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EX 43: Non-resident’s pension or annuity exemption
or “Tax exemption for certain overseas pensions or annuities”
You could also call this:

“How to choose from five methods to calculate your foreign investment fund income or loss”

You can calculate FIF income or loss from an attributing interest using five different methods. These methods are:

  1. The attributable FIF income method
  2. The comparative value method
  3. The deemed rate of return method
  4. The fair dividend rate method
  5. The cost method

You need to choose which method to use when you fill out your tax return. However, you can’t just pick any method you like. Your choice is limited by rules set out in other parts of the law. These rules are explained in sections EX 46, EX 47, EX 47B, EX 48, and EX 62 of the Income Tax Act.

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Next up: EX 45: Exclusion of amounts of death benefit

or “Death benefit payments from certain life insurance policies are not counted as income”
Next

Part E Timing and quantifying rules
Controlled foreign company and foreign investment fund rules: Calculation of FIF income or loss

EX 44Five calculation methods

  1. If the tests in section CQ 5 (When FIF income arises) or DN 6 (When FIF loss arises) are met, the amount of a person’s FIF income or loss from an attributing interest is calculated under—

    1. the attributable FIF income method; or
      1. the comparative value method; or
        1. the deemed rate of return method; or
          1. the fair dividend rate method; or
            1. the cost method.

              1. The person must choose which calculation method applies by completing their return of income accordingly, but the choice is limited by sections EX 46, EX 47, EX 47B, EX 48, and EX 62.

              Compare
              Notes
              • Section EX 44 heading: amended (with effect on 1 July 2011 and applying for income years beginning on or after that date), on , by section 31(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
              • Section EX 44(1): amended, on , by section 147(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
              • Section EX 44(1)(a): repealed (with effect on 1 July 2011 and applying for income years beginning on or after that date), on , by section 31(2) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
              • Section EX 44(1)(b): replaced (with effect on 1 July 2011 and applying for income years beginning on or after that date), on , by section 31(3) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
              • Section EX 44(2): amended, on , by section 14(1) (and see section 14(2) for application) of the Taxation (Neutralising Base Erosion and Profit Shifting) Act 2018 (2018 No 16).
              • Section EX 44 list of defined terms accounting profits method: repealed (with effect on 1 July 2011), on , by section 31(4)(a) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
              • Section EX 44 list of defined terms attributable FIF income method: inserted (with effect on 1 July 2011), on , by section 31(4)(b) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
              • Section EX 44 list of defined terms attributing interest: inserted, on , by section 147(2)(b) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
              • Section EX 44 list of defined terms branch equivalent method: repealed (with effect on 1 July 2011), on , by section 31(4)(a) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).
              • Section EX 44 list of defined terms fair dividend rate: repealed, on , by section 147(2)(a) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
              • Section EX 44 list of defined terms fair dividend rate method: inserted, on , by section 147(2)(b) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).