Source: https://laws-lois.justice.gc.ca/eng/AnnualStatutes/2013_34/page-22.html
Timestamp: 2020-08-08 13:26:23
Document Index: 443008329

Matched Legal Cases: ['art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2']

85. (1) Paragraph (b) of the definition “earnings” in subsection 5907(1) of the Regulations, as enacted by Part 2, is replaced by the following:
(b) in any other case, the total of all amounts each of which is an amount of income that would be required under paragraph 95(2)(a) of the Act to be included in computing the affiliate’s income or loss from an active business for the year if that income were computed taking into account the rules in subsection (2.03); (gains)
(2) The portion of the definition “exempt earnings” in subsection 5907(1) of the Regulations before subparagraph (a)(iii), as amended by Part 2, is replaced by the following:
“exempt earnings”
“exempt earnings”, of a particular foreign affiliate of a particular corporation for a taxation year of the particular affiliate, means, subject to subsection (2.02), the total of all amounts each of which is
(i) the amount of the taxable capital gains for the year referred to in the description of B in the definition “foreign accrual property income” in subsection 95(1) of the Act,
(ii) the amount of the taxable capital gains for the year referred to in subparagraphs (c)(i), (e)(i) and (f)(iv) of the definition “net earnings”, and
(3) The portion of the definition “exempt loss” in subsection 5907(1) of the Regulations before subparagraph (a)(iii), as amended by Part 2, is replaced by the following:
“exempt loss”
“exempt loss”, of a foreign affiliate of a corporation for a taxation year of the affiliate, means, subject to subsection (2.02), the total of all amounts each of which is
(i) the amount of the allowable capital losses for the year referred to in the description of E in the definition “foreign accrual property income” in subsection 95(1) of the Act,
(ii) the amount of the allowable capital losses for the year referred to in subparagraphs (c)(i), (e)(i) and (f)(iv) of the definition “net loss”, and
(4) The portion of the definition “exempt surplus” in subsection 5907(1) of the Regulations before paragraph (a) is replaced by the following:
“exempt surplus”
“exempt surplus”, of a foreign affiliate (in this definition referred to as the “subject affiliate”) of a corporation in respect of the corporation, at any particular time, means the amount determined by the following formula in respect of the period that begins with the latest of the following times and that ends with the particular time:
(5) The portion of the definition “exempt surplus” in subsection 5907(1) of the English version of the Regulations after paragraph (c) and before the description of A is replaced by the following:
(6) Subparagraph (vii) of the description of A in the definition “exempt surplus” in subsection 5907(1) of the Regulations is replaced by the following:
(7) Paragraph (b) of the definition “loss” in subsection 5907(1) of the Regulations, as enacted by Part 2, is replaced by the following:
(b) in any other case, the total of all amounts each of which is an amount of a loss that would be required under paragraph 95(2)(a) of the Act to be included in computing the affiliate’s income or loss from an active business for the year if that loss were computed taking into account the rules in subsection (2.03);
(8) Paragraph (b) of the definition “net earnings” in subsection 5907(1) of the Regulations is replaced by the following:
(b) in respect of foreign accrual property income is the amount that would be its foreign accrual property income for the year, if the formula in the definition “foreign accrual property income” in subsection 95(1) of the Act were read without reference to F and F.1 in that formula and the amount determined for E in that formula were the amount determined under paragraph (a) of the description of E in that formula, minus the portion of any income or profits tax paid to the government of a country for the year by the affiliate that can reasonably be regarded as tax in respect of that income,
(9) Subparagraphs (d)(i) and (ii) of the definition “net earnings” in subsection 5907(1) of the Regulations are replaced by the following:
(i) shares of the capital stock of another foreign affiliate of the corporation that were excluded property of the affiliate (other than dispositions to which any of paragraphs 95(2)(c) to (e) of the Act was applicable and dispositions in respect of which the amount of the capital gain is included in computing the amount, at any time in the year, of the affiliate’s hybrid surplus, or hybrid deficit, in respect of the corporation), or
(ii) partnership interests that were excluded property of the affiliate (other than dispositions in respect of which the amount of the capital gain is included in computing the amount, at any time in the year, of the affiliate’s hybrid surplus, or hybrid deficit, in respect of the corporation)
(10) Paragraph (d) of the definition “net earnings” in subsection 5907(1) of the Regulations, as amended by subsection (9), is repealed.
