Corporations Tax Act

Bills that amended this Act0

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Sections479

• [s0]

  PART I GENERAL

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  Interpretation

• 1Interpretation

  1 (1) In this Act and in the application of the provisions of the Income Tax Act (Canada) that are by this Act made applicable for the purposes of this Act, (a) each of the provisions contained in Part XVII of the Income Tax Act (Canada) applies for the purposes of this Act unless otherwise provided in this Act; (b) Repealed: 1996, c. 29, s. 36 (1). (c) subsection 248 (7) of the Income Tax Act (Canada) does not apply for the purposes of this Act; (d) the interpretations contained in the said Part XVII of the expressions “farming”, “foreign resource property”, “Minister”, “paid-up capital”, “regulation”, “taxable income”, “taxable income earned in Canada” and “tax payable” do not apply and in lieu thereof the following interpretations are applicable: “farming” includes tillage of the soil, livestock raising or exhibiting, maintaining of horses for racing, raising of poultry, fur farming, …

• 1.
• [s3]

  Liability for Taxes Taxes payable

• 2Taxes payable, resident corporation

  2 (1) Subject to subsection (5), every corporation resident in Canada that has a permanent establishment in Ontario at any time in a taxation year shall pay to the Crown in right of Ontario the taxes for the taxation year imposed by this Act at the time and in the manner required by this Act. 2005, c. 28, Sched. D, s. 2 (1); 2007, c. 11, Sched. B, s. 2 (1). Taxes payable, non-resident corporation (2) Subject to subsection (5), every non-resident corporation shall pay to the Crown in right of Ontario the taxes for a taxation year imposed by this Act at the time and in the manner required by this Act if, at any time in the taxation year or in a previous taxation year, (a) the corporation had a permanent establishment in Ontario within the meaning of section 4; (b) the corporation owned real property, timber resource property or a timber limit in Ontario and the corporation’s income from th…

• 2.
• 3How tax to be determined

  3 (1) Unless otherwise provided in this Act, any tax imposed by this Act shall be determined on the amount of the paid-up capital or other subject in respect of which the amount of the tax is to be ascertained as such paid-up capital or other subject stood at the close of the taxation year of the corporation for which the tax is imposed. R.S.O. 1990, c. C.40, s. 3 (1); 2004, c. 16, s. 2 (2). Idem (2) Any tax imposed by this Act that is to be calculated in respect of, (a) the taxable income of a corporation; or (b) the gross premiums that become payable to insurance corporations, shall be calculated with reference to the taxable income earned or the gross premiums that become payable, as the case may be, during the taxation year of the corporation for which the respective tax is imposed. R.S.O. 1990, c. C.40, s. 3 (2); 2004, c. 16, s. 2 (2). Same (3) The tax imposed by subsection 2 (2.1) …

• 3.
• 4Permanent establishment

  4 (1) In this Act, “permanent establishment” includes branches, mines, oil wells, farms, timberlands, factories, workshops, warehouses, offices, agencies and other fixed places of business. R.S.O. 1990, c. C.40, s. 4 (1); 2004, c. 16, s. 2 (2). Idem (2) Where a corporation carries on business through an employee or agent who has general authority to contract for the corporation or who has a stock of merchandise owned by the corporation from which the employee or agent regularly fills orders which the employee or agent receives, such employee or agent shall be deemed to operate a permanent establishment of the corporation. R.S.O. 1990, c. C.40, s. 4 (2); 2004, c. 16, s. 2 (2). Idem (3) The fact that a corporation has business dealings through a commission agent, broker or other independent agent shall not of itself be deemed to mean that the corporation has a permanent establishment. R.S.…

• 4.
• 5Definitions

  5 (1) In this section and in subsection 80 (3), “avoidance transaction” means any transaction, (a) that, but for this section, would result directly or indirectly in a tax benefit, unless the transaction may reasonably be considered to have been undertaken or arranged in good faith primarily for purposes other than to obtain the tax benefit, or (b) that is part of a series of transactions which would result directly or indirectly in a tax benefit but for this section, unless the transaction may reasonably be considered to have been undertaken or arranged in good faith primarily for purposes other than to obtain the tax benefit; (“opération d’évitement”) “tax benefit” means a reduction, avoidance or deferral of tax or other amount payable by a corporation under this Act or under the Income Tax Act (Canada) or an increase in a refund of tax or other amount under this Act or under the Incom…

• 5.
• 5.1Definitions

  5.1 (1) In this section, “taxpayer” means a corporation or a partnership whose members include one or more corporations; (“contribuable”) “transferee” means, in respect of a taxation year, (a) a corporation that has a permanent establishment in one or more provinces other than Ontario, or (b) a partnership, one or more of whose members is a corporation described in clause (a); (“bénéficiaire du transfert”) “transferor” means, in respect of a taxation year, (a) a corporation that has a permanent establishment in one or more provinces other than Ontario, (b) an individual who is ordinarily resident in a province other than Ontario on the last day of the taxation year, including a trust that is deemed under subsection 104 (2) of the Income Tax Act (Canada) to be an individual in respect of the trust property, or (c) a partnership, one or more of whose members is a corporation described in c…

• 5.2Anti-avoidance of provincial tax

  5.2 (1) Except as otherwise provided in this section, if a corporation deducts or claims an amount under a provision of this Act, or of the Income Tax Act (Canada) as it applies for the purposes of this Act, that is less than the maximum amount the corporation may deduct or claim in determining its income or taxable income for the taxation year, or fails to deduct or claim any amount under the provision for the taxation year, the corporation shall be deemed to deduct or claim an amount under the provision in determining its income or taxable income, as the case may be, for the taxation year, in addition to the amount, if any, that it has deducted or claimed under the provision, equal to the amount, if any, by which the lesser of “A” and “B” exceeds “C”,

• [s10]

  where, “A” is the greatest amount that may be deducted or claimed by the corporation under the provision in determining its income or taxable income under this Act for the taxation year, “B” is the greatest of the amounts deducted or claimed by the corporation under the corresponding provisions of the laws of other provinces in computing its income or taxable income for the taxation year under the laws of the other provinces, and “C” is the amount, if any, that the corporation deducted or claimed under the provision for the taxation year before the application of this subsection. 1998, c. 34, s. 27 (1); 1999, c. 9, s. 73 (1); 2004, c. 16, s. 2 (2). Exception (1.1) Subsection (1) does not apply if the corporation deducted or claimed the amount, or failed to deduct or claim the amount, primarily for purposes other than a reduction in the total amount of income tax payable to one or more pr…

• 5.3Definition

  5.3 (1) In this section, “specified reserve” means, in relation to a corporation, an amount claimed as a deduction in determining income under Part II under any of the following provisions of the Income Tax Act (Canada) as they apply for the purposes of Part II, or under the comparable provisions of the laws of a province that impose a tax calculated by reference to the corporation’s income: 1. Paragraphs 20 (1) (l), (l.1), (m), (m.1), (n) and (o). 2. Subsection 26 (2). 3. Subsection 32 (1). 4. Clauses 40 (1) (a) (iii) (C) and (D). 5. Subparagraphs 138 (3) (a) (i), (ii) and (iv). 6. Such other provisions as may be prescribed by regulation. 1999, c. 9, s. 74; 2004, c. 16, s. 2 (2). Anti-avoidance, provincial tax (2) The amount of a specified reserve claimed by a corporation in determining its income under Part II for a taxation year shall be deemed to be the amount determined under subsec…

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• 5.4Transfer pricing

  5.4 The provisions of Part XVI.1 of the Income Tax Act (Canada) apply in determining an amount that would be determined for the purposes of this Act, but for this section and section 5, in respect of a corporation for a taxation year commencing after December 31, 1997, with the following exceptions: 1. The reference to a person’s “filing-due date” for a taxation year in the definition of “documentation-due date” in subsection 247 (1) of the Income Tax Act (Canada) shall be read as a reference to the date on which the person is required to deliver a return under section 75 of this Act for the taxation year. 2. The reference to subsection 245 (1) of the Income Tax Act (Canada) in the definition of “tax benefit” in subsection 247 (1) of that Act shall be read as a reference to subsection 5 (1) of this Act. 3. The reference to section 245 of the Income Tax Act (Canada) in subsection 247 (2) …

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  PART II INCOME TAX

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  Division A — Liability for Income Tax

