Archived - Explanatory Notes relating to the Income Tax Act, the Excise Act, the Excise Act, 2001, the Excise Tax Act, the Air Travellers Security Charge Act and Related Acts and Regulations

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

April 2010


Related Documents:


pdf Explanatory Notes (Formatting changes have been made to clauses 10, 55 and 79 of the Explanatory Notes. No substantive changes have been made.)


Formatting changes have been made to clauses 10, 55 and 79 of the Explanatory Notes. No substantive changes have been made.


Preface

These explanatory notes describe proposed amendments to the Income Tax Act, the Excise Act, the Excise Act, 2001, the Excise Tax Act, the Air Travellers Security Charge Act and related Acts and Regulations to implement certain tax measures for the Budget announced on March 4, 2010 and to implement certain other tax measures. These explanatory notes describe these proposed amendments, clause by clause, for the assistance of Members of Parliament, taxpayers and their professional advisors.

The Honourable James M. Flaherty, P.C., M.P.

Minister of Finance


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


Table of Contents

Clause in Legislation Section of the Act/Regulations Amended Topic

Part 1
Amendments to the Income Tax Act and related acts and regulations

Income Tax Act
2 44.1 Capital gain deferral
3 51 Convertible property
4 56 Other income inclusions
5 60 Deductions in computing income
6 85 Transfer of property to corporation by shareholders
7 85.1 Share for share exchange
8 87 Shares of predecessor corporation
9 97 Rules where election by partners
10 107 Capital interests in a trust
11 107.4 Tax consequences of qualifying dispositions
12 110 U.S. social security benefits
13 118.2 Medical expense tax credit – Cosmetic procedures
14 127 Investment tax credits
15 128.1 Deemed taxable Canadian property
16 146.1 Registered education savings plans
17 146.4 Registered disability savings plans
18 147.2 Registered pension plans
19 164 Late refund of overpayment
20 205 Taxes in respect of registered disability savings plans
21 241 Communication of information
22 248 Interpretation
Income Tax Regulations
23 4301 Prescribed rate of interest
24 8510 Special rules – member-funded pension plans
25 8516 Funding on termination basis
Canada Disability Savings Act
26 2 Definitions
27 6 Income thresholds – Canada Disability Savings Grants
28 7 Income thresholds – Canada Disability Savings Bonds  
Canada Disability Savings Regulations
29 4 Issuer reporting
Canada Education Savings Act
30 2 Definitions
31 5 Income thresholds – Additional Canada Education Savings Grants
Canada Education Savings Regulations
32 10 Apportionment of Educational Assistance Payments
33 16 Transfers
Canada Pension Plan Regulations
34 36 Prescribed rate of interest
Insurable Earnings and Collection of Premiums Regulations
35 18 Prescribed rate of interest.
Regulations Excluding Certain Indictable Offences from the Definition of "Designated Offence"
36 1 Exclusion....

Part 2
Amendments in respect of excise duties and sales and excise taxes

Excise Act  
37 110.1 Penalty and interest.
Excise Act, 2001
38 2 Interpretation..
39 5 Possession...
40 25.1 to 25.5 Excise stamps.
41 206 Keeping records – excise stamps
42 214 Unlawful production, sale, etc., of tobacco or alcohol
43 234 Failure to comply
44 238.1 Penalty in respect of unaccounted excise stamps....
45 264 Certain things not to be returned....
46 266 Excise stamps not to be sold.
47 304 Regulations
Customs Act
48 2 Interpretation..
49 97.25 Excise stamps not to be sold.
50 117 No return of certain goods
51 119.1 Excise stamps not to be sold.
52 142 Disposal of things abandoned or forfeit.
53 142.1 Dealing with abandoned or forfeited excise stamps
Application
54 Application.
Excise Tax Act
55 123 Definitions..
56 141.01 Method of determining extent of use, etc. .
57 141.02 Input tax credit allocation methods for financial institutions..
58 172.1 Pension plans..
59 178 Network sellers
60 185 Financial services – Input tax credits.
61 217 Imported supplies of financial institutions..
62 217.1 Imported supplies of financial institutions..
63 218.01 Imposition of goods and services tax
64 218.1 Tax in participating province
65 218.2 and 218.3 When tax payable...
66 219 Filing of returns and payment of tax.
67 220 Dealings between permanent establishments..
68 220.05 Pension entities....
69 220.08 Pension entities
70 225.2 Adjustment to net tax
71 232.01 Tax adjustment notes
72 236.5 Adjustment by network seller if conditions not met
73 238 Filing of returns
74 242 Request for cancellation
75 261.01 Pension plan rebate
76 273.2 Information return for financial institutions
77 281 Effect of extension
78 284.1 Failure to provide information on an information return
79 298 Period for assessment
80 301 Notice of objection
81 306.1 Limitation on appeals to the tax court
82 326 Saving
83 Sch. V, Pt. II section 1 Health care services - Definitions
84 Sch. V, Pt. II section 1.1 Cosmetic service supply
85 Sch. V, Pt. II, section 2 Institution health care services
86 Sch. V, Pt. II, section 5 Consultative, diagnostic, treatment services
87 Sch. V, Pt. VI, section 2 Public service bodies
88 Sch. VI, Pt. II, section 1.2 Medical and assistive devices
89 Sch. VI, PT. II, section 34 Installation services
Health Care Services (GST/HST) Regulations
90 2 Prescribed health care services
Input Tax Credit Allocation Methods (GST/HST) Regulations
91 and 92 Input tax credit allocation methods for financial institutions
Interest Rates (Excise Act, 2001) Regulations
93 2 Prescribed rate of interest
Interest Rates (Excise Tax Act) Regulations
94 2 Prescribed rate of interest
Coordinating Amendment – Excise Tax Act
95 218.1 Coordinating amendment

Part 3
Amendments in respect of the Air Travellers Security Charge


Air Travellers Security Charge Act
96 12 Amount of charge if service acquired in or outside Canada
Interest Rates (Air Travellers Security Charge Act) Regulations
97 3 Prescribed rate of interest
Part 4
Federal credit unions - Amendments related to Income Tax
Income Tax Act
2108 63.1 Deduction for insolvency – resident corporation
2109 248 Interpretation