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Vol. 132, No. 7 — April 1, 1998
Registration
SI/98-47 1 April, 1998
FINANCIAL ADMINISTRATION ACT
Order Amending the Income Earned in Quebec Income Tax Remission Order, 1988
P.C. 1998-396 19 March, 1998
His Excellency the Governor General in Council, considering that it is in the public interest to do so, on the recommendation of the Minister of Finance, pursuant to subsection 23(2) (see footnote a) of the Financial Administration Act, hereby makes the annexed Order Amending the Income Earned in Quebec Income Tax Remission Order, 1988.
ORDER AMENDING THE INCOME EARNED IN QUEBEC INCOME TAX REMISSION ORDER, 1988
AMENDMENTS
1. Paragraph 3(b) of the Income Earned in Quebec Income Tax Remission Order, 1988 (see footnote 1) is amended by striking out the word "and" at the end of paragraph (c) of subsection 2602(1) of the Income Tax Regulations, as it reads for the purposes of paragraph 3(b) of the Order, by adding the word "and" at the end of paragraph (d) of that subsection and by adding the following after paragraph (d) of that subsection:
(e) the income of the individual for that year from the disposition of a life insurance policy under which a person resident in the province is, at the time the policy was issued or effected, the person whose life was insured.
2. (1) Subparagraph 4(d)(ii) of the French version of the Order is replaced by the following:
(ii) soit par une société, une commission ou une association dont au moins 90 % des actions, du capital ou des biens appartenaient à la province de Québec ou par une filiale en propriété exclusive d'une telle société, commission ou association, si nul autre que Sa Majesté du chef de la province de Québec n'avait des droits sur les actions, le capital ou les biens de cette société, commission, association ou filiale, ou n'avait le droit d'acquérir ces actions, ce capital ou ces biens,
(2) Paragraphs 4(f) and (g) of the Order are replaced by the following:
(f) amounts that would be required by paragraph 56(1)(n) or (o) of the Act to be included in computing the individual's income for the year if
(i) the individual were resident in Canada throughout the year,
(ii) the references in subparagraph 56(1)(n)(i) and paragraph 56(1)(o) of the Act to "received by the taxpayer in the year" were read as references to "received by the taxpayer in the year from the Province of Quebec or any corporation, commission, association or institution referred to in paragraph 4(d) of the Income Earned in Quebec Income Tax Remission Order, 1988, other than an institution of the Government of Canada, or from a wholly-owned corporation subsidiary to such a corporation, commission or association", and
(iii) the reference to "$500" in paragraph 56(1)(n) of the Act were read as a reference to "the proportion of $500 that the amount determined under subparagraph (i) is of the amount that would be so determined if the requirements of subparagraphs 4(f)(i) and (ii) of the Income Earned in Quebec Income Tax Remission Order, 1988 were not taken into account",
(g) amounts that would be required by subsection 56(8) of the Act to be included in computing the individual's income for the year if the individual were resident in Canada throughout the year, and
3. (1) Clause 5(2)(c)(ii)(B) of the French version of the Order is replaced by the following:
(B) soit d'une société, commission ou association dont au moins 90 % des actions, du capital ou des biens appartenaient à la province de Québec, ou d'une filiale en propriété exclusive d'une telle société, commission ou association, si nul autre que Sa Majesté du chef de la pro-vince de Québec n'avait des droits sur les actions, le capital ou les biens de cette société, commission, association ou filiale, ou n'avait le droit d'acquérir ces actions, ce capital ou ces biens,
(2) Paragraph 5(2)(e) of the Order is replaced by the following:
(e) was, at any time in the year, a child of a person described in paragraph (b) or (c) and was living with the person in a self-contained domestic establishment that the person, whether alone or jointly with one or more other persons, maintained and in which the person lived and actually supported the child who, at that time, was
(i) wholly dependent for support on the person, or the person and the other person or persons, and
(ii) either under 18 years of age or so dependent by reason of mental or physical infirmity.
