Plain meaning
Certain passive or property-type income of a controlled foreign affiliate that may be included in a Canadian taxpayer's income before distribution.
Key points
- FAPI generally targets passive income and certain income earned through controlled foreign affiliates.
- A Canadian taxpayer may have an income inclusion even if the foreign affiliate has not paid a dividend.
- Exemptions and detailed business-income rules can change the result.
- FAPI interacts with surplus accounts, foreign tax credits, and reporting forms.
Why it comes up
FAPI rules are central to Canada's anti-deferral regime for offshore passive income.