Section 212 — Income Tax Act: Tax

Every non-resident person shall pay an income tax of 25% on every amount that a person resident in Canada pays or credits, or is deemed by Part I to pay or credit, to the non-resident person as, on account or in lieu of payment of, or in satisfaction of, a management or administration fee or charge; interest that is not fully exempt interest and is paid or payable to a person with whom the payer is not dealing at arm’s length, or in respect of a debt or other obligation to pay an amount to a person with whom the payer is not dealing at arm’s length, or is participating debt interest; income of or from an estate or a trust to the extent that the amount is included in computing the income of the non-resident person under subsection 104(13), except to the extent that the amount is deemed by subsection 104(21) to be a taxable capital gain of the non-resident person, or can reasonably be considered (having regard to all the circumstances including the terms and conditions of the estate or trust arrangement) to be a distribution of, or derived from, an amount received by the estate or trust as, on account of, in lieu of payment of or in satisfaction of, a dividend on a share of the capital stock of a corporation resident in Canada, other than a taxable dividend; rent, royalty or similar payment, including, but not so as to restrict the generality of the foregoing, any payment for the use of or for the right to use in Canada any property, invention, trade-name, patent, trademark, design or model, plan, secret formula, process or other thing whatever, for information concerning industrial, commercial or scientific experience where the total amount payable as consideration for that information is dependent in whole or in part on the use to be made of, or the benefit to be derived from, that information, production or sales of goods or services, or profits, for services of an industrial, commercial or scientific character performed by a non-resident person where the total amount payable as consideration for those services is dependent in whole or in part on the use to be made of, or the benefit to be derived from, those services, production or sales of goods or services, or profits, but not including a payment made for services performed in connection with the sale of property or the negotiation of a contract, unless paragraph (i) applies to the amount, made pursuant to an agreement between a person resident in Canada and a non-resident person under which the non-resident person agrees not to use or not to permit any other person to use any thing referred to in subparagraph (i) or any information referred to in subparagraph (ii), or that was dependent on the use of or production from property in Canada whether or not it was an instalment on the sale price of the property, but not including an instalment on the sale price of agricultural land, but not including a royalty or similar payment on or in respect of a copyright in respect of the production or reproduction of any literary, dramatic, musical or artistic work, a payment in respect of the use by a railway company or by a person whose principal business is that of a common carrier of property that is railway rolling stock as defined in the definition rolling stock in section 2 of the Railway Act if the payment is made for the use of that property for a period or periods not expected to exceed in the aggregate 90 days in any 12 month period, or in any other case, if the payment is made pursuant to an agreement in writing entered into before November 19, 1974; a payment made under a bona fide cost-sharing arrangement under which the person making the payment shares on a reasonable basis with one or more non-resident persons research and development expenses in exchange for an interest, or for civil law a right, in any or all property or other things of value that may result therefrom, a rental payment for the use of or the right to use outside Canada any tangible, or for civil law corporeal, property, any payment made to a person with whom the payer is dealing at arm’s length, to the extent that the amount thereof is deductible in computing the income of the payer under Part I from a business carried on by the payer in a country other than Canada, a payment made to a person with whom the payer is dealing at arm’s length for the use of or the right to use property that is an aircraft, furniture, fittings or equipment attached to an aircraft, a spare part for property described in clause 212(1)(d)(xi)(A) or 212(1)(d)(xi)(B), air navigation equipment utilized in the provision of services under the Civil Air Navigation Services Commercialization Act or computer software the use of which is necessary for the operation of that equipment that is used by the payer for no other purpose; or an amount to which subsection (5) would apply if that subsection were read without reference to “to the extent that the amount relates to that use or reproduction”; a timber royalty in respect of a timber resource property or a timber limit in Canada (which, for the purposes of this Part, includes any consideration for a right under or pursuant to which a right to cut or take timber from a timber resource property or a timber limit in Canada is obtained or derived, to the extent that the consideration is dependent on, or computed by reference to, the amount of timber cut or taken); [Repealed, 1997, c. 25, s. 63] a patronage dividend, that is, a payment made pursuant to an allocation in proportion to patronage as defined by section 135 or an amount that would, under subsection 135(7), be included in computing the non-resident person’s income if that person were resident in Canada; a payment of a superannuation or pension benefit, other than [Repealed, 1996, c. 21, s. 55] an amount distributed from a pooled registered pension plan that has been designated by the administrator of the plan in accordance with subsection 147.5(18), an amount or payment referred to in subsection 81(1) to the extent that that amount or payment would not, if the non-resident person had been resident in Canada throughout the taxation year in which the payment was made, be included in computing that person’s income, the portion of the payment that is transferred by the payer on behalf of the non-resident person, pursuant to an authorization in prescribed form, to a pooled registered pension plan, registered pension plan, registered retirement savings plan, registered retirement income fund or specified pension plan and that because of any of subsections 146(21), 147.3(9) and 147.5(22) would not, if the non-resident person had been resident in Canada throughout the taxation year in which the payment was made, be included in computing the non-resident person’s income, or by reason of paragraph 60(j) or 60(j.2) would, if the non-resident person had been resident in Canada throughout the year, be deductible in computing the non-resident person’s income for the year, an amount referred to in paragraph 110(1)(f) to the extent that the amount would, if the non-resident person had been resident in Canada throughout the taxation year in which the amount was paid, be deductible in computing that person’s taxable income or that of the spouse or common-law partner of that person, in the case of a payment described in section 57, that portion of the payment that would, by virtue of that section, not be included in the recipient’s income for the taxation year in which it was received, if the recipient were resident in Canada throughout that year, or the portion of the payment that is transferred by the payer on behalf of the non-resident person, pursuant to an authorization in prescribed form, to acquire an annuity contract in circumstances to which subsection 146(21) applies, except such portion, if any, of the payment as may reasonably be regarded as attributable to services rendered by the person, to or in respect of whom the payment is made, in taxation years during which the person at no time was resident in Canada, and throughout which the person was not employed, or was only occasionally employed, in Canada; an amount that would, if the non-resident person had been resident in Canada throughout the taxation year in which the amount was received or receivable, be required by paragraph 56(1)(m) or subsection 56.4(2) to be included in computing the non-resident person’s income for the taxation