Tax wiki
s. 12.7
PART I — Income Tax · DIVISION B — Computation of Income · SUBDIVISION B — Income or Loss from a Business or Property · Inclusions
Hybrid mismatch arrangements — definitions
Not yet annotated · Text current to 2026-06-21 · section last amended 2024-06-20
Current text
The definitions in subsection 18.4(1) apply in this section.
Secondary rule — conditions for application
(2)Subsection (3) applies in respect of a payment of which a taxpayer is a recipient if
the payment arises under a hybrid mismatch arrangement; and
there is a foreign deduction component of the hybrid mismatch arrangement.
Secondary rule — consequences
(3)Subject to subsection 18.4(5), if this subsection applies in respect of a payment of which a taxpayer is a recipient, an amount equal to the hybrid mismatch amount in respect of the payment shall be
included in computing the taxpayer’s income from the same source as the payment; and
included in computing the taxpayer’s income for the last taxation year of the taxpayer that begins at or before the end of the first foreign taxation year of any entity in which an amount in respect of the payment, in the absence of any foreign expense restriction rule, would be — or would reasonably be expected to be — deductible in computing relevant foreign income or profits of the entity.
Source: Justice Laws Website. Not an official version.
Historic text
This section has not been amended since it was enacted (2024, c. 15, s. 3), so there is no earlier version.
Earlier versions: Justice Laws point-in-time versions of the Act (from 31 August 2004), and CanLII (under “Versions”). On Justice Laws, each version of section 12.7 links to the one before it.
Enacting and amending legislation
- 2024, c. 15, s. 3
Text before 2004 is found in the annual Statutes of Canada cited above. Application and coming-into-force provisions are not part of the consolidation; see the amending Acts.
Cross-references
Citation
Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), s. 12.7.