• 6.
• 6Income tax

  6 (1) Except as otherwise provided in this Part, every corporation liable to the taxes imposed under this Act by virtue of subsection 2 (1) shall, for every taxation year of the corporation, pay an income tax as hereinafter required upon its taxable income. R.S.O. 1990, c. C.40, s. 6 (1); 2004, c. 16, s. 2 (2). Idem (2) Except as otherwise provided in this Part, every corporation liable to the taxes imposed under this Act by virtue of subsection 2 (2) shall, for every taxation year of the corporation, pay an income tax as hereinafter required upon its taxable income earned in Canada. R.S.O. 1990, c. C.40, s. 6 (2); 2004, c. 16, s. 2 (2). Section Amendments with date in force (d/m/y) 2004, c. 16, s. 2 (2) - 01/01/2004

• 7.
• 7Taxable income

  7 The taxable income of a corporation for a taxation year is its income for the taxation year plus the additions required by Division C and less the deductions permitted by Division C. R.S.O. 1990, c. C.40, s. 7; 2004, c. 16, s. 2 (2). Section Amendments with date in force (d/m/y) 2004, c. 16, s. 2 (2) - 01/01/2004

• 8.
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• 8Taxable income earned in Canada

  8 The taxable income earned in Canada of a corporation for a taxation year is its taxable income earned in Canada determined under Division D. R.S.O. 1990, c. C.40, s. 8; 2004, c. 16, s. 2 (2). Section Amendments with date in force (d/m/y) 2004, c. 16, s. 2 (2) - 01/01/2004

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  Division B — Computation of Income

• 9.
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  basic rules

• 10.
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• 9Basic rules, Income Tax Act (Canada), s. 3, applicable

  9 (1) Except as hereinafter provided, section 3 of the Income Tax Act (Canada) is applicable for the purposes of this Act in so far as the said section applies to corporations. R.S.O. 1990, c. C.40, s. 9 (1); 2004, c. 16, s. 2 (2). Interpretation (2) In the application of the said section 3 for the purposes of this Act, the reference in paragraph (c) thereof to “subdivision e” shall be deemed to be a reference to Subdivision D of Division B of Part II of this Act, and the reference in the said section to “this Part” shall be deemed to be a reference to Part II of this Act. R.S.O. 1990, c. C.40, s. 9 (2); 2004, c. 16, s. 2 (2). Losses deemed deducted, deductible or claimed (3) Subject to subsection 11 (3), for the purpose of computing the income and taxable income of a corporation for a taxation year, any amount deducted, deductible or claimed by the corporation under a provision of the I…

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• 10Income or loss from a source or from sources in a place

  10 (1) Except as hereinafter provided, section 4 of the Income Tax Act (Canada) is applicable for the purposes of this Act in so far as the said section applies to corporations. R.S.O. 1990, c. C.40, s. 10 (1); 2004, c. 16, s. 2 (2). Interpretation (2) In the application of the said section 4 for the purposes of this Act, the references therein to “this Part” shall be deemed to be references to Part II of this Act. R.S.O. 1990, c. C.40, s. 10 (2); 2004, c. 16, s. 2 (2). Section Amendments with date in force (d/m/y) 2004, c. 16, s. 2 (2) - 01/01/2004

• 11.
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  Subdivision A — Income or Loss from a Business or Property

• 11Application of Income Tax Act (Canada)

  11 (1) Except as hereinafter provided, the income or loss of a corporation for a taxation year from a business or property shall for the purposes of this Act be determined in accordance with subdivisions a and b of Division B of Part I of the Income Tax Act (Canada) and the said subdivisions a and b are applicable to this Act in so far as the said subdivisions apply to corporations. R.S.O. 1990, c. C.40, s. 11 (1); 2004, c. 16, s. 2 (2). Inventory (2) In the application of section 10 of the Income Tax Act (Canada) for the purposes of this Act, the amount determined by a corporation for the purposes of that Act as the value of property described in an inventory shall apply for the purposes of this Act, except that if the Minister is of the opinion that the value has been incorrectly determined by the corporation, the Minister may determine the value under section 10 of that Act for the pu…

• 11.0.1Deductions, resource corporations

  11.0.1 (1) For taxation years ending after December 31, 2002, paragraphs 12 (1) (o), (x.2) and (z.5), 18 (1) (m) and 20 (1) (v) of the Income Tax Act (Canada) do not apply in computing the income of a corporation from a business or property for the purposes of this Act and the provisions of this section apply instead. 2004, c. 31, Sched. 9, s. 3. Deduction not allowed (2) Despite paragraph 18 (1) (a) of the Income Tax Act (Canada), in computing the income of a corporation for taxation years ending after December 31, 2002 from a business or property, no deduction shall be made in respect of any tax on income levied by any province or territory in Canada for the year from mining operations other than a deduction prescribed by the regulations. 2004, c. 31, Sched. 9, s. 3. Income amounts, royalties, etc. (3) There shall be included in computing the income of a corporation for a taxation year…

• 12.
• 11.1Ontario new technology tax incentive gross-up recapture

  11.1 (1) A corporation shall include in its income for a taxation year the total of all amounts, if any, each of which is the amount determined under subsection (2) of the corporation’s Ontario new technology tax incentive gross-up recapture in respect of a depreciable property of a prescribed class if an amount in respect of the depreciable property is required, under section 13 of the Income Tax Act (Canada), as made applicable by section 11, to be included in computing the corporation’s income for the taxation year or the income of a partnership, of which the corporation is a member at the end of the taxation year, for a fiscal period ending in the taxation year. 1997, c. 43, Sched. A, s. 6; 2004, c. 16, s. 2 (2). Amount of recapture (2) The amount of a corporation’s Ontario new technology tax incentive gross-up recapture in respect of a depreciable property of a prescribed class is t…

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• 11.2Definitions

  11.2 (1) In this section, “Federal Act” means the Income Tax Act (Canada); (“loi fédérale”) “investment tax credit amount” means, in respect of a corporation for a taxation year, an amount deducted by the corporation for a prior taxation year under subsection 127 (5) or (6) of the Federal Act; (“crédit d’impôt à l’investissement”) “Ontario allocation factor” has the meaning given to that expression by subsection 12 (1); (“coefficient de répartition de l’Ontario”) “qualified Ontario SR & ED expenditure” means, (a) a qualified expenditure within the meaning of subsection 12 (1) that is made or incurred by a corporation in a specified taxation year or in the taxation year immediately preceding the first specified taxation year of the corporation, or (b) an expenditure made or incurred by a partnership in a fiscal period that ends in a specified taxation year of a corporation if, (i) the cor…

• 12Definitions

  12 (1) In this section, “amalgamated corporation” means a corporation that is a new corporation for the purposes of section 87 of the Income Tax Act (Canada); (“société issue de la fusion”) “base period”, of a corporation for a particular taxation year, means the three previous taxation years of the corporation or, where the corporation has had fewer than three previous taxation years, the period commencing on the first day of its first taxation year and ending immediately before the particular taxation year, except that, (a) if the corporation is an amalgamated corporation that, after the amalgamation, has had fewer than three taxation years ending before the particular taxation year, the base period, (i) shall commence on the earliest day within the thirty-six-month period immediately before the particular taxation year on which a taxation year of a predecessor corporation commenced, a…

• 13Definitions

  13 (1) In this section, “amalgamated corporation” means a corporation that is a “new corporation” for the purposes of section 87 of the Income Tax Act (Canada); (“société issue de la fusion”) “eligible asset”, of a corporation, means prescribed manufacturing and processing machinery or equipment acquired by the corporation after the 31st day of December, 1988 and before the 1st day of January, 1992, or prescribed pollution control equipment acquired by the corporation after the 17th day of May, 1989, that, (a) has not been used by any person for any purpose before being acquired by the corporation, (b) is first used by the corporation in Ontario, (c) is used by the corporation for the purpose of earning income from a business, and (d) has not been deemed to have been acquired by the corporation by paragraph 16.1 (1) (b) of the Income Tax Act (Canada), as made applicable by subsection 11 …

• 13.1Ontario new technology tax incentive gross-up

  13.1 (1) A corporation may deduct in computing its income from a business for a taxation year the amount determined in respect of the corporation for the year according to the following formula: A = B/C – B

• [s30]

  where, “A” is the corporation’s Ontario new technology tax incentive gross-up for the taxation year; “B” is the total of all amounts for the taxation year, each of which is, (a) an amount deducted by the corporation under clause 11 (10) (a), in computing its income from a business for the taxation year, as an Ontario new technology tax incentive in respect of a prescribed depreciable property, or (b) an amount equal to the product of, (i) the amount deducted under clause 11 (10) (a), as an Ontario new technology tax incentive in respect of a prescribed depreciable property, by a partnership of which the corporation is a member, in computing the partnership’s income from a business for a fiscal period ending in the corporation’s taxation year, and (ii) the percentage of the partnership’s income or loss for the fiscal period to which the corporation is entitled; and “C” is the corporation’…

