,canada ,cu/oms                       #a
& ,rev5ue ,ag5cy

            ,9=m,n ,circul>
    
,subject3 ,books1 ,records & ,o!r
  ,require;ts = ,taxpay]s ,hav+ ,=eign
  ,a6iliates
,numb]3 #gg-i;,r
,date3 ,june #bb1 #aihc

  ,? circul> c.els & replaces ,9=m,n
,circul> #gg-i dat$ ,may #bd1 #aigg4
,curr5t revi.ns >e design$ 0v]tical
l9es4

#a4 ,? circul> is =! guid.e & 9=m,n (
  taxpay]s resid5t 9 ,canada :o h =eign
  a6iliates1 b5eficial 9t]e/s 9 c]ta9
  non-resid5t tru/s deem$ 0p>agraph
  #id7#a77d7 6be non-resid5t corpor,ns
  &/or b5eficial 9t]e/s 9 non-resid5t
  4cre;n>y tru/s4

                                      #a
          ,9come ,tax ,returns       a#a
    
#b4 ,all taxpay]s ) =eign a6iliates1
  b5eficial 9t]e/s 9 c]ta9 non-resid5t
  tru/s deem$ 0p>agraph #id7#a77d7 6be
  non-resid5t corpor,ns &/or b5eficial
  9t]e/s 9 non-resid5t 4cre;n>y tru/s >e
  ask$ 6respond 6! foll[+ "qs ) _! 9come
  tax returns3
  7a7 ,9dividual ,taxpay]s 7,t#a
    ,returns7
    7;i7 ,did y h any 3troll$ =eign
      a6iliates at any "t dur+ ! tax,n
      ye>8
    7;ii7 ,did y1 or any 3troll$ =eign
      a6iliate ( yrs1 or any corpor,n or
      tru/ ) : y did n d1l at >m's l5g?1
      h a b5eficial 9t]e/1 at any "t
      dur+ ! tax,n ye>1 9 a non-resid5t
      4cre;n>y tru/ 6: subsec;n #id7#a7
      applies8
  7b7 ,corporate ,taxpay]s 7,t#b
    ,returns7
  
                                      #b
                #gg-i;,r             b#a
    7;i7 ,did ! corpor,n h any =eign
      a6iliates at any "t dur+ ! tax,n
      ye>8
    7;ii7 ,did ! corpor,n1 or any
      3troll$ =eign a6iliate (!
      corpor,n1 or any o!r corpor,n or
      tru/ ) : ! corpor,n did n d1l at
      >m's l5g?1 h a b5eficial 9t]e/1 at
      any "t dur+ ! tax,n ye>1 9 a non-
      resid5t 4cre;n>y tru/ 6: subsec;n
      #id7#a7 applies8
--------------------------------------#b
  7c7 ,tru/s 7,t#c ,returns7
    7;i7 ,did ! tru/ h any 3troll$ =eign
      a6iliates at any "t dur+ ! tax,n
      ye>8
    7;ii7 ,did ! tru/1 or any 3troll$
      =eign a6iliate (! tru/1 or any
      corpor,n or any o!r tru/ ) : !
      tru/ did n d1l at >m's l5g?1 h a
      b5eficial 9t]e/1 at any "t dur+ !
      tax,n ye>1 9 a non-resid5t
      4cre;n>y tru/ 6: subsec;n #id7#a7
      applies8                        #c
                #gg-i;,r             a#b
  ,if a 8yes0 answ] is giv5 6any (!
  =ego+ "qs1 a supple;t>y s*$ule w 2
  requir$4 ,": 9 ! case (a corporate
  taxpay] ! positive answ] is 6"q 7;i71
  ! s*$ule w require details (! full "n
  & a4ress ( ea* =eign a6iliate )a
  4t9c;n 2+ made 2t 3troll$ =eign
  a6iliates & o!r =eign a6iliates4 ,9 !
  case ( 9dividuals & tru/s ! nec data w
  2 only = 3troll$ =eign a6iliates4 ,":
  ! positive answ] is 6"q 7;ii71 ! full
  "n & a4ress ( ea* tru/ &(! tru/ees ( t
  tru/ w 2 requir$4
#c4 ,f9ancial /ate;ts (a 3troll$ =eign
  a6iliate 9 respect ( xs tax,n ye> 7z
  def9$ 9 p>agraph #ie7#a77g7 (! ,act7
  5d+ 9 ! tax,n ye> (! taxpay] resid5t 9
  ,canada m/ a3ompany ! 9come tax return
  fil$ 9 respect ( t tax,n ye>4
  ,f9ancial /ate;ts ( =eign a6iliates t
  >e n requir$ 6be fil$ %d1 n"e!.s1 2
  reta9$ 0! ,canadian taxpay] & 2
  availa# = exam9,n 0! ,de"p;t4
                                      #d
                #gg-i;,r             b#b
#d4 ,f9ancial /ate;ts 6be fil$ or reta9$
  0! ,canadian taxpay] %d be3
  7a7 ^? t h be5 a3ept$ 0tax,n
    au?orities 9 ! =eign jurisdic;n1 or
  7b7 ": !y >e n requir$ 0s* au?orities1
    ^? t h be5 c]tifi$ 0auditors4
  
