regulations within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Mr. Gerry Salembier, Financial Sector Policy Branch, Department of Finance, L'Esplanade Laurier, 15th Floor, East Tower, 140 O'Connor Street, Ottawa, Ontario, K1A 0G5. Ottawa, February 13, 2003 EILEEN BOYD Assistant Clerk of the Privy Council
Regulations Amending the Income Tax Regulations (Foreign Bank Branches)Statutory Authority Income Tax Act Sponsoring Department Department of Finance REGULATORY IMPACT ANALYSIS STATEMENT Description The introduction of a special income taxation regime for foreign bank branches affected a number of sections of the Income Tax Act ("the Act") and their relevant Income Tax Regulations ("the Regulations"). For the purposes of the Act, a branch of a foreign bank is defined as an "authorized foreign bank" in subsection 248(1). The following describes the Regulations that are amended to apply to authorized foreign banks. Withholding Tax A non-resident corporation carrying on business in Canada is subject to withholding tax on payments made to it by a resident under both Parts I and XIII of the Act. The resident payer is generally responsible for withholding the applicable amount. Subsection 105(2) of the Regulations excludes certain payments from the withholding requirement under Part I of the Act. This subsection is amended to exclude payments made to an authorized foreign bank and a registered non-resident insurer. Sections 800 to 803 of the Regulations currently exempt a resident payer from the withholding responsibility imposed under Part XIII of the Act on payments made to a registered non-resident insurer. Also, these sections outline the compliance rules applicable to a registered non-resident insurer. These sections are amended to apply to an authorized foreign bank as well. Section 810 of the Regulations prescribes the meaning of excluded property of certain non-resident insurers for the purposes of paragraph 116(6)(e) of the Act. This section is repealed, as the substance of this section has been included in paragraph 116(6)(e) of the Act. Tax Abatement A corporation that has taxable income earned in a province is eligible for a 10 percent federal tax abatement under section 124 of the Act, and Part IV of the Regulations prescribes the meaning of "taxable income earned in a province." Former subsection 404(1) of the Regulations prescribes the taxable income earned in a province for chartered banks. This amendment changes the reference from "chartered bank" to "bank" to reflect the fact that for the purpose of the Act a "bank" now includes an authorized foreign bank or a bank within the meaning assigned by the Bank Act. Section 413 of the Regulations defines certain terms, such as "salaries and wages paid in the year" and "total gross revenue for the year", for the purposes of Part IV of the Regulations. New subsection 413(3) of the Regulations prescribes the meaning of all loans and deposits of an authorized foreign bank for the purpose of paragraph 404(1)(b) of the Regulations, which as stated above determines the taxable income earned in a province by a corporation. Branch Tax Part XIV of the Act imposes a tax on non-resident corporations carrying on a business in Canada through a branch. The purpose of this tax is to put those non-resident corporations in a similar position for Canadian tax purposes as non-residents who carry on business in Canada through a Canadian subsidiary. Branch tax is levied at a flat rate of 25 percent on a non-resident corporation's taxable income from Canadian sources, with certain adjustments, including an allowance for its investment in property in Canada. A corporation's allowance for investment in property in Canada is computed under section 808 of the Regulations. Paragraphs 808(2)(h) and (p), subparagraphs 808(2)(l)(i), (n)(ii) and (iii), and (o)(ii) and (iii) of the Regulations are amended to reflect earlier amendments to Part XIV of the Act. Subsection 808(1) of the Regulations computes the allowance for investment in property for all non-resident corporations. This subsection is amended to specifically exclude authorized foreign bank from these computational rules, and new subsection 808(8) of the Regulations is added to compute the allowance for investment in property in Canada for an authorized foreign bank. A non-resident corporation's allowance for investment in property in Canada is computed on the basis of its "qualified investment in property in Canada." "Qualified investment in property in Canada" includes a corporation's "allowable liquid assets" and its share of the "allowable liquid assets" of a partnership of which the corporation is a member. The amendment to paragraph 808(6)(a) of the Regulations clarifies that the allowable liquid assets of a partnership do not include amounts that were not either generated by or intended for the use of its business carried on in Canada. Paragraphs 808(2)(d) to (d.2), subparagraphs 808(2)(l)(ii) and 808(5)(j)(ii) of the Regulations generally refer to rules applicable to resource property in the computation of the "qualified investment in property in Canada." These paragraphs are revised as the miscellaneous program amendments of the Department of Finance. Instalment Base Section 