Flow-through mining
expenditure
A form of grassroots CEE that is renounced by a corporation
to an individual (other than a trust) or a partnership of which
the individual is a member pursuant to a flow-through share
agreement that entitles the individual to an investment tax
credit of 15% of the expenditure.
Flow-through share
A share or a right to acquire a share of a principal-business
corporation issued by the corporation to an investor pursuant
to an agreement in writing under which the corporation agrees
to incur qualifying CEE or qualifying CDE and to renounce such
expenses to the investor.
Foreign accrual property
income
Income of a controlled foreign affiliate of a Canadian resident
that is imputed to the Canadian resident as it is earned. Includes
most passive property income such as interest, rent, royalties,
and taxable capital gains realized by the controlled foreign
affiliate on dispositions of property other than excluded property.
Foreign affiliate
A non-resident corporation will be a “foreign affiliate” of a
Canadian-resident taxpayer if the Canadian resident owns
directly or indirectly 1% or more of the shares (of any class)
of the non-resident, and, either alone or together with related
persons, 10% or more of the shares (of any class) of the non-
resident.
Foreign exploration and
development expense
An expense that would be a foreign resource expense if it were
incurred after 2000.
Foreign resource expense
See discussion on page 14 and following.
Foreign resource property
Property that would be a Canadian resource property if it were
located in Canada.
Functional currency year
A taxation year in which a functional currency election
is effective.
Generally accepted
accounting principles and
international financial
reporting standards
Accounting standards accepted by a recognized professional
body.
General anti-avoidance rule
A statutory rule in the ITA that applies to deny a tax benefit
arising from an avoidance transaction if the transaction
otherwise would result in a misuse or abuse of the provisions
of the statute. An avoidance transaction is a transaction, or a
transaction that is part of a series of transactions, that cannot
reasonably be considered to have been undertaken or arranged
primarily for bona fide purposes other than to obtain the
tax benefit.
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Glossary
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