international shipping. In this vein, section 250(6) of the Income Tax Act provides as
follows:
250(6) Residence of international shipping corporation
For the purposes of this Act, a corporation that was incorporated or otherwise formed
under the laws of a country other than Canada or of a state, province or other political
subdivision of such a country is deemed to be resident in that country throughout a taxation
year and not to be resident in Canada at any time in the year, if
(a) the corporation
(i) has international shipping as its principal business in the year, or
(ii) holds eligible interests in one or more eligible entities throughout the year and at no
time in the year is the total of the cost amounts to it of all those eligible interests and
of all debts owing to it by an eligible entity in which an eligible interest is held by it,
by a person related to it or by a partnership affiliated with it less than 50% of the
total of the cost amounts to it of all its property;
(b) all or substantially all the corporation’s gross revenue
20 for the year consists of any one
or more of
(i) gross revenue from international shipping,
(ii) gross revenue from an eligible interest held by it in an eligible entity, and
(iii) interest on a debt owing by an eligible entity in which an eligible interest is held by
it, by a person related to it or by a partnership affiliated with it; and
(c) the corporation was not granted articles of continuance in Canada before the end of the
year.
21
20 The Canada Revenue Agency’s position and policy is that the expression “substantially all” as
used in the Income Tax Act means 90% or more. See Canada Revenue Agency, Summary Policy,
September 3, 2003 (Revised November 23, 2005) Ref. no. CSP-S16—https://www.canada.ca/en/
revenue-agency/services/charities-giving/charities/policies-guidance/summary-policy-s16-substan
tially.html. Accessed on 29 December 2018.
21 Prior to 2014, this provision read as follows:
(6) For the purposes of this Act, a corporation that was incorporated or otherwise formed
under the laws of a country other than Canada or of a state, province or other political
subdivision of such a country shall be deemed to be resident in that country throughout a
taxation year and not to be resident in Canada at any time in the year, where
(a) the corporation
(i) has as its principal business in the year the operation of ships that are primarily used
in transporting passengers or goods in international traffic (determined on the
assumption that the corporation is non-resident and that, except where paragraph
(c) of the definition “international traffic” in subsection 248(1) applies, any port or
other place on the Great Lakes or St. Lawrence River is in Canada), or
(ii) holds throughout the year shares of one or more other corporations, each of which
(A) is a subsidiary wholly-owned corporation of the corporation as defined by
subsection 87(1.4), and
(B) is deemed by this subsection to resident in another country other than Canada
throughout the year,
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F. M. Manolis and R. L. Bozzer
follows:
250(6) Residence of international shipping corporation
For the purposes of this Act, a corporation that was incorporated or otherwise formed
under the laws of a country other than Canada or of a state, province or other political
subdivision of such a country is deemed to be resident in that country throughout a taxation
year and not to be resident in Canada at any time in the year, if
(a) the corporation
(i) has international shipping as its principal business in the year, or
(ii) holds eligible interests in one or more eligible entities throughout the year and at no
time in the year is the total of the cost amounts to it of all those eligible interests and
of all debts owing to it by an eligible entity in which an eligible interest is held by it,
by a person related to it or by a partnership affiliated with it less than 50% of the
total of the cost amounts to it of all its property;
(b) all or substantially all the corporation’s gross revenue
20 for the year consists of any one
or more of
(i) gross revenue from international shipping,
(ii) gross revenue from an eligible interest held by it in an eligible entity, and
(iii) interest on a debt owing by an eligible entity in which an eligible interest is held by
it, by a person related to it or by a partnership affiliated with it; and
(c) the corporation was not granted articles of continuance in Canada before the end of the
year.
21
20 The Canada Revenue Agency’s position and policy is that the expression “substantially all” as
used in the Income Tax Act means 90% or more. See Canada Revenue Agency, Summary Policy,
September 3, 2003 (Revised November 23, 2005) Ref. no. CSP-S16—https://www.canada.ca/en/
revenue-agency/services/charities-giving/charities/policies-guidance/summary-policy-s16-substan
tially.html. Accessed on 29 December 2018.
21 Prior to 2014, this provision read as follows:
(6) For the purposes of this Act, a corporation that was incorporated or otherwise formed
under the laws of a country other than Canada or of a state, province or other political
subdivision of such a country shall be deemed to be resident in that country throughout a
taxation year and not to be resident in Canada at any time in the year, where
(a) the corporation
(i) has as its principal business in the year the operation of ships that are primarily used
in transporting passengers or goods in international traffic (determined on the
assumption that the corporation is non-resident and that, except where paragraph
(c) of the definition “international traffic” in subsection 248(1) applies, any port or
other place on the Great Lakes or St. Lawrence River is in Canada), or
(ii) holds throughout the year shares of one or more other corporations, each of which
(A) is a subsidiary wholly-owned corporation of the corporation as defined by
subsection 87(1.4), and
(B) is deemed by this subsection to resident in another country other than Canada
throughout the year,
464
F. M. Manolis and R. L. Bozzer