157 of the Act requires taxpayers to make regular instalment payment of taxes. The amount of the instalment is determined by reference to an "instalment base," which in broad terms reflects the amount of the taxpayer's expected tax liability. Section 5301 of the Regulations computes the instalment base of a corporation, and paragraph 5301(1)(b), clause 5301(4)(a)(i)(B) and subsection 5301(10) of the Regulations describe the taxes payable to be included in such computation. An authorized foreign bank is subject to the new Branch Interest Tax imposed under Part XIII.1 of the Act. Paragraph 5301(1)(b), clause 5301(4)(a)(i)(B) and subsection 5301(10) of the Regulations are amended to include the Part XIII.1 tax in the computation of an instalment base. Subsection 5301(8) of the Regulations describes the additional rules applicable in the computation of an instalment base when a property is disposed of in a transaction governed by subsection 85(1) or (2) of the Act. Subsection 142.7(3) of the Act allows a Canadian affiliate of an authorized foreign bank to dispose of its property in the manner similar to an election under subsection 85(1) of the Act. Subsection 5301(8) of the Regulations is amended to include the property disposed of by virtue of an election under subsection 142.7(3) of the Act. Prescribed Financial Institutions Section 7900 of the Regulations defines the meaning of "prescribed financial institution" for the purposes of various provisions in the Act. Section 7900 of the Regulations is re-numbered to be new subsection 7900(1), and new subsection 7900(2) describes that an authorized foreign bank is a prescribed financial institution for the purposes of the definitions "excluded income" and "excluded revenue" and "specified deposit" in subsection 95(2.5) and clause 212(1)(b)(iii)(D) of the Act. Permanent Establishment Section 8201 of the Regulations defines the meaning of "permanent establishment" for the purposes of various provisions in the Act. This section is amended to prescribe the meaning of "permanent establishment" to various amended provisions including the ones relevant to the taxation regime of foreign bank branches. Alternatives These Regulations are necessary for the application of the taxation regime of foreign bank branches. Therefore, no alternatives were considered. Benefits and Costs These amending Regulations are essential for the application of the taxation regime of the foreign bank branches, and there should be no additional costs in the administration of these Regulations. Consultation These amendments were developed through extensive consultations with representatives of the banking sector, both Canadian and foreign, and the Canada Customs and Revenue Agency. In addition, all stakeholders were given an opportunity to comment on the tax rules for authorized foreign banks when those rules were released in a draft form on August 8, 2000. Compliance and Enforcement The Income Tax Act provides the necessary compliance mechanisms. These mechanisms allow the Minister of National Revenue to assess and reassess tax payable, conduct audits and seize relevant records and documents. Joseph Lam, Tax Legislation Division, Department of Finance, L'Esplanade Laurier, 140 O'Connor Street, Ottawa, Ontario K1A 0G5, (613) 992-4853 (Telephone), Lam.Joseph@fin.gc.ca (Electronic mail). Notice is hereby given that the Governor in Council, pursuant to section 221 (see footnote p) of the Income Tax Act (see footnote q) , proposes to make the annexed Regulations Amending the Income Tax Regulations (Foreign Bank Branches). Interested persons may make representations with respect to the proposed Regulations within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Joseph Lam, Tax Legislation Division, Department of Finance, L'Esplanade Laurier, 17th Floor, East Tower, 140 O'Connor Street, Ottawa, Ontario, K1A 0G5. Ottawa, February 13, 2003 EILEEN BOYD Assistant Clerk of the Privy Council REGULATIONS AMENDING THE INCOME TAX REGULATIONS (FOREIGN BANK BRANCHES) AMENDMENTS 1. Subsection 105(2) of the Income Tax Regulations (see footnote 1) is replaced by the following: (2) Subsection (1) does not apply to a payment
(b) made to a registered non-resident insurer (within the meaning assigned by section 804) or to an authorized foreign bank. 2. The heading before section 404 of the Regulations is replaced by the following: Banks 3. The portion of subsection 404(1) of the Regulations before paragraph (a) is replaced by the following : 404. (1) Notwithstanding subsections 402(3) and (4), the amount of taxable income that is deemed to have been earned by a bank in a taxation year in a province in which it had a permanent establishment is 1/3 of the total of 4. Section 413 of the Regulations is amended by adding the following after subsection (2): (3) For the purpose of paragraph 404(1)(b), in the case of an authorized foreign bank, "all loans and deposits of the bank for the year" shall be read as a reference to "all loans and deposits of the bank for the year in respect of its Canadian banking business". 5. The heading before section 800 and sections 800 to 803 of the Regulations are replaced by the following: Authorized Foreign Banks and Non-resident Insurers 800. Subsections 215(1), (2) and (3) of the Act do not apply to amounts paid or credited to an authorized foreign bank or to a registered non-resident insurer. 