Income Tax Act — I-3.3 162
as required to be filed, during any part of which the return has not been filed, and (d) where paragraph 162(10)(b) applies, the lesser of 24 and the number of months, beginning with the month in which the demand was served, during any part of which the return has not been filed, B is (e) where the person or partnership has failed to comply with a demand under section 233 to file a return, 2, and (f) in any other case, 1, and C is the penalty to which the person or partnership is liable under subsection 162(7) in respect of the return. Additional penalty (10.1) Where (a) a person or partnership is liable to a penalty under subsection 162(10) for the failure to file a return (other than an information return required to be filed under section 233.1), (b) if paragraph 162(10)(a) applies, the number of months, beginning with the month in which the return was required to be filed, during any part of which the return has not been filed exceeds 24, and (c) if paragraph 162(10)(b) applies, the number of months, beginning with the month in which the demand referred to in that paragraph was served, during any part of which the return has not been filed exceeds 24, the person or partnership is liable, in addition to the penalty determined under subsection 162(10), to a penalty equal to the amount determined by the formula A - B where A is (d) if the return is required to be filed under section 233.2 in respect of a trust, 5% of the total of all amounts each of which is the fair market value, at the time it was made, of a contribution of the person or partnership made to the trust before the end of the last taxation year of the trust in respect of which the return is required, (e) where the return is required to be filed under section 233.3 for a taxation year or fiscal period, 5% of the greatest of all amounts each of which is the total of the cost amounts to the person or partnership at any time in the year or period of a specified foreign property (as defined by subsection 233.3(1)) of the person or partnership, and (f) where the return is required to be filed under section 233.4 for a taxation year or fiscal period in respect of a foreign affiliate of the person or partnership, 5% of the greatest of all amounts each of which is the total of the cost amounts to the person or partnership at any time in the year or period of a property of the person or partnership that is a share of the capital stock or indebtedness of the affiliate, and B is the total of the penalties to which the person or partnership is liable under subsections 162(7) and 162(10) in respect of the return. Application to trust contributions (10.11) In paragraph (d) of the description of A in subsection (10.1), subsections 94(1), (2) and (9) apply. Shares or debt owned by controlled foreign affiliate (10.2) For the purpose of paragraph (f) of the description of A in subsection 162(10.1), (a) shares or indebtedness owned by a controlled foreign affiliate of a person or partnership are deemed to be owned by the person or partnership; and (b) the cost amount at any time of such shares or indebtedness to the person or partnership is deemed to be equal to 20% of the cost amount at that time to the controlled foreign affiliate of the shares or indebtedness. Application to partnerships (10.3) For the purposes of paragraph (f) of the description of A in subsection 162(10.1) and subsection 162(10.2), in determining whether a non-resident corporation or trust is a foreign affiliate or a controlled foreign affiliate of a partnership, (a) the definitions direct equity percentage and equity percentage in subsection 95(4) shall be read as if a partnership were a person; and (b) the definitions controlled foreign affiliate and foreign affiliate in subsection 95(1) shall be read as if a partnership were a taxpayer resident in Canada. Application to non-resident trusts (10.4) For the purposes of this subsection, paragraph (f) of the description of A in subsection 162(10.1) and subsecti