(11) Clause (b)(i)(A) of the definition “net loss” in subsection 5907(1) of the Regulations is replaced by the following:
(I) the amount determined for D in the formula in the definition “foreign accrual property income” in subsection 95(1) of the Act for the year,
(12) Subparagraphs (d)(i) and (ii) of the definition “net loss” in subsection 5907(1) of the Regulations are replaced by the following:
(i) shares of the capital stock of another foreign affiliate of the corporation that were excluded property of the affiliate (other than dispositions to which paragraph 95(2)(c), (d) or (e) of the Act was applicable and dispositions in respect of which the amount of the capital loss is included in computing the amount, at any time in the year, of the affiliate’s hybrid surplus, or hybrid deficit, in respect of the corporation), or
(ii) partnership interests that were excluded property of the affiliate (other than dispositions in respect of which the amount of the capital loss is included in computing the amount, at any time in the year, of the affiliate’s hybrid surplus, or hybrid deficit, in respect of the corporation)
(13) Paragraph (d) of the definition “net loss” in subsection 5907(1) of the Regulations, as amended by subsection (12), is repealed.
(14) Paragraphs (a) to (c) of the definition “net surplus” in subsection 5907(1) of the Regulations are replaced by the following:
(15) Paragraph (b) of the definition “taxable earnings” in subsection 5907(1) of the Regulations, as amended by Part 2, is amended by striking out “or” at the end of subparagraph (iii), adding “or” at the end of subparagraph (iv) and adding the following after subparagraph (iv):
(16) The portion of the definition “taxable surplus” in subsection 5907(1) of the Regulations before paragraph (a) is replaced by the following:
“taxable surplus”
“taxable surplus”, of a foreign affiliate (in this definition referred to as the “subject affiliate”) of a corporation in respect of the corporation, at any particular time, means the amount determined by the following formula in respect of the period that begins with the latest of the following times and that ends with the particular time:
(17) The portion of the definition “taxable surplus” in subsection 5907(1) of the English version of the Regulations after paragraph (c) and before the description of A is replaced by the following:
(18) Subparagraph (v) of the description of A in the definition “taxable surplus” in subsection 5907(1) of the Regulations is replaced by the following:
(19) Subparagraph (iv) of the description of B in the definition “taxable surplus” in subsection 5907(1) of the Regulations is replaced by the following:
(20) The portion of the definition “underlying foreign tax” in subsection 5907(1) of the Regulations before paragraph (a) is replaced by the following:
“underlying foreign tax”
“underlying foreign tax”, of a foreign affiliate (in this definition referred to as the “subject affiliate”) of a corporation in respect of the corporation, at any particular time, means the amount determined by the following formula in respect of the period that begins with the later of the following times and that ends with the particular time:
(21) The portion of the definition “underlying foreign tax” in subsection 5907(1) of the English version of the Regulations, as amended by Part 2, after paragraph (b) and before the description of A is replaced by the following:
(22) Subparagraph (ii) of the description of A in the definition “underlying foreign tax” in subsection 5907(1) of the Regulations is replaced by the following:
(23) Subparagraph (ii) of the description of B in the definition “underlying foreign tax” in subsection 5907(1) of the Regulations is replaced by the following:
(24) Subsection 5907(1) of the Regulations is amended by adding the following in alphabetical order:
“designated person or partnership”
“designated person or partnership”, in respect of a taxpayer at any time, means the taxpayer or a person or partnership that is at that time
“hybrid deficit”
“hybrid deficit”, of a foreign affiliate of a corporation in respect of the corporation at any time, means the amount, if any, by which
(a) the total of all amounts each of which is an amount determined at that time under any of subparagraphs (i) to (vii) of the description of B in the definition “hybrid surplus”
“hybrid surplus”
“hybrid surplus”, of a foreign affiliate (in this definition referred to as the “subject affiliate”) of a corporation in respect of the corporation, at any particular time, means the amount determined by the following formula in respect of the period that begins with the latest of the following times and that ends with the particular time:
