Archived - Explanatory Notes Relating to the Budget and Economic Statement Implementation Act, 2007 and Draft Regulations Relating to Tax Information Exchange Agreements

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

November 2007


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

Table of Contents


Clause in Legislation

Section of the Act Amended

Topic

Preface

Part 3
Amendments Related to Income Tax

Income Tax Act

Revised explanatory notes to implement remaining Budget 2007 tax measures:

9

12

Inclusions

12

18.2(9)

Partnerships

15

38(a.1)

Taxable capital gain - donation of listed securities

22

85

Transfer of property to corporations by shareholders

26

95

Definitions - Foreign affiliates

29

110(1)(d.01)

Charitable donation of employee option securities

30

110.1(1)

Gifts of medicine

31

110.6

Maximum capital gains deduction

36

118(1)(b.1)

Child amount

41

122.1(1)

SIFT trusts - definitions - REIT

42

122.7(3)

Deemed payment on account of tax - Disability supplement

43

127(9)

"investment tax credit"

46

149.1

Definitions

51

157(2.1)

$3000 Threshold

57

204

"qualified investment"

58

207.1(5)

Replacement of "prescribed stock exchange" by "designated stock exchange"

59

212

Non-residents' Canadian-source interest income

60

214(8) and (11)

Part XIII rules

62

221(1)(d.2)

Regulations

63

231.2(1)

Requirement to provide documents or information

64

241(4)(e)(xii)

Where taxpayer information may be disclosed

65

248(1)

"NISA Fund No. 2"

66

260

Replacement of "prescribed stock exchange" by "designated stock exchange" - securities lending arrangements

67

261

Functional currency reporting

 

262

Authority to designate stock exchange

68

Various

Replacement of "prescribed stock exchange" by "designated stock exchange"


Income Tax Application Rules

69

10(5)

Certificate of exemption


Income Tax Regulations

72 and 73

204.1 and 229.1

Definitions

74

3200 and 3201

Stock exchanges

86

8514(2)

Prohibited investments


Part 4
Disability Savings
Amendments Relating to Income Tax

Income Tax Act

Revised explanatory notes relating to registered disability savings plans

:

108

87(10)

Amalgamations - Shares deemed listed

115

146.4

Registered disability savings plans

118

160.2

Joint and several liability - Registered disability savings plans

120

Part XI

Taxes in respect of registered disability savings plans


Income Tax Regulations

126 and 127

Part XLIX

Qualified investments

Old Age Security Act

129

2

Definitions


Part 14
Tax Amendments to Implement the 2007 Economic Statement
Amendments Relating to Income Tax

Income Tax Act

179

117(2)

Tax rates applicable to individuals

180

118(3.1) and (3.2)

Personal credits

181

123.4(1)

"general rate reduction percentage"

182

125(1.1)

Small business deduction rate


Amendments to Implement the GST/HST Rate Reduction

Excise Tax Act

183

123(1)

Definition "basic tax content"

184

165(1)

Imposition of goods and services tax

185

173(1)

Employee and shareholder benefits

186

212

Imposition of goods and services tax on imported goods

187

218

Imposition of goods and services tax on imported taxable supplies

188

254(2)

New housing rebate

189

254.1

New housing rebate for building only

190

255

Cooperative housing rebate

191

256(2)

Rebate for owner-built homes

192

256.2

New residential rental property rebate

193

256.6

Transitional rebate for builder

194

256.7 to 256.77

Transitional rebate - 2008 rate reduction

195

274.11

Variation of agreement - 2008 rate reduction


Related Amendments as a Result of the GST/HST Rate Reduction

Air Travellers Security Charge Act

196

12(1) & (2)

Amount of charge


Excise Act, 2001

197

58.1

Definition "taxed tobacco"

198

58.2

Imposition of tax

199

58.3

Exemption for small retail inventory

200

58.5

Returns

201

58.6

Payment

202

216(2) & (3)

Punishment - minimum and maximum amount

203

240

Contravention of subsection 50(5)

204

Sched. 1, para. 1(b)

Duty on cigarettes

205

Sched. 1, para. 2(b)

Duty on tobacco sticks

206

Sched. 1, para. 3(b)

Duty on other manufactured tobacco

207

Sched. 1, s. 4

Duty on cigars

208

Sched. 2

Additional duty on cigars

209

 

Application of interest


Draft Regulations Relating to Tax Information Exchange Agreements

Income Tax Regulations

N/A

5907

"Designated treaty country" for exempt surplus