year, except an amount deemed to be a payment of interest and referred to in subsection 214(15); any benefit described in any of subparagraphs 56(1)(a)(iii) to 56(1)(a)(vi), any amount described in paragraph 56(1)(x) or 56(1)(z) (other than an amount transferred under circumstances in which subsection 207.6(7) applies) or the purchase price of an interest in a retirement compensation arrangement; a payment of any allowance described in subparagraph 56(1)(a)(ii), except such portion, if any, of the payment as may reasonably be regarded as attributable to services rendered by the person, to or in respect of whom the payment is made, in taxation years during which the person at no time was resident in Canada, and throughout which the person was not employed, or was only occasionally employed, in Canada, and the portion of the payment transferred by the payer on behalf of the non-resident person pursuant to an authorization in prescribed form to a registered pension plan or to a registered retirement savings plan under which the non-resident person is the annuitant (within the meaning assigned by subsection 146(1)) that would, if the non-resident person had been resident in Canada throughout the year, be deductible in computing the income of the non-resident person by virtue of paragraph 60(j.1); a payment by a trustee under a registered supplementary unemployment benefit plan; a payment out of or under a registered retirement savings plan or a plan referred to in subsection 146(12) as an “amended plan” that would, if the non-resident person had been resident in Canada throughout the taxation year in which the payment was made, be required by section 146 to be included in computing the income of the non-resident person for the year, other than the portion thereof that has been transferred by the payer on behalf of the non-resident person pursuant to an authorization in prescribed form to a registered retirement savings plan under which the non-resident person is the annuitant (within the meaning assigned by subsection 146(1)), to acquire an annuity described in subparagraph 60(l)(ii) under which the non-resident person is the annuitant, or to a carrier (within the meaning assigned by subsection 146.3(1)) as consideration for a registered retirement income fund under which the non-resident person is the annuitant (within the meaning assigned by subsection 146.3(1)), and would, if the non-resident person had been resident in Canada throughout the year, be deductible in computing the income of the non-resident person for the year by virtue of paragraph 60(l); a payment of an amount described in paragraph 56(1)(z.5); a payment under a deferred profit sharing plan or a plan referred to in subsection 147(15) as a “revoked plan” that would, if the non-resident person had been resident in Canada throughout the taxation year in which the payment was made, be required by section 147, if it were read without reference to subsections 147(10.1) and 147(20), to be included in computing the non-resident person’s income for the year, other than the portion thereof that is transferred by the payer on behalf of the non-resident person, pursuant to an authorization in prescribed form, to a registered pension plan or registered retirement savings plan and that by reason of subsection 147(20) would not, if the non-resident person had been resident in Canada throughout the year, be included in computing the non-resident person’s income, or by reason of paragraph 60(j.2) would, if the non-resident person had been resident in Canada throughout the year, be deductible in computing the non-resident person’s income for the year; a payment under an income-averaging annuity contract, any proceeds of the surrender, cancellation, redemption, sale or other disposition of an income-averaging annuity contract, or any amount deemed by subsection 61.1(1) to have been received by the non-resident person as proceeds of the disposition of an income-averaging annuity contract; a payment under an annuity contract (other than a payment in respect of an annuity issued in the course of carrying on a life insurance business in a country other than Canada) to the extent of the amount in respect of the interest of the non-resident person in the contract that, if the non-resident person had been resident in Canada throughout the taxation year in which the payment was made, would be required to be included in computing the income of the non-resident person for the year, and would not be deductible in computing that income; an amount that would, if the non-resident person had been resident in Canada at the time at which the amount was paid, be required by paragraph 12(1)(z.5) to be included in computing the non-resident person’s income for the taxation year that includes that time; a payment out of or under a registered retirement income fund that would, if the non-resident person had been resident in Canada throughout the taxation year in which the payment was made, be required by section 146.3 to be included in computing the non-resident person’s income for the year, other than the portion thereof that has been transferred by the payer on behalf of the non-resident person pursuant to an authorization in prescribed form to a registered retirement savings plan under which the non-resident person is the annuitant (within the meaning assigned by subsection 146(1)), to acquire an annuity described in subparagraph 60(l)(ii) under which the non-resident person is the annuitant, or to a carrier (within the meaning assigned by subsection 146.3(1)) as consideration for a registered retirement income fund under which the non-resident person is the annuitant (within the meaning assigned by subsection 146.3(1)), and would, if the non-resident person had been resident in Canada throughout the year, be deductible in computing the non-resident person’s income for the year by reason of paragraph 60(l); a payment that is required by paragraph 56(1)(q) to be included in computing the non-resident person’s income under Part I for a taxation year, and not required to be included in computing the non-resident person’s taxable income or taxable income earned in Canada for the year; an amount that would, if the non-resident person had been resident in Canada throughout the taxation year in which the amount was paid, be required by paragraph 56(1)(q.1) to be included in computing the non-resident person’s income for the taxation year; a grant under a prescribed program of the Government of Canada relating to home insulation or energy conversion; a payment out of a NISA Fund No. 2 to the extent that that amount would, if Part I applied, be required by subsection 12(10.2) to be included in computing the person’s income for a taxation year; a payment in respect of an amateur athlete trust that would, if Part I applied, be required by section 143.1 to be included in computing the person’s income for a taxation year; a payment made by a custodian (within the meaning assigned by subsection 148.1(1)) of an arrangement that was, at the time it was established, an eligible funeral arrangement, to the extent that such amount would, if the non-resident person were resident in Canada, be included because of subsection 148.1(3) in computing the person’s income; a payment out of a trust that is, or was, at any time, an employee life and health trust, except to the extent that it is a payment of a designated employee benefit (as defined by subsection 144.1(1)); a payment of an amount described in paragraph 56(1)(z.4); or a payment out of a FHSA, other than any portion of the payment that is transferred in accordance with subsection 146.6(7). Every non-resident person shall pay an income tax of 25% on every amount that a corporation resident in Canada pays or credits, or is deemed by Part I or Part XIV to pay or credit, to the non-resident person as, on account or in lieu of payment of, or in satisfaction of, a taxable dividend (other than a capital gains dividend within the meaning assigned by subsection 130.1(4), 131(1) or 133(7.1)); or a capital dividend. Subsection (2) does not apply to an amount paid or credited, by a borrower, under a securities lending arrangement or a specified securities lending arrangement if the amount is deemed by subparagraph 260(8)(a)(ii) to be a dividend; either the arrangement is a fully collateralized arrangement, or the borrower and the lender are dealing at