• 13.2Workplace child care tax incentive

  13.2 (1) A corporation, other than a child care operator that controls or manages a child care facility with an expectation of profit, may deduct in computing its income from a business for a taxation year a workplace child care tax incentive for the taxation year equal to the amount determined using the formula, (A/B) × 30%

• [s32]

  in which, “A” is the amount of the corporation’s qualifying expenditures for the taxation year, and “B” is the corporation’s Ontario allocation factor for the taxation year. 1998, c. 34, s. 30; 1999, c. 9, s. 77; 2004, c. 16, s. 2 (2). Qualifying expenditures (2) Subject to subsection (4), the amount of a corporation’s qualifying expenditures for a taxation year is the total of, (a) all capital costs in respect of expenditures incurred by the corporation after May 5, 1998 and before January 1, 2005, (i) in the construction or renovation of a licensed child care facility in Ontario that are included by the corporation for that year for the purposes of the Income Tax Act (Canada) in Class 1, 3, 6 or 13 of Schedule II to the regulations made under that Act, and (ii) on the acquisition of playground equipment for the child care facility that are included by the corporation for that year for …

• [s33]
• 13.3Workplace accessibility tax incentive

  13.3 (1) Subject to subsection (10), a corporation may deduct a workplace accessibility tax incentive in computing its income from a business for a taxation year. 1998, c. 34, s. 31; 2004, c. 16, s. 2 (2). Amount of tax incentive (2) The amount of a corporation’s workplace accessibility tax incentive for a taxation year is an amount equal to the total of the amounts determined under the following paragraphs: 1. The amount determined by dividing the amount of expenditures, if any, incurred by the corporation in the taxation year, but after July 1, 1998 and before January 1, 2005 to provide during a job interview in Ontario the support services of a sign language interpreter, an intervenor, a note-taker, a reader or an attendant, by the corporation’s Ontario allocation factor for the taxation year. 2. The total of all amounts, each of which is determined in respect of a qualifying employee…

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• [s34]
• 13.4Ontario school bus safety tax incentive

  13.4 (1) In computing its income from a business for a taxation year, a corporation may deduct an Ontario school bus safety tax incentive for the taxation year equal to the total of all amounts determined using the formula, (A/B) × 0.3

• [s35]

  in which, “A” is the capital cost of an eligible school bus acquired by the corporation in the taxation year, and “B” is the corporation’s Ontario allocation factor for the taxation year. 1999, c. 9, s. 78; 2004, c. 16, s. 2 (2). Eligible school bus (2) A vehicle acquired by a corporation is an eligible school bus if, (a) it is a school bus as defined under subsection 175 (1) of the Highway Traffic Act that meets the requirements of sections 1 and 3 of Regulation 612 of the Revised Regulations of Ontario, 1990 (School Buses) made under the Highway Traffic Act and that conforms to the Canadian Standards Association Standard D250-1998; (b) it is acquired by the corporation after May 4, 1999 and before January 1, 2006; (c) it is used in Ontario to transport children or to transport adults with a developmental disability and has not previously been used; and (d) the capital cost of the vehic…

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• [s36]
• 13.5Educational technology tax incentive

  13.5 (1) In this section, “eligible course” means a course of study offered by an eligible educational institution that provides credit towards a post-secondary degree, diploma, certificate or an apprentice training program approved by the Director of Apprenticeships under the Apprenticeship and Certification Act, 1998 or the Trades Qualification and Apprenticeship Act; (“cours admissible”) “eligible educational institution” means, (a) a university or college of applied arts and technology in Ontario, whose enrolment is counted for the purposes of calculating its entitlement to annual operating grants from the Government of Ontario, (b) the Michener Institute of Applied Health Sciences, or (c) the Ontario College of Art & Design; (“établissement d’enseignement autorisé”) “eligible equipment” means the equipment described in subsection (14) and excludes the things described in subsection …

• [s37]
• 13.6Repealed

  13.6 Repealed: 2004, c. 31, Sched. 9, s. 7 (1). Section Amendments with date in force (d/m/y) 2002, c. 23, s. 2 (1) - 09/12/2002 2004, c. 16, s. 2 (2) - 01/01/2004; 2004, c. 23, Sched. C, s. 2 - no effect - see 2004, c. 31, Sched. 9, s. 7 (1) - 09/12/2002; 2004, c. 31, Sched. 9, s. 7 (1) - 09/12/2002; 2004, c. 31, Sched. 9, s. 7 (2) - 16/12/2004

• 16.
• [s38]

  Subdivision B — Taxable Capital Gains and Allowable Capital Losses

• 14Application of Income Tax Act (Canada)

  14 (1) Except as hereinafter provided, the taxable capital gains and allowable capital losses of a corporation for a taxation year from the disposition of any property shall for the purposes of this Act be determined in accordance with subdivision c of Division B of Part I of the Income Tax Act (Canada) and the said subdivision c is applicable to this Act in so far as the said subdivision applies to corporations. R.S.O. 1990, c. C.40, s. 14 (1); 2004, c. 16, s. 2 (2). Idem (2) In the application of paragraph 39 (1) (a) of the Income Tax Act (Canada) for the purposes of this Act, subparagraph 39 (1) (a) (ii.1) is not applicable. R.S.O. 1990, c. C.40, s. 14 (2); 2004, c. 16, s. 2 (2). Idem (3) Subsections 39 (7) and (8) of the Income Tax Act (Canada) do not apply for the purposes of this Act. R.S.O. 1990, c. C.40, s. 14 (3); 1996, c. 29, s. 40 (1); 2004, c. 16, s. 2 (2). Limit on capital g…

• 17.
• [s40]

  Subdivision C — Other Sources of Income

• 18.
• 15Income Tax Act (Canada), Part I (B) (d) applicable

  15 (1) Except as hereinafter provided, subdivision d of Division B of Part I of the Income Tax Act (Canada) is applicable for the purposes of this Act in so far as the said subdivision applies to corporations. R.S.O. 1990, c. C.40, s. 15 (1); 2004, c. 16, s. 2 (2). Disposition of resource property (2) In the application of section 59 of the Income Tax Act (Canada) for the purposes of this Act, (a) subsection (1) and paragraphs (3.2) (a) and (3.3) (f) of the said section are not applicable; and (b) the references in subsection (2) of the said section to amounts deducted as a reserve in computing income for the immediately preceding taxation year shall include any amount deducted under section 16 of the Corporations Tax Act, being chapter 97 of the Revised Statutes of Ontario, 1980, in computing income for the immediately preceding taxation year. R.S.O. 1990, c. C.40, s. 15 (2); 2004, c. 1…

• 19.
• [s42]

  Subdivision D — Deductions in Computing Income

• 20.
• 16Application of s. 60 of Income Tax Act (Canada)

  16 (1) Except as hereinafter provided, section 60 of the Income Tax Act (Canada) is applicable for the purposes of this Act in so far as the said section applies to corporations. R.S.O. 1990, c. C.40, s. 16 (1); 2004, c. 16, s. 2 (2). Corporation taxes deductible (2) In addition to the deductions permitted by virtue of subsection (1), there may be deducted in computing the income of a corporation for a taxation year all corporation taxes payable in the taxation year by the corporation. R.S.O. 1990, c. C.40, s. 16 (2); 2004, c. 16, s. 2 (2). Definitions (3) In this section, “corporation income tax” means a tax imposed by the Parliament of Canada or by the Legislature of a province or by a municipality in the province that is declared by the regulations to be a tax of general application on the profits of corporations; (“impôt sur le revenu des sociétés”) “corporation tax” means a tax impo…

• 21.
• 16.1Application of Income Tax Act (Canada), ss. 61.3, 61.4

  16.1 Sections 61.3 and 61.4 of the Income Tax Act (Canada) apply for the purposes of this Act in so far as those sections apply to corporations. 1996, c. 29, s. 41 (1); 2004, c. 16, s. 2 (2). Section Amendments with date in force (d/m/y) 1996, c. 29, s. 41 (1, 2) - 22/02/1994 2004, c. 16, s. 2 (2) - 01/01/2004

• 22.
• 17Allowance for oil or gas well, mine or timber limit

  17 (1) There may be deducted in computing a corporation’s income for a taxation year such amount as an allowance, if any, in respect of, (a) a natural accumulation of petroleum or natural gas, oil or gas well, mineral resource or timber limit; or (b) the processing, to the prime metal stage or its equivalent, of ore from a mineral resource,