(ii) the amount of a capital gain (except to the extent that the taxable portion of the capital gain is included under the description of B in the definition “foreign accrual property income” in subsection 95(1) of the Act in respect of the subject affiliate), for a taxation year, of the subject affiliate, or of a partnership of which the subject affiliate is a member (to the extent that the capital gain is reasonably attributable to the subject affiliate), in respect of a disposition, at any time in the period, of
(C) a property, that is an excluded property of the subject affiliate because of paragraph (c.1) of the definition “excluded property” in subsection 95(1) of the Act, that related to
(II) an amount payable, or an amount of indebtedness, described in clause (c.1)(ii)(B) of that definition “excluded property” arising in respect of the acquisition of an excluded property of the affiliate that is referred to in clause (A) or (B) any capital gain or capital loss from the disposition of which would, if that excluded property were disposed of, be included under this subparagraph or subparagraph (ii) of the description of B, as the case may be,
(v) an amount added to the hybrid surplus of the subject affiliate or deducted from its hybrid deficit in the period and before the particular time under subsection (1.1) or (1.2), and
(ii) the amount of a capital loss (except to the extent that the allowable portion of the capital loss is included under paragraph (a) of the description of E in the definition “foreign accrual property income” in subsection 95(1) of the Act in respect of the subject affiliate), for a taxation year, of the subject affiliate, or of a partnership of which the subject affiliate is a member (to the extent that the capital loss is reasonably attributable to the subject affiliate), in respect of a disposition, at any time in the period, of
(II) an amount payable, or an amount of indebtedness, described in clause (c.1)(ii)(B) of that definition “excluded property” arising in respect of the acquisition of an excluded property of the affiliate that is referred to in clause (A) or (B) any capital gain or capital loss from the disposition of which would, if that excluded property were disposed of, be included under subparagraph (ii) of the description of A or this subparagraph, as the case may be,
(vii) an amount, in the period and before the particular time, deducted from the hybrid surplus of the subject affiliate or added to its hybrid deficit under subsection (1.1) or (1.2); (surplus hybride)
“hybrid underlying tax”
“hybrid underlying tax”, of a foreign affiliate (in this definition referred to as the “subject affiliate”) of a corporation in respect of the corporation, at any particular time, means the amount determined by the following formula in respect of the period that begins with the later of the following times and that ends with the particular time:
(ii) the portion of any income or profits tax paid to the government of a country by the subject affiliate that can reasonably be regarded as having been paid in respect of any amount referred to in subparagraph (ii) or (iv) of the description of A in the definition “hybrid surplus”,
(iv) the amount by which the subject affiliate’s hybrid underlying tax is required to be increased under subsection (1.1) or (1.2),
(i) the portion of any income or profits tax refunded by the government of a country to the subject affiliate that can reasonably be regarded as having been refunded in respect of an amount referred to in subparagraph (ii) or (iii) of the description of B in the definition “hybrid surplus”,
(iv) the amount by which the subject affiliate’s hybrid underlying tax is required to be decreased in the period and before the particular time under subsection (1.1) or (1.2); (montant intrinsèque d’impôt hybride)
“hybrid underlying tax applicable”
“hybrid underlying tax applicable”, in respect of a corporation to a whole dividend paid at any time on the shares of any class of the capital stock of a foreign affiliate of the corporation by the affiliate, means the proportion of the hybrid underlying tax of the affiliate at that time in respect of the corporation that
(25) Subsection 5907(1.01) of the Regulations is replaced by the following:
(1.01) For the purposes of section 113 of the Act, “exempt surplus”, “hybrid surplus” and “taxable surplus” have the meanings assigned by subsection (1).
