Section 219

Subsection 219(1) - Additional tax

Administrative Policy


Gravelle, McAskile, "Conversion of a Branch to a Subsidiary and a Subsidiary to a Branch", 1993 Canadian Tax Journal, No. 6, p. 1180.


Subsection 219(1.1) - Excluded gains

Administrative Policy

28 July 2008 External T.I. 2008-0298011E5 - Branch Tax - Section 219

gains on capital property used in Cdn active business are subject to branch tax

Although the reference to taxable Canadian property is to be read without reference to paragraph (a) of the definition (real property situated in Canada), real property situated in Canada that is used or held by a business carried on in Canada would also fit within paragraph (b) of the definition, so that such property would not be excluded. CRA stated:

This is consistent with the Department of Finance's Technical Notes which indicate that as a result of the restriction on the definition of taxable Canadian property under subsection 219(1.1) of the Act, only gains and losses that arise on capital property used in carrying on the non-resident corporation's business in Canada are included in the branch tax base amount.

Subsection 219(2) - Exempt corporations


Twentieth Century Fox Film Corp. v. MNR, 2001 DTC 5125 (FCTD)

In rejecting a submission that the taxpayer, whose Canadian branch was responsible for distributing in Canada films, videos and other products produced by it, was exempt from Part XIV tax, MacKay J. noted that the taxpayer's submission failed to address the distinction that has been drawn between the art of "communication" and the industry of "communications".

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 164 - Subsection 164(1) 171

Administrative Policy

28 February 1995 External T.I. 9421715 - COMMUNICATIONS AND BRANCH TAX

"... Subparagraph 219(2)(b)(ii) of the Act grants tax relief to those non-resident corporations who own or rent a transmission facility in Canada and whose principal business is the provision of communication or telecommunication services to the public, generally, for compensation. In a situation where the provider of such services does not own or rent a transmission facility but instead purchases a block of capacity or time from other licensed transmitters and where the provider is subject to registration or licensing requirements under any of the above-noted statutes, it is our general view that the provider of such services is in the business of communications ... . As long as the main or chief business of a non-resident corporation is communications, the requirement of subparagraph 219(2)(b)(ii) of the Act would be met ... ."

Subsection 219(3) - Provisions applicable to Part

Administrative Policy

23 April 2012 Internal T.I. 2011-0426601I7 - Part XIV tax - non-resident insurer

The taxpayer (a non-resident insure) transferred its Canadian insurance branch on a rollover basis to a wholly-0wned subsidiary, did not enter any amount on line 728 of its T2 return respecting Part XIV tax payable and did not file any specific Part XIV schedule other than the rollover election under s. 219(5.2). CRA noted that it appeared that the taxpayer had met its filing requirements respecting Part XIV tax.

CRA noted that

it is our long-standing position that an assessment under each Part of the Act should be regarded as a separate assessment notwithstanding the fact that a single Notice of Assessment is used to inform a taxpayer of assessments under more than one Part of the Act.

As a nil assessment for the taxation year of the transfer had been issued more than four years previously, reassessment of Part XIV tax was now barred unless one of the circumstances described in ss. 152(4)(a) to (d) applied.

Subsection 219(4) - Non-resident insurers