  ,": ! ,canadian taxpay] is (! op9ion t
  ^! f9ancial /ate;ts >e unrelia# or
  9consi/5t )! basis us$ = o!r corpor,ns
  9 ! gr\p & he has -pil$ a revis$ v].n1
  !n t revis$ v].n %d al 2 fil$ )!
  annual 9come tax return or rema9
  availa# = exam9,n z ! case may be4
#e4 ,all f9ancial /ate;ts ( 3troll$
  =eign a6iliates %d 2 translat$
  96,5gli% or ,fr5* if !y >e pres5t$ 9 a
  language o!r ?an ,5gli% or ,fr5*4





                                      #e
      ,books1 ,records & ,f9ancial   c#b
                 ,9=m,n
    
#f4 ,corpor,ns
  7a7 ,": ! ,canadian taxpay] is a
    corpor,n1 require;ts w v>y dep5d+ on
    :e!r or n ! =eign a6iliate is
--------------------------------------#c
    7;i7 a 3troll$ =eign a6iliate
      79clud+ a non-resid5t tru/ t is
      deem$ 6be a 3troll$ =eign
      a6iliate71 or
    7;ii7 any o!r =eign a6iliate4
  7b7 ,! provi.ns ( subsec;n #bcj7#a7 (!
    ,act make x ! responsibil;y (!
    ,canadian taxpay] 65sure t adequate
    books & records >e ma9ta9$ 9 ,canada
    or else":4
  7c7 ,9 ! case (a 3troll$ =eign
    a6iliate1 adequate books1 records &
    support+ s*$ules %d 2 availa# 9
    ,canada1 on reque/1 6sub/antiate !
    9=m,n 4clos$ 9 ! taxpay]'s returns4
  7d7 ,": o!r =eign a6iliates >e 9volv$1
    require;ts w v>y dep5d+ ^u !      #f
                #gg-i;,r             a#c
    circum/.es4 ,if ! ,canadian taxpay]
    has a sub/antial 9t]e/ 9 ! =eign
    a6iliate & is a# 6make a suita#
    >range;t 6acquire1 or "! >e o!r
    circum/.es : 5a# ! taxpay] 6obta9 !
    9=m,n1 ! ,de"p;t wd norm,y expect t
    "! wd 2 ! same 9=m,n availa# z "! wd
    2 =a 3troll$ =eign a6iliate4 ,": !
    taxpay] is una# 6obta9 ! requir$
    9=m,n & c demon/rate t a r1sona#
    ef=t 0 made 6d s1 or ": x c 2
    demon/rat$ 6! ,de"p;t's satisfac;n t
    x is n practical 6make s* an ef=t1 !
    ,de"p;t may1 dep5d+ on ! circum/.es1
    a3ept less4 ,= example1 a corpor,n
    resid5t 9 ,canada may 2 una# 6obta9
    all ! 9come tax returns & o!r 9=m,n
    requir$ 6-pute ! v>i\s am.ts def9$ 9
    sec;n #eijg (! ,regul,ns =a "picul>
    =eign a6iliate (! corpor,n 2c (
    re/ric;ns impos$ 0a law (a =eign
    jurisdic;n or 0! directors (! =eign
    a6iliate4 ,if a r1sona# ef=t has be5
    made 6obta9 ! requir$ 9=m,n1 !    #g
                #gg-i;,r             b#c
    corpor,n may -pute s* am.ts us+
    alt]native docu;t,n provid+ !
    ,de"p;t is satisfi$ t1 hav+ reg>d
    6all ! circum/.es1 a r1sona#
    approxim,n ( s* am.ts c 2 obta9$ "?
    ! use ( s* alt]native docu;t,n4 ,:at
    wd ord9>ily 2 expect$ 6be made
    availa# wd 2 ! f9ancial /ate;ts &
    o!r 9=m,n t ! ,canadian taxpay] or a
    =eign a6iliate is 5titl$ 6rcv 9 xs
    "r z a %>ehold] "u ! corpor,n or o!r
    /atutes (! =eign jurisdic;n4
  
     ,ret5;n ( ,books1 ,records1 &
                 ,9=m,n
    
#g4 ,! require;ts =! ret5;n ( records &
  books ( a3.t (a ,canadian taxpay] >e
  set \ 9 ,9=m,n ,circul> #gh-aj;,r4 ,^!
  require;ts al apply 6! books1 records
  & 9=m,n ma9ta9$ 0! ,canadian taxpay]
  on ! a6airs (a =eign a6iliate4