(26) Subparagraph 5907(1.1)(a)(iv) of the Regulations is amended by striking out “and” at the end of clause (A) and adding the following after clause (A):
(27) Subparagraph 5907(1.1)(a)(v) of the Regulations is amended by striking out “and” at the end of clause (C) and adding the following after clause (C):
(28) Clause 5907(1.1)(b)(i)(B) of the Regulations is amended by striking out “and” at the end of subclause (I) and adding the following after subclause (I):
(29) Clause 5907(1.1)(b)(ii)(A) of the Regulations, as enacted by Part 2, is amended by striking out “and” at the end of subclause (I) and adding the following after subclause (I):
(30) Paragraph 5907(1.2)(c) of the Regulations is amended by striking out “and” at the end of subparagraph (i) and adding the following after subparagraph (i):
(31) Subparagraph 5907(1.2)(d)(i) of the Regulations is amended by striking out “and” at the end of clause (A) and adding the following after clause (A):
(32) Subsection 5907(1.4) of the Regulations, as enacted by Part 2, is replaced by the following:
(33) Section 5907 of the Regulations is amended by adding the following after subsection (1.6), as enacted by Part 2:
(34) Subparagraph 5907(2)(f)(ii) of the Regulations is replaced by the following:
(35) Subparagraph 5907(2)(j)(iii) of the Regulations is replaced by the following:
(36) Paragraph 5907(2)(l) of the Regulations is replaced by the following:
(37) Section 5907 of the Regulations is amended by adding the following after subsection (2):
(2.03) The determination — under subparagraph (a)(iii) and paragraph (b) of the definition “earnings”, and paragraph (b) of the definition “loss”, in subsection (1) — of the earnings or loss of a foreign affiliate of a taxpayer resident in Canada for a particular taxation year from an active business is to be made as if the affiliate
(38) Subsection 5907(2.9) of the Regulations is replaced by the following:
(i) there is to be added to the amount determined under paragraph (a) of the definition “earnings” in subsection (1), after adjustment in accordance with subsections (2) to (2.2),
is the amount determined under paragraph (a) of the definition “relevant cost base” in subsection 95(4) of the Act in respect of the property, in respect of the taxpayer, immediately before the time of the disposition, and
(ii) there is to be added to the amount determined under paragraph (a) of the definition “loss” in subsection (1),
(39) Subsection 5907(5) of the Regulations, as enacted by Part 2, is replaced by the following:
(5.01) For the purposes of subsection (6), if any capital gain, capital loss, taxable capital gain or allowable capital loss referred to in subsection (5), or any capital loss referred to in subparagraph (iii) of the description of B in the definition “hybrid surplus” in subsection (1), of a foreign affiliate of a corporation is required to be computed in Canadian currency and the currency referred to in subsection (6) is not Canadian currency, the amount of the gain or loss is to be converted from Canadian currency into the currency referred to in subsection (6) at the rate of exchange prevailing on the date of disposition of the property.
(40) The portion of subsection 5907(5.1) of the Regulations before paragraph (a) is replaced by the following:
(41) Subsection 5907(7.1) of the Regulations is repealed.
(42) Subsection 5907(8) of the Regulations is replaced by the following:
(43) Subsection 5907(9) of the Regulations is replaced by the following:
(44) Subsection 5907(13) of the Regulations is replaced by the following:
(45) Subsections (1), (7), (8), (11), (15), (22) and (26) to (33) and subsection 5907(2.03) of the Regulations, as enacted by subsection (37), apply in respect of taxation years of a foreign affiliate of a taxpayer that end after August 19, 2011.
