I-3 - Taxation Act

Section 21.4.31 Disposition versions

2010-04-20

21.4.31. If a winding-up described in section 556 begins at a particular time and the parent and the subsidiary referred to in that section would, in the absence of this section, have different tax reporting currencies at that time, the following rules apply for the purpose of computing the subsidiary’s Québec tax results for its taxation years that end after the particular time:

(a)  if the subsidiary’s tax reporting currency is Canadian currency,

i.  despite section 21.4.18, section 21.4.19 is deemed to apply to the subsidiary in respect of its taxation year that includes the particular time and each of its subsequent taxation years,

ii.  the subsidiary is deemed to have as its elected functional currency the parent’s tax reporting currency, and

iii.  if the subsidiary’s taxation year that includes the particular time would, in the absence of this section, be a reversionary year of the subsidiary, this chapter applies with the necessary modifications; and

(b)  if neither the subsidiary’s tax reporting currency nor the parent’s tax reporting currency is Canadian currency,

i.  the subsidiary’s first reversionary year is deemed to end at the given time that is immediately after the time at which it began,

ii.  a new taxation year of the subsidiary is deemed to begin immediately after the given time,

iii.  despite section 21.4.18, section 21.4.19 is deemed to apply to the subsidiary in respect of its taxation year that includes the particular time and each of its subsequent taxation years, and

iv.  the subsidiary is deemed to have as its elected functional currency the parent’s tax reporting currency.

2010, c. 5, s. 11.