I-3 - Taxation Act

Section 1138.2.2 Disposition versions

2012-05-09

1138.2.2. A corporation that carries on, in a taxation year, a recognized business in connection with which a major investment project was carried out or is in the process of being carried out, or is a member of a partnership that carries on, in a fiscal period of the partnership that ends in the year, such a recognized business, may deduct from its paid-up capital otherwise determined for the year under this Title, the aggregate of all amounts each of which is, in relation to a particular major investment project of the corporation or partnership, the proportion of the amount that would be the corporation’s paid-up capital otherwise determined for the year under this Title if such capital were established on the sole basis of the financial statements referred to in subparagraph c or d of the second paragraph in relation to the particular major investment project, that the number of days in the eligibility period of the corporation for the year or of the partnership for the fiscal period, as the case may be, in relation to the particular major investment project, is of the number of days in the taxation year or fiscal period, as the case may be.

However, a deduction is allowed under the first paragraph for a taxation year in respect of a major investment project of the corporation or partnership, only if the corporation encloses, with its fiscal return it is required to file under section 1000 for the year, the following documents:

(a)  the prescribed form containing the prescribed information;

(b)  a copy of the initial qualification certificate issued to the corporation or partnership in relation to the major investment project, and of any annual qualification certificate for the taxation year of the corporation or the fiscal period of the partnership issued in relation to the major investment project;

(c)  where the recognized business is carried on by the corporation, the financial statements of the corporation prepared in accordance with generally accepted accounting principles but pertaining only to the eligible activities of the corporation, in relation to the major investment project, and, if applicable, the financial statements of a joint venture in which the corporation has an interest, prepared in accordance with those principles but pertaining only to the activities carried on by the joint venture that would be eligible activities of a corporation, in relation to the major investment project, if the joint venture were a corporation; and

(d)  where the recognized business is carried on by the partnership,

i.  the financial statements of the partnership prepared in accordance with generally accepted accounting principles but pertaining only to the eligible activities of the partnership, in relation to the major investment project,

ii.  if applicable, the financial statements of a joint venture in which the partnership has an interest, prepared in accordance with generally accepted accounting principles but pertaining only to the activities carried on by the joint venture that would be eligible activities of a partnership, in relation to the major investment project, if the joint venture were a partnership, and

iii.  the financial statements of the corporation prepared in accordance with generally accepted accounting principles but pertaining only to the elements attributable to the eligible activities of the partnership, in relation to the major investment project, and, where applicable, only to the elements attributable to the activities referred to in subparagraph ii.

For the purposes of subparagraph b of the second paragraph, where, at any time, a corporation or partnership acquires from another corporation or partnership all or substantially all of a recognized business, and the Minister of Finance previously authorized the acquisition for the purposes of this Book, the initial qualification certificate issued to the other corporation or partnership, in relation to the major investment project, is deemed to have been issued, from that time, to the corporation or partnership, as the case may be.

The amounts reported in the financial statements referred to in subparagraph c or d of the second paragraph of the corporation, partnership or joint venture must be the same as the amounts that, in respect of eligible activities, activities or elements attributable to eligible activities or activities referred to in that subparagraph, were taken into account in determining the amounts reported in the financial statements of the corporation, partnership or joint venture, as the case may be, otherwise prepared under this Part.

2002, c. 9, s. 131; 2009, c. 5, s. 560; 2012, c. 8, s. 248.

2009-05-15

1138.2.2. A corporation that carries on, in a taxation year, a recognized business in connection with which a major investment project was carried out or is in the process of being carried out, or is a member of a partnership that carries on, in a fiscal period of the partnership that ends in the year, such a recognized business, may deduct from its paid-up capital otherwise determined for the year under this Title, the aggregate of all amounts each of which is, in relation to a particular major investment project of the corporation or partnership, the proportion of the amount that would be the corporation’s paid-up capital otherwise determined for the year under this Title if such capital were established on the sole basis of the financial statements referred to in subparagraph c or d of the second paragraph in relation to the particular major investment project, that the number of days in the eligibility period of the corporation for the year or of the partnership for the fiscal period, as the case may be, in relation to the particular major investment project, is of the number of days in the taxation year or fiscal period, as the case may be.

