ARCHIVED — Vol. 147, No. 5 — February 27, 2013

Registration

SOR/2013-22 February 14, 2013

INCOME TAX ACT

Regulations Amending the Income Tax Regulations (Prescribed Missions, 2013)

P.C. 2013-144 February 14, 2013

His Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to section 221 (see footnote a) of the Income Tax Act (see footnote b), makes the annexed Regulations Amending the Income Tax Regulations (Prescribed Missions, 2013).

REGULATIONS AMENDING THE INCOME TAX REGULATIONS
(PRESCRIBED MISSIONS, 2013)

AMENDMENTS

1. (1) Section 7500 of the Income Tax Regulations (see footnote 1) is amended by striking out “and” at the end of paragraph (q), by adding “and” at the end of paragraph (r) and by adding the following after paragraph (r):

  • (s) Operation Caribbe (Curacao).

(2) Section 7500 of the Regulations, as amended by subsection (1), is amended by striking out “and” at the end of paragraph (r) and by adding the following after paragraph (s):

  • (t) Operation Kobold (Balkans – Pristina); and
  • (u) Operation Saturn (Ethiopia – Addis Ababa).

(3) Section 7500 of the Regulations, as amended by subsection (2), is amended by striking out “and” at the end of paragraph (t), by adding “and” at the end of paragraph (u) and by adding the following after paragraph (u):

  • (v) Operation Enduring Freedom (Kuwait).

(4) Section 7500 of the Regulations, as amended by subsection (3), is amended by striking out “and” at the end of paragraph (u), by adding “and” at the end of paragraph (v) and by adding the following after paragraph (v):

  • (w) Seventh Airlift Squadron Operation (Kyrgyzstan).

(5) Section 7500 of the Regulations, as amended by subsection (4), is amended by striking out “and” at the end of paragraph (v), by adding “and” at the end of paragraph (w) and by adding the following after paragraph (w):

  • (x) Operation Slipper (United Arab Emirates).

COMING INTO FORCE

2. (1) Subsection 1(1) is deemed to have come into force on October 30, 2007.

(2) Subsection 1(2) is deemed to have come into force on September 1, 2008.

(3) Subsection 1(3) is deemed to have come into force on February 23, 2009.

(4) Subsection 1(4) is deemed to have come into force on February 28, 2009.

(5) Subsection 1(5) is deemed to have come into force on April 14, 2009.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Background

The Income Tax Act (the Act) provides a deduction in computing the taxable income of an eligible member of the Canadian Forces (or of a police force) who is deployed by the Department of National Defence as a member of certain high-risk international operational missions. The maximum amount that an individual may deduct in a taxation year in respect of income earned while deployed on such missions cannot exceed the highest level of pay earned by a non-commissioned member of the Canadian Forces (i.e. approximately $8,400 per month in 2012).

The tax deduction is intended to recognize that Canadian Forces personnel and police officers on high-risk operations are required to perform potentially dangerous operational roles. Eligibility for the deduction generally requires that a member of the Canadian Forces, or of a police force, be deployed on a mission that is assessed a certain minimum level for risk allowance, as determined by the Department of National Defence. An operational mission that is assessed for risk allowance at level 3 or 4 (the two highest levels) qualifies. An operational mission that is assessed for risk allowance at level 2 (which is a moderate-risk level) may qualify if the mission is prescribed.

The Income Tax Regulations (the Regulations) prescribe level 2 military missions that qualify.

Issue

There are a number of level 2 missions that are not prescribed but that are deserving of prescription.

Objective

To add six level 2 missions to the list of prescribed missions.

Description

The Regulations Amending the Income Tax Regulations (Prescribed Missions, 2013) [the amendment] modify the Regulations to add the following six missions:

  • Operation Caribbe (Curaçao) — effective October 30, 2007;
  • Operation Kobold (Balkans — Pristina) — effective September 1, 2008;
  • Operation Saturn (Ethiopia — Addis Ababa) — effective September 1, 2008;
  • Operation Enduring Freedom (Kuwait) — effective February 23, 2009;
  • Seventh Airlift Squadron Operation (Kyrgyzstan) — effective February 28, 2009; and
  • Operation Slipper (United Arab Emirates) — effective April 14, 2009.
“One-for-One” Rule

The amendment addresses tax or tax administration and is carved out from the “One-for-One” Rule.

Small business lens

The small business lens does not apply, as the amendment does not impose administrative or compliance costs on business.

Rationale

The deduction is intended to recognize that Canadian forces personnel and police officers on certain operations are required to perform potentially dangerous operational roles.

Implementation, enforcement and service standards

Tax deductions available as a result of the missions added by the amendment will be subject to the existing reporting and compliance mechanisms available to the Minister of National Revenue under the Act. These mechanisms allow the Minister of National Revenue to assess and reassess tax payable, conduct audits and obtain relevant records and documents.

Contact

Tim Fish
Tax Legislation Division
Department of Finance
140 O’Connor Street
Ottawa, Ontario
K1A 0G5
Telephone: 613-992-5634