(46) Subsection (2) applies in respect of taxation years of a foreign affiliate of a taxpayer that end after August 19, 2011, except that, for taxation years of the foreign affiliate that begin before 2013, subparagraph (a)(ii) of the definition “exempt earnings” in subsection 5907(1) of the Regulations, as enacted by subsection (2), is to be read as follows:
(ii) the amount of the taxable capital gains for the year referred to in subparagraphs (c)(i), (d)(iii), (e)(i) and (f)(iv) of the definition “net earnings”, and
(47) Subsection (3) applies in respect of taxation years of a foreign affiliate of a taxpayer that end after August 19, 2011, except that, for taxation years of the foreign affiliate that begin before 2013, subparagraph (a)(ii) of the definition “exempt loss” in subsection 5907(1) of the Regulations, as enacted by subsection (3), is to be read as follows:
(ii) the amount of the allowable capital losses for the year referred to in subparagraphs (c)(i), (d)(iii), (e)(i) and (f)(iv) of the definition “net loss”, and
(48) Subsections (4) to (6), (14), (16) to (21), (23), (25), (39) and (41) are deemed to have come into force on August 20, 2011.
(49) Subsections (9) and (12) apply in respect of taxation years of a foreign affiliate of a taxpayer that end after August 19, 2011. However, if the taxpayer has elected under subsection 70(31), subsection (9) also applies to all mergers or combinations in respect of foreign affiliates of the taxpayer that occur after December 20, 2002 and in taxation years of those foreign affiliates that end on or before August 19, 2011 and, in respect of those mergers or combinations, subparagraphs (d)(i) and (ii) of the definition “net earnings” in subsection 5907(1) of the Regulations, as enacted by subsection (9), are to be read as follows:
(i) shares of the capital stock of another foreign affiliate of the corporation that were excluded property of the affiliate (other than dispositions to which any of paragraphs 95(2)(c) to (e) of the Act was applicable), or
(ii) partnership interests that were excluded property of the affiliate
(50) Subsections (10) and (13) apply to taxation years of a foreign affiliate of a taxpayer that begin after 2012.
(51) Subsection (24) is deemed to have come into force on August 20, 2011. However, in respect of dispositions that occur after August 19, 2011 and before 2013,
(a) the portion of subparagraph (ii) of the description of A in the definition “hybrid surplus” in subsection 5907(1) of the Regulations before clause (A), as enacted by subsection (24), is to be read as follows:
(ii) the amount of a capital gain (except to the extent that the taxable portion of the capital gain is included under the description of B in the definition “foreign accrual property income” in subsection 95(1) of the Act in respect of the subject affiliate), for a taxation year, of the subject affiliate, or of a partnership of which the subject affiliate is a member (to the extent that the capital gain is reasonably attributable to the subject affiliate), in respect of a disposition, at any time in the period, to a person or partnership that was, at that time, a designated person or partnership in respect of the corporation, of
(b) the portion of subparagraph (ii) of the description of B in the definition “hybrid surplus” in subsection 5907(1) of the Regulations before clause (A), as enacted by subsection (24), is to be read as follows:
(ii) the amount of a capital loss (except to the extent that the allowable portion of the capital loss is included under paragraph (a) of the description of E in the definition “foreign accrual property income” in subsection 95(1) of the Act in respect of the subject affiliate), for a taxation year, of the subject affiliate, or of a partnership of which the subject affiliate is a member (to the extent that the capital loss is reasonably attributable to the subject affiliate), in respect of a disposition, at any time in the period, to a person or partnership that was, at that time, a designated person or partnership in respect of the corporation, of
(c) section 5907 of the Regulations is to be read as if it contained a subsection (1.001) that reads as follows:
(1.001) For the purposes of subparagraph (ii) of the description of A, and subparagraph (ii) of the description of B, in the definition “hybrid surplus” in subsection (1)
(a) if a foreign affiliate of a corporation redeems, acquires or cancels shares of its capital stock those shares are, for greater certainty, deemed to be disposed of to the affiliate by the person or partnership that, immediately before the redemption, acquisition or cancellation, holds those shares;
(b) if a partnership redeems, acquires or cancels interests in the partnership those interests are, for greater certainty, deemed to be disposed of to the partnership by the person or partnership that, immediately before the redemption, acquisition or cancellation, holds those interests; and
(c) if a person or partnership is deemed under subsection 40(3) of the Act to have disposed of shares of the capital stock of a corporation, the person or partnership is deemed to have disposed of those shares to itself.
