I-3 - Taxation Act

Section 772.6.1 Disposition versions

2006-03-01

772.6.1. For the purposes of sections 146.1 and 146.2 and this chapter, in respect of an authorized foreign bank, the following rules apply:

(a)  the bank is deemed, for the purposes of sections 772.2, 772.4 and 772.5.1 to 772.7, to be a corporation resident in Canada in respect of its Canadian banking business;

(b)  the reference in the portion of section 146.1 before paragraph a to “foreign country” shall be read as a reference to “country that is neither Canada nor a country in which the taxpayer is resident at any time in the year”;

(c)  the definition of “tax-exempt income” in section 772.2 shall be read as follows:

““tax-exempt income” means income of a taxpayer from a source in a particular country in respect of which

(a)  the taxpayer is, under a comprehensive agreement or convention for the elimination of double taxation on income, which has the force of law in the particular country and to which a country in which the taxpayer is resident is a party, entitled to an exemption from all income or profits taxes, imposed in the particular country, to which the agreement or convention applies; and

(b)  no income or profits tax to which the agreement or convention does not apply is imposed in the particular country;”;

(d)  the references in the portion of the second paragraph of section 772.7 before subparagraph a to “in relation to a foreign country” and “from sources situated in a foreign country” shall be read as references to “in relation to a country that is neither Canada nor a country in which the corporation is resident at any time in the year” and “in respect of its Canadian banking business from sources in that country”, respectively;

(e)  the reference in subparagraphs a and d of the second paragraph of section 772.7 to “in the foreign country” shall be read as a reference to “in that country”; and

(f)  the bank shall include in computing its non-business income tax paid for a taxation year to the government of a foreign country, only taxes that relate to amounts that are included in computing the bank’s taxable income from its Canadian banking business.

2004, c. 8, s. 147.