arm’s length; and the security that is transferred or lent to the borrower under the securities lending arrangement is a share of a class of the capital stock of a non-resident corporation. The following definitions apply for the purpose of paragraph (1)(b). fully exempt interest means interest that is paid or payable on a bond, debenture, note, mortgage, hypothecary claim or similar debt obligation of, or guaranteed (otherwise than by being insured by the Canada Deposit Insurance Corporation) by, the Government of Canada, of the government of a province, of an agent of a province, of a municipality in Canada or a municipal or public body performing a function of government in Canada, of a corporation, commission or association to which any of paragraphs 149(1)(d) to (d.6) applies, or of an educational institution or a hospital if repayment of the principal amount of the obligation and payment of the interest is to be made, or is guaranteed, assured or otherwise specifically provided for or secured by the government of a province; interest that is paid or payable on a mortgage, hypothecary claim or similar debt obligation secured by, or on an agreement for sale or similar obligation with respect to, real property situated outside Canada or an interest in any such real property, or to immovables situated outside Canada or a real right in any such immovable, except to the extent that the interest payable on the obligation is deductible in computing the income of the payer under Part I from a business carried on by the payer in Canada or from property other than real or immovable property situated outside Canada; interest that is paid or payable to a prescribed international organization or agency; or an amount paid or payable or credited under a securities lending arrangement, or a specified securities lending arrangement, that is deemed by subparagraph 260(8)(a)(i) to be a payment made by a borrower to a lender of interest, if the arrangement is a fully collateralized arrangement, and the following conditions are met: the arrangement was entered into by the borrower in the course of carrying on a business outside Canada, and the security that is transferred or lent to the borrower under the arrangement is described in paragraph (b) of the definition qualified security in subsection 260(1) and issued by a non-resident issuer, the security that is transferred or lent to the borrower under the arrangement is described in paragraph (c) of the definition qualified security in subsection 260(1), or the security that is transferred or lent to the borrower under the arrangement is described in paragraph (a) or (b). ( intérêts entièrement exonérés ) participating debt interest means interest (other than interest described in any of paragraphs (b) to (d) of the definition fully exempt interest ) that is paid or payable on an obligation, other than a prescribed obligation, all or any portion of which interest is contingent or dependent on the use of or production from property in Canada or is computed by reference to revenue, profit, cash flow, commodity price or any other similar criterion or by reference to dividends paid or payable to shareholders of any class of shares of the capital stock of a corporation. ( intérêts sur des créances participatives ) Subsection (3.2) applies at any time in respect of a taxpayer if the taxpayer pays or credits a particular amount at that time as, on account or in lieu of payment of, or in satisfaction of, interest (determined without reference to paragraph 18(6.1)(b) and subsection 214(16)) in respect of a particular debt or other obligation to pay an amount to a person or partnership (in this subsection and subsection (3.2) referred to as the immediate funder ); the immediate funder is not a person resident in Canada that does not deal at arm’s length with the taxpayer, or a partnership each member of which is a person described in subparagraph (i); at any time in the period during which the interest accrued (in this subsection and subsections (3.2) and (3.3) referred to as the relevant period ), a relevant funder, in respect of a particular relevant funding arrangement, has an amount outstanding as or on account of a debt or other obligation to pay an amount to a person or partnership that meets any of the following conditions: recourse in respect of the debt or other obligation is limited in whole or in part, either immediately or in the future and either absolutely or contingently, to a relevant funding arrangement, or it can reasonably be concluded that all or a portion of the particular relevant funding arrangement was entered into, or was permitted to remain in effect, because all or a portion of the debt or other obligation was entered into or was permitted to remain outstanding, or the relevant funder anticipated that all or a portion of the debt or other obligation would become owing or remain outstanding, or has a specified right in respect of a particular property that was granted directly or indirectly by a person or partnership and the existence of the specified right is required under the terms and conditions of the particular relevant funding arrangement, or it can reasonably be concluded that all or a portion of the particular relevant funding arrangement was entered into, or was permitted to remain in effect, because the specified right was granted, or the relevant funder anticipated that the specified right would be granted; the tax that would be payable under this Part in respect of the particular amount, if the particular amount were paid or credited to any ultimate funder rather than the immediate funder, is greater than the tax payable under this Part (determined without reference to this subsection and subsection (3.2)) in respect of the particular amount; and at any time during the relevant period, the total of all amounts — each of which is an amount outstanding as or on account of a debt or other obligation owed by the immediate funder that is a relevant funding arrangement or the fair market value of a particular property in respect of which the immediate funder is granted a specified right that is a relevant funding arrangement —

is equal to at least 25% of the total of the amount outstanding as or on account of the particular debt or other obligation, and the total of all amounts each of which is an amount (other than the amount described in subparagraph (i)) that the taxpayer, or a person or partnership that does not deal at arm’s length with the taxpayer, has outstanding as or on account of a debt or other obligation to pay an amount to the immediate funder under the agreement, or an agreement that is connected to the agreement, under which the particular debt or other obligation was entered into where the immediate funder is granted a security interest (as defined in subsection 18(5)) in respect of a property that is the debt or other obligation owed by the immediate funder or the particular property, as the case may be, and the security interest secures the payment of two or more debts or other obligations that include the debt or other obligation and the particular debt or other obligation, and each security interest that secures the payment of a debt or other obligation referred to in clause (A) secures the payment of every debt or other obligation referred to in that clause. If this subsection applies at any time in respect of a taxpayer, then for the purposes of paragraph (1)(b), the taxpayer is deemed, at that time, to pay interest to each ultimate funder, the amount of which is determined for each particular ultimate funder by the formula (A – B) × C/D × (E – F)/E where A is the particular amount referred to in paragraph (3.1)(a); B is the portion, if any, of the particular amount deemed by subsection 214(16) to have been paid by the taxpayer as a dividend; C is the average of all amounts each of which is, at a particular time in the relevant period, the amount determined by the formula G – H where G is the lesser of the following amounts: the amount of the particular debt or other obligation referred to in paragraph (3.1)(a) outstanding at the particular time, and the total of all amounts each of which is at that particular time an amount outstanding as or on account of a debt or other obligation that is owed to the particular ultimate funder under a relevant funding arrangement, the fair market value of a particular property referred to in