7.1. A qualified international financial transaction does not include such a transaction carried out between a corporation or partnership operating an international financial centre and a person or partnership with which it is not dealing at arm’s length.
The first paragraph does not apply in respect of a qualified international financial transaction if any of the parties to the transaction is a financial corporation or a designated financial corporation or if the transaction is described in paragraph 22 or 25 of section 7.
For the purposes of the first paragraph and subparagraph a of paragraph 25 of section 7, if any of the parties to a qualified international financial transaction is a partnership, the partnership must be considered, for the purpose of determining whether the parties are not dealing at arm’s length, to be a corporation all the voting shares in the capital stock of which are owned by each member of the partnership at the end of the fiscal period of the partnership in which the qualified international financial transaction is carried out, in a proportion equal to the proportion that the member’s share of the income or loss of the partnership for that fiscal period is of the income or loss of the partnership for that fiscal period, on the assumption that, if the income and loss of the partnership for that fiscal period are nil, the partnership’s income for that fiscal period is equal to $1,000,000.
2005, c. 23, s. 4; 2007, c. 12, s. 5.