• 23.
• [s46]

  as is allowed by regulation. R.S.O. 1990, c. C.40, s. 17 (1); 2004, c. 16, s. 2 (2). Regulations (2) For greater certainty it is hereby declared that, in the case of a regulation made under subsection (1), (a) there may be prescribed by such regulation an amount in respect of any or all, (i) natural accumulations of petroleum or natural gas, oil or gas wells or mineral resources in which the corporation has an interest, or (ii) processing operations described in clause (1) (b) that are carried on by the corporation; and (b) despite any other provision contained in this Act, the Lieutenant Governor in Council may prescribe the formula by which the amount that may be allowed to the corporation by such regulation shall be determined. R.S.O. 1990, c. C.40, s. 17 (2); 2004, c. 16, s. 2 (2). Lessee’s share of allowance (3) Where a deduction is allowed under subsection (1) in respect of a coal …

• 24.
• 18Exploration and development expenses

  18 (1) A principal-business corporation may deduct, in computing its income for a taxation year, the lesser of, (a) the aggregate of such of its Canadian exploration and development expenses as were incurred by it before the end of the taxation year, to the extent that they were not deductible in computing income for a previous taxation year; and (b) of that aggregate, an amount equal to its income for the taxation year if no deduction were allowed under this subsection or section 17, minus the deductions allowed for the taxation year by sections 112 and 113 of the Income Tax Act (Canada) as made applicable by section 34 of this Act. R.S.O. 1990, c. C.40, s. 18 (1); 2004, c. 16, s. 2 (2). Expenses of other corporations (2) A corporation other than a principal-business corporation may deduct, in computing its income for a taxation year, the lesser of, (a) the aggregate of such of its Cana…

• 25.
• [s48]
• 19Canadian exploration expense, Canadian development expense and Canadian oil and gas property expense

  19 (1) Sections 66.1, 66.2 and 66.4 of the Income Tax Act (Canada) are applicable for the purposes of this Act in so far as the said sections apply to corporations except that, in the application of the said sections for the purposes of this Act, (a) the references therein to “Canadian exploration expense”, “Canadian development expense”, “Canadian oil and gas property expense”, “cumulative Canadian exploration expense”, “cumulative Canadian development expense” and “cumulative Canadian oil and gas property expense” shall be deemed to be references to such of those outlays or expenses as are made or incurred after the 19th day of May, 1981; (b) subject to section 22, in addition to the deduction provided under this section by virtue of subsection 66.2 (2) of the Income Tax Act (Canada), a corporation may claim in respect of its Canadian development expenses made or incurred in Ontario in…

• [s49]
• 20Application of Income Tax Act (Canada), s. 66, part

  20 Subsections 66 (12.6) to (12.741), (16), (17), (18) and (19) of the Income Tax Act (Canada) are applicable for the purposes of this Act in so far as they apply to corporations, except that in the application of these subsections, (a) references to the “Minister” in subsections 66 (12.68), (12.69), (12.691), (12.7), (12.701), (12.73), (12.74) and (12.741) of that Act shall be read as references to the Minister of National Revenue; (b) the reference to “this Part” in subsection 66 (12.71) of that Act shall be read as a reference to Part II of this Act; (c) a prescribed form referred to in subsection 66 (12.68), (12.69) or (12.7) of that Act that was required to be filed, and that was filed, on or before the 19th day of March, 1987, shall be deemed to have been filed at the time required under that subsection; and (d) expenditures described in subparagraph 66.1 (6) (a) (i) or (ii.1) of t…

• 26.
• [s50]
• 21Successor rules

  21 Section 66.7 of the Income Tax Act (Canada), other than subsections (2), (8), (13) and (15) and paragraph (10) (h), is applicable for the purposes of this Act, except that in the application thereof, (a) references to “Canadian exploration and development expenses” shall be read as references to only Canadian exploration and development expenses incurred before the 20th day of May, 1981; (b) the section shall be read without the references to “foreign exploration and development expenses”, “foreign resource property” and “foreign resource properties”; and (c) references to “the Minister” in subsection (12.1) shall be read as references to the Minister of National Revenue. R.S.O. 1990, c. C.40, s. 21; 1994, c. 14, s. 8 (1); 2004, c. 16, s. 2 (2). Section Amendments with date in force (d/m/y) 1994, c. 14, s. 8 (1, 2) - 17/12/1991 2004, c. 16, s. 2 (2) - 01/01/2004

• 27.
• [s51]
• 22Proration of “CDE” and “COGPE” for short taxation years

  22 Subsection 66 (13.1) of the Income Tax Act (Canada) is applicable for the purposes of this Act and in the application thereof the reference to paragraph 66.2 (2) (c) of that Act shall be deemed to include a reference to clause 19 (1) (b). R.S.O. 1990, c. C.40, s. 22; 2004, c. 16, s. 2 (2); 2004, c. 31, Sched. 9, s. 11. Section Amendments with date in force (d/m/y) 2004, c. 16, s. 2 (2) - 01/01/2004; 2004, c. 31, Sched. 9, s. 11 - 16/12/2004

• [s52]
• 23Limited partnership resource expenditures

  23 Section 66.8 of the Income Tax Act (Canada) is applicable for the purposes of this Act and in the application thereof the foreign exploration and development expenses referred to in clause (1) (a) (i) (D) of that section shall be limited to only those foreign exploration and development expenses that are deductible. R.S.O. 1990, c. C.40, s. 23; 2004, c. 16, s. 2 (2). Section Amendments with date in force (d/m/y) 2004, c. 16, s. 2 (2) - 01/01/2004

• 28.
• [s53]
• 24Shares taxed as inventory

  24 Section 66.3 of the Income Tax Act (Canada) is applicable for the purposes of this Act in so far as that section applies to corporations. R.S.O. 1990, c. C.40, s. 24; 2004, c. 16, s. 2 (2). Section Amendments with date in force (d/m/y) 2004, c. 16, s. 2 (2) - 01/01/2004

• [s54]
• 25Application of Income Tax Act (Canada), s. 66.6

  25 Section 66.6 of the Income Tax Act (Canada) is applicable for the purposes of this Act with the references therein to “this Part” read as references to Part II of this Act. R.S.O. 1990, c. C.40, s. 25; 2004, c. 16, s. 2 (2). Section Amendments with date in force (d/m/y) 2004, c. 16, s. 2 (2) - 01/01/2004

• 29.
• [s55]

  Subdivision E — Rules Relating to Computation of Income

• [s56]
• 26Income Tax Act (Canada), Part I (B) (f), applicable

  26 (1) The rules provided in subdivision f of Division B of Part I of the Income Tax Act (Canada), relating to the computation of income are, in so far as the said rules apply to corporations, applicable in computing income for the purposes of this Act. R.S.O. 1990, c. C.40, s. 26 (1); 2004, c. 16, s. 2 (2). General limitation re expenses (2) In computing income, no deduction shall be made in respect of an outlay or expense in respect of which any amount is otherwise deductible under this Act, except to the extent that the outlay or expense was reasonable in the circumstances. R.S.O. 1990, c. C.40, s. 26 (2); 2004, c. 16, s. 2 (2). Treatment of foreign resource properties on amalgamation (3) In the application of subsection 69 (13) of the Income Tax Act (Canada) for the purposes of this Act, the proceeds of disposition of a foreign resource property shall be deemed to be the cost amount …

• [s57]
• 27Benefit conferred on corporation

  27 (1) If a person at any time confers a benefit on a corporation either directly or indirectly by any means, the amount of the benefit shall be included in computing the corporation’s income or taxable income earned in Canada for the taxation year in which the benefit is conferred, to the extent that, (a) the amount of the benefit is not otherwise included in the corporation’s income or taxable income earned in Canada; and (b) the amount of the benefit would be so included if the amount were a payment made directly by the person to the corporation and the corporation were resident in Canada. R.S.O. 1990, c. C.40, s. 27 (1); 2004, c. 16, s. 2 (2). Arm’s length (2) If it is established that a transaction was entered into by persons dealing at arm’s length, in good faith and not pursuant to or as part of any other transaction, and not to effect payment, in whole or in part, of an existing …

• 30.
• [s58]

  Subdivision F — Amounts not Included in Computing Income

• [s59]
• 28Amounts not included in income:

