Excise Tax Act — E-15 217
, (II) the margin for risk transfer of the policy of reinsurance, or (III) expenses incurred exclusively in Canada by the qualifying taxpayer to issue and administer the particular insurance policies, (iv) each fee paid by the qualifying taxpayer to the insurer or an affiliate (A) is commensurate with the arm’s length transfer price , as defined in subsection 247(1) of the Income Tax Act , for the provision of the property and services to which the fee relates, and (B) is allowed as a deduction, an allowance or an allocation for a reserve under the Income Tax Act in computing the qualifying taxpayer’s income for a specified year, or would be so allowed if the conditions set out in subparagraphs (a)(i) to (iii) of the description of A in the definition qualifying consideration applied to the qualifying taxpayer, and (v) the qualifying taxpayer pays or remits any amount that is payable or remittable under this Part by the qualifying taxpayer in respect of each fee paid by the qualifying taxpayer to the insurer or an affiliate; (k.2) consideration (other than interest referred to in paragraph (g) or dividends referred to in paragraph (h)) for a supply that is deemed by subsection 150(1) to be a supply of a financial service and that is made to the qualifying taxpayer by another person, if the other person is a qualifying taxpayer throughout each specified year of the other person during which the other person makes an outlay, or incurs an expense, outside Canada for the purpose of making the supply; (l) consideration (other than interest referred to in paragraph (g) or dividends referred to in paragraph (h)) for a specified derivative supply made to the qualifying taxpayer; or (m) a prescribed amount. ( déduction autorisée ) qualifying compensation of an employee means any salary, wages and other remuneration of the employee and any other amount that is required to be included as income from an office or employment in computing the income of the employee for the purposes of the Income Tax Act . ( rétribution admissible ) qualifying consideration for a specified year of a qualifying taxpayer in respect of an outlay made, or expense incurred, outside Canada means the amount in respect of the outlay or expense determined by the formula A – B where A is the amount of the outlay or expense that (a) is allowed as a deduction, an allowance or an allocation for a reserve under the Income Tax Act in computing the qualifying taxpayer’s income for the specified year, or would be so allowed if (i) the qualifying taxpayer’s income were computed in accordance with that Act, (ii) the qualifying taxpayer carried on a business in Canada, and (iii) that Act applied to the qualifying taxpayer, and (b) may reasonably be regarded as being applicable to a Canadian activity of the qualifying taxpayer; and B is the total of all amounts each of which is included in the amount determined under the description of A and is (a) an amount that is a permitted deduction for the specified year or a preceding specified year of the qualifying taxpayer, other than an amount that is included in paragraph (b) or that is a returned commission included in paragraph (c), (b) an amount that represents a cost to a qualifying establishment of the qualifying taxpayer in a country other than Canada, or a share of a profit of the qualifying taxpayer that is redistributed from a qualifying establishment of the qualifying taxpayer in Canada to a qualifying establishment of the qualifying taxpayer in a country other than Canada, that is solely attributable to the issuance, renewal, variance or transfer of ownership by the qualifying taxpayer of a financial instrument that is a derivative, provided that all or substantially all of the amount is (i) an error or profit margin, or employee compensation or benefits, that is reasonably attributable to the issuance, renewal, variance or transfer of ownership, or (ii) the estimate of the default risk premium that is directly associated