Income Tax Act — I-3.3 18.4
have been exercised at that time, and (ii) paragraph (c) of the definition specified beneficiary in subsection 18(5) is deemed to apply at that time and the references in that definition to “particular person” are to be read as references to “first entity”; and (b) notwithstanding paragraph (a), a particular entity is deemed not to be a specified entity in respect of another entity at any time if (i) the particular entity would, but for this paragraph, be a specified entity in respect of the other entity at that time, (ii) there was in effect at that time an agreement or arrangement under which, on the satisfaction of a condition or the occurrence of an event that it is reasonable to expect will be satisfied or will occur, the particular entity will cease to be a specified entity in respect of the other entity, and (iii) the purpose for which the particular entity became a specified entity was the safeguarding of rights or interests of the particular entity or an entity with which the particular entity is not dealing at arm’s length in respect of any indebtedness owing at any time to the particular entity or an entity with which the particular entity is not dealing at arm’s length. Tiered partnerships (18) For the purposes of this section and section 12.7, a person or partnership that is a member of a particular partnership that is a member of another partnership is deemed to be a member of the other partnership, and the person or partnership is deemed to have, directly, rights to the income or capital of the other partnership to the extent of the person or partnership’s direct and indirect rights to that income or capital. Multiple recipients (19) For the purposes of this section and section 12.7, if there would, in the absence of this subsection, be multiple recipients of a particular payment, each portion of the particular payment that arises to each recipient is deemed to be a separate payment. Anti-avoidance (20) The tax consequences (as defined in subsection 245(1)) to a person shall be determined in order to deny a tax benefit (as defined in subsection 245(1)) to the extent necessary to eliminate any deduction/non-inclusion mismatch, or other outcome that is substantially similar to a deduction/non-inclusion mismatch, arising from a payment if (a) it can reasonably be considered that one of the main purposes of a transaction or series of transactions that includes the payment is to avoid or limit the application of subsection (4), 12.7(3) or 113(5) in respect of the payment; and (b) any of the following conditions is met: (i) the payment is a dividend and an amount would be — or would reasonably be expected to be — deductible in respect of the payment in computing relevant foreign income or profits of an entity for a foreign taxation year, (ii) the mismatch or other outcome arises in whole or in part because of a difference in tax treatment of any transaction or series of transactions under the laws of more than one country that is attributable to the terms or conditions of the transaction or one or more transactions included in the series, or (iii) the mismatch or other outcome would arise in whole or in part because of a difference described in subparagraph (ii), if any other reason for the mismatch or other outcome were disregarded. Filing Requirement (21) Each taxpayer shall file with its return of income for a taxation year a prescribed form containing prescribed information if, in computing the taxpayer’s income for the taxation year, (a) an amount is not deductible in respect of a payment because of subsection (4); or (b) subsection 12.7(3) includes an amount in respect of a payment. [NOTE: Application provisions are not included in the consolidated text; see relevant amending Acts and regulations.] 2024, c. 15, s. 8