,canada ,rev5ue ,ag5cy #a ,9t]pret,n ,bullet9 ,subject3 ,9come ,tax ,act--,=eign ,tax ,cr$it--,tru/ & ,b5efici>ies ,numb]3 ,,it-#bja;,r#b ,date3 ,febru>y #ab1 #aiif ,ref];e3 ,subsec;ns #ajd7#bb7 to 7#bb.d7 7al sec;n #abf2 subsec;ns #bj7#aa7 & 7#ab71 & #ajd7#ac7 & 7#ad72 &! def9i;ns ( 8busi;s-9come tax0 & 8non- busi;s-9come tax0 9 subsec;n #abf7#g7 (! ,9come ,tax ,act7 ,9t]pret,n bullet9s 7,,it's7 provide ,rev5ue ,canada's te*nical 9t]pret,ns ( 9come tax law4 ,due 6_! te*nical nature1 ,,it's >e us$ prim>ily 0de"p;tal /aff1 tax speciali/s1 & o!r 9dividuals :o h an 9t]e/ 9 tax matt]s4 ,= ^? r1d]s :o pref] a less te*nical explan,n (! law1 ! ,de"p;t (f]s o!r public,ns1 s* z tax guides & pamphlets4 #a  ,,it-#bja;,r#b a#a ,:ile ! ,,it's d n h ! =ce ( law1 !y c g5],y 2 reli$ ^u z reflect+ ! ,de"p;t's 9t]pret,n (! law 6be appli$ on a 3si/5t basis 0de"p;tal /aff4 ,9 cases ": an ,,it has n yet be5 revis$ 6reflect legislative *anges1 r1d]s %d ref] 6! am5d$ legisl,n & xs e6ective date4 ,simil>ly1 c\rt deci.ns subsequ5t 6! date (! ,,it %d 2 3sid]$ :5 det]m9+ ! relevancy (! -;ts 9 ! ,,it4 ,an 9t]pret,n describ$ 9 an ,,it applies z (! date ! ,,it is publi%$1 un.s o!rwise specifi$4 ,:5 "! is a *ange 9 a previ\s 9t]pret,n &! *ange is b5eficial 6taxpay]s1 x is usu,y e6ective = all future assess;ts & reassess;ts4 ,if ! *ange is n fav\ra# 6taxpay]s1 x w norm,y 2 e6ective =! curr5t & subsequ5t tax,n ye>s or = transac;ns 5t]$ 96af ! date (! ,,it4 ,a *ange 9 a de"p;tal 9t]pret,n may al 2 ann\nc$ 9 ! ,9come ,tax ,te*nical ,news4 #b  ,,it-#bja;,r#b b#a ,if y h any -;ts reg>d+ matt]s 4cuss$ 9 ? ,,it1 pl1se s5d !m to3 ,director1 ,busi;s & ,public,ns ,divi.n ,9come ,tax ,rul+s ,directorate ,policy & ,legisl,n ,bran* ,rev5ue ,canada ,ottawa ,,on ,k#a;,a #j;,l#e ,9t]pret,n bullet9s c 2 f.d on ! ,rev5ue ,canada ,9t]net site at3 _+www.rc.gc.ca_: ,3t5ts ,applic,n ,summ>y ,4cus.n & ,9t]pret,n ,design,n ( =eign s\rce 9come 7p>agraphs #a-b7 ,fl[-"? ( busi;s-9come tax or non-busi;s-9come tax 7p>agraphs #c-d7 #c  ,,it-#bja;,r#b c#a ,t#c ,supple;t>y 7p>agraph #e7 ,recalcul,n (a tru/'s =eign s\rce 9come & =eign tax 7p>agraph #f7 ,alloc,n ( residual 9come 7p>agraph #g7 ,9complete or 9valid design,ns 7p>agraph #h7 ,deduc;n f 9come 7p>agraph #i7 ,explan,n ( ,*anges ,applic,n ,? bullet9 c.els & replaces ,9t]pret,n ,bullet9 ,,it-#bja;,r dat$ ,septemb] #d1 #aihd4 ,summ>y ,? bullet9 4cusses ! rules t all[ a tru/ 6designate tru/ 9come f a =eign s\rce 9clud$ 9 a b5efici>y's 9come z 9come (! b5efici>y f t =eign s\rce4 ,only a tru/ t is resid5t 9 ,canada "?\t a tax,n ye> c make ? design,n4 ,z a #d  ,,it-#bja;,r#b d#a result (! design,n1 ! b5efici>y is tr1t$ z hav+ pd a pro-rata %>e ( any busi;s-9come tax or non-busi;s-9come tax pd 0! tru/ on t =eign s\rce 9come =! purposes (! =eign tax cr$it4 ,4cus.n & ,9t]pret,n ,design,n ( =eign s\rce 9come 7p>agraphs #a-b7 #a4 ,subsec;n #ajd7#bb7 all[s a tru/ 6designate xs =eign s\rce 9come =a tax,n ye> 6xs b5efici>ies provid$ ! tru/ 0 resid5t 9 ,canada "?