Section 181

Subsection 181(1) - Definitions

Long-Term Debt

Administrative Policy

2 August 1991 T.I. (Tax Window, No. 7, p. 20, ¶1384)

Debentures issued by a savings and mortgage corporation would not be "subordinate indebtedness" if they represent the corporation's primary source...

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Reserves

Administrative Policy

6 December 2000 External T.I. 2000-0056245 - DEFERRED INCOME TAXES

The change in terminology under Canadian GAAP from deferred income taxes to future income tax assets and liabilities does not alter the legal...

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27 July 2000 Internal T.I. 2000-0037177 - TEMPORARY AND PERMANENT WRITE DOWNS PART 1.3

A permanent write-down in the value of a capital asset of a corporation results in a reduction of the corporation's capital, whereas a write-down...

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93 A.P.F.F. Round Table, Q.16

Where the value of a long-term investment has been written down as a result of a non-temporary decline in its value, such reduction will not be...

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Subsection 181(3) - Determining values and amounts

Cases

Canada v. Bombardier Inc., 2012 DTC 5088 [at 7005], 2012 FCA 46

The taxpayer, an aircraft producer, received advances from its customers, which the taxpayer applied as payments on partially complete contracts. ...

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Canada (Attorney General) v. Ford Credit Canada Ltd., 2007 DTC 5431, 2007 FCA 225

In finding that retractable preferred shares that the taxpayer had issued were not capital stock for purposes of s. 181.3(3)(b) because they were...

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See Also

Gaz Métro inc. c. Agence du revenu du Québec, 2017 QCCQ 3664

The plaintiff (“GMi”) borrowed in the capital markets and on-lent on identical terms to a limited partnership (“SCGM”) in which it had a...

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Words and Phrases
released

Ford Credit Canada Limited v. The Queen, 2006 DTC 3424, 2006 TCC 441

Retractable preferred shares in the capital of the taxpayer (a financial institution) were not included in its capital under s. 181.3(3)(a) given...

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Royal Trustco v. The Queen, 2001 DTC 52 (TCC)

Sarchuk T.C.J. found that GAAP should be applied in determining the characterization of items for purposes of Part I.3 rather than just their...

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Autobus Thomas Inc. v. The Queen, 99 DTC 259, [1999] 2 CTC 2001 (TCC)

Before concluding that amounts owing by the taxpayer represented by conditional sales contracts that had been assigned by the vendor to a bank...

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Oerlikon Aérospatiale Inc. v. The Queen, 97 DTC 962 (TCC), aff'd 99 DTC 5318 (FCA)

Before going on to find that prepayments received by the taxpayer for future work to be performed by it represented advances rather than reserves...

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The Queen v. Consumers' Gas Co. Ltd., 87 DTC 5008, [1987] 1 CTC 79 (FCA)

With respect to an argument of counsel that the accounting method used by the taxpayer in offsetting reimbursements received by it against the...

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Words and Phrases
reflected
Locations of other summaries Wordcount
Tax Topics - General Concepts - Accounting Principles 35
Tax Topics - Income Tax Act - Section 152 - Subsection 152(1) assessment is of dollar amount 87

Administrative Policy

19 January 2009 Internal T.I. 2008-0305241I7 F - Impôt de la partie I.3 et PCGR

After indicating that where the amount of the paid-up capital for ITA purposes of shares issued on a s. 85(1) rollover transaction exceeded the...

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11 May 2005 Roundtable, 2005-0127081C6 F - États financiers - Impôt de la Partie I.3

Where a Canadian public corporation prepares its financial statements in accordance with US GAAP, will this be accepted as GAAP under s....

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2 August 2001 External T.I. 2001-008593

Where the financial statements of a subsidiary are revalued in accordance with section 1625 of the CICA Handbook, those adjustments are not to be...

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3 July 2001 Internal T.I. 2001-0078917 - PARTNERSHIPS AND OVERDRAFTS PART 1.3

"Components that make up the amount shown on the face of the balance sheet, are amounts reflected in the balance sheet for purposes of subsection...