(52) Subsections (34) to (36) apply in respect of dispositions of property by a foreign affiliate of a taxpayer that occur after August 19, 2011. However, if the taxpayer has elected under subsection (53),
(a) subparagraph 5907(2)(f)(ii) of the Regulations, as enacted by subsection (34), and subparagraph 5907(2)(j)(iii) of the Regulations, as enacted by subsection (35), apply in respect of dispositions of property by all foreign affiliates of the taxpayer that occur after December 20, 2002;
(b) that subparagraph 5907(2)(f)(ii) is, in respect of all such dispositions that occur on or before August 19, 2011, to be read as follows:
(ii) subject to subsection (2.01), does not arise with respect to a disposition (other than a disposition to which subsection (9) applies) by the affiliate of property to another foreign affiliate of the taxpayer or to a person with whom the taxpayer does not deal at arm’s length, to which a tax deferral, rollover or similar tax postponement provision of the income tax law that is relevant in computing the earnings amount of the affiliate applied, and
(c) that subparagraph 5907(2)(j)(iii) is, in respect of all such dispositions that occur on or before August 19, 2011, to be read as follows:
(iii) subject to subsection (2.01), does not arise with respect to a disposition (other than a disposition to which subsection (9) applies) by the affiliate of property to another foreign affiliate of the taxpayer or to a person with whom the taxpayer does not deal at arm’s length, to which a loss deferral or similar loss postponement provision of the income tax law that is relevant in computing the earnings amount of the affiliate applied, and
(53) Subsection 5907(2.01) of the Regulations, as enacted by subsection (37), applies to dispositions by a foreign affiliate of a taxpayer that occur after August 19, 2011. However, if the taxpayer elects in writing under this subsection in respect of all of its foreign affiliates and files the election with the Minister of National Revenue on or before the day that is the later of the taxpayer’s filing-due date for the taxpayer’s taxation year that includes the day on which this Act receives royal assent and the day that is one year after the day on which this Act receives royal assent, that subsection 5907(2.01) applies to dispositions by all foreign affiliates of the taxpayer that occur after December 20, 2002.
(54) Subsection 5907(2.02) of the Regulations, as enacted by subsection (37), applies in respect of transactions (within the meaning of subsection 245(1) of the Act) that are entered into after August 19, 2011.
(55) Subsection (38) applies in respect of taxation years of a foreign affiliate of a taxpayer that begin after December 20, 2002. However, if the taxpayer has elected under paragraph 70(29)(b), subsection (38) applies in respect of taxation years of all foreign affiliates of the taxpayer that begin after 1994.
(56) Subsection (40) applies to dispositions that occur after August 19, 2011.
(57) Subsection (42) applies in respect of mergers or combinations in respect of a foreign affiliate of a taxpayer that occur after August 19, 2011.
(58) Subsection 5907(9) of the Regulations, as enacted by subsection (43), applies in respect of liquidations and dissolutions of foreign affiliates of a taxpayer that begin after December 20, 2002, except that
(a) if the taxpayer has elected under subsection 70(28), paragraph 5907(9)(b) of the Regulations, as enacted by subsection (43), is, in respect of liquidations and dissolutions of all foreign affiliates of the taxpayer that begin on or before February 27, 2004, to be read as follows:
(b) each property of the affiliate that was disposed of by the affiliate in the course of the liquidation and dissolution is, subject to subsection 88(3) of the Act, deemed to have been
(A) if the liquidation and dissolution is one to which paragraph 95(2)(e) of the Act applies in respect of the disposition, the amount determined under subparagraph 95(2)(e)(i) or (ii) of the Act, and
(B) in any other case, the fair market value of the property at the time it was actually disposed of, and
(b) if the taxpayer has not elected under subsection 70(28), paragraph 5907(9)(b) of the Regulations, as enacted by subsection (43), is, in respect of liquidations and dissolutions of foreign affiliates of the taxpayer that
(i) begin on or before February 27, 2004, to be read as follows:
(b) each property of the affiliate that was disposed of by the affiliate in the course of the liquidation and dissolution is, subject to subsection 88(3) and paragraphs 95(2)(e) and (e.1) of the Act, deemed to have been