subparagraph (3.1)(c)(ii) in respect of which the particular ultimate funder has granted a specified right under a relevant funding arrangement, or if neither subparagraph (i) nor (ii) applies at that particular time, nil, and H is the total of all amounts each of which is, at the particular time, the amount that is an amount outstanding as or on account of a debt or other obligation that is owed by the particular ultimate funder under a relevant funding arrangement, the fair market value of a particular property referred to in subparagraph (3.1)(c)(ii) in respect of which the particular ultimate funder has a specified right under a relevant funding arrangement, or if neither paragraph (a) nor (b) applies at that particular time, nil; D is the average of all amounts each of which is the amount of the particular debt or other obligation outstanding at a time in the relevant period; E is the rate of tax (determined without reference to subsection 214(16)) that would be imposed under this Part on the particular amount if the particular amount were paid by the taxpayer to the particular ultimate funder at that time; and F is the rate of tax (determined without reference to subsection 214(16)) imposed under this Part on the immediate funder in respect of all or the portion of the particular amount paid or credited to the immediate funder. Subsection (3.22) applies in respect of a taxpayer and two or more ultimate funders (referred to in this subsection and subsection (3.22) as the electing ultimate funders ) at any time if at that time, subsection (3.2) applies in respect of the taxpayer; prior to that time, the taxpayer and the electing ultimate funders have jointly filed an election under this subsection; the election designates one of the electing ultimate funders to be the recipient of interest payments that are deemed to be made by the taxpayer under subsection (3.22); at that time, the tax that would be payable under this Part in respect of an interest payment by the taxpayer to the designated ultimate funder is not less than the tax that would be payable under this Part if the interest payment were made by the taxpayer to any of the other electing ultimate funders; and the election has not been revoked prior to that time. If this subsection applies at any time in respect of a taxpayer and two or more electing ultimate funders, then each interest payment that would, in the absence of this subsection, have been deemed under subsection (3.2) to have been made at that time by the taxpayer to an electing ultimate funder, and received by the electing ultimate funder from the taxpayer, is deemed to have instead been made by the taxpayer to the designated ultimate funder; and received by the designated ultimate funder from the taxpayer. Subsection (3.4) applies in respect of a particular relevant funder if the amount determined by the following formula is greater than nil: A – B where A is the total of all amounts each of which is the amount owing by the particular relevant funder, or is the fair market value of a property in respect of which the particular relevant funder has a specified right, under a relevant funding arrangement; and B is the total of all amounts each of which is the amount owed to the particular relevant funder, or is the fair market value of a property in respect of which the particular relevant funder has granted a specified right, under a relevant funding arrangement. If this subsection applies in respect of a particular relevant funder, for the purposes of subsections (3.2) to (3.4) (other than for the purpose of applying subsections (3.3) and (3.4) in respect of the particular relevant funder), each amount that is owed by the particular relevant funder, or that is the fair market value of a property in respect of which the particular relevant funder has been granted a specified right, under a relevant funding arrangement, is deemed to be the amount determined by the formula C/D x E where C is the amount owing or the fair market value of the property, as the case may be; D is the amount determined for A in subsection (3.3); and E is the amount determined for B in subsection (3.3). If an amount owing by a relevant funder or a specified right held by the relevant funder is a relevant funding arrangement in respect of more than one particular debt or other obligation referred to in paragraph (3.1)(a), for the purposes of applying subsections (3.2) to (3.4) in respect of each of the particular debts or other obligations, the amount owing, or the fair market value of the property in respect of which the specified right was granted, as the case may be, is deemed, in respect of each particular debt or other obligation, to be the amount determined by the formula A/B × C where A is the total of all amounts each of which is an amount owing to the relevant funder, or the fair market value of a property in respect of which the relevant funder has granted a specified right, under a relevant funding arrangement, in respect of the particular debt or other obligation; B is the total of all amounts each of which is an amount owing to the relevant funder, or the fair market value of a property in respect of which the relevant funder has granted a specified right, under a relevant funding arrangement, in respect of all of the particular debts or other obligations; and C is the amount owing by the relevant funder or the fair market value of the property in respect of which the relevant funder holds the specified right. Subsection (3.7) applies in respect of shares (other than specified shares) of the capital stock of a particular relevant funder, in respect of a particular relevant funding arrangement, if —

at any time at or after the time when the particular debt or other obligation referred to in paragraph (3.1)(a) was entered into — the particular relevant funder has an obligation to pay or credit an amount as, on account or in lieu of payment of, or in satisfaction of, a dividend on the shares, either immediately or in the future and either absolutely or contingently, to a person or partnership, and any of the following conditions is met: the amount of the dividend is determined, in whole or in part, by reference to an amount of interest paid or credited, or an obligation to pay or credit interest, under a relevant funding arrangement, or it can reasonably be concluded that the particular relevant funding arrangement was entered into or was permitted to remain in effect, because the shares were issued or were permitted to remain issued and outstanding, or it was anticipated that the shares would be issued or would be permitted to remain issued and outstanding; or a specified royalty arrangement, if —

at any time at or after the time when the particular debt or other obligation referred to in paragraph (3.1)(a) was entered into —

a particular relevant funder, in respect of a particular relevant funding arrangement, is a specified licensee that has an obligation to pay or credit an amount under the specified royalty arrangement, either immediately or in the future and either absolutely or contingently, to a person or partnership, and any of the following conditions is met: the amount is determined, in whole or in part, by reference to an amount of interest paid or credited, or an obligation to pay or credit interest, under a relevant funding arrangement, or it can reasonably be concluded that the particular relevant funding arrangement was entered into or was permitted to remain in effect, because the specified royalty arrangement was entered into or was permitted to remain in effect, or it was anticipated that the specified royalty arrangement would be entered into or remain in effect. If this subsection applies in respect of a specified royalty arrangement (under which a particular relevant funder is a specified licensee) or shares of the capital stock of a particular relevant funder, then, for the purposes of subsections (3.1) to (3.8), the specified royalty arrangement or the holding of the shares, as the case may be, is deemed to be a relevant funding arrangement; the specified licensor or shareholder, as the case may be, in respect of the relevant funding arrangement, is deemed to be a relevant funder, in respect of the relevant funding arrangement; the conditions in paragraph (3.1)(c) are deemed to be met in respect of the relevant funding arrangement; and the relevant funder is deemed to be