\t ! ye>4 ,! design,n is made 9 ! tru/'s 9come tax return =! ye>4 ,! am.t t a tru/ c designate 9 respect (a "picul> b5efici>y is limit$ 6! por;n (! --------------------------------------#b tru/'s 9come =! ye> f a s\rce 9 a c.try o!r ?an ,canada t --c r1sonably 2 3sid]$ 7hav+ reg>d 6all ! circum/.es 9clud+ ! t]ms #e  ,,it-#bja;,r#b a#b & 3di;ns (! tru/ >range;t7 6be "p (! 9come t 0 9clud$ 9 ! b5efici>y's 9come 0virtue ( subsec;n #ajd7#ac7 or 7#ad7 7see ! curr5t v].ns ( ,,it-#cdb1 ,tru/s--,9come ,paya# 6,b5efici>ies1 & ,,it-#cid1 ,pref]r$ ,b5efici>y ,elec;n72 & --is n designat$ 0! tru/ 9 respect ( any o!r b5efici>y4 ,:5 ! tru/ has made ? design,n1 subsec;n #ajd7#bb7 deems ! designat$ 9come 6be 9come (! "picul> b5efici>y f t =eign s\rce =! purposes ( subsec;ns #ajd7#bb7 & 7#bb.a7 &! =eign tax cr$it rules "u sec;n #abf4 #b4 ,:5 a b5efici>y (a tru/ is ano!r tru/1 ! o!r tru/ c1 )9 ! t]ms ( subsec;n #ajd7#bb71 designate =eign s\rce 9come 6xs [n b5efici>ies t _h be5 designat$ 6x 9 xs capac;y z b5efici>y1 & ad 9f9itum if "! >e o!r tru/s 9 su3es.n4 #f  ,fl[-"? ( busi;s-9come tax b#b or non-busi;s-9come tax 7p>agraphs #c-d7 #c4 ,=! purposes ( subsec;ns #ajd7#bb7 to 7#bb.c71 subsec;n #ajd7#bb.d7 provides t ! expres.ns 8busi;s-9come tax0 & 8non-busi;s-9come tax0 h ! m1n+s assign$ 0subsec;n #abf7#g74 ,^! expres.ns >e 4cuss$ 9 detail 9 ! curr5t v].n ( ,,it-#bgj1 ,=eign ,tax ,cr$it4 #d4 ,:51 z a result (a design,n describ$ 9 p>agraph #a abv1 a por;n (! 9come (a tru/ f a =eign s\rce is deem$ 6be 9come (a b5efici>y f t s\rce =a "picul> tax,n ye>1 subsec;n #ajd7#bb.a7 deems ! b5efici>y 6h pd = t "picul> ye> a pro-rata %>e (! busi;s-9come tax or non-busi;s-9come tax pd 0! tru/ on t 9come =! purposes ( det]m9+ ! b5efici>y's =eign tax cr$it "u sec;n #abf4 ,! pro-rata %>e is equal 6! propor;n (! busi;s-9come tax or non-busi;s-9come tax pd 0! #g  ,,it-#bja;,r#b c#b tru/ on ! =eign s\rce 9come =a tax,n ye> (! tru/ t 5ds 9 ! "picul> ye> t ! b5efici>y's deem$ 9come "u subsec;n #ajd7#bb7 f t s\rce is (! tru/'s 9come =! ye> f t s\rce4 ,= ? purpose1 ! busi;s-9come tax or non-busi;s-9come tax pd 0! tru/ is ! am.t pd 0! tru/ 2f x is reduc$ "u subsec;n #ajd7#bb.c7 7see p>agraph #f 2l74 ,t#c ,supple;t>y 7p>agraph #e7 #e4 ,! ,canadian doll> equival5t (! b5efici>y's %>e (3 --deem$ =eign s\rce 9come2 & --! relat$ busi;s-9come tax or non- busi;s-9come tax >e report$ on ! b5efici>y's ,t#c ,supple;t>y4 ,= 9=m,n on ! applica# 3v].n rate pr9ciples 6foll[ :5 3v]t+ =eign s\rce 9come &! relat$ busi;s- 9come tax or non-busi;s-9come tax #h  ,,it-#bja;,r#b d#b 96,canadian doll>s1 ref] 6! curr5t v].n ( ,,it-#bgj4 ,recalcul,n (a tru/'s =eign s\rce 9come & =eign tax 7p>agraph #f7 #f4 ,=! purposes ( det]m9+ ! =eign tax cr$it (a tru/ t has made a design,n "u subsec;n #ajd7#bb71 subsec;n #ajd7#bb.b7 provides t ! tru/ m/ reduce xs 9come