This post outlines the basic organization and layout of the Income Tax Act (Canada) (“ITA”).
The ITA is divided into Parts from Part I to Part XIX. The more commonly encountered Parts are highlighted below.
Part I, Income Tax, consists of sections 2 to 180. This Part contains the main body of the ITA.
Part III, Additional Tax on Excessive Elections, consists of sections 184 and 185. This Part imposes tax on excessive capital dividend elections.
Part III.1, Additional Tax on Excessive Eligible Dividend Designations, consists of sections 185.1 and 185.2. This Part imposes tax on excessive eligible dividend designations.
Part IV, Tax on Taxable Dividends Received by Private Corporations, consists of sections 186 to 187. This Part imposes tax on a private corporation that receives dividends from an unconnected corporation.
Part XIII, Tax on Income from Canada of Non-Resident Persons, consists of sections 212 to 218.1. This Part imposes withholding tax on certain Canadian-source income earned by non-residents.
Part XV, Administration and Enforcement, consists of sections 220 to 244. This Part contains rules for administration, collection, offences, and punishment.
Part XVI, Tax Avoidance, consists of sections 245 and 246. This Part includes the general anti-avoidance rule (“GAAR”).
Part XVI.1, Transfer Pricing, consists of section 247. This Part contains the transfer pricing rules for transactions involving non-resident taxpayers dealing at non-arm’s length.
Part XVII, Interpretation, consists of sections 248 to 262. This Part contains rules of interpretation and definitions of many defined terms used in the ITA.
Part I is divided into divisions from Division A to Division J.
Division A, Liability for Tax, consists of section 2.
Division B, Computation of Income, consists of sections 3 to 108.
Division C, Computation of Taxable Income, consists of sections 110 to 114.2.
Division D, Taxable Income Earned in Canada by Non-Residents, consists of sections 115 to 116.
Division E, Computation of Tax, consists of sections 117 to 127.41.
Division E.1, Minimum Tax, consists of sections 127.5 to 127.55.
Division F, Special Rules in Certain Circumstances, consists of sections 128 to 143.4.
Division G, Deferred Income and Other Special Income Arrangements, consists of sections 144 to 148.1.
Division H, Exemptions, consists of sections 149 to 149.2.
Division I, Returns, Assessments, Payment and Appeals, consists of sections 150 to 168.1.
Division J, Appeals to the Tax Court of Canada and the Federal Court of Appeal, consists of sections 169 to 180.
Division B is divided into subdivisions from subdivision a to subdivision k.
Division B starts with sections 3 and 4, which are not in any subdivision.
Subdivision a, Income or Loss from an Office or Employment, consists of sections 5 to 8.
Subdivision b, Income or Loss from a Business or Property, consists of sections 9 to 37.
Subdivision c, Taxable Capital Gains and Allowable Capital Losses, consists of sections 38 to 55.
Subdivision d, Other Sources of Income, consists of sections 56 to 59.1.
Subdivision e, Deductions in Computing Income, consists of sections 60 to 66.8.
Subdivision f, Rules Relating to Computation of Income, consists of sections 67 to 80.6.
Subdivision g, Amounts Not Included in Computing Income, consists of section 81.
Subdivision h, Corporations Resident in Canada and Their Shareholders, consists of sections 82 to 89.
Subdivision i, Shareholders of Corporations Not Resident in Canada, consists of sections 90 to 95.
Subdivision j, Partnerships and their Members, consists of sections 96 to 103.
Subdivision k, Trusts and Their Beneficiaries, consists of sections 104 to 108.