I-3 - Taxation Act

Section 985 Disposition versions

2015-12-04

985. A person is exempt from tax for a period when the person is

(a)  a corporation, commission or association all of the capital, property or shares, other than directors’ qualifying shares, of which is owned by one or more persons each of which is the State, Her Majesty in right of Canada or Her Majesty in right of a province, other than Québec;

(b)  a corporation, commission or association not less than 90% of the capital, property or shares, other than directors’ qualifying shares, of which is owned by one or more persons each of which is the State, Her Majesty in right of Canada or Her Majesty in right of a province, other than Québec;

(c)  a corporation all of the capital, property or shares, other than directors’ qualifying shares, of which is owned by one or more persons each of which is another corporation, a commission or an association to which this subparagraph or subparagraph a applies for the period;

(d)  a corporation, commission or association not less than 90% of the capital, property or shares, other than directors’ qualifying shares, of which is owned by

i.  one or more persons each of which is the State, Her Majesty in right of Canada, Her Majesty in right of a province, other than Québec, or a person to which subparagraph a or c applies for the period, or

ii.  one or more municipalities in Canada in combination with one or more persons referred to in subparagraph i;

(e)  a corporation all of the capital, property or shares, other than directors’ qualifying shares, of which is owned by one or more persons each of which is another corporation, a commission or an association to which this subparagraph or any of subparagraphs a to d applies for the period;

(f)  subject to sections 985.0.1 and 985.0.2, a corporation, commission or association not less than 90% of whose capital is owned by one or more entities each of which is a municipality in Canada or a municipal or public body performing a function of government in Canada, and not more than 10% of whose income for the period is derived from activities carried on outside the geographical boundaries of the territories of those entities; or

(g)  subject to sections 985.0.1 and 985.0.2, a corporation all of the capital, property or shares (other than directors’ qualifying shares) of which is owned by one or more entities (in this subparagraph referred to as “qualifying owners”) each of which is, for the period, another corporation, a commission or an association to which subparagraph f applies, a corporation to which this subparagraph applies, a municipality in Canada, or a municipal or public body performing a function of government in Canada, where not more than 10% of the corporation’s income for the period is from activities carried on outside

i.  if subparagraph f applies to a qualifying owner, the geographical boundaries of the territory of the municipality or municipal or public body referred to in subparagraph f where it applies to each such qualifying owner,

ii.  if this subparagraph applies to a qualifying owner, the geographical boundaries of the territory of a municipality or municipal or public body referred to in subparagraph iii or subparagraph f, as the case may be, where it applies to each such qualifying owner, and

iii.  if a qualifying owner is a municipality in Canada, or a municipal or public body performing a function of government in Canada, the geographical boundaries of the territory of the municipality or municipal or public body.

Where at a particular time a corporation, commission or association, in this paragraph referred to as the “entity”, would, but for this paragraph, be described in any of subparagraphs a to g of the first paragraph, the entity is deemed not to be, at the particular time, a person described in that subparagraph if

(a)  one or more persons, other than the State, Her Majesty in right of Canada, Her Majesty in right of a province, other than Québec, a municipality in Canada or a person which, at the particular time, is a person described in any of subparagraphs a to g of the first paragraph, have at the particular time a right to the capital, property or shares of that entity, or a right to acquire them; and

(b)  the exercise of the rights referred to in subparagraph a would result in the entity not being a person described in any of subparagraphs a to g of the first paragraph at the particular time.

1972, c. 23, s. 717; 1980, c. 13, s. 100; 1997, c. 3, s. 71; 1998, c. 16, s. 251; 2000, c. 5, s. 229; 2001, c. 7, s. 136; 2004, c. 8, s. 173; 2009, c. 5, s. 398; 2015, c. 36, s. 65.

2009-05-15

985. A person is exempt from tax for a period when the person is

(a)  a corporation, commission or association all of the capital, property or shares, other than directors’ qualifying shares, of which is owned by one or more persons each of which is the State, Her Majesty in right of Canada or Her Majesty in right of a province, other than Québec;

(b)  a corporation, commission or association not less than 90% of the capital, property or shares, other than directors’ qualifying shares, of which is owned by one or more persons each of which is the State, Her Majesty in right of Canada or Her Majesty in right of a province, other than Québec;

(c)  a corporation all of the capital, property or shares, other than directors’ qualifying shares, of which is owned by one or more persons each of which is another corporation, a commission or an association to which this subparagraph or subparagraph a applies for the period;

(d)  a corporation, commission or association not less than 90% of the capital, property or shares, other than directors’ qualifying shares, of which is owned by

i.  one or more persons each of which is the State, Her Majesty in right of Canada, Her Majesty in right of a province, other than Québec, or a person to which subparagraph a or c applies for the period, or

ii.  one or more municipalities in Canada in combination with one or more persons referred to in subparagraph i;

(e)  a corporation all of the capital, property or shares, other than directors’ qualifying shares, of which is owned by one or more persons each of which is another corporation, a commission or an association to which this subparagraph or any of subparagraphs a to d applies for the period;