(i) disposed of by the affiliate, at the time that is the earlier of the time it was actually disposed of and the time that is immediately before the time that is immediately before the particular time, for proceeds of disposition equal to the fair market value of the property at the time it was actually disposed of, and
(ii) begin after February 27, 2004 and on or before August 19, 2011, to be read as follows:
(b) each property of the affiliate that was disposed of by the affiliate in the course of the liquidation and dissolution is, subject to paragraphs 95(2)(e) and (e.1) of the Act, deemed to have been
(A) if the liquidation and dissolution is one to which subsection 88(3) of the Act applies in respect of the disposition, the amount that would (in the absence of subsection 88(3.3) of the Act) be determined under paragraph 88(3)(a) or (b) of the Act, as the case may be, and
(59) Subsection 5907(9.1) of the Regulations, as enacted by subsection (43), applies to mergers or combinations in respect of a foreign affiliate of a taxpayer that occur after August 19, 2011. However, if the taxpayer has elected under subsection 70(31), that subsection 5907(9.1) applies to mergers or combinations in respect of all foreign affiliates of the taxpayer that occur after December 20, 2002.
(60) Subsections 5907(13) and (14) of the Regulations, as enacted by subsection (44), apply after 1992 in respect of a foreign affiliate of a taxpayer. However,
(a) if the foreign affiliate elected in accordance with paragraph 111(4)(a) of the Statutes of Canada, 1994, chapter 21, those subsections 5907(13) and (14) apply to the foreign affiliate from the foreign affiliate’s time of continuation (within the meaning assigned by that paragraph);
(b) in their application in respect of dispositions that occur on or before August 19, 2011,
(i) subject to paragraph (c), subsection 5907(13) of the Regulations, as enacted by subsection (44), is to be read as follows:
A – B – (C – D)
is the total of all amounts each of which is the amount by which the affiliate’s underlying foreign tax in respect of the other taxpayer at the end of the year would have increased because of the gain or income of the affiliate that would have arisen if a disposition, deemed under paragraph 128.1(1)(b) of the Act, of a property by the affiliate had been an actual disposition of the property by the affiliate, and
is the total of all amounts each of which is the amount otherwise added in computing the affiliate’s underlying foreign tax in respect of the other taxpayer at the end of the year in respect of income or profits taxes paid to the government of a country in respect of all or a portion of a gain or an income of the affiliate referred to in the description of C, and
is the underlying foreign tax of the affiliate in respect of the other taxpayer at the end of the year, and
is the amount, if any, by which the amount determined under the description of C exceeds the amount determined under the description of D,
(ii) the total of all amounts required by paragraph 92(1)(b) of the Act to be deducted at any time in a preceding taxation year in computing the adjusted cost base to the other taxpayer of the shares of the affiliate owned by the other taxpayer at the end of the year.
(ii) the portion of subsection 5907(14) of the Regulations before paragraph (a), as enacted by subsection (44), is to be read as follows:
(14) For the purposes of the description of C in the description of X in subsection (13), the amount by which the underlying foreign tax of the affiliate in respect of the taxpayer at the end of the year would have increased, if a disposition (referred to in this subsection as the “notional actual disposition”) deemed under paragraph 128.1(1)(b) of the Act of any property by the affiliate had been an actual disposition of the property by the affiliate, is the total of all amounts each of which is the amount, if any, by which
(c) in its application in respect of dispositions that occur on or before February 27, 2004, the description of M in subsection 5907(13) of the Regulations, as enacted by subsection (44) and as required to be read by subparagraph (b)(i), is instead to be read as follows:
is the amount that would be determined to be the amount by which the amount determined under the description of C exceeds the amount determined under the description of D if this section were read without reference to subsection (14), and
(61) Subsection 5907(15) of the Regulations, as enacted by subsection (44), applies in respect of dispositions that occur after August 19, 2011.