Income Tax Act — I-3.3 126
n the taxation year that are after 2011 is of the number of days in the taxation year, B is the total of the taxpayer’s proceeds from the disposition of the property at the particular time and the amount of all dividends or interest from the property in respect of the period included in computing the taxpayer’s income for any taxation year, C is the total of the cost at which the taxpayer last acquired the property and any outlays or expenses made or incurred by the taxpayer for the purpose of disposing of the property at the particular time, D is the amount of foreign tax that would otherwise be included in computing the taxpayer’s business-income tax or non-business-income tax for the particular year, and E is the total amount of foreign tax that would otherwise be included in computing the taxpayer’s business-income tax or non-business-income tax for all taxation years. Exceptions (4.3) Subsection (4.2) does not apply to a property of a taxpayer (a) that is a capital property; (b) that is a debt obligation issued to the taxpayer that has a term of one year or less and that is held by no one other than the taxpayer at any time; (c) that was last acquired by the taxpayer before February 24, 1998; or (d) in respect of which any foreign tax is, because of subsection (4.1), not included in computing the taxpayer’s business-income tax or non-business-income tax. Dispositions ignored (4.4) For the purposes of subsections (4.1) and (4.2) and the definition economic profit in subsection (7), (a) a disposition or acquisition of property deemed to be made by subsection 10(12) or (13) or 45(1), section 70, 128.1 or 132.2, subsections 138(11.3), 138.2(4) or 142.5(2), paragraph 142.6(1)(b) or subsections 142.6(1.1) or (1.2) or 149(10) is not a disposition or acquisition, as the case may be; and (b) a disposition (i) to which section 51.1 applies, of a convertible obligation in exchange for a new obligation, (ii) to which subsection 86(1) applies, of old shares in exchange for new shares, or (iii) to which subsections 87(4) and (8) apply, of old shares in exchange for new shares, is not a disposition, and the convertible obligation and the new obligation, or the old shares and the new shares, as the case may be, are deemed to be the same property. Synthetic disposition — holding period (4.5) If a synthetic disposition arrangement is entered into in respect of a property owned by a taxpayer and the synthetic disposition period of the arrangement is 30 days or more, (a) for the purpose of determining whether the period referred to in subsection (4.2) is one year or less, the period is deemed to begin at the earlier of (i) the time that is immediately before the particular time referred to in subsection (4.2), and (ii) the end, if any, of the synthetic disposition period; and (b) for the purposes of subsection (4.6), the taxpayer is deemed not to own the property during the synthetic disposition period. Exception (4.6) Subsection (4.5) does not apply in respect of a property owned by a taxpayer in respect of a synthetic disposition arrangement if the taxpayer owned the property throughout the one-year period (determined without reference to this subsection) that ended immediately before the synthetic disposition period of the arrangement. Foreign oil and gas levies (5) A taxpayer who is resident in Canada throughout a taxation year and carries on a foreign oil and gas business in a taxing country in the year is deemed for the purposes of this section to have paid in the year as an income or profits tax to the government of the taxing country an amount equal to the lesser of (a) the amount, if any, by which (i) the amount obtained by multiplying the taxpayer’s income from the business in the taxing country for the year by the total of (A) that proportion of 26.5% that the number of days in the taxation year that are in 2011 is of the number of days in the taxation year, and (B) that proportion of 25% that the number of days in the taxation ye