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In This Volume

  • 2.01 In this section and sections 2.02 and 2.03:
  • “controlled”, in relation to the control of a corporation, means controlled, directly or indirectly in any manner whatever, within the meaning of section 256 of the Income Tax Act (Canada);
  • “foreign corporation” means a corporation that is one of the following:
  • (a) a corporation that is not incorporated in Canada;
  • (b) unless the shares of the corporation are listed on a Canadian stock exchange, a corporation that is incorporated in Canada and is controlled by one or more of the following:
    • (i) a foreign national;
    • (ii) a corporation that is not incorporated in Canada;
    • (iii) a corporation that would, if each share of the corporation’s capital stock that is owned by a foreign national or by a corporation described in paragraph (a) of this definition were owned by a particular person, be controlled by the particular person;
  • “foreign entity” means a foreign national or a foreign corporation;
  • “foreign national” means an individual who is a foreign national as defined in section 2(1) of the Immigration and Refugee Protection Act (Canada);
  • “residential property” means any of the following:
  • (a) land or improvements, or both, as defined in section 1(1) of the Assessment Act, that are described as class 1 property in section 1 of the Prescribed Classes of Property Regulation, B.C. Reg. 438/81, but does not include prescribed land or improvements;
  • (b) an area of land, not including improvements, that
    • (i) is not larger than 0.5 ha in area, and
    • (ii) is classified as a farm under the Assessment Act only because the land is used for
      • (A) an owner’s dwelling as defined in section 23(0.1) of the Assessment Act, or
      • (B) a farmer’s dwelling as defined in section 1(1) of the Classification of Land as a Farm Regulation, B.C. Reg. 411/95;
  • “specified area” means any of the following:
  • (a) the Metro Vancouver Regional District, other than both of the following;
    • (i) subject to paragraph (b), the treaty lands of the Tsawwassen First Nation;
    • (ii) a prescribed area within the Metro Vancouver Regional District;
  • (b) the treaty lands of the Tsawwassen First Nation, if those treaty lands are prescribed for the purposes of this definition;
  • (c) a prescribed area that is not within the Metro Vancouver Regional District;
  • “taxable trustee”, in relation to a taxable transaction, means a trustee of a trust in respect of which
  • (a) any trustee is a foreign entity, or
  • (b) no trustee is a foreign entity but, immediately after the registration of the taxable transaction, a beneficiary of the trust who is a foreign entity holds a beneficial interest in the residential property to which that taxable transaction relates;
  • “trust” does not include the following:
  • (a) a mutual fund trust within the meaning of section 132(6) of the Income Tax Act (Canada);
  • (b) a real estate investment trust as defined in section 122.1(1) of the Income Tax Act (Canada);
  • (c) a SIFT trust as defined in section 122.1(1) of the Income Tax Act (Canada).

2016-27-3, effective August 2, 2016 am. 2018-23-53, Sch. 1.

CASE LAW

$6 Million Foreign Buyer Tax Assessment Upheld on Plain Meaning of “Controlled”

The court dismissed an appeal under s. 21 of the Property Transfer Tax Act of $6 million in assessments made for additional property transfer tax (“additional PTT”) (also known as the “foreign buyer tax”) payable on a 2018 purchase of a Burnaby lowrise apartment building.

The petitioner argued that because a permanent resident of Canada controlled the majority of the shares in Nanjing, which controls Global, which in turn controls the petitioner, no additional property transfer tax) should be payable.

The court reasoned, however, that the term “controlled” is defined in the PTTA as controlled, directly or indirectly, “in any manner whatever.”

After examining Hansard legislative debates discussing the additional PTT provisions, the court said it was satisfied that a plain reading of both the definition of “controlled” in the PTTA and of the within-referenced provisions of the federal Income Tax Act “would lead to the inescapable conclusion that Nanjing was a foreign corporation and that Global and the petitioner are therefore also foreign corporations" (1164708 B.C. Ltd. v. British Columbia, 2023 BCSC 1863).