Archived - Explanatory Notes relating to the Income Tax Act, the Excise Act, the Excise Act, 2001, the Customs Tariff, the Excise Tax Act and other Acts

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Published by
The Honourable James M. Flaherty, P.C., M.P.
Minister of Finance

April 2008


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These explanatory notes are provided to assist in an understanding of the relevant amendments. These notes are intended for information purposes only and should not be construed as an official interpretation of the provisions that they describe.

Table of Contents

Clause in Legislation Section of the Act Amended Topic

Preface    

1   Short title

Part 1
Amendments related to Income Tax
Income Tax Act
2 18 Prohibited Deductions - TFSA
3 37 Scientific Research and Experimental Development
4 38 Gifts of Securities
5 40 Gains and Losses – Limitations
6 74.5 Attribution Rules – Where Sections 74.1 to 74.3 do not apply
7 75 Attribution Rules – Trusts - Exceptions
8 82 Dividend "Gross-up"
9 87 Amalgamations – Shares Deemed Listed
10 107.4 Qualifying Disposition
11 108 Taxation of Trusts and their Beneficiaries – Definitions
12 110.1 Eligible Medical Gift
13 110.7 Northern Residents Deduction
14 116 Disposition by non-resident person of certain property
15 118.1 Direct Designations – RRSPs, RRIFs and TFSAs
16 118.2 Medical Expense Tax Credit
17 121 Dividend Tax Credit
18 122 Tax Payable by inter vivos trust
19 127 Investment tax credit: Definitions
20 128.1 Changes in Residence - Definitions
21 132.2 Mutual Fund Qualifying Exchanges
22 138.1 Segregated Funds – Where ss. (1) to (6) do not apply
23 146.1 Registered Education Savings Plans
24 146.2 Tax-free Savings Accounts
25 146.4 Registered Disability Savings Plans
26 148 Life Insurance Policies
27 149 TFSA Trust
28 150 Filing returns of income
29 153 Withholding and Remittance
30 197 Tax on SIFT Partnership
31 Part XI.01 Taxes in respect of TFSAs
32 211 Tax on Investment Income of Life Insurers – Definitions
33 227 Penalty
34 248 Definitions
35 252 Extended meaning of "spouse" and "former spouse"
36 253.1 Investments in Limited Partnerships
37 259 Proportional Holdings in Trust Property

Canada Pension Plan
38 21 Withholding and Remittances

Employment Insurance Act
39 82 Withholding and Remittances

Coordinating Amendments
40 to 44   Bill C-10

Conditional Amendments
45 to 48   Bill C-253

Part 2
Amendments in respect of Excise Duty on Tobacco Products and Alcohol
Excise Act
49 4 Definition "beer" or "malt liquor"

Excise Act, 2001
50 2 Definition "tobacco manufacturing equipment"
51 5 Possession
52 23 Licences and registrations
53 32.1 Prohibitions — tobacco manufacturing equipment
54 38 Delivery of imported tobacco
55 47 Duty relieved — reimportation of stamped tobacco by individual
56 53 Special duty on imported manufactured tobacco delivered to duty free shop
57 54 Exception to the special duty on traveller’s tobacco
58 180.1 Refund — imported black stock tobacco
59 206 Keeping records — tobacco manufacturing equipment
60 214 Unlawful production, sale, etc. of tobacco or alcohol
61 216 Penalty
62 240 Penalty
63 Sched. 1, s. 2 Duties on tobacco sticks
64 Sched. 1, s. 3 Duties on other manufactured tobacco
65 Sched. 3, s. 1 Special duty on imported manufactured tobacco
66 Sched. 3, s. 2 Special duty on traveller’s tobacco
67 Sched. 3, para 3(b) Special duty on unstamped tobacco products
68 Sched. 3, s. 4 Special duty on stamped tobacco products
69 Sched. 1, paras 2(a) and (b), 3(a) and (b); Sched. 3, paras 1(b) and (c), 2(b) and (c), 3(b), 4(b) and (c) Application of interest

Customs Tariff
70 21 Definition "spirits"
71 92 Non-application to stamped manufactured tobacco

Part 3
Amendments in respect of the Goods and Services Tax and Harmonized Sales Tax (GST/HST)
Excise Tax Act
72 162 Natural resources
73 191 Self-supply of real property
74 191.1 Subsidized residential complexes
75 236.4 Election for residential complexes
76 256.1 Rebate to owner or lessee of land leased for residential purposes
77 256.2 New residential rental property rebate
78 V/I/ 6.1 Lease of real property where exempt re-supply
79 V/I/ 6.11 Lease of real property where exempt re-supply
80 V/II/5 and 6 Physicians’ and dentists’ services and nursing services
81 V/II/7 Practitioners’ services
82 V/II/7.1 and 7.2 Dietetic services and social workers’ services
83 V/II/10 Prescribed health care service
84 V/II/14 and 15 Specially designed training
85 VI/I/1 Prescription drugs
86 VI/I/2 Prescription drugs
87 VI/I/3 Prescription drugs
88 VI/II/1.1 Medical devices
89 VI/II/6 Medical devices
90 VI/II/14 and 14.1 Medical devices
91 VI/II/20 Medical devices
92 VI/II/33 and 34 Medical devices
93 VI/II/41 Medical devices