owed, under the relevant funding arrangement and by the particular relevant funder, an amount as or on account of a debt, the outstanding amount of which is determined by the formula (A – B) × C/D where A is the total of all amounts each of which is at the particular time, an amount outstanding as or on account of a debt or other obligation that is owed to the particular relevant funder under a relevant funding arrangement, the fair market value of a particular property referred to in subparagraph (3.1)(c)(ii) in respect of which the particular relevant funder has granted a specified right under a relevant funding arrangement, or if neither subparagraph (i) nor (ii) applies at that particular time, nil, B is the total of all amounts each of which is, at the particular time, in respect of a relevant funding arrangement (other than a relevant funding arrangement deemed under paragraph (a)) and is an amount outstanding as or on account of a debt or other obligation that is owed by the particular relevant funder under the relevant funding arrangement, the fair market value of a particular property referred to in subparagraph (3.1)(c)(ii) in respect of which the particular relevant funder has been granted a specified right under a relevant funding arrangement, or if neither subparagraph (i) nor (ii) applies at that particular time, nil, C is the fair market value, at the particular time, of if the relevant funding arrangement is described in paragraph (3.6)(a), the shares, or if the relevant funding arrangement is described in paragraph (3.6)(b), the specified royalty arrangement, and D is the total of all amounts each of which is, in respect of a relevant funding arrangement referred to in the description of C, the amount determined for C at the particular time. The following definitions apply in this subsection and subsections (3.1) to (3.7) and (3.81). relevant funder , in respect of a relevant funding arrangement, means if the relevant funding arrangement is described in paragraph (a) of the definition relevant funding arrangement , the immediate funder referred to in paragraph (3.1)(a); if the relevant funding arrangement is described in paragraph (b) of the definition relevant funding arrangement , the creditor in respect of the debt or other obligation or the grantor of the specified right, as the case may be; or a person or partnership that does not deal at arm’s length with a person or partnership that is referred to in paragraph (a) or (b) and that deals at arm’s length with the taxpayer. ( bailleur de fonds considéré ) relevant funding arrangement means the particular debt or other obligation referred to in paragraph (3.1)(a); and each debt or other obligation or specified right, owing by or granted to a relevant funder, in respect of a particular relevant funding arrangement, if the debt or other obligation or specified right meets the conditions in subparagraph (3.1)(c)(i) or (ii) in respect of a relevant funding arrangement. ( mécanisme de financement considéré ) specified licensee means a lessee, licensee or grantee of a right similar to a right granted under a lease or licence, under a specified royalty arrangement; an assignee under a specified royalty arrangement; or a purchaser under a specified royalty arrangement. ( porteur de licence déterminé ) specified licensor means a lessor, licensor or grantor of a right similar to a right granted under a lease or licence, under a specified royalty arrangement; an assignor under a specified royalty arrangement; or a seller under a specified royalty arrangement. ( cédant de licence déterminé ) specified right has the same meaning as in subsection 18(5). ( droit déterminé ) specified royalty arrangement has the same meaning as in subsection (3.94). ( mécanisme de redevance déterminé ) specified share means a share of the capital stock of a corporation if, under the terms or conditions of the share, or any agreement or arrangement relating to the share, the holder of the share may cause the share to be redeemed, acquired or cancelled; the issuing corporation is, or may be, required to redeem, acquire or cancel the share at a specific time; or the share is convertible or exchangeable into a share that meets the conditions in paragraph (a) or (b). ( action déterminée ) ultimate funder means a relevant funder, in respect of a relevant funding arrangement (other than the immediate funder) that either is not a debtor, or a holder of a specified right, under a relevant funding arrangement; or is a debtor, or a holder of a specified right, under a relevant funding arrangement, if the amount that would —

if the relevant funder were an ultimate funder —

be determined for C in the formula in subsection (3.2) is greater than nil. ( bailleur de fonds ultime ) For the purposes of subsections (3.1) to (3.8), specified shares of a relevant funder, in respect of a relevant funding arrangement, held at any time by a person or partnership are deemed to be a debt of the relevant funder owing to the person or partnership; and the amount outstanding at that time as or on account of the debt is deemed to be equal to the fair market value of the specified shares at that time. Subsection (3.91) applies at any time in respect of a taxpayer if the taxpayer pays or credits a particular amount at that time as, on account or in lieu of payment of, or in satisfaction of, rent, royalty or similar payment, in respect of a particular lease, licence or similar agreement, to a non-resident person or a partnership any member of which is a non-resident person (in this subsection and subsections (3.91) to (3.94) referred to as the immediate licensor ); at any time at or after the time when the particular lease, licence or similar agreement was entered into, a relevant licensor in respect of a particular relevant royalty arrangement has an obligation to pay or credit an amount, either immediately or in the future and either absolutely or contingently, to a person or partnership, in respect of a specified royalty arrangement, and either of the following additional conditions is met: the amount is determined, in whole or in part, by reference to an amount paid or credited, or an obligation to pay or credit an amount, in respect of a relevant royalty arrangement, or one or more of the fair market value of, any revenue, profits, income, or cash flow from, or any other similar criteria in respect of, a particular property, if a right in respect of the property is granted under the particular lease, licence or similar agreement, or it can reasonably be concluded that the particular relevant royalty arrangement was entered into, or was permitted to remain in effect, because the specified royalty arrangement was entered into or was permitted to remain in effect, or it was anticipated that the specified royalty arrangement would be entered into or remain in effect, and either the person or partnership does not deal at arm’s length with the taxpayer, or deals at arm’s length with the taxpayer, if it can reasonably be concluded that one of the main purposes of the specified royalty arrangement was to reduce or avoid the tax payable under this Part in respect of the particular amount, or to avoid the application of subsection (3.91); and the tax that would be payable under this Part in respect of the particular amount, if the particular amount were paid or credited to an ultimate licensor rather than the immediate licensor, is greater than the tax payable under this Part (determined without reference to this subsection and subsection (3.91)) in respect of the particular amount. If this subsection applies at any time in respect of a taxpayer, then, for the purposes of paragraph (1)(d), the taxpayer is deemed, at that time, to pay to each ultimate licensor an amount —

