Income Tax Act — I-3.3 18.4
ll or part of the income earned by the entity, irrespective of whether that income is distributed currently to the shareholder. ( régime fiscal des sociétés étrangères contrôlées ) deductible , in relation to an amount in respect of a payment, in computing relevant foreign income or profits, includes any relief that arises in respect of the payment and is equivalent in effect to a deduction, including (a) an exemption or exclusion in computing the relevant foreign income or profits; and (b) a refund of, or credit that can be applied to reduce or offset, income or profits tax paid or payable to a government of a country other than Canada in respect of the relevant foreign income or profits. ( déductible ) entity has the same meaning as in subsection 95(1). ( entité ) equity interest means any of the following: (a) a share of the capital stock of a corporation; (b) an interest as a beneficiary under a trust; (c) an interest as a member of a partnership; or (d) any similar interest in respect of any entity. ( participation au capital ) equity or financing return means a payment that can reasonably be considered to be in respect of, or determined by reference to, (a) revenue, profit, cash flow, commodity price or any other similar criterion; (b) dividends paid or payable to shareholders of any class of shares of the capital stock of a corporation, or income or capital paid or payable to any member of a partnership or beneficiary under a trust, or any other distribution in respect of any entity; or (c) an amount that is, or is on account of, in lieu of payment of or in satisfaction of, interest, or that is otherwise compensation for the use of money. ( rendement financier ou de capitaux propres ) exempt dealer compensation payment means a payment that (a) is a dealer compensation payment (as defined in subsection 260(1)); (b) is received by a registered securities dealer resident in Canada, as compensation for a taxable dividend paid on a share of the capital stock of a public corporation, from a non-resident corporation (referred to in this definition as the “affiliate”) that, at the time the payment is received, (i) is a controlled foreign affiliate of (A) the registered securities dealer, or (B) another taxpayer that does not deal at arm’s length with the registered securities dealer, (ii) has a substantial market presence in a particular country other than Canada, (iii) makes the payment in the ordinary course of a business of trading in securities, if (A) the business is carried on by the affiliate as a foreign bank (as defined in subsection 95(1)), a trust company, a credit union, an insurance corporation or a trader or dealer in securities, (B) the activities of the business are regulated under the laws of (I) the particular country, (II) another country under the laws of which the affiliate is governed and any of exists, was (unless the affiliate was continued in any jurisdiction) formed or organized, or was last continued and of each country in which the business is carried on through a permanent establishment, or (III) if the affiliate is related to a corporation, another country under the laws of which the related corporation is governed and any of exists, was (unless the related corporation was continued in any jurisdiction) formed or organized, or was last continued, if those regulating laws are recognized under the laws of the country in which the business is principally carried on and all of those countries are members of the European Union, and (iv) conducts the business, directly or indirectly, (A) principally with persons that (I) deal at arm’s length with the affiliate, and (II) are resident, or carry on business through a permanent establishment, in the particular country, and (B) in competition with other entities that (I) deal at arm’s length with the affiliate, and (II) have a substantial market presence in the particular country; and (c) does not arise under, or in connection with, a structured arrangement.