However, a deduction is allowed under the first paragraph for a taxation year in respect of a major investment project of the corporation or partnership, only if the corporation encloses, with its fiscal return it is required to file under section 1000 for the year, the following documents:

(a)  the prescribed form containing the prescribed information;

(b)  a copy of the unrevoked initial qualification certificate issued to the corporation or partnership in relation to the major investment project, and of any valid annual qualification certificate for the taxation year of the corporation or the fiscal period of the partnership issued in relation to the major investment project;

(c)  where the recognized business is carried on by the corporation, the financial statements of the corporation prepared in accordance with generally accepted accounting principles but pertaining only to the eligible activities of the corporation, in relation to the major investment project, and, if applicable, the financial statements of a joint venture in which the corporation has an interest, prepared in accordance with those principles but pertaining only to the activities carried on by the joint venture that would be eligible activities of a corporation, in relation to the major investment project, if the joint venture were a corporation; and

(d)  where the recognized business is carried on by the partnership,

i.  the financial statements of the partnership prepared in accordance with generally accepted accounting principles but pertaining only to the eligible activities of the partnership, in relation to the major investment project,

ii.  if applicable, the financial statements of a joint venture in which the partnership has an interest, prepared in accordance with generally accepted accounting principles but pertaining only to the activities carried on by the joint venture that would be eligible activities of a partnership, in relation to the major investment project, if the joint venture were a partnership, and

iii.  the financial statements of the corporation prepared in accordance with generally accepted accounting principles but pertaining only to the elements attributable to the eligible activities of the partnership, in relation to the major investment project, and, where applicable, only to the elements attributable to the activities referred to in subparagraph ii.

For the purposes of subparagraph b of the second paragraph, where, at any time, a corporation or partnership acquires from another corporation or partnership all or substantially all of a recognized business, and the Minister of Finance previously authorized the acquisition for the purposes of this Book, the initial qualification certificate issued to the other corporation or partnership, in relation to the major investment project, is deemed to have been issued, from that time, to the corporation or partnership, as the case may be.

The amounts reported in the financial statements referred to in subparagraph c or d of the second paragraph of the corporation, partnership or joint venture must be the same as the amounts that, in respect of eligible activities, activities or elements attributable to eligible activities or activities referred to in that subparagraph, were taken into account in determining the amounts reported in the financial statements of the corporation, partnership or joint venture, as the case may be, otherwise prepared under this Part.

2002, c. 9, s. 131; 2009, c. 5, s. 560.

2006-03-01

1138.2.2. A corporation that carries on, in a taxation year, a recognized business in connection with which a major investment project was carried out or is in the process of being carried out, or is a member of a partnership that carries on, in a fiscal period of the partnership that ends in the year, such a recognized business, may deduct from its paid-up capital otherwise determined for the year under this Title, the aggregate of all amounts each of which is, in relation to a particular major investment project of the corporation or partnership, the proportion of the amount that would be the corporation’s paid-up capital otherwise determined for the year under this Title if such capital were established on the sole basis of the financial statements referred to in subparagraph c or d of the second paragraph in relation to the particular major investment project, that the number of days in the eligibility period of the corporation for the year or of the partnership for the fiscal period, as the case may be, in relation to the particular major investment project, is of the number of days in the taxation year or fiscal period, as the case may be.

However, a deduction is allowed under the first paragraph for a taxation year in respect of a major investment project of the corporation or partnership, only if the corporation encloses, with its fiscal return it is required to file under section 1000 for the year, the following documents:

(a)  the prescribed form containing the prescribed information;

(b)  a copy of the unrevoked initial qualification certificate issued to the corporation or partnership in relation to the major investment project, and of any valid annual qualification certificate for the taxation year of the corporation or the fiscal period of the partnership issued in relation to the major investment project;

(c)  where the recognized business is carried on by the corporation, the financial statements of the corporation prepared in accordance with generally accepted accounting principles but pertaining only to the eligible activities of the corporation, in relation to the major investment project, and, as the case may be, the financial statements of a joint venture in which the corporation has an interest and that carries on activities arising from the major investment project, prepared in accordance with those principles but pertaining only to those latter activities; and

(d)  where the recognized business is carried on by the partnership,

i.  the financial statements of the partnership prepared in accordance with generally accepted accounting principles but pertaining only to the eligible activities of the partnership, in relation to the major investment project,

ii.  where applicable, the financial statements of a joint venture in which the partnership has an interest and that carries on activities arising from the major investment project, prepared in accordance with generally accepted accounting principles but pertaining only to those activities, and

iii.  the financial statements of the corporation prepared in accordance with generally accepted accounting principles but pertaining only to the elements attributable to the eligible activities of the partnership, in relation to the major investment project, and, where applicable, only to the elements attributable to the activities referred to in subparagraph ii.

For the purposes of subparagraph b of the second paragraph, where, at any time, a corporation or partnership acquires from another corporation or partnership all or substantially all of a recognized business, and the Minister of Finance previously authorized the acquisition for the purposes of this Book, the initial qualification certificate issued to the other corporation or partnership, in relation to the major investment project, is deemed to have been issued, from that time, to the corporation or partnership, as the case may be.

The amounts reported in the financial statements referred to in subparagraph c or d of the second paragraph of the corporation, partnership or joint venture must be the same as the amounts that, in respect of eligible activities, activities or elements attributable to eligible activities or activities referred to in that subparagraph, were taken into account in determining the amounts reported in the financial statements of the corporation, partnership or joint venture, as the case may be, otherwise prepared under this Part.

2002, c. 9, s. 131.