  28 There shall not be included in computing the income of a corporation for a taxation year, federal grants (a) an amount paid to a corporation on account of a grant under the Regional Development Incentives Act (Canada) or the Employment Support Act (Canada); and other amounts (b) an amount determined in accordance with the rules provided in paragraph 81 (1) (b), (c), (l) or (m) of the Income Tax Act (Canada). R.S.O. 1990, c. C.40, s. 28; 1994, c. 14, s. 10; 2004, c. 16, s. 2 (2). Section Amendments with date in force (d/m/y) 1994, c. 14, s. 10 - 23/06/1994 2004, c. 16, s. 2 (2) - 01/01/2004

• 31.
• [s60]

  Subdivision G — Corporations Resident in Canada and Their Shareholders

• [s61]
• 29Income Tax Act (Canada), Part I (B) (h), applicable

  29 (1) Except as hereinafter provided, the rules provided in subdivision h of Division B of Part I of the Income Tax Act (Canada) are applicable for the purposes of this Act. R.S.O. 1990, c. C.40, s. 29 (1); 2004, c. 16, s. 2 (2). Amalgamations consideration for resource property disposition (2) In lieu of the rule provided in paragraph 87 (2) (p) of the Income Tax Act (Canada) with respect to amalgamations, the following rule is applicable for the purposes of this Act: For the purpose of computing a deduction from the income of the new corporation for a taxation year under section 16 of the Corporations Tax Act, being chapter 97 of the Revised Statutes of Ontario, 1980, any amount that has been included in computing the income of a predecessor corporation for its last taxation year or a previous taxation year by virtue of clause 14 (3) (a) or (c) of the Corporations Tax Act, being chapt…

• [s62]
• 29.1Ontario corporations and partnerships

  29.1 (1) In this section, (a) a corporation is an Ontario corporation for a taxation year if not more than 10 per cent of its taxable income for the year is deemed, or would be deemed if it had had income for that year, to have been earned outside Ontario for the purposes of section 39; and (b) a partnership is an Ontario partnership for a fiscal period of the partnership if not more than 10 per cent of its income for the fiscal period would be deemed to have been earned outside Ontario for the purposes of section 39 if the partnership were a corporation, its fiscal period were its taxation year and it had had income for the fiscal period. 1997, c. 43, Sched. A, s. 11 (1); 1998, c. 34, s. 33 (1); 2004, c. 16, s. 2 (2). Elections (2) The following rules apply in respect of elections under provisions of the Income Tax Act (Canada) that apply for the purposes of this Subdivision: 1. No elec…

• 32.
• [s63]

  Subdivision H — Shareholders of Corporations not Resident in Canada

• [s64]
• 30Income Tax Act (Canada), Part I (B) (i), applicable

  30 (1) The provisions of subdivision i of Division B of Part I of the Income Tax Act (Canada) are applicable in computing the income of a corporation for a taxation year for the purposes of this Act. R.S.O. 1990, c. C.40, s. 30 (1); 2004, c. 16, s. 2 (2). Definition (2) In the application of the said subdivision i for the purposes of this Act, (a) the references therein to “Minister” shall be deemed to be references to the Minister of National Revenue for Canada; (b) the reference in subsection 94.1 (1) to “this Part” shall be deemed to be a reference to Part II of this Act; and (c) the aggregate referred to in paragraph 94.1 (1) (f) computed for the purposes of that Act shall apply for the purposes of this Act. R.S.O. 1990, c. C.40, s. 30 (2); 2004, c. 16, s. 2 (2). Section Amendments with date in force (d/m/y) 2004, c. 16, s. 2 (2) - 01/01/2004

• 33.
• [s65]

  Subdivision I — Partnerships and Their Members

• 34.
• 31Income Tax Act (Canada), Part I (B) (j), applicable

  31 (1) Except as hereinafter provided, the rules provided in subdivision j of Division B of Part I of the Income Tax Act (Canada) with respect to partnerships and their members are applicable for the purposes of this Act in so far as the said rules apply to corporations. R.S.O. 1990, c. C.40, s. 31 (1); 2004, c. 16, s. 2 (2). No deduction of reserve (1.1) Paragraph 20 (1) (n) of the Income Tax Act (Canada) does not apply in determining for the purposes of this Act a partnership’s income for a fiscal period from a business in respect of a property sold in the course of the business if any property taken as security on the sale of the property has been sold, pledged, assigned or otherwise disposed of. 1998, c. 34, s. 34 (1); 2004, c. 16, s. 2 (2). Application of s. 11.0.1 (1.2) If a corporation holds a direct interest in and is a majority interest partner of a partnership at the end of a f…

• 35.
• 31.1Definitions

  31.1 (1) In this section, “Ontario corporation” has the same meaning as in subsection 29.1 (1); (“société ontarienne”) “Ontario partnership” has the same meaning as in subsection 29.1 (1). (“société de personnes ontarienne”) 1997, c. 42, Sched. A, s. 13 (1); 2004, c. 16, s. 2 (2). Elections (2) The following rules apply in respect of elections under provisions of the Income Tax Act (Canada) that apply for the purposes of this Subdivision: 1. No election may be made by a corporation and the members of a partnership for the purposes of this Act unless the election has been properly made by the corporation and the members of the partnership for the purposes of the Income Tax Act (Canada). 2. If the amount elected or deemed to have been elected for the purposes of the Income Tax Act (Canada) is different from the amount that would be elected or deemed to have been elected for the purposes of…

• 36.
• [s68]

  Subdivision J — Beneficiaries of Trusts

• [s69]
• 32Income Tax Act (Canada), Part I (B) (k), applicable

  32 (1) In determining for the purposes of this Act the income of a corporation that is a beneficiary of a trust, subdivision k of Division B of Part I of the Income Tax Act (Canada) is applicable in so far as the said subdivision applies to corporations that are beneficiaries of trusts, and any amount included in or deducted from the income of a corporation for a taxation year by virtue of that subdivision shall be included or deducted, as the case may be, in computing its income for the taxation year for the purposes of this Act. R.S.O. 1990, c. C.40, s. 32 (1); 2004, c. 16, s. 2 (2). Idem (2) In the application of the said subdivision for the purposes of this Act, (a) subsection 1 (3.1) of this Act does not apply; and (b) the references therein to “Minister” shall be deemed to be references to the Minister of National Revenue for Canada. R.S.O. 1990, c. C.40, s. 32 (2); 2004, c. 16, s.…

• 37.
• [s70]

  Division C — Computation of Taxable Income

• [s71]
• 33Application of Income Tax Act (Canada), s. 132.1

  33 (1) A corporation that is required under paragraph 132.1 (1) (d) of the Income Tax Act (Canada) to include an amount in its income for a taxation year for the purposes of that Act shall include the amount in its income for the taxation year for the purposes of this Act. R.S.O. 1990, c. C.40, s. 33 (1); 2004, c. 16, s. 2 (2). Mutual fund trust unit (2) In computing the adjusted cost base to the corporation of a unit in a mutual fund trust, there shall be included any amount added to the adjusted cost base of the unit under subsection 132.1 (2) of that Act for the purposes of that Act. R.S.O. 1990, c. C.40, s. 33 (2); 2004, c. 16, s. 2 (2). Section Amendments with date in force (d/m/y) 2004, c. 16, s. 2 (2) - 01/01/2004

• [s72]
• 34Income Tax Act (Canada), Part I (C), applicable

  34 (1) Except as hereinafter in this Division provided, in computing the taxable income of a corporation for a taxation year ending before January 1, 2009, Division C of Part I of the Income Tax Act (Canada) is applicable for the purposes of this Act in so far as the said Division applies to additions and deductions permitted to corporations. R.S.O. 1990, c. C.40, s. 34 (1); 2004, c. 16, s. 2 (2); 2007, c. 11, Sched. B, s. 2 (5). Restriction on carry back of losses incurred after 2008 (1.0.1) The amount deducted under section 111 of the Income Tax Act (Canada), as it applies for the purposes of this Act, in computing the taxable income of a corporation for a taxation year ending before January 1, 2009 in respect of a non-capital loss, net capital loss, farm loss, restricted farm loss or limited partnership loss for a taxation year ending after December 31, 2008 shall not exceed the amoun…

• [s73]
• 35Reduction of non-capital loss deductible

  35 (1) The Minister may direct that the maximum amount that may be deducted by a corporation in a taxation year under paragraph 111 (1) (a) of the Income Tax Act (Canada), as applicable for the purposes of this Act, in respect of a non-capital loss incurred in a particular taxation year, shall not exceed the amount determined under subsection (2) if, (a) the corporation deducted an amount under any of sections 12, 13, 13.1, 13.2, 13.3, 13.4 and 13.5 in determining the amount of its non-capital loss for the particular taxation year and the Ontario allocation factor of the corporation for the taxation year in which an amount in respect of the loss is to be deducted is greater than 120 per cent of the Ontario allocation factor for the particular taxation year in which the loss was incurred; or (b) the Minister has directed the maximum amount deductible in respect of the loss for a prior tax…

