A “foreign entity” is defined as either a “foreign national” or a “foreign corporation.”
A “foreign national” is defined in the Immigration and Refugee Protection Act, as either a “stateless” individual or an individual who is neither a permanent resident nor citizen of Canada.
A “foreign corporation” refers to one of the following types of corporations:
“1. A corporation that is not incorporated in Canada
2. A corporation, the shares of which are not listed on a stock exchange in Canada, that is incorporated in Canada and is controlled, directly or indirectly in any manner whatever, within the meaning of section 256 of the Income Tax Act (Canada), 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 1 were owned by a particular person, be controlled, directly or indirectly in any manner whatever, within the meaning of section 256 of the Income Tax Act(Canada), by the particular person.”
“TAXABLE TRUSTEE”: IMPORTANT EFFECT ON LAND CONVEYANCES INVOLVING TRUSTS
For the NRST, a “taxable trustee” refers to either a trustee of a trust where either at least one trustee could be considered a “foreign entity”, or importantly, where the trustee is not a foreign entity but where the beneficial interest in the land is held by a foreign entity beneficiary. In other words, if land is purchased using a trust, even if a trustee is not considered a foreign entity, the NRST rules imply that even if one beneficiary (even a potential one) could be considered a “foreign entity”, the conveyance could be subject to the NRST.