after reasonable inquiry that the non-resident person is, under a tax treaty between Canada and a particular country, resident in the particular country; (ii) any gain from the disposition of the property would be exempt from Canadian income tax by virtue of such treaty; and (iii) the purchaser provides the CRA with notice of the acquisition within a specified period.
GENERAL RULES
Determination of Income In very general terms, income for purposes of the Tax Act means income from business or property, income from office or employment and taxable capital gains. Income must be computed on a legal entity basis and there is generally no consolidated group reporting. Income from business or property is generally equivalent to the profit from the business or property calculated in accordance with “well-accepted principles of business (or accounting) practice” or “well-accepted principles of commercial trading,” adjusted as required by specific rules in the Tax Act. Income also includes one-half of the capital gain (referred to as the taxable capital gain) realized on a disposition of capital property, subject to reduction by allowable capital losses. The amount of the capital gain generally equals the proceeds of disposition less the sum of the adjusted cost base of the property under the Tax Act and any costs of disposition. If capital cost allowance (tax depreciation) has been taken in respect of the capital asset, part of the proceeds may be ordinary income (a recapture of the capital cost allowance previously claimed). Employment income includes wages, bonuses and taxable employment benefits. Remuneration paid to directors constitutes income from employment. Deductions from employment income are very limited.
Income also includes one-half of the capital gain realized on a disposition of capital property, subject to reduction by allowable capital losses.
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Doing Business in Canada
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