4. Subparagraphs 6(1)(b)(ii) and (iii) of the Order are replaced by the following:
(ii) the definition "business-income tax" in subsection 126(7) of the Act read as follows:
""business-income tax" paid by a taxpayer for a taxation year in respect of businesses carried on by the taxpayer in a country other than Canada (in this definition referred to as the "business country") means such portion of 55 % of any income or profits tax paid by the taxpayer for the year to the government of any country other than Canada or to the government of a state, province or other political subdivision of any such country as can reasonably be regarded as tax in respect of the income of the taxpayer from any business carried on by the taxpayer in the business country, but does not include a tax, or the portion of a tax, that can reasonably be regarded as relating to an amount that
(a) any other person or partnership has received or is entitled to receive from that government, or
(b) was deductible under subparagraph 110(1)(f)(i) in computing the taxpayer's taxable income for the year;", and
(iii) the definition "tax for the year otherwise payable under this Part" in subsection 126(7) of the Act read as follows:
""tax for the year otherwise payable under this Part" means the amount determined by the formula
A - B
where
A is the tax payable under this Part for the year after taking into account the requirements of subparagraph 6(1)(b)(i) of the Income Earned in Quebec Income Tax Remission Order, 1988, but before making any deduction under any of sections 121, 122.3, 126.1, 127 and 127.2 to 127.4 and this section, and
B is the amount, if any, deemed by subsection 120(2) to have been paid on account of tax payable under this Part for the year after taking into account the requirements of subparagraph 6(1)(b)(i) of the Income Earned in Quebec Income Tax Remission Order, 1988;".
5. Paragraph 7(b) of the French version of the order is replaced by the following:
b) dans le cas d'un particulier visé à l'alinéa 5(2)b), c), d) ou e), en ce qui concerne la rémunération reçue de la province de Québec ou d'une société, commission, association ou institution ou d'un établissement visés à l'alinéa 5(2)c), sauf une institution du gouvernement du Canada, ou d'une filiale en propriété exclusive d'une telle société, commission ou association.
6. The Order is amended by adding the following after section 7:
7.1 Every individual to whom an amount was remitted under section 5 for a taxation year shall reimburse that amount, plus interest thereon to the day of payment, to Her Majesty in right of Canada to the extent of the amount of tax payable under the Taxation Act, R.S.Q., c. I-3, for that year that the individual, as a result of an objection served on the Minister of Revenue of the Province of Quebec, a claim filed in any court or a complaint made to any tribunal, was declared not to be liable to pay on the ground that the individual was not subject to the tax levied under that Act because of the individual's place of residence.
7. Subsection 8(1) (see footnote 2) of the Order is replaced by the following:
8. (1) Sections 3 to 6 apply to the 1983 to 1996 taxation years.
APPLICATION
8. (1) Sections 1 and 7 apply to the 1994 and subsequent taxation years.
(2) Paragraph 4(f) of the Order, as enacted by subsection 2(2), applies to the 1983 and subsequent taxation years.
(3) Paragraph 4(g) of the Order, as enacted by subsection 2(2), applies to the 1993 and subsequent taxation years.
(4) Subsection 3(2) applies to the 1988 and subsequent taxation years.
(5) Section 4 applies to the 1990 and subsequent taxation years.
EXPLANATORY NOTE
(This note is not part of the Order.)
The Income Earned in Quebec Income Tax Remission Order, 1988 defines the expression "income earned in the year in a province" for the purposes of the Income Tax Act and remits to certain individuals who are deemed to be resident in Canada, to non-residents who realized capital gains in Quebec and to Quebec residents who earned business income from a foreign source the additional tax, interest and penalty arising both from the imposition of the federal surtax and from the loss of the federal tax abatement in respect of income earned in Quebec.
This Order extends, with the necessary changes, the application of the Income Earned in Quebec Income Tax Remission Order, 1988 with respect to the 1994, 1995 and 1996 taxation years in the case of sections 3 to 6 of that Order. The federal surtax and the federal tax abatement in respect of income earned in Quebec are respectively 52% and 16.5%.
S.C. 1991, c. 24, s. 7(2)
SI/89-157
SI/94-43
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