• 38.
• [s74]
• 36Political donations

  36 (1) In computing a corporation’s taxable income for a taxation year, there may be deducted the aggregate of amounts (the aggregate of which amounts is hereafter in this subsection referred to as “the amount contributed”) that are contributions for the purposes of the Election Finances Act and that are contributed in the taxation year, and in any previous taxation year ending after the 12th day of February, 1975 to the extent that such contributions have not already been deducted, by the corporation to registered candidates, to registered constituency associations or to registered parties, provided that, (a) subject to subsection (3), such deduction shall not exceed the least of, (i) the amount contributed, (ii) its taxable income computed without reference to this section, and (iii) $15,000, multiplied by the indexation factor determined under section 40.1 of the Election Finances Act…

• [s75]

  Division D — Taxable Income Earned in Canada by Non-Residents

• 39.
• 37Non-residents’ taxable income earned in Canada

  37 (1) The taxable income earned in Canada for a taxation year of a corporation to which subsection 2 (2) applies shall be computed in accordance with the rules provided in section 115 of the Income Tax Act (Canada) in so far as the said rules apply to corporations, except that for the purposes of this Act, (a) there shall be included, (i) income from property that is real property situated in Canada, or any interest therein, including, (A) amounts that arose from the sale or rental of such property or interest therein, or both, and (B) royalties and similar payments in respect of such property or interest therein, and (ii) timber royalties in respect of a timber resource property or a timber limit situated in Canada; (b) the amount of the income included in accordance with the said rules and clause (a) shall be determined in accordance with this Act; and (c) in the application of paragr…

• 40.
• [s77]

  Division D.1 — Tax Incentive for Investing in Ontario Jobs and Opportunity Bonds

• 41.
• 37.1Tax incentive, Ontario Jobs and Opportunity Bonds

  37.1 (1) In this section, “Authority” means the Ontario Strategic Infrastructure Financing Authority continued under subsection 2 (1) of the Ontario Strategic Infrastructure Financing Authority Act, 2002; (“Office”) “Ontario Jobs and Opportunity Bond” means a bond, debenture or other security, (a) that is issued by the Authority and is designated by it as an Ontario Jobs and Opportunity Bond, (b) that is issued by a subsidiary, trust, partnership or other entity established or acquired by the Authority and is designated by the Authority as an Ontario Jobs and Opportunity Bond, or (c) that is designated by the Minister as an Ontario Jobs and Opportunity Bond. (“obligation ontarienne de financement d’emplois et de projets”) 2002, c. 22, s. 40; 2004, c. 16, s. 2 (2); 2004, c. 31, Sched. 9, s. 14. Tax incentive (2) A corporation that owns an Ontario Jobs and Opportunity Bond at any time in a…

• [s79]

  Division E — Computation of Income Tax Payable

• 42.
• 38Amount of tax payable

  38 (1) The tax payable by a corporation for a taxation year under this Part on its taxable income or on its taxable income earned in Canada, as the case may be, is the amount determined by multiplying such amount by the specified basic rate of the corporation for the taxation year. 2000, c. 10, s. 2; 2004, c. 16, s. 2 (2). Specified basic rate (2) The specified basic rate of a corporation for a taxation year is the total of, (a) 15.5 per cent multiplied by the ratio of the number of days in the taxation year that are before May 2, 2000 to the number of days in the taxation year; (b) 14.5 per cent multiplied by the ratio of the number of days in the taxation year that are after May 1, 2000 and before January 1, 2001 to the total number of days in the taxation year; (c) 14 per cent multiplied by the ratio of the number of days in the taxation year that are after December 31, 2000 and befor…

• 43.
• 38.1Temporary surtax on banks

  38.1 In addition to the tax, if any, otherwise payable under this Part by a bank for a taxation year ending after April 30, 1992 and commencing before November 1, 1993, the bank shall pay a surtax for each such taxation year calculated according to the following formula: S = 0.1 × T × A/B

• [s82]

  where: “S” is the amount of the surtax for the taxation year; “T” is the amount of tax, if any, otherwise payable under this Part by the bank for the taxation year, determined without reference to this section and section 40; “A” is the number of days in the taxation year after April 30, 1992 and before November 1, 1993; and “B” is the total number of days in the taxation year. 1994, c. 14, s. 12 (1); 2004, c. 16, s. 2 (2). Section Amendments with date in force (d/m/y) 1994, c. 14, s. 12 (1, 2) - 01/05/1992 2004, c. 16, s. 2 (2) - 01/01/2004

• 39Deduction from income tax, inter-provincial allocation

  39 (1) There may be deducted from the tax otherwise payable under this Part for a taxation year by a corporation an amount calculated using the formula, A × B

• [s84]

  in which, “A” is the specified basic rate of the corporation for the taxation year, as determined under subsection 38 (2), and “B” is that portion of the taxable income or the taxable income earned in Canada, as the case may be, of the corporation which is earned in the taxation year in each jurisdiction other than Ontario, determined under rules prescribed by the regulations. 2000, c. 10, s. 2; 2004, c. 16, s. 2 (2). Application provision, 2000 Budget (2) This section, as it is re-enacted by the Taxpayer Dividend Act, 2000, applies with respect to taxation years ending after May 1, 2000. 2000, c. 10, s. 2; 2004, c. 16, s. 2 (2). Section Amendments with date in force (d/m/y) 2000, c. 10, s. 2 - 02/05/2000 2004, c. 16, s. 2 (2) - 01/01/2004

• 40Foreign tax deduction

  40 (1) Where a corporation has a permanent establishment in Ontario, and, (a) the corporation has included in computing its income for the taxation year, (i) income that was derived from sources within a jurisdiction outside Canada in the form of dividends, interest, rents or royalties received in the year, or (ii) the amount by which, (A) the aggregate of that part of the corporation’s taxable capital gains for the taxation year from the disposition of property as may reasonably be considered to be income from a source within a jurisdiction outside Canada, exceeds, (B) the aggregate of such of the corporation’s allowable capital losses for the year from the disposition of property as may reasonably be considered to be a loss from a source within that jurisdiction outside Canada, hereinafter in this section referred to as “foreign investment income”; or (b) the corporation, having includ…

• [s86]

  and where, (c) for the purposes of subsection 126 (2) of the Income Tax Act (Canada), (i) such foreign investment income has not been included as part of such foreign business income, (ii) such foreign investment income has been excluded from the calculation of gross revenue or any part thereof for the purpose of allocating taxable income to a jurisdiction outside Ontario in accordance with the regulations made under section 39, and (iii) where the corporation is a bank which has allocated any of its taxable income for the taxation year to a jurisdiction outside Canada under the regulations made under section 39, such foreign investment income has not been derived from loans and deposits of the bank’s permanent establishments in jurisdictions outside Canada used in the determination of such allocation; and (d) the corporation is entitled to a deduction under section 126 of the Income Tax…

• [s87]

  the corporation may deduct from the tax otherwise payable under this Part for the taxation year an amount equal to the lesser of, (e) the amount calculated using the formula, A × B × C in which, “A” is the amount of the foreign investment income, “B” is the specified basic rate of the corporation for the taxation year, as determined under subsection 38 (2), and “C” is the corporation’s Ontario allocation factor for the taxation year; (f) the amount determined by applying the Ontario allocation factor for the taxation year to the deficiency, if any, between, (i) that portion of the income or profits tax paid for the taxation year by the corporation to the jurisdiction outside Canada in respect of such foreign investment income, that was not deducted, by virtue of subsection 20 (12) of the Income Tax Act (Canada) for the purposes of that Act or for the purposes of this Act by virtue of tha…

• 41Small business incentive

  41 (1) There may be deducted from the tax otherwise payable under this Part by a corporation for a taxation year an amount equal to the percentage described in subsection (1.1) of the amount determined under subsection (2), if the corporation has made a deduction under section 125 of the Income Tax Act (Canada) for the taxation year, or could have made a deduction under that section if its business limit for the taxation year under paragraph 125 (1) (c) of that Act had been determined without reference to subsection 125 (5.1) of that Act. 1996, c. 1, Sched. B, s. 5 (1); 1998, c. 5, s. 10 (1); 2004, c. 16, s. 2 (2). Same (1.1) Subject to subsections (1.2) to (1.4), the percentage referred to in subsection (1) is, (a) 6 per cent, in respect of a taxation year that ends after June 30, 1994 and before May 5, 1998; (b) 6.5 per cent, in respect of a taxation year that ends after May 4, 1998 an…