of the same character as the particular amount referred to in paragraph (3.9)(a) — determined for each particular ultimate licensor by the formula (A × B/C) × (D – E)/D where A is the particular amount referred to in paragraph (3.9)(a); B is the portion of the amount referred to in paragraph (3.9)(a) that is demonstrated, to the satisfaction of the Minister, to be reasonably allocable to the particular ultimate licensor, and if an amount is not demonstrated, to the satisfaction of the Minister, to be reasonably allocable to each particular ultimate licensor, one; C is the total of all amounts, each of which is the portion of the amount referred to in paragraph (3.9)(a) that is demonstrated, to the satisfaction of the Minister, to be reasonably allocable to each ultimate licensor, and if an amount is not demonstrated, to the satisfaction of the Minister, to be reasonably allocable to each particular ultimate licensor, the number of ultimate licensors; D is if an amount is not demonstrated, to the satisfaction of the Minister, to be reasonably allocable to each particular ultimate licensor, the highest rate of tax that would be imposed under this Part on the particular amount referred to in paragraph (3.9)(a) if the particular amount were paid by the taxpayer to any of the ultimate licensors at that time, and in any other case, the rate of tax that would be imposed under this Part on the particular amount referred to in paragraph (3.9)(a) if the particular amount were paid by the taxpayer to the particular ultimate licensor at that time; and E is the rate of tax imposed under this Part at that time on the immediate licensor in respect of the particular amount, referred to in paragraph (3.9)(a), paid or credited to the immediate licensor. Subsection (3.93) applies in respect of shares of the capital stock of a particular relevant licensor, in respect of a particular relevant royalty arrangement, if —

at any time at or after the time when a particular lease, license or similar agreement referred to in paragraph (3.9)(a) was entered into — the particular relevant licensor has an obligation to pay or credit an amount as, on account or in lieu of payment of, or in satisfaction of, a dividend on the shares, either immediately or in the future and either absolutely or contingently, to a person or partnership, and either of the following conditions is met: the amount of the dividend is determined, in whole or in part, by reference to an amount of rent, royalty or similar payment paid or credited, or an obligation to pay or credit rent, royalty or similar payment, under a relevant royalty arrangement, or one or more of the fair market value of, any revenue profits, income or cash flow from, or any other similar criteria in respect of a particular property, if a right in respect of the property is granted under the particular lease, licence or similar agreement, or it can reasonably be concluded that the particular relevant royalty arrangement was entered into or was permitted to remain in effect, because the shares were issued or were permitted to remain issued and outstanding, or it was anticipated that the shares would be issued or would be permitted to remain issued and outstanding, and either the person or partnership does not deal at arm’s length with the taxpayer referred to in paragraph (3.9)(a), or deals at arm’s length with that taxpayer, if it can reasonably be concluded that one of the main purposes of the issuance of the shares was to reduce or avoid the tax payable under this Part in respect of the particular amount referred to in paragraph (3.9)(a), or to avoid the application of subsection (3.91); and an amount outstanding as or on account of a debt or other obligation to pay an amount, if —

at any time at or after the time when a particular lease, license or similar agreement referred to in paragraph (3.9)(a) was entered into —

a particular relevant licensor, in respect of a particular relevant royalty arrangement, has an obligation to pay or credit an amount as, on account or in lieu of payment of, or in satisfaction of, interest under the debt or other obligation, either immediately or in the future and either absolutely or contingently, to a person or partnership, and either of the following conditions is met: the amount of the interest is determined, in whole or in part, by reference to an amount of rent, royalty or similar payment paid or credited, or an obligation to pay or credit rent, royalty or similar payment, under a relevant royalty arrangement, or one or more of the fair market value of, any revenue profits, income or cash flow from, or any other similar criteria in respect of a particular property, if a right in respect of the property is granted under the particular lease, licence or similar agreement, or it can reasonably be concluded that the particular relevant royalty arrangement was entered into or was permitted to remain in effect, because the debt or other obligation was entered into or was permitted to remain in effect, or it was anticipated that the debt or other obligation would be entered into or remain in effect, and either the person or partnership does not deal at arm’s length with the taxpayer referred to in paragraph (3.9)(a), or deals at arm’s length with that taxpayer, if it can reasonably be concluded that one of the main purposes of entering into the debt or other obligation was to reduce or avoid the tax payable under this Part in respect of the particular amount referred to in paragraph (3.9)(a), or to avoid the application of subsection (3.91). If this subsection applies in respect of a debt or other obligation to pay an amount (under which a particular relevant licensor is a borrower) or shares of the capital stock of a particular relevant licensor, then, for the purposes of subsections (3.9) to (3.94), the debt or other obligation or the holding of the shares, as the case may be, is deemed to be a relevant royalty arrangement; the creditor or shareholder, as the case may be, in respect of the relevant royalty arrangement, is deemed to be a relevant licensor, in respect of the relevant royalty arrangement; and the relevant royalty arrangement is deemed to be a specified royalty arrangement in respect of which the conditions in paragraph (3.9)(b) are met. The following definitions apply in this subsection and subsections (3.9) to (3.93). lease, licence or similar agreement means an agreement under which a rent, royalty or similar payment is or could be made. ( convention de bail, licence ou autre convention semblable ) relevant licensor , in respect of a relevant royalty arrangement, means if the relevant royalty arrangement is described in paragraph (a) of the definition relevant royalty arrangement , the immediate licensor referred to in paragraph (3.9)(a); if the relevant royalty arrangement is described in paragraph (b) of the definition relevant royalty arrangement , a person or partnership that is the lessor, the licensor or the grantor of a right similar to a right granted under a lease or licence, the assignor or the seller, as the case may be; or a person or partnership that does not deal at arm’s length with a relevant licensor referred to in paragraph (a) or (b). ( cédant de licence considéré ) relevant royalty arrangement means the particular lease, licence or similar agreement referred to in paragraph (3.9)(a); and each specified royalty arrangement that meets, in respect of a relevant royalty arrangement, the conditions in clause (3.9)(b)(i)(A) or (B),

and is an arrangement in respect of which the person or partnership referred to in subparagraph (3.9)(b)(ii) meets the conditions in clause (3.9)(b)(ii)(A) or (B). ( mécanisme de redevance considéré ) rent, royalty or similar payment means a rent, royalty or similar payment described in paragraph (1)(d) and, for greater certainty, includes any payment described in subparagraphs (1)(d)(i) to (v) but does not include any payment described in subparagraphs (1)(d)(vi) to (xii). ( loyer, redevance ou paiement semblable ) specified royalty arrangement means a lease, license or similar agreement, an assignment or an instalment sale. ( mécanisme de redevance déterminé ) ultimate licensor means a relevant licensor (other than the immediate licensor), in respect of a relevant royalty arrangement, that is not, under a relevant royalty arrangement, a lessee, a licensee or a grantee of a right similar to a right granted under a lease or licence; an assignee; or a purchaser. ( cédant de licence ultime ) For the purpose of paragraph 212(1)(a), management or administration fee or charge does not include any amount paid or credited or deemed by Part I to have been paid or credited to a non-resident person as, on account or in lieu of payment of, or in satisfaction of, a service performed by the non-resident person if, at the time the non-resident person performed the service the service was performed in the ordinary course of a business carried on by the non-resident person that included the performance of such a service for a fee, and the non-resident