(f)  subject to sections 985.0.1 and 985.0.2, a corporation, commission or association not less than 90% of whose capital is owned by one or more entities each of which is a municipality in Canada or a municipal or public body performing a function of government in Canada, and not more than 10% of whose income for the period is derived from activities carried on outside the geographical boundaries of the territories of those entities; or

(g)  subject to sections 985.0.1 and 985.0.2, a corporation all of the capital, property or shares, other than directors’ qualifying shares, of which is owned by one or more persons each of which is another corporation, a commission or an association to which this subparagraph or subparagraph f applies for the period, where not more than 10% of the corporation’s income for the period is derived from

i.  where subparagraph f applies to the other corporation, the commission or the association, activities carried on outside the geographical boundaries of the territories of the entities referred to in that subparagraph f in its application to that other corporation, commission or association, as the case may be, or

ii.  where this subparagraph applies to the other corporation, activities carried on outside the geographical boundaries of the territories of the entities referred to in this subparagraph in its application to that other corporation.

Where at a particular time a corporation, commission or association, in this paragraph referred to as the “entity”, would, but for this paragraph, be described in any of subparagraphs a to g of the first paragraph, the entity is deemed not to be, at the particular time, a person described in that subparagraph if

(a)  one or more persons, other than the State, Her Majesty in right of Canada, Her Majesty in right of a province, other than Québec, a municipality in Canada or a person which, at the particular time, is a person described in any of subparagraphs a to g of the first paragraph, have at the particular time a right to the capital, property or shares of that entity, or a right to acquire them; and

(b)  the exercise of the rights referred to in subparagraph a would result in the entity not being a person described in any of subparagraphs a to g of the first paragraph at the particular time.

1972, c. 23, s. 717; 1980, c. 13, s. 100; 1997, c. 3, s. 71; 1998, c. 16, s. 251; 2000, c. 5, s. 229; 2001, c. 7, s. 136; 2004, c. 8, s. 173; 2009, c. 5, s. 398.

2006-03-01

985. A person is exempt from tax for a period when the person is

(a)  a corporation, commission or association all of the capital, property or shares, other than directors’ qualifying shares, of which is owned by one or more persons each of which is the State, Her Majesty in right of Canada or Her Majesty in right of a province, other than Québec;

(b)  a corporation, commission or association not less than 90% of the capital, property or shares, other than directors’ qualifying shares, of which is owned by one or more persons each of which is the State, Her Majesty in right of Canada or Her Majesty in right of a province, other than Québec;

(c)  a corporation all of the capital, property or shares, other than directors’ qualifying shares, of which is owned by one or more persons each of which is another corporation, a commission or an association to which this subparagraph or subparagraph a applies for the period;

(d)  a corporation, commission or association not less than 90% of the capital, property or shares, other than directors’ qualifying shares, of which is owned by

i.  one or more persons each of which is the State, Her Majesty in right of Canada, Her Majesty in right of a province, other than Québec, or a person to which subparagraph a or c applies for the period, or

ii.  one or more municipalities in Canada in combination with one or more persons referred to in subparagraph i;

(e)  a corporation all of the capital, property or shares, other than directors’ qualifying shares, of which is owned by one or more persons each of which is another corporation, a commission or an association to which this subparagraph or any of subparagraphs a to d applies for the period;

(f)  subject to sections 985.0.1 and 985.0.2, a corporation, commission or association not less than 90% of the capital of which is owned by one or more municipalities in Canada, where not more than 10% of the income of the corporation, commission or association for the period is derived from activities carried on outside the geographical boundaries of the territories of those municipalities; or

(g)  subject to sections 985.0.1 and 985.0.2, a corporation all of the capital, property or shares, other than directors’ qualifying shares, of which is owned by one or more persons each of which is another corporation, a commission or an association to which this subparagraph or subparagraph f applies for the period, where not more than 10% of the corporation’s income for the period is derived from

i.  where subparagraph f applies to the other corporation, the commission or the association, activities carried on outside the geographical boundaries of the territories of the municipalities referred to in that subparagraph f in its application to that other corporation, commission or association, as the case may be, or

ii.  where this subparagraph applies to the other corporation, activities carried on outside the geographical boundaries of the territories of the municipalities referred to in this subparagraph in its application to that other corporation.

Where at a particular time a corporation, commission or association, in this paragraph referred to as the “entity”, would, but for this paragraph, be described in any of subparagraphs a to g of the first paragraph, the entity is deemed not to be, at the particular time, a person described in that subparagraph if

(a)  one or more persons, other than the State, Her Majesty in right of Canada, Her Majesty in right of a province, other than Québec, a municipality in Canada or a person which, at the particular time, is a person described in any of subparagraphs a to g of the first paragraph, have at the particular time a right to the capital, property or shares of that entity, or a right to acquire them; and

(b)  the exercise of the rights referred to in subparagraph a would result in the entity not being a person described in any of subparagraphs a to g of the first paragraph at the particular time.

1972, c. 23, s. 717; 1980, c. 13, s. 100; 1997, c. 3, s. 71; 1998, c. 16, s. 251; 2000, c. 5, s. 229; 2001, c. 7, s. 136; 2004, c. 8, s. 173.