• 41.1Surtax on Canadian-controlled private corporations

  41.1 (1) Every corporation that has claimed a deduction under subsection 41 (1) for a taxation year shall pay, in addition to the amount of tax otherwise payable for the taxation year under this Part, a surtax equal to the lesser of, (a) the amount claimed as a deduction by the corporation under subsection 41 (1) for the taxation year; or (b) the amount calculated using the formula, A × B × C/D in which, “A” is the specified rate of the corporation for the taxation year, as determined under subsection (3), “B” is the amount, if any, by which “X” plus “Y” exceeds “Z”, where “X” is the taxable income of the corporation for the taxation year, “Y” is the taxable income of each corporation (“associated corporation”) with which the corporation was associated at any time during the taxation year, for the last taxation year of the associated corporation that ended on or before the last day of th…

• 42New enterprise incentive

  42 (1) There may be deducted from the tax otherwise payable by a corporation under this Part for the corporation’s first, second or third taxation year ending after the date of its incorporation an amount equal to 15.5 per cent of the amount determined under subsection 41 (2), if, (a) the corporation was incorporated after the 13th day of May, 1982 and before the 21st day of April, 1988; (b) the corporation commenced carrying on an active business in Canada before the 21st day of April, 1988; and (c) the corporation is eligible to claim and has claimed a deduction under section 125 of the Income Tax Act (Canada) from the tax otherwise payable by the corporation under that Act for the taxation year. R.S.O. 1990, c. C.40, s. 42 (1); 2004, c. 16, s. 2 (2). Incorporation before the 1st day of May, 1988 (2) For the purposes of subsection (1), a corporation incorporated after the 20th day of A…

• 43Tax credit for manufacturing, processing, etc.

  43 (1) There may be deducted from the tax otherwise payable under this Part for a taxation year by a corporation an amount equal to 2 per cent of that proportion of the amount determined under subsection (2) that, (a) that portion of its taxable income or taxable income earned in Canada, as the case may be, for the year remaining after deducting therefrom that portion thereof which is earned in the taxation year in jurisdictions other than Ontario as determined for the purpose of section 39,

• [s92]

  is of, (b) the aggregate of the portions of its taxable income or taxable income earned in Canada, as the case may be, for the taxation year which were earned in the provinces or territories of Canada as determined for the purpose of section 39. R.S.O. 1990, c. C.40, s. 43 (1); 1994, c. 14, s. 16 (1); 2004, c. 16, s. 2 (2). Transition, electricity corporation (1.1) Despite subsection (1), for a corporation that generates electrical energy for sale or produces steam for use in the generation of electrical energy for sale, the amount that may be deducted by the corporation for a taxation year ending after December 31, 1998 on its eligible Canadian profits from the generation of electrical energy for sale or the production of steam for use in the generation of electrical energy for sale is the amount that would be determined under subsection (1) if the reference in that subsection to “2 per…

• 43.1Definitions

  43.1 (1) In this section, “amalgamated corporation” means a corporation that is a “new corporation” for the purposes of section 87 of the Income Tax Act (Canada); (“société issue de la fusion”) “parent corporation” means a corporation that is a “parent” under subsection 88 (1) of the Income Tax Act (Canada); (“société mère”) “predecessor corporation” means a corporation that is a predecessor corporation referred to in section 87 of the Income Tax Act (Canada) and includes a corporation that was a predecessor corporation of a predecessor corporation; (“société remplacée”) “subsidiary corporation” means a corporation that is a “subsidiary” under subsection 88 (1) of the Income Tax Act (Canada). (“filiale”) 1994, c. 14, s. 17 (1); 2004, c. 16, s. 2 (2). Corporate minimum tax credit (2) There may be deducted from tax otherwise payable under this Part by a corporation for a taxation year an a…

• 44.
• [s94]
• 43.2Qualifying environmental trust tax credit

  43.2 (1), (2) Repealed: 1996, c. 29, s. 47 (1). Qualifying environmental trust tax credit (3) The amount of a corporation’s qualifying environmental trust tax credit for a taxation year is the amount that would be determined under subsection 127.41 (1) of the Income Tax Act (Canada) to be the amount of its “Part XII.4 tax credit” for the taxation year if the tax payable under Part XII.4 of the Income Tax Act (Canada) by a qualifying environmental trust for a taxation year ending in the corporation’s taxation year equalled the amount of tax payable by the trust for that year under the Income Tax Act. 1996, c. 1, Sched. B, s. 6 (1); 1998, c. 34, s. 39 (1); 2004, c. 16, s. 2 (2). Deemed tax payment (4) A corporation, other than a corporation that is exempt from tax under this Act by virtue of section 57, shall be deemed to pay on account of its tax payable under this Act for a taxation year…

• 43.3Ontario innovation tax credit

  43.3 (1) A corporation that is a qualifying corporation for a taxation year may deduct from its tax otherwise payable under this Part for the taxation year, after making all deductions claimed under sections 39, 40, 41 and 43 for the taxation year, an amount not exceeding the amount of its Ontario innovation tax credit for the taxation year. 1996, c. 1, Sched. B, s. 7 (1); 1996, c. 29, s. 48; 2004, c. 16, s. 2 (2). Same (2) A corporation that is a qualifying corporation for a taxation year may deduct from its tax otherwise payable for the year under Parts III and IV of the Act an amount not exceeding the amount by which its Ontario innovation tax credit for the taxation year exceeds the maximum amount, if any, deductible by the corporation for the year under subsection (1). 1996, c. 1, Sched. B, s. 7 (1); 2004, c. 16, s. 2 (2). Amount of tax credit (3) The amount of a qualifying corporat…

• [s96]
• 43.4Co-operative education tax credit

  43.4 (1) A corporation that complies with the requirements of this section may deduct from its tax otherwise payable under this Part for the taxation year, after making all deductions claimed under sections 39, 40, 41, 43 and 43.3 for the taxation year, an amount not exceeding the amount of its co-operative education tax credit for the taxation year. 1996, c. 24, s. 27; 1996, c. 29, s. 49 (1); 2004, c. 16, s. 2 (2). Same (2) A corporation that complies with the requirements of this section may deduct from its tax otherwise payable for the year under Parts III and IV an amount not exceeding the amount by which its co-operative education tax credit for the taxation year exceeds the maximum amount, if any, deductible by the corporation for the year under subsection (1). 1996, c. 24, s. 27; 2004, c. 16, s. 2 (2). Amount of tax credit (3) The amount of a corporation’s co-operative education t…

• 45.
• [s97]
• 43.5Ontario film and television tax credit

  43.5 (1) A corporation that is a qualifying production company for a taxation year and complies with the requirements of this section may deduct from its tax otherwise payable under this Part for the taxation year, after making all deductions claimed under sections 39, 40, 41, 43, 43.3 and 43.4 for the taxation year, an amount not exceeding the amount of its Ontario film and television tax credit for the taxation year. 1996, c. 24, s. 27; 1996, c. 29, s. 50; 2004, c. 16, s. 2 (2). Same (2) A corporation that is a qualifying production company for a taxation year and complies with the requirements of this section may deduct from its tax otherwise payable for the year under Parts III and IV of the Act an amount not exceeding the amount by which its Ontario film and television tax credit for the taxation year exceeds the maximum amount, if any, deductible by the corporation for the year und…

• 43.6Graduate transitions tax credit

  43.6 (1) A corporation that complies with the requirements of this section may deduct from its tax otherwise payable under this Part for a taxation year, after making all the deductions for the taxation year claimed under sections 39, 40, 41, 43 and 43.2 to 43.5, an amount not exceeding the amount of its graduate transitions tax credit for the taxation year. 1997, c. 43, Sched. A, s. 20; 2004, c. 16, s. 2 (2). Same (2) A corporation that complies with the requirements of this section may deduct from its tax otherwise payable for the year under Parts III and IV an amount not exceeding the amount by which its graduate transitions tax credit for the taxation year exceeds the maximum amount, if any, deductible by the corporation for the year under subsection (1). 1997, c. 43, Sched. A, s. 20; 2004, c. 16, s. 2 (2). Amount of tax credit (3) The amount of a corporation’s graduate transitions t…