person and the payer were dealing with each other at arm’s length, or a specific expense incurred by the non-resident person for the performance of a service that was for the benefit of the payer, to the extent that the amount so paid or credited was reasonable in the circumstances. Every non-resident person shall pay an income tax of 25% on every amount that a person resident in Canada pays or credits, or is deemed by Part I to pay or credit, to the non-resident person as, on account or in lieu of payment of, or in satisfaction of, payment for a right in or to the use of a motion picture film, or a film, video tape or other means of reproduction for use in connection with television (other than solely in connection with and as part of a news program produced in Canada), that has been, or is to be, used or reproduced in Canada to the extent that the amount relates to that use or reproduction. Notwithstanding any regulation made under paragraph 214(13)(c), every person who is either a non-resident individual who is an actor or that is a corporation related to such an individual shall pay an income tax of 23% on every amount paid or credited, or provided as a benefit, to or on behalf of the person for the provision in Canada of the acting services of the actor in a film or video production. Where a corporation is liable to tax under subsection (5.1) in respect of an amount for acting services of an actor (in this subsection referred to as the “corporation payment”) and the corporation pays, credits or provides as a benefit to the actor an amount for those acting services (in this subsection referred to as the “actor payment”), no tax is payable under subsection (5.1) with respect to the actor payment except to the extent that it exceeds the corporation payment. If the Minister is satisfied that the deduction or withholding otherwise required by section 215 from an amount described in subsection (5.1), would cause undue hardship, the Minister may determine a lesser amount to be deducted or withheld and that lesser amount is deemed to be the amount so required to be deducted or withheld. Where an amount described by subsection 212(1) relates to interest on bonds or other obligations of or guaranteed by Her Majesty in right of a province or interest on bonds or other obligations provision for the payment of which was made by a statute of a provincial legislature, the tax payable under subsection 212(1) is 5% of that amount. Subsection 212(6) does not apply to interest on any bond or other obligation described therein that was issued after December 20, 1960, except any such bond or other obligation for the issue of which arrangements were made on or before that day with a dealer in securities, if the existence of the arrangements for the issue of the bond or other obligation can be established by evidence in writing given or made on or before that day. For the purposes of this Part, where any bond, except a bond to which clause 212(1)(b)(ii)(C) applies, was issued after December 20, 1960 in exchange for a bond issued on or before that day, it shall, if the terms on which the bond for which it was exchanged was issued conferred on the holder thereof the right to make the exchange, be deemed to have been issued on or before December 20, 1960. Where a dividend or interest is received by a trust from a non-resident-owned investment corporation, an amount (in this subsection referred to as the “royalty payment”) is received by a trust as, on account of, in lieu of payment of or in satisfaction of, a royalty on or in respect of a copyright in respect of the production or reproduction of any literary, dramatic, musical or artistic work, interest is received by a mutual fund trust maintained primarily for the benefit of non-resident persons, or a dividend or interest is received by a trust that is created under a reinsurance trust agreement to which a regulatory authority — being the Superintendent of Financial Institutions or a provincial regulatory authority having powers similar to those of the Superintendent —

is a party, and that accords with guidelines issued by the regulatory authority relating to reinsurance arrangements with unregistered insurers and a particular amount is paid or credited to a non-resident person as income of or from the trust and can reasonably be regarded as having been derived from the dividend, interest or royalty payment, as the case may be, no tax is payable because of paragraph 212(1)(c) as a consequence of the payment or crediting of the particular amount if no tax would have been payable under this Part in respect of the dividend, interest or royalty payment, as the case may be, if it had been paid directly to the non-resident person instead of to the trust. Where all the beneficiaries of a trust established before 1949 reside, during a taxation year, in one country other than Canada and all amounts included in computing the income of the trust for the taxation year were received from persons resident in that country, no tax is payable under paragraph 212(1)(c) on an amount paid or credited in the taxation year to a beneficiary as income of or from the trust. An amount paid or credited by a trust or an estate to a beneficiary or other person beneficially interested therein shall be deemed, for the purpose of paragraph 212(1)(c) and without limiting the generality thereof, to have been paid or credited as income of the trust or estate, regardless of the source from which the trust or estate derived it. Where by reason of subsection 56(4) or 56(4.1) or any of sections 74.1 to 75 of this Act or section 74 of the Income Tax Act , chapter 148 of the Revised Statutes of Canada, 1952, there is included in computing a taxpayer’s income under Part I for a taxation year an amount paid or credited to a non-resident person in the year, no tax is payable under this section on that amount. For the purposes of this section, where a non-resident person pays or credits an amount as, on account or in lieu of payment of, or in satisfaction of, rent for the use in Canada of property (other than property that is rolling stock as defined in section 2 of the Railway Act ), a timber royalty in respect of a timber resource property or a timber limit in Canada, a payment of a superannuation or pension benefit under a registered pension plan or of a distribution to one or more persons out of or under a retirement compensation arrangement, a payment of a retiring allowance or a death benefit to the extent that the payment is deductible in computing the payer’s taxable income earned in Canada, a payment described in any of paragraphs 212(1)(k) to 212(1)(n), 212(1)(q) and 212(1)(v), interest on any mortgage, hypothecary claim or other indebtedness entered into or issued or modified after March 31, 1977 and secured by real property situated in Canada or an interest therein, or by immovables situated in Canada or real rights therein, to the extent that the amount so paid or credited is deductible in computing the non-resident person’s taxable income earned in Canada or the amount on which the non-resident person is liable to pay tax under Part I, or an amount to which paragraph (1)(i) would apply if the amount paid or credited were paid or credited by a person resident in Canada, and that amount affects, or is intended to affect, in any way whatever, the acquisition or provision of property or services in Canada, the acquisition or provision of property or services outside Canada by a person resident in Canada, or the acquisition or provision outside Canada of a taxable Canadian property, the non-resident person shall be deemed in respect of that payment to be a person resident in Canada. For the purposes of this Part, other than section 216, where a partnership pays or credits an amount to a non-resident person, the partnership shall, in respect of the portion of that amount that is deductible, or that would but for section 21 be deductible in computing the amount of the income or loss, as the case may be, referred to in paragraph 96(1)(f) or 96(1)(g) if the references therein to “a particular place” and “that particular place” were read as references to “Canada”, be deemed to be a person resident in Canada; where a partnership pays, credits or provides to a non-resident person an amount described in subsection (5.1), the partnership is deemed in respect of the amount to be a person; and where a person resident in