                                      #h
                #gg-i;,r              #d
#h4 ,z a m9imum1 ^! records %d 2
  su6ici5t 6sub/antiate ! -put,n ( =eign
  a3rual prop]ty 9come & any deduc;ns
  claim$ "u subsec;n #ia7#e7 or sec;n
  #aac 9 respect ( divid5ds rcvd f !
  =eign a6iliate4 ,x w 2 nec 6reta9
  records relat+ 6! surplus a3.ts1 =eign
  taxes pd1 reorganiz,ns1 amalgam,ns &
  *anges 9 "picipat+ p]c5tage or surplus
  5title;t p]c5tage & any o!r relevant
  9=m,n 2y ! m&atory ret5;n p]iod if ^!
  transac;ns h future tax 3sequ;es4
#i4 ,=eign a3rual prop]ty 9come is def9$
  9 p>agraph #ie7#a77b7 (! ,act & g5],y
  excludes 9come & losses f active
  busi;ses4 ,! ,de"p;t's 9t]pret,n (
  9come f an active busi;s is set \ 9
  ,9t]pret,n ,bullet9 ,,it-#gc;,r#c4
#aj4 ,": ! =eign jurisdic;n requires !
  9come or pr(it f an active busi;s 6be
  -put$ 9 a3ord.e )! 9come tax law ( t
  jurisdic;n1 depreci,n or capital co/
  all[.e wd 2 calculat$ ac 6! =eign
  tax,n regul,ns un.s an elec;n is    #i
                #gg-i;,r             a#d
  made pursuant 6subsec;n #eijg7#b.a7 (!
  ,regul,ns4 ,capital co/ all[.e or
  depreci,n s*$ules ne$ n 2 fil$ b %d 2
  reta9$4 ,": ! =eign jurisdic;n has no
  s* require;ts1 ! active busi;s 9come
  %d 2 calculat$ "u ,"p #a (! ,9come
  ,tax ,act4
#aa4 ,=eign a3rual prop]ty 9come
  calcul,ns (a 3troll$ =eign a6iliate m/
  2 -put$ "u ,"p ;,i (! ,act4 ,capital
  co/ all[.e may 2 claim$ on assets
  situat$ abroad =! purpose ( calculat+
  =eign a3rual prop]ty 9come2 h["e1
  appropriate capital co/ all[.e s*$ules
  m/ 2 fil$ )! annual return4

            ,=eign ,ex*ange
    
#ab4 ,=eign curr5cy 3v].ns w1 except 9 !
  cases not$ 9 subsec;n #eijc7#b7 (!
  ,regul,ns1 2 made 9 a3ord.e )! normal
  law4 ,! ,de"p;t has issu$ a numb] (
  ,9t]pret,n ,bullet9s
                                     #aj
                #gg-i;,r             b#d
  7e4g4 ,,it-#ie;,r1 ,,it-#agd;,r1
  ,,it-#bje7 on ! subject ( 3v].ns4
#ac4 ,subsec;n #eijg7#f7 (! ,regul,ns
  describes ! curr5cy 6be us$ = record+
  ! am.ts ref]r$ 6in subsec;n #eijg7#a7
  & 7#b74

       ,subsec;n #ic7#a7 ,elec;ns
    
#ad4 ,:5 a valid elec;n has be5 made1 "!
  is no provi.n ":by x c 2 )drawn or
  replac$ ) an am5d$ elec;n4 ,h["e1 ": x
  is evid5t t ! corpor,n 9t5d$ 6elect on
  ! full am.t (! availa# exempt surplus1
  ! taxa# surplus 9 respect ( : a full
  deduc;n is availa# "u sec;n #aac1 or
--------------------------------------#e
  ! capital ga9 o!rwise det]m9$ 9
  respect (! 4posi;n (! %>es &! taxpay]
  is n attempt+ 6obta9 any undue tax
  advantage & due & r1sona# c>e 0
  ex]cis$ 9 mak+ ! elec;n1 ! ,de"p;t w1
  if ! taxpay] s reque/s 9 writ+1 3sid]
                                     #aa
                #gg-i;,r             a#e
  revi.ns 6! am.ts designat$ 9 xs elec;n
  9 ! foll[+ circum/.es3
  7a7 ! am.t designat$ 9 ! elec;n is
    bas$1 9 "p1 on ! det]m9,n ( "o or m
    fair m>ket values &a r1sona# ef=t
    has be5 made 6e/abli% ! value & x is
    subsequ5tly det]m9$ t ! fair m>ket
    value 0 o!r ?an ! e/imat$ am.t1
  7b7 typographical1 cl]ical or o!r
    simil> ]rors or omis.ns h be5 made 9
    an o!rwise valid elec;n1 or
  7c7 exempt surplus1 taxa# surplus &/or
    tax pd 9 respect 6taxa# surplus has
    *ang$ due 6circum/.es t >e 2y !
    3trol (! taxpay]4
#ae4 ,reque/s = revi.ns 6! am.t
  designat$ 9 an elec;n made "u subsec;n
  #ic7#a7 m/ 2 sign$ 0an au?oriz$ (fic]
  (! corpor,n & %d set \ 9 detail !
  r1sons =! reque/$ revi.n4 ,^! reque/s
  %d 2 submitt$ 6! ,4trict ,tax,n
  ,(fice4

                                     #ab