I-3 - Taxation Act

Section 583 Disposition versions

2017-02-08

583. A taxpayer who has included an amount under section 580 in respect of a share of a controlled foreign affiliate (in this section referred to as the “particular foreign affiliate”) in computing the taxpayer’s income for a taxation year or for one of the five preceding taxation years may deduct in so computing for the year the lesser of

(a)  the product obtained by multiplying the taxpayer’s prescribed tax factor for the year by the aggregate—to the extent that the aggregate was not deductible under this section for a preceding year—of any amount prescribed in respect of the particular foreign affiliate or a shareholder affiliate that is attributable to the amount and any income or profits tax reasonably attributable to the amount that is paid by

i.  the particular foreign affiliate,

ii.  the shareholder affiliate of the taxpayer, or

iii.  another foreign affiliate of the taxpayer in respect of a dividend received, directly or indirectly, from the particular foreign affiliate, if that other foreign affiliate has an equity percentage in the particular foreign affiliate; and

(b)  the amount by which that amount exceeds the aggregate of the amounts deductible under this section in respect of the share for the five preceding taxation years.

For the purposes of the first paragraph, a shareholder affiliate of the taxpayer means a foreign affiliate of the taxpayer, other than the particular foreign affiliate, where

(a)  it has an equity percentage in the particular foreign affiliate; and

(b)  the income or profits tax is paid by it to a country other than Canada and it, and not the particular foreign affiliate, is liable for that tax under the laws of that country.

1975, c. 22, s. 158; 1984, c. 15, s. 128; 2015, c. 21, s. 192; 2017, c. 1, s. 142.

2015-10-21

583. A taxpayer who has included an amount under section 580 in respect of a share of a controlled foreign affiliate in computing the taxpayer’s income for a taxation year or for one of the five preceding taxation years may deduct in so computing for the year the lesser of

(a)  the aggregate of any amount prescribed in respect of the affiliate that is attributable to the amount and any income or profits tax paid by the affiliate, or by another foreign affiliate of the taxpayer in respect of a dividend received from the affiliate, that is reasonably attributable to the amount, to the extent that the aggregate was not deductible under this section for a preceding year, multiplied by the taxpayer’s prescribed tax factor for the year; and

(b)  the amount by which that amount exceeds the aggregate of the amounts deductible under this section in respect of the share for the five preceding taxation years.

1975, c. 22, s. 158; 1984, c. 15, s. 128; 2015, c. 21, s. 192.

2006-03-01

583. A taxpayer who has included an amount under section 580 in respect of a share of a controlled foreign affiliate in computing his income for a taxation year or for one of the five preceding taxation years may deduct in so computing for the year the lesser of

(a)  the aggregate of any amount prescribed in respect of the affiliate that is applicable to the amount and of any income or profits tax paid by the affiliate, or by another foreign affiliate of the taxpayer in respect of a dividend received from the affiliate, that is reasonably applicable to the amount, to the extent that the aggregate was not deductible under this section for a preceding year multiplied by the prescribed tax factor; or

(b)  the amount by which such amount exceeds the aggregate of the amounts deductible under this section in respect of that share for the five preceding taxation years.

1975, c. 22, s. 158; 1984, c. 15, s. 128.