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6 November 2000 Internal T.I. 2000-0050847 - DEEP DISCOUNT DEBT PART 1.3 TAX

Where a corporation has issued a bond at a discount, there is an argument that the full face amount of the bond should be included in the...

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IT-532 "Income Tax Act, Part I.3 - Tax on Large Corporations"

9 February 1999 External T.I. 9808995 - LCT ON NON-RESIDENT CORPORATIONS

"For the purposes of subsection 181(3) the reference to GAAP ... does not necessarily mean GAAP under Canadian rules."

Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Regulation 8601 28

10 February 1997 Internal T.I. 9701277 - PURCHASE AND SALE AGREEMENT - PART I.3

The obligation of the taxpayer under a purchase and sale agreement where a condition precedent had not yet been fulfilled did not represent either...

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29 April 1997 Issue Statement 971054

In the case of an insurer that shows the carrying value of real estate on its balance sheet net of related encumbrances, Revenue Canada will look...

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8 July 1996 Internal T.I. 9617717 - LEVERAGED LEASES AND PREPAID PENSION - PART I.3

Where the taxpayer's investment in leveraged leases is reflected as a single-line item on its balance sheet, but the notes to its financial...

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22 February 1996 Internal T.I. 9604507 - PART I.3 - CAPITAL LEASES & CONDITIONAL SALES AGREEMENTS

"For purposes of Part I.3, and with respect to leases, it is the department's position that it is the legal nature of the agreement that governs...

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1996 Corporate Management Tax Conference Round Table, Q. 6

High-low preferred shares that are reclassified as debt for accounting purposes will be treated as equity although, by virtue of s. 181(3), the...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 18 - Subsection 18(4) 59

31 July 1995 External T.I. 9518505 - PUSH-DOWN ACCOUNTING & PART I.3

Where balance sheet amounts have been written up through the application of push-down accounting as sanctioned by section 1625 of the CICA...

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3 June 1994 External T.I. 9406995 - USE OF DIFFERENT ACCOUNTING POLICIES UNDER PART I.3

For purpose of Part I.3, a corporation is entitled to change from one accounting policy to another, where both policies are in accordance with...

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10 March 1992 T.I. (Tax Window, No. 17, p. 22, ¶1794)

If GAAP requires bank account balances and bank loans to be disclosed separately, they cannot be netted for purposes of calculating capital under...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 181.2 - Subsection 181.2(3) 25

18 November 1991 T.I. (Tax Window, No. 13, p. 16, ¶1597)

A corporation is required to include in its capital its share of earnings of a partnership of which it is a member on the same basis that it would...

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Various T.I. (Tax Window, No. 2, p. 9, ¶1181)

Summaries of various technical interpretations indicating various anomalies.

Articles

R. Ashton, "Leasing: Recent Developments", 1997 Corporate Management Tax Conference Report, c. 11.

Paragraph 181(3)(b)

Subparagraph 181(3)(b)(i)

Administrative Policy

2 May 2017 External T.I. 2016-0663781E5 F - Meaning of retained earnings/calculation of capital

On the initial application of accounting standards for private enterprises ("ASPEs") on January 1, 2011, a corporation revalued its assets (from...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 181.2 - Subsection 181.2(3) - Paragraph 181.2(3)(a) appraisal increment in acordance with ASPE increased a corporation’s retained earnings 83

21 September 2007 External T.I. 2007-0229191E5 F - Agent de voyages & impôt de la partie I.3

Quebec and Ontario travel agents were required by provincial legislation to hold funds collected from clients for services to be rendered to them...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 181.2 - Subsection 181.2(3) - Paragraph 181.2(3)(c) customer advances received by travel agents and reported as deferred revenue in their balance sheets were “advances” 112

Subsection 181(4) - Limitations respecting inclusions and deductions

Administrative Policy

2004 APFF Roundtable Q. 8, 2004-008675

In indicating that s. 181(4) would not provide relief where an insurance company issued $1 million of shares in order to acquire a building for $1...

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