I-3 - Taxation Act

Section 174.0.1 Disposition versions

2020-09-24

174.0.1. The rules to which section 174 refers in respect of a taxpayer at any time are as follows:

(a)  the portion of the particular amount, at that time, referred to in paragraph a of section 174 that is equal to the lesser of the following amounts is deemed to be an amount owing as or on account of a debt or other obligation to pay an amount to the particular person referred to in subparagraph i or ii of paragraph c of section 174 and not to the intermediary:

i.  the amount owing as or on account of the intermediary debt or the fair market value of the particular property referred to in subparagraph ii of paragraph c of section 174, as the case may be, and

ii.  the proportion of the particular amount that the amount owing or the fair market value, as the case may be, is of the aggregate of all amounts each of which is

(1)  an amount owing as or on account of an intermediary debt in respect of the particular debt or other particular obligation that is owed to the particular person or any other person that is, in respect of the taxpayer, a specified person not resident in Canada, or

(2)  the fair market value of a particular property referred to in subparagraph ii of paragraph c of section 174 in respect of the particular debt or other particular obligation, and

(b)  the portion of the interest paid or payable by the taxpayer, in respect of a period throughout which subparagraph a applies, on the particular debt or other particular obligation referred to in paragraph a of section 174 that is equal to the amount determined by the following formula is deemed to be paid or payable by the taxpayer to the particular person, and not to the intermediary, as interest for the period on the amount that is deemed under subparagraph a to be owing to the particular person:

A × B/C.

In the formula in subparagraph b of the first paragraph,

(a)  A is the interest paid or payable;

(b)  B is the average of all amounts each of which is an amount that is deemed under subparagraph a of the first paragraph to be owing to the particular person at a time during the period; and

(c)  C is the average of all amounts each of which is the particular amount owing at a time during the period.

2017, c. 29, s. 49; 2020, c. 16, s. 44.

2017-12-07

174.0.1. The rules to which section 174 refers in respect of a taxpayer at any time are as follows:

(a)  the portion of the particular amount, at that time, referred to in paragraph a of section 174 that is equal to the lesser of the following amounts is deemed to be an amount outstanding as or on account of a debt or other obligation to pay an amount to the particular person referred to in subparagraph i or ii of paragraph c of section 174 and not to the intermediary:

i.  the amount outstanding as or on account of the intermediary debt or the fair market value of the particular property referred to in subparagraph ii of paragraph c of section 174, as the case may be, and

ii.  the proportion of the particular amount that the amount outstanding or the fair market value, as the case may be, is of the aggregate of all amounts each of which is

(1)  an amount outstanding as or on account of an intermediary debt in respect of the particular debt or other particular obligation, owed to the particular person or any other person that is, in respect of the taxpayer, a specified person not resident in Canada, or

(2)  the fair market value of a particular property referred to in subparagraph ii of paragraph c of section 174 in respect of the particular debt or other particular obligation, and

(b)  the portion of the interest paid or payable by the taxpayer, in respect of a period throughout which subparagraph a applies, on the particular debt or other particular obligation referred to in paragraph a of section 174 that is equal to the amount determined by the following formula is deemed to be paid or payable by the taxpayer to the particular person, and not to the intermediary, as interest for the period on the amount deemed under subparagraph a to be outstanding to the particular person:

A × B/C.

In the formula in subparagraph b of the first paragraph,

(a)  A is the interest paid or payable;

(b)  B is the average of all amounts each of which is an amount that is deemed under subparagraph a of the first paragraph to be outstanding to the particular person at a time during the period; and

(c)  C is the average of all amounts each of which is the particular amount outstanding at a time during the period.

2017, c. 29, s. 49.