f a =eign s\rce =a tax,n ye> 0! total ( all am.ts deem$ 6be 9come ( xs b5efici>ies f t s\rce z designat$ 9 p>agraph #a abv4 ,"u subsec;n #ajd7#bb.c71 ! tru/ m/ al reduce ! busi;s-9come tax or non- busi;s-9come tax t x pd =! ye> 9 respect ( t s\rce 0! total ( all am.ts deem$ 6be pd 0xs b5efici>ies z busi;s- 9come tax or non-busi;s-9come tax 9 respect ( t s\rce4 #i  ,alloc,n ( residual 9come e#b 7p>agraph #g7 #g4 ,:5 =eign 9come =ms "p (! residual 9come (! tru/1 x is usu,y allocat$ 6! b5efici>ies &! tru/1 :5 applica#1 9 ! ratio t !y %>e ! residual 9come4 ,example ,tru/ de$ requires3 --,u4,s4 bond 9t]e/ 6g 6;,a --,canadian bond 9t]e/ 6g 6;,b --"o-six? (! residual 9come 6g 6;,c --"o-half (! residual 9come 6g 6;,d --,! rema9+ "o-?ird 6be a3umulat$ 9 ! tru/ ,transcrib]'s note3 7,! foll[+ is set up 9 ?ree columns3 ,column #a3 ,all ,9come ,column #b3 ,=eign ,s\rce ,9come ,column #c3 ,non-busi;s-9come ,tax ,pd7 #aj  ,,it-#bja;,r#b f#b ,all ,9come ,9come ( tru/3 ,u4,s4 bond 9t]e/ """""""""""""" 4#b1ejj ,canadian bond 9t]e/ """"""""""" 4#a1ejj ,u4,s4 divid5ds """""""""""""""""" 4#fjj ,o!r ,canadian 9come """"""""""" 4#e1djj ,total """""""""""""""""""""""" 4#aj1jjj ,=eign ,s\rce ,9come ,9come ( tru/3 ,u4,s4 bond 9t]e/ """""""""""""" 4#b1ejj ,canadian bond 9t]e/ """""""""""""" ---- ,u4,s4 divid5ds """""""""""""""""" 4#fjj ,o!r ,canadian 9come """""""""""""" ---- ,total """"""""""""""""""""""""" 4#c1ajj ,non-busi;s-9come ,tax ,pd ,9come ( tru/3 ,u4,s4 bond 9t]e/ """""""""""""""" 4#cge ,canadian bond 9t]e/ """""""""""""" ---- ,u4,s4 divid5ds """"""""""""""""""" 4#ij ,o!r ,canadian 9come """""""""""""" ---- ,total """"""""""""""""""""""""""" 4#dfe #aa  ,,it-#bja;,r#b #c ,9come alloc,n & design,n3 ,transcrib]'s note3 7,! foll[+ is set up 9 f\r columns3 ,column #a & #b3 ,all ,9come ,column #c & #d3 ,=eign ,s\rce ,9come ,designat$7 ,all ,9come ;,a """""""""""""""""""""""""""" 4#b1ejj ;,b """""""""""""""""""""""""""" 4#a1ejj ,residual 9come3 ;,c 7"o-six?7 """""""" 4#a1jjj ;,d 7"o-half7 """""""" 4#c1jjj ,tru/ 7"o-?ird7 """""" 4#b1jjj 4#f1jjj ,total """""""""""""""""""""""" 4#aj1jjj ,non-busi;s-9come tax alloc,n3 ;,a 74#cge "ts 4#b1ejj divid$ 04#b1ejj7 """""""""""""""""""""" 4#cge ;,b """"""""""""""""""""""""""""""" ---- ;,c 74#ij "ts 4#ajj divid$ 04#fjj7 """"""""""""""""""""""""" 4#ae #ab  ,,it-#bja;,r#b a#c ;,d 74#ij "ts 4#cjj divid$ 04#fjj7 """"""""""""""""""""""""" 4#de ,tru/ 74#ij m9us 74#ae plus 4#de77 """""""""""""""""""""""""" 4#cj ,total """"""""""""""""""""""""""" 4#dfe ,9complete or 9valid design,ns 7p>agraph #h7 #h4 ,:5 a design,n 0a tru/ is 9complete or is 9valid 2c x designates too l>ge an am.t1 ! tru/ w 2 giv5 an opportun;y 6provide ! 