• 46.
• 43.7Ontario book publishing tax credit

  43.7 (1) A corporation that is an Ontario book publishing company for a taxation year and complies with the requirements of this section may deduct from its tax otherwise payable under this Part for a taxation year, after making all the deductions for the taxation year claimed under sections 39, 40, 41, 43 and 43.3 to 43.6, an amount not exceeding the amount of its Ontario book publishing tax credit for the taxation year. 1997, c. 43, Sched. A, s. 21; 2004, c. 16, s. 2 (2). Same (2) A corporation referred to in subsection (1) that complies with the requirements of this section may deduct from its tax otherwise payable for the year under Parts III and IV an amount not exceeding the amount by which its Ontario book publishing tax credit for the taxation year exceeds the maximum amount, if any, deductible by the corporation for the year under subsection (1). 1997, c. 43, Sched. A, s. 21; 20…

• 47.
• 43.8Ontario computer animation and special effects tax credit

  43.8 (1) A corporation that is a qualifying corporation for a taxation year and complies with the requirements of this section may deduct from its tax otherwise payable under this Part for the taxation year, after making all deductions claimed under sections 39, 40, 41, 43, 43.3, 43.4, 43.5, 43.6 and 43.7 for the taxation year, an amount not exceeding the amount of its Ontario computer animation and special effects tax credit for the taxation year. 1997, c. 43, Sched. A, s. 22; 2004, c. 16, s. 2 (2). Same (2) A corporation that is a qualifying corporation for a taxation year and complies with the requirements of this section may deduct from its tax otherwise payable for the year under Parts III and IV an amount not exceeding the amount by which its Ontario computer animation and special effects tax credit for the taxation year exceeds the maximum amount, if any, deductible by the corpora…

• 48.
• [s101]
• 43.9Ontario business-research institute tax credit

  43.9 (1) A corporation that is a qualifying corporation in respect of one or more eligible contracts for a taxation year and complies with the requirements of this section may deduct from its tax otherwise payable under this Part for the taxation year, after making all deductions claimed under sections 39, 40, 41, 43 and 43.2 to 43.8 for the taxation year, an amount not exceeding the amount of its Ontario business-research institute tax credit for the taxation year in respect of the contracts. 1997, c. 43, Sched. A, s. 23; 2004, c. 16, s. 2 (2). Same (2) A corporation referred to in subsection (1) that complies with the requirements of this section may deduct from its tax otherwise payable for the year under Parts III and IV an amount not exceeding the amount by which its Ontario business-research institute tax credit for the taxation year exceeds the maximum amount, if any, deductible b…

• 43.10Ontario production services tax credit

  43.10 (1) A corporation that is a qualifying corporation for a taxation year and complies with the requirements of this section may deduct from its tax otherwise payable under this Part for the taxation year, after making all deductions claimed under sections 39, 40, 41, 43 and 43.2 to 43.9 for the taxation year, an amount not exceeding the amount of its Ontario production services tax credit for the taxation year. 1998, c. 5, s. 17; 2004, c. 16, s. 2 (2). Same (2) A corporation that is a qualifying corporation for a taxation year and complies with the requirements of this section may deduct from its tax otherwise payable for the year under Parts III and IV of the Act an amount not exceeding the amount by which its Ontario production services tax credit for the taxation year exceeds the maximum amount, if any, deductible by the corporation for the year under subsection (1). 1998, c. 5, s…

• 49.
• [s103]
• 43.11Ontario interactive digital media tax credit

  43.11 (1) A corporation that is a qualifying corporation for a taxation year and complies with the requirements of this section may deduct from its tax otherwise payable under this Part for the taxation year, after making all deductions claimed under sections 39, 40, 41, 43 and 43.2 to 43.10 for the taxation year, an amount not exceeding the amount of its Ontario interactive digital media tax credit for the taxation year. 1998, c. 34, s. 42; 2004, c. 16, s. 2 (2). Same (2) A corporation that is a qualifying corporation for a taxation year and complies with the requirements of this section may deduct from its tax otherwise payable for the year under Parts III and IV of the Act an amount not exceeding the amount by which its Ontario interactive digital media tax credit for the taxation year exceeds the maximum amount, if any, deductible by the corporation for the year under subsection (1).…

• 50.
• 43.12Ontario sound recording tax credit

  43.12 (1) A corporation that is an eligible sound recording company for a taxation year and complies with the requirements of this section may deduct from its tax otherwise payable under this Part for a taxation year, after making all the deductions for the taxation year claimed under sections 39, 40, 41, 43 and 43.3 to 43.11, an amount not exceeding the amount of its Ontario sound recording tax credit for the taxation year. 1998, c. 34, s. 43; 2004, c. 16, s. 2 (2). Same (2) A corporation referred to in subsection (1) that complies with the requirements of this section may deduct from its tax otherwise payable for the year under Parts III and IV an amount not exceeding the amount by which its Ontario sound recording tax credit for the taxation year exceeds the maximum amount, if any, deductible by the corporation for the year under subsection (1). 1998, c. 34, s. 43; 2004, c. 16, s. 2 (…

• 51.
• [s105]
• 43.13Apprenticeship training tax credit

  43.13 (1) A corporation that complies with the requirements of this section may deduct from its tax otherwise payable under this Part for a taxation year, after making all deductions claimed under sections 39 to 41, 43 and 43.3 to 43.12 for the taxation year, an amount not exceeding the amount of its apprenticeship training tax credit for the taxation year. 2004, c. 31, Sched. 9, s. 22. Same (2) A corporation that complies with the requirements of this section may deduct from its tax otherwise payable for the year under Parts III and IV an amount not exceeding the amount by which its apprenticeship training tax credit for the taxation year exceeds the maximum amount, if any, deductible by the corporation for the year under subsection (1). 2004, c. 31, Sched. 9, s. 22. Amount of tax credit (3) The amount of a corporation’s apprenticeship training tax credit for a taxation year is the tota…

• 52.
• 44Tax on tax

  44 Where, under a contract, will or trust, made or created before the 14th day of May, 1953, a person is required to make a payment to a corporation and is required by the terms of the contract, will or trust to pay an additional amount measured by reference to tax payable by such corporation under Part I of the Income Tax Act (Canada) and Part II of this Act by reason of the payment, (a) the tax payable by the corporation under Part II of this Act for the taxation year in or in respect of which such payment is made or becomes payable is the amount that the tax of the corporation under Part II of this Act would be if no amount under the contract were included in computing its income for the taxation year plus, (i) the amount by which its tax under Part II of this Act would be increased by including in computing its income, (A) the payment, and (B) the amount by which its tax under Part I…

• 53.
• [s107]

  Division F — Special Rules Applicable in Certain Circumstances

• 54.
• [s108]
• 44.1Rules applicable to specified tax credits

  44.1 (1) Despite any other provision of this Act, a corporation that is exempt from tax under this Act for a taxation year by virtue of section 57 shall not deduct or claim an amount in respect of a specified tax credit under this Act for the taxation year. 1996, c. 24, s. 27; 2004, c. 16, s. 2 (2). Same (2) A corporation shall be considered not to be entitled to deduct an amount from tax payable under this Part for a taxation year in respect of a specified tax credit, for the purposes of determining an amount referred to in sub-subclause 43.1 (2) (a) (ii) (A), subclause 43.1 (2) (b) (ii) or 43.1 (3) (b) (ii) or clause 43.1 (3.2) (b), 57.3 (2) (b) or 74.1 (1) (b). 1996, c. 24, s. 27; 1996, c. 29, s. 51 (1); 2004, c. 16, s. 2 (2); 2007, c. 7, Sched. 6, s. 5. Same (3) A deduction allowed to a corporation under subsection 43.1 (2) for a taxation year shall not exceed the amount of tax payab…

• 45If corporation bankrupt

  45 If a corporation has become bankrupt, the rules provided in section 128 of the Income Tax Act (Canada) apply for the purposes of this Act. 1999, c. 9, s. 82; 2004, c. 16, s. 2 (2). Section Amendments with date in force (d/m/y) 1999, c. 9, s. 82 - 27/04/1995 2004, c. 16, s. 2 (2) - 01/01/2004

• 55.
• [s110]
• 45.1Application of Income Tax Act (Canada), ss. 128.1, 128.2

  45.1 Sections 128.1 and 128.2 of the Income Tax Act (Canada), in so far as they apply to corporations, are applicable for the purposes of this Act. 1996, c. 29, s. 52; 2004, c. 16, s. 2 (2). Section Amendments with date in force (d/m/y) 1996, c. 29, s. 52 - 01/01/1993 2004, c. 16, s. 2 (2) - 01/01/2004