Income Tax Regulations — 5907
pertinent persons or partnerships in respect of the particular affiliate: (i) the funding affiliate or the funding partnership, (ii) a non-resident corporation (A) in which the funding affiliate has an equity percentage, or (B) that has an equity percentage in the funding affiliate, and (iii) a partnership a member of which is a person or partnership referred to in subparagraph (i) or (ii). (1.07) For the purposes of paragraph (1.03)(a), a specified owner in respect of the particular corporation is not to be considered, under the relevant foreign tax law, to own less than all of the shares of the capital stock of another corporation that are considered to be owned for the purposes of the Act solely because the specified owner or the other corporation is not treated as a corporation under the relevant foreign tax law. (1.08) For the purposes of paragraph (1.03)(b), a member of a partnership is not to be considered to have a lesser direct or indirect share of the income of the partnership under the relevant foreign tax law than for the purposes of the Act solely because of one or more of the following: (a) a difference between the relevant foreign tax law and the Act in the manner of (i) computing the income of the partnership, or (ii) allocating the income of the partnership because of the admission to, or withdrawal from, the partnership of any of its members; (b) the treatment of the partnership as a corporation under the relevant foreign tax law; or (c) the fact that the member is not treated as a corporation under the relevant foreign tax law. (1.09) For the purposes of subsection (1.03), if a specified owner owns, for the purposes of the Act, shares of the capital stock of a corporation and the dividends, or similar amounts, in respect of those shares are treated under the income tax laws of any country other than Canada under the laws of which any income of the corporation is subject to income taxation as interest or another form of deductible payment, the specified owner is deemed to be considered, under those tax laws, to own less than all of the shares of the capital stock of the corporation that are considered to be owned by the specified owner for the purposes of the Act. (1.091) Subsection (1.092) applies in respect of income or profits tax paid by, or refunded to, a foreign affiliate (in this subsection and subsection (1.092) referred to as the “shareholder affiliate”) of a taxpayer for a taxation year of the shareholder affiliate in respect of its income or profits, or loss, as the case may be, and the income or profits, or loss, as the case may be, of another foreign affiliate (in this subsection and subsection (1.092) referred to as the “transparent affiliate”) of the taxpayer if (a) the shareholder affiliate has an equity percentage in the transparent affiliate; (b) the income or profits tax is paid to, or refunded by, a government of a country other than Canada; and (c) under the income tax laws of the country referred to in paragraph (b), the shareholder affiliate, and not the transparent affiliate, is liable for that tax payable to, or entitled to that refund from, a government of that country for that year (otherwise than solely because the shareholder affiliate is part of a group of corporations that determines its liabilities for income or profits tax payable to the government of that country on a consolidated or combined basis). (1.092) If this subsection applies in respect of income or profits tax paid by, or refunded to, a shareholder affiliate for a taxation year (a) in respect of the shareholder affiliate, (i) any such income or profits tax paid by the shareholder affiliate for the year is deemed not to have been paid and any such refund to the shareholder affiliate of income or profits tax otherwise payable by it for the year is deemed not to have been made, (ii) any such income or profits tax that would have been payable by the shareholder affiliate for the year if the shareholder affiliate had no