Canada pays or credits an amount to a partnership (other than a Canadian partnership within the meaning assigned by section 102), the partnership shall be deemed, in respect of that payment, to be a non-resident person. For the purposes of this Part, if a particular non-resident person pays or credits an amount (other than an amount to which subsection (13) applies) to another non-resident person or to a partnership (other than a Canadian partnership), the particular non-resident person is deemed to be a person resident in Canada in respect of the portion of the amount that is deductible in computing the particular non-resident person’s taxable income earned in Canada from a source that is neither a treaty-protected business nor a treaty-protected property; or the amount on which the particular non-resident person is liable to pay tax under Part I because of section 216. An authorized foreign bank is deemed to be a person resident in Canada for the purposes of this Part, in respect of any amount paid or credited to or by the bank in respect of its Canadian banking business; and the application in paragraph (13.1)(b) and subsection (13.2) of the definition Canadian partnership (as defined in subsection 248(1)), in respect of a membership interest in a partnership held by the bank in the course of its Canadian banking business. [Repealed, 2007, c. 35, s. 59] For the purposes of subparagraph (1)(b)(ii), after November 18, 1974 interest on a bond, debenture, note, mortgage, hypothecary claim or similar obligation that is insured by the Canada Deposit Insurance Corporation is deemed not to be interest with respect to an obligation guaranteed by the Government of Canada. Clause 212(1)(d)(vii)(A) does not apply to a payment in a year for the temporary use of railway rolling stock by a railway company to a person resident in a country other than Canada unless that country grants substantially similar relief for the year to the company in respect of payments received by it for the temporary use by a person resident in that country of railway rolling stock. This section is not applicable to payments out of or under an employee benefit plan or employee trust. Notwithstanding subsections (1) and (2), the International Olympic Committee is not taxable under this Part on any amount paid or credited to it, after 2005 and before 2011, in respect of the 2010 Olympic Winter Games, and the International Paralympic Committee is not taxable under this Part on any amount paid or credited to it, after 2005 and before 2011, in respect of the 2010 Paralympic Winter Games. Every person who in a taxation year is a prescribed financial institution or a person resident in Canada who is a registered securities dealer shall on demand from the Minister, served personally or by registered letter, file within such reasonable time as may be stipulated in the demand, an undertaking in prescribed form relating to the avoidance of payment of tax under this Part. Every taxpayer who is a registered securities dealer resident in Canada shall pay a tax under this Part equal to the amount determined by the formula 1/365 × .25 × (A - B) × C where A is the total of all amounts each of which is the amount of money provided before the end of a day to the taxpayer (and not returned or repaid before the end of the day) by or on behalf of a non-resident person as collateral or as consideration for a security that was lent or transferred under a designated securities lending arrangement, B is the total of all amounts each of which is the amount of money provided before the end of the day by or on behalf of the taxpayer (and not returned or repaid before the end of the day) to a non-resident person as collateral or as consideration for a security that is described in paragraph (a) of the definition fully exempt interest in subsection (3), or that is an obligation of the government of any country, province, state, municipality or other political subdivision, and that was lent or transferred under a securities lending arrangement, and the greater of 10 times the greatest amount determined, under the laws of the province or provinces in which the taxpayer is a registered securities dealer, to be the capital employed by the taxpayer at the end of the day, and 20 times the greatest amount of capital required, under the laws of the province or provinces in which the taxpayer is a registered securities dealer, to be maintained by the taxpayer as a margin in respect of securities described in paragraph (a) of the definition fully exempt interest in subsection (3), or that is an obligation of the government of any country, province, state, municipality or other political subdivision, at the end of the day, and C is the prescribed rate of interest in effect for the day, and shall remit that amount to the Receiver General on or before the 15th day of the month after the month in which the day occurs. For the purpose of subsection (19), a designated securities lending arrangement is a securities lending arrangement under which the lender is a prescribed financial institution or a registered securities dealer resident in Canada, the particular security lent or transferred is an obligation described in paragraph (a) of the definition fully exempt interest in subsection (3) or an obligation of the government of any country, prov- ince, state, municipality or other political subdivision, the amount of money provided to the lender at any time during the term of the arrangement either as collateral or as consideration for the particular security does not exceed 110% of the fair market value at that time of the particular security; and that was neither intended, nor made as a part of a series of securities lending arrangements, loans or other transactions that was intended, to be in effect for more than 270 days. Subsection (22) applies at any time in respect of a taxpayer if the taxpayer pays or credits a particular amount at that time as, on account or in lieu of payment of, or in satisfaction of, interest to a person or partnership (in this subsection and subsection (22) referred to as the “interest coupon holder”) in respect of a debt or other obligation, other than a specified publicly offered debt obligation, owed to another person or partnership (in this subsection and subsection (22) referred to as the “non-arm’s length creditor”) that is a non-resident person with whom the taxpayer is not dealing at arm’s length, or a partnership other than a Canadian partnership; and the tax that would be payable under this Part in respect of the particular amount, if the particular amount were paid or credited to the non-arm’s length creditor rather than the interest coupon holder, is greater than the tax payable under this Part (determined without reference to subsection (22)) in respect of the particular amount. If this subsection applies at any time in respect of a taxpayer, then for the purpose of paragraph (1)(b), the taxpayer is deemed, at that time, to pay interest to the non-arm’s length creditor, the amount of which is determined by the formula A × (B − C) ÷ B where A is the particular amount referred to in paragraph (21)(a); B is the rate of tax that would be imposed under this Part in respect of the particular amount if the particular amount were paid by the taxpayer to the non-arm’s length creditor rather than the interest coupon holder at that time; and C is the rate of tax imposed under this Part in respect of the particular amount paid or credited to the interest coupon holder at that time. For the purposes of subsection (21), specified publicly offered debt obligation means a debt or other obligation that meets the following conditions: it was issued by the taxpayer as part of an offering that is lawfully distributed to the public in accordance with a prospectus, registration statement or similar document filed with and, where required by law, accepted for filing by a public authority;

and it can reasonably be considered that none of the main purposes of a transaction or event, or series of transactions or events, as a part of which the taxpayer pays or credits an amount as, on account or in lieu of payment of, or in satisfaction of, interest to a person or partnership in respect of the debt or other obligation is to avoid or reduce tax that would otherwise be payable under this Part by a non-resident person or partnership to whom the debt or other obligation is owed.