Income Tax Act — I-3.3 233.8
greement); or (b) has persistently failed to automatically provide country-by-country reports in its possession — in respect of MNE groups that have constituent entities in Canada — to Canada. ( défaillance systémique ) ultimate parent entity means a constituent entity of an MNE group that meets the following conditions: (a) the constituent entity holds directly or indirectly a sufficient interest in one or more constituent entities of the MNE group so that it is required to prepare consolidated financial statements under accounting principles generally applied in its jurisdiction of residence, or would be so required if its equity interests were traded on a public securities exchange in its jurisdiction of residence; and (b) no other constituent entity of the MNE group holds, directly or indirectly, an interest in it that is described in paragraph (a). ( entité mère ultime ) Determination of residence — ultimate parent entity (2) For the purposes of this section, if an ultimate parent entity is a partnership, it is deemed to be resident (a) if it is, under the laws of another jurisdiction, resident in that other jurisdiction for tax purposes, in that other jurisdiction; and (b) in any other case, in the jurisdiction under the laws of which it was organized. Filing obligations (3) A report in prescribed form (this report, along with each substantially similar report required to be filed in a jurisdiction other than Canada, collectively referred to in this section as a country-by-country report ), in respect of a reporting fiscal year of an MNE group, shall be filed in prescribed manner with the Minister on or before the date specified in subsection (6) by (a) the ultimate parent entity of the MNE group, if it is resident in Canada in the reporting fiscal year; or (b) a constituent entity of the MNE group — which is not the ultimate parent entity of the MNE group — with respect to the reporting fiscal year of the MNE group, if the following conditions are satisfied: (i) the constituent entity is resident in Canada in the reporting fiscal year, and (ii) one of the following conditions applies: (A) the ultimate parent entity of the MNE group is not obligated to file a country-by-country report in its jurisdiction of residence, (B) the jurisdiction of residence of the ultimate parent entity of the MNE group does not have a qualifying competent authority agreement in effect to which Canada is a party on or before the time specified in subsection (6) for filing the country-by-country report for the reporting fiscal year, or (C) there has been a systemic failure of the jurisdiction of residence of the ultimate parent entity and the Minister has notified the constituent entity of the systemic failure. Designation for multiple constituent entities (4) If more than one constituent entity of an MNE group is described in paragraph (3)(b) in respect of a reporting fiscal year, one of those constituent entities may be designated — on or before the date specified in subsection (6) in respect of the reporting fiscal year — so that it is entitled to file a country-by-country report for the reporting fiscal year with the Minister on behalf of all such constituent entities in the MNE group. Surrogate filing (5) Notwithstanding subsection (3), a constituent entity of an MNE group described in paragraph (3)(b) is not required to file a country-by-country report with the Minister with respect to a reporting fiscal year if (a) a surrogate parent entity of the MNE group files a country-by-country report in respect of the reporting fiscal year with the tax authority of its jurisdiction of residence on or before the date specified in subsection (6); and (b) the jurisdiction of residence of the surrogate parent entity (i) requires filing of country-by-country reports, (ii) has a qualifying competent authority agreement in effect to which Canada is a party on or before the time specified in subsection (6) for filing the country-by-country report in respe