801. A taxpayer that is an authorized foreign bank or a registered non-resident insurer at any time in a taxation year shall file a return in respect of the year in prescribed form with the Minister on or before its filing-due date for the year. 802. The amounts that are taxable under Part XIII of the Act in a taxation year of a taxpayer that is an authorized foreign bank or a registered non-resident insurer are amounts paid or credited to the taxpayer in the year other than amounts included under Part I of the Act in computing the taxpayer's income from a business carried on by it in Canada. 803. Authorized foreign banks and registered non-resident insurers shall pay to the Receiver General, on or before their filing-due dates for a taxation year, the tax payable by them under Part XIII of the Act. 6. Section 805 of the Regulations is replaced by the following: 805. Subject to section 802, every non-resident person who carries on business in Canada is taxable under Part XIII of the Act on all amounts otherwise taxable under that Part except those amounts that
(b) are required by subparagraph 115(1)(a)(iii.3) of the Act to be included in computing the person's taxable income earned in Canada for the year. 7. (1) The portion of subsection 808(1) of the Regulations before paragraph (a) is replaced by the following: 808. (1) For the purposes of paragraph 219(1)(j) of the Act, the allowance of a corporation (other than an authorized foreign bank) for a taxation year in respect of its investment in property in Canada is prescribed to be the amount, if any, by which (2) Paragraphs 808(2)(d) to (d.2) of the Regulations are replaced by the following:
(ii) cumulative Canadian exploration expense, within the meaning assigned by subsection 66.1(6) of the Act, at the end of the year minus any deduction under subsection 66.1(3) of the Act in computing the corporation's income for the year, (d.2) an amount equal to the corporation's cumulative Canadian oil and gas property expense, within the meaning assigned by subsection 66.4(5) of the Act, at the end of the year minus any deduction under subsection 66.4(2) of the Act in computing the corporation's income for the year, (3) Subsection 808(2) of the Regulations is amended by adding the word "and" at the end of paragraph (g) and by repealing paragraph (h). (4) Subparagraph 808(2)(l)(i) of the Regulations is replaced by the following:
(5) Subparagraph 808(2)(l)(ii) of the Regulations is replaced by the following:
(6) Subparagraphs 808(2)(n)(ii) and (iii) of the Regulations are replaced by the following:
(B) the amount that would be determined under clause (A) for the year if it were read without reference to the expression "that was not used or held by it in the year in the course of carrying on business in Canada", is of the corporation's taxable income earned in Canada for the year; and (7) Subparagraphs 808(2)(o)(ii) and (iii) of the Regulations are replaced by the following:
(B) the amount that would be determined under clause (A) for the year if it were read without reference to the expression "that was not used or held by it in the year in the course of carrying on business in Canada" is of the corporation's taxable income earned in Canada for the year. (8) Paragraph 808(2)(p) of the Regulations is repealed. (9) Subparagraph 808(5)(j)(ii) of the Regulations is replaced by the following:
(10) Paragraph 808(6)(a) of the Regulations is amended by striking out the word "and" at the end of subparagraph (iii) and by adding the following after that subparagraph: to the extent that those amounts are attributable to the profits of the partnership from carrying on a business in Canada, or are used or held by the partnership in the year in the course of carrying on a business in Canada; and (11) Section 808 of the Regulations is amended by adding the following after subsection (7): (8) For the purpose of paragraph 219(1)(j) of the Act, the allowance of an authorized foreign bank for a taxation year in respect of its investment in property in Canada is prescribed to be the amount, if any, by which
0.05 × A
A is the amount of the element A in the formulae in subsection 20.2(3) of the Act for the period, and (ii) the amount by which
L + BA
L is the amount of the element L in the formulae in subsection 20.2(3) of the Act for the period, and BA is the amount of the element BA in the formulae in subsection 20.2(3) of the Act for the period, and (II) the amount claimed by the bank under clause 20.2(3)(b)(ii)(A) of the Act exceeds
8. Section 810 of the Regulations and the heading before it are repealed. 9. (1) Paragraph 5301(1)(b) of the Regulations is replaced by the following:
(2) Clause 5301(4)(a)(i)(B) of the Regulations is replaced by the following:
(3) The portion of subsection 5301(8) of the Regulations before paragraph (a) is replaced by the following: (8) Subject to subsection (9), if at a particular time a corporation (in this subsection referred as the "transferor") has disposed of all or substantially all of its property to another corporation with which it was not dealing at arm's length (in this subsection and subsection (9) referred to as the "transferee") and subsection 85(1) or (2) or 142.7(3) of the Act applied in respect of the disposition of any of the property, the following rules apply: (4) Subsection 5301(10) of the Regulations is replaced by the following: (10) For the purpose of this section, tax payable under Part I, I.3, VI or XIII.1 of the Act by a corporation for a taxation year means the corporation's tax payable for the year under the relevant Part, determined before taking into consideration the specified future tax consequences for the year. 10. Section 7900 of the Regulations is replaced by the following: 7900. (1) For the purposes of section 33.1, the definitions "excluded income" and "excluded revenue" and "specified deposit" in subsection 95(2.5), clause 212(1)(b)(iii)(D) and subparagraph 212(1)(b)(xi) of the Act, each of the following is a prescribed financial institution:
(b) a credit union that is a shareholder or member of a body corporate or organization that is a central for the purposes of the Canadian Payments Act. (2) For the purposes of the definitions "excluded income" and "excluded revenue" and "specified deposit" in subsection 95(2.5) and clause 212(1)(b)(iii)(D) of the Act, an authorized foreign bank is a prescribed financial institution. 11. The portion of section 8201 of the Regulations before paragraph (a) is replaced by the following: 8201. For the purposes of subsection 16.1(1), the definition "outstanding debts to specified non-residents" in subsection 18(5), subsection 34.2(6), the definition "excluded income" and "excluded revenue" in subsection 95(2.5), subsections 112(2), 125.4(1) and 125.5(1), the definition "taxable supplier" in subsection 127(9), subparagraph 128.1(4)(b)(ii), paragraphs 181.3(5)(a) and 190.14(2)(b), subsection 206(1.3), the definition "Canadian banking business" in subsection 248(1) and paragraph 260(5)(a) of the Act, a "permanent establishment" of a person or partnership (either of whom is referred to in this section as the "person") means a fixed place of business of the person, including an office, a branch, a mine, an oil well, a farm, a timberland, a factory, a workshop or a warehouse if the person has a fixed place of business and, where the person does not have any fixed place of business, the principal place at which the person's business is conducted, and COMING INTO FORCE 12. (1) Sections 1, 3 and 4, subsection 7(11), section 8, subsection 9(3) and section 10 apply after June 27, 1999, except that in applying section 7900 of the Income Tax Regulations, as amended by section 10, to taxation years that began before 2000, the reference to the phrase "the definitions "excluded income" and "excluded revenue" and "specified deposit" in subsection 95(2.5)" is to be read as a reference to the phrase "paragraph 95(2)(a.3), the definition "specified deposit" in subsection 95(2.5)". (2) Sections 5 and 6 apply to taxation years that end after June 27, 1999, except that the return required to be filed under section 801 of the Income Tax Regulations, as amended by section 5, by an authorized foreign bank is deemed to have been filed with the Minister of National Revenue in a timely manner if it is so filed on or before the later of
(b) the day that is six months after the day on which these Regulations are registered. (3) Subsections 7(1), (3), (4) and (6) to (8) apply to taxation years that begin after 1995, except that in applying subsection 808(1) of the Income Tax Regulations, as amended by subsection 7(1), to taxation years ending before June 28, 1999, it is to be read without reference to "(other than an authorized foreign bank)". (4) Section 2 and subsections 7(2), (5) and (9) come into force on the day on which these Regulations are registered. (5) Subsection 7(10) is deemed to have come into force on August 8, 2000. (6) Subsections 9(1), (2) and (4) apply to the 2001 and subsequent taxation years. (7) Section 11 is deemed to have come into force on October 2, 1996, except that in applying section 8201 of the Income Tax Regulations, as amended by section 11,
(b) to taxation years that ended before November 1997, it is to be read without the reference to subsection 125.5(1) of the Act; (c) to taxation years that began before 1996, it is to be read without the reference to the phrase "the definition "taxable supplier" in subsection 127(9),"; (d) to taxation years that ended before June 28, 1999, it is to be read without the reference to the phrases "paragraph 181.3(5)(a) and 190.14(2)(b)," and "the definition "Canadian banking business" in subsection 248(1)"; and (e) to taxation years that began before 2000, it is to be read without the reference to the phrase "the definition "excluded income" and "excluded revenue" in subsection 95(2.5)". [7-1-o] S.C. 2001, c. 9, s. 127 S.C. 2001, c. 9, s. 132 S.C. 2001, c. 9, s. 183 S.C. 2001, c. 9, s. 183 S.C. 1991, c. 46 S.C. 2001, c. 9, s. 314 S.C. 2001, c. 9, s. 339 S.C. 1991, c. 48 S.C. 2001, c. 9, s. 426 S.C. 2001, c. 9, s. 465 S.C. 2001, c. 9, s. 465 S.C. 1991, c. 47 S.C. 2001, c. 9, s. 550 S.C. 2001, c. 9, s. 569 S.C. 1991, c. 45 S.C. 2000, c. 12, s. 142 (Sch. 2, par. 1(z. R.S., c. 1 (5th Supp.) C.R.C., c. 945 |
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