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Bill C-103

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This enactment amends the Excise Tax Act and the Income Tax Act.

The Excise Tax Act is amended to impose an excise tax in respect of split-run editions of periodicals. The tax is imposed at the rate of 80% of the value of all the advertisements contained in a split-run edition.

A split-run edition is an edition

    (a) that is distributed in Canada;

    (b) in which more than 20% of the editorial material is the same or substantially the same as editorial material that appears in one or more periodical editions that are distributed primarily outside Canada; and

    (c) that contains an advertisement that does not appear in identical form in those other periodical editions.

The tax is payable by the responsible person in respect of the split-run edition. Depending on the circumstances, the responsible person is either the publisher, a person connected with the publisher, the distributor, the printer or the wholesaler. Persons connected with the responsible person are jointly and severally liable for payment of the tax.

Periodicals that would otherwise be subject to the tax are exempted from the tax based on the number of split-run issues that were distributed in Canada during the 12-month period ending on March 26, 1993. In addition, the tax does not apply to an edition that is distributed primarily outside Canada.

The Income Tax Act is amended to add an anti-avoidance rule to section 19 of the Act. That section provides rules restricting the deductibility of expenses of taxpayers in respect of advertising in non-Canadian newspapers or periodicals where the advertising is directed primarily to a market in Canada.