9=m,n nec 6-plete ! design,n or 6make a new "o4 ,deduc;n f 9come 7p>agraph #i7 #i4 ,:ile ! rules 9 subsec;ns #ajd7#bb7 to 7#bb.c7 apply =! purposes ( sec;n #abf1 !y d n apply =! purposes ( subsec;n #bj7#aa7 or 7#ab74 ,z a result1 a b5efici>y _c claim any non- busi;s 9come tax allocat$ 6x "u ^! rules z a deduc;n f 9come "u #ac  ,,it-#bja;,r#b b#c subsec;n #bj7#aa7 or 7#ab74 ,= m 9=m,n on ! deduc;n "u subsec;n #bj7#aa7 or 7#ab71 see ! curr5t v].n ( ,,it-#ejf1 ,=eign ,9come ,taxes z a ,deduc;n ,f ,9come4 #ad  ,explan,n ( ,*anges #d ,9troduc;n ,! purpose (! ,explan,n ( ,*anges is 6give ! r1sons =! revi.ns 6an 9t]pret,n bullet94 ,x \tl9es revi.ns t we h made z a result ( *anges 6! law1 z well z *anges reflect+ new or revis$ de"p;tal 9t]pret,ns4 ,ov]view ,? bullet9 4cusses ! rules 9 subsec;ns #ajd7#bb7 to 7#bb.d7 : all[ a tru/ resid5t 9 ,canada 6designate =eign s\rce 9come 6a b5efici>y "u ! tru/4 ,^! rules al p]mit a pro-rata %>e (! busi;s-9come tax or non-busi;s-9come tax pd on t 9come 6fl[ "? 6! b5efici>y =! purposes (! =eign tax cr$it4 ,we revis$ ! bullet9 6reflect am5d;ts 6subsec;n #ajd7#bb7 5act$ 9 ,s4,c4 #aiid1 c4 #ba 7=m]ly ,bill ;,c-#bg74 ,subsec;n #ajd7#bb7 0 am5d$ #ae  ,,it-#bja;,r#b a#d 0divid+ ! subsec;n 96five new subsec;ns4 ,^! new subsec;ns require t a design,n ( =eign s\rce 9come 2 made on a s\rce-by- s\rce basis4 ,! -;ts 9 ? bullet9 >e n a6ect$ 0any draft legisl,n rel1s$ 2f ,septemb] #bh1 #aiie4 ,legislative & o!r *anges ,new p>agraph #a 7=m] p>agraph #b7 reflects ! am5d;t 6subsec;n #ajd7#bb7 6all[ a tru/ resid5t 9 ,canada 6designate =eign s\rce 9come 6xs b5efici>ies4 ,? am5d;t applies 6tax,n ye>s 5d+ af ,novemb] #ab1 #aiha1 except t1 = tru/s resid5t \tside ,canada = tax,n ye>s -m5c+ 2f #aihh1 ! am5d;t applies = tax,n ye>s 5d+ af ,novemb] #ab1 #aiha1 & -m5c+ 2f #aihh4 ,new p>agraph #c d1ls ) subsec;n #ajd7#bb.d7 : def9es 8busi;s-9come tax0 #af  ,,it-#bja;,r#b b#d & 8non-busi;s-9come tax0 0ref];e 6! def9i;ns ( ^? expres.ns 9 sec;n #abf4 ,new p>agraph #d 7=m] p>agraph #c7 4cusses subsec;n #ajd7#bb.a7 : corresponds 6=m] p>agraph #ajd7#bb77b74 ,subsec;n #ajd7#bb.a7 tr1ts a b5efici>y "u a tru/1 z a result (! tru/'s design,n "u subsec;n #ajd7#bb71 z hav+ pd a pro- rata %>e ( busi;s-9come tax or non- busi;s-9come tax pd 0! tru/4 ,new p>agraph #e 7=m] p>agraph #d7 has be5 revis$ 6reflect subsec;n #ajd7#bb.a7 : makes a 4t9c;n 2t busi;s-9come tax & non-busi;s-9come tax4 ,! =m] ^w+ ( subsec;n #ajd7#bb7 did n 4t+ui% 2t ^! two types ( taxes ev5 ?\< a b5efici>y's %>e ( =eign tax _h 6be divid$ 96busi;s & non-busi;s categories = report+ purposes4 ,new p>agraph #f 7=m] p>agraph #e7 4cusses subsec;ns #ajd7#bb.b7 & 7#bb.c7 : correspond 6=m] p>agraphs #ajd7#bb77c7 & 7d74 #ag  ,,it-#bja;,r#b c#d ,! example foll[+ new p>agraph #g 7=m] p>agraph #f7 has be5 exp&$ 6%[ ! fl[-"? ( non-busi;s-9come tax f a tru/ 6xs b5efici>ies4 ,new p>agraph #i expla9s t ! non- busi;s-9come tax allocat$ 6a b5efici>y z a result (a design,n made "u subsec;n #ajd7#bb7 _c 2 claim$ z a deduc;n f 9come "u subsec;n #bj7#aa7 or 7#ab74 ,"?\t ! bullet91 we h made a numb] ( m9or *anges 6improve ! ov]all cl>;y & r1dabil;y (! bullet94 #ah