Income Tax Act — I-3.3 95
 end of its taxation year, a controlled foreign affiliate of the taxpayer is (a) where the foreign accrual property income of the affiliate for that year is $5,000 or less, nil, and (b) where the foreign accrual property income of the affiliate for that year exceeds $5,000, (i) the percentage that would be the taxpayer’s equity percentage in the affiliate at the end of that taxation year on the assumption that the taxpayer owned no shares other than the particular share (but in no case shall that assumption be made for the purpose of determining whether or not a corporation is a foreign affiliate of the taxpayer) if (A) the affiliate and each corporation that is relevant to the determination of the taxpayer’s equity percentage in the affiliate have, at that time, only one class of issued shares, and (B) no foreign affiliate (referred to in this clause as the “upper-tier affiliate”) of the taxpayer that is relevant to the determination of the taxpayer’s equity percentage in the affiliate has, at that time, an equity percentage in a foreign affiliate (including, for greater certainty, the affiliate) of the taxpayer that has an equity percentage in the upper-tier affiliate, and (ii) in any other case, the percentage determined in prescribed manner; ( pourcentage de participation ) permanent establishment has the meaning assigned by regulation; ( établissement stable ) relevant tax factor , of a person or partnership for a taxation year, means (a) in the case of a corporation (other than a Canadian-controlled private corporation or a corporation that is a substantive CCPC at any time in the year), or of a partnership all the members of which, other than non-resident persons, are corporations (other than Canadian-controlled private corporations or corporations that are substantive CCPCs at any time in the year), the quotient obtained by the formula 1/(A – B) where A is the percentage set out in paragraph 123(1)(a), and B is (i) in the case of a corporation, the percentage that is the corporation’s general rate reduction percentage (as defined by section 123.4) for the taxation year, and (ii) in the case of a partnership, the percentage that would be determined under subparagraph (i) in respect of the partnership if the partnership were a corporation whose taxation year is the partnership’s fiscal period, and (b) in any other case, 1.9; ( facteur fiscal approprié ) specified fixed interest , at any time, of an entity in a trust, means an interest of the entity as a beneficiary under the trust if (a) the interest includes, at that time, rights of the entity as a beneficiary under the trust to receive, at or after that time and directly from the trust, income and capital of the trust, (b) the interest was issued by the trust, at or before that time, to an entity, in exchange for consideration and the fair market value, at the time at which the interest was issued, of that consideration was equal to the fair market value, at the time at which it was issued, of the interest, (c) the only manner in which any part of the interest may cease to be the entity’s is by way of a disposition (determined without reference to paragraph (i) of the definition disposition in subsection 248(1) and paragraph 248(8)(c)) by the entity of that part, and (d) no amount of income or capital of the trust that any entity may receive directly from the trust at any time as a beneficiary under the trust depends on the exercise by any entity of, or the failure by any entity to exercise, a discretionary power; ( participation fixe désignée ) specified person or partnership , in respect of a taxpayer, at any time means the taxpayer or a person (other than a designated acquired corporation of the taxpayer), or a partnership, that is at that time (a) a person (other than a partnership) that is resident in Canada and does not, at that time, deal at arm’s length with the taxpayer, (b) a specified predecessor corporation of the taxpayer or of a specified person or partne