Tax wiki
s. 127.54
PART I — Income Tax · DIVISION E.1 — Minimum Tax
Definitions
Not yet annotated · Text current to 2026-06-21 · section last amended 2024-06-20
Current text
In this section,
foreign income of an individual for a taxation year means the total of
the individual’s incomes for the year from businesses carried on by the individual in countries other than Canada, and
the individual’s incomes for the year (as would be determined if paragraph 127.52(1)(d) were applicable) from sources in countries other than Canada in respect of which the individual has paid non-business-income taxes, as defined in subsection 126(7), to governments of countries other than Canada; (revenu de source étrangère)
foreign taxes of an individual for a taxation year means the total of the business-income taxes, as defined in subsection 126(7), paid by the individual for the year in respect of businesses carried on by the individual in countries other than Canada and 2/3 of the non-business-income taxes, as defined in that subsection, paid by the individual for the year to the governments of countries other than Canada. (impôts payés à l’étranger)
Foreign tax credit
(2)For the purposes of section 127.5, an individual’s special foreign tax credit for a taxation year is the greater of
the total of all amounts deductible under section 126 from the individual’s tax for the year, and
the lesser of
the individual’s foreign taxes for the year, and
the amount determined by the formula
A × B
where
is 20.5%, and
is the individual’s foreign income for the year.
Source: Justice Laws Website. Not an official version.
Historic text
Immediately preceding version, in force from 2006-06-22 to 2024-06-19:
Show the text in force 2006-06-22 to 2024-06-19
Definitions
127.54 (1) In this section,
foreign incomeforeign income of an individual for a taxation year means the total of
(a) the individual’s incomes for the year from businesses carried on by the individual in countries other than Canada, and
(b) the individual’s incomes for the year from sources in countries other than Canada in respect of which the individual has paid non-business-income taxes, within the meaning assigned by subsection 126(7), to governments of countries other than Canada; (revenu de source étrangère)
foreign taxes of an individual for a taxation year means the total of the business-income taxes, within the meaning assigned by subsection 126(7), paid by the individual for the year in respect of businesses carried on by the individual in countries other than Canada and 2/3 of the non-business-income taxes, within the meaning assigned by that subsection, paid by the individual for the year to the governments of countries other than Canada. (impôts payés à l’étranger)
Foreign tax credit
(2) For the purposes of section 127.5, an individual’s special foreign tax credit for a taxation year is the greater of
(a) the total of all amounts deductible under section 126 from the individual’s tax for the year, and
(b) the lesser of
(i) the individual’s foreign taxes for the year, and
(ii) the amount determined by the formula
A × B
where
Ais the appropriate percentage for the taxation year, andBis the individual’s foreign income for the year.
- [NOTE: Application provisions are not included in the consolidated text
- see relevant amending Acts and regulations.]
- R.S., 1985, c. 1 (5th Supp.), s. 127.54
- 2001, c. 17, s. 120
- 2006, c. 4, s. 77
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 127.54 links to the one before it.
Enacting and amending legislation
- R.S., 1985, c. 1 (5th Supp.), s. 127.54; 2001, c. 17, s. 120; 2006, c. 4, s. 77
- 2024, c. 17, s. 43
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. 127.54.