Income Tax Act — I-3.3 87
m, or shares of the capital stock of, any predecessor foreign corporation) representing all or substantially all of the fair market value of all such properties owned by each predecessor foreign corporation immediately before the merger or combination, then (a) the merger or combination is deemed to be a merger or combination of the predecessor foreign corporations to form one non-resident corporation; (b) the survivor corporation is deemed to be the non-resident corporation so formed; (c) all of the properties of the survivor corporation immediately before the merger or combination that are properties of the survivor corporation immediately after the merger or combination are deemed to become properties of the survivor corporation as a consequence of the merger or combination; (d) all of the liabilities of the survivor corporation immediately before the merger or combination that are liabilities of the survivor corporation immediately after the merger or combination are deemed to become liabilities of the survivor corporation as a consequence of the merger or combination; (e) all of the shares of the capital stock of the survivor corporation that were outstanding immediately before the merger or combination that are shares of the capital stock of the survivor corporation immediately after the merger or combination are deemed to become shares of the capital stock of the survivor corporation as a consequence of the merger or combination; and (f) all of the shares of the capital stock of each predecessor foreign corporation (other than the survivor corporation) that were outstanding immediately before the merger or combination and that cease to exist as a consequence of the merger or combination are deemed to be exchanged by the shareholders of each such predecessor corporation for shares of the survivor corporation as a consequence of the merger or combination. Anti-avoidance (8.3) Subsection (8) does not apply in respect of a taxpayer’s shares of the capital stock of a predecessor foreign corporation that are exchanged for or become, on a foreign merger, shares of the capital stock of the new foreign corporation or the foreign parent corporation, if (a) the new foreign corporation is, at the time that is immediately after the foreign merger, a foreign affiliate of the taxpayer; (b) the foreign merger is part of a transaction or event or a series of transactions or events that includes a disposition (referred to in paragraph (c) as the “relevant disposition”) of a property that is (i) a share of the capital stock of the new foreign corporation, (ii) property substituted for a share of the capital stock of the new foreign corporation, or (iii) property any of the fair market value of which is derived, directly or indirectly, from property referred to in subparagraph (i) or (ii); and (c) the relevant disposition is to a person or partnership (referred to in this subsection and subsection (8.31) as the “acquirer”) that (i) immediately after the transaction, event or series, deals at arm’s length with the taxpayer or a person that is, at any time during the period that begins at the time of the foreign merger and ends immediately after the transaction, event or series, a particular person in respect of the taxpayer, unless (A) the acquirer is a foreign affiliate of the taxpayer or of a successor corporation of the taxpayer in respect of which the taxpayer or the successor corporation, as the case may be, has a qualifying interest (within the meaning of paragraph 95(2)(m)) at the time of the transaction or event or throughout the series, or (B) at the time of the relevant disposition, the property that is disposed of is not excluded property (as defined in subsection 95(1)) of a foreign affiliate of the taxpayer, of a person that is, at any time during the period, a particular person in respect of the taxpayer or of a partnership, any member of which is, at any time during the period, the taxpayer or a particular person in respect o