I-3 - Taxation Act

Section 737.18.17.2 Disposition versions

2019-06-19

737.18.17.2. For the purposes of this Title, to determine the income or loss of a corporation for a taxation year, or of a partnership for a fiscal period, from its eligible activities in relation to a large investment project, the income or loss is to be computed as if

(a)  the eligible activities were the carrying on of a separate business; and

(b)  the corporation or partnership were deducting in computing its income for the taxation year or fiscal period and had deducted in computing its income for any preceding taxation year or fiscal period, in relation to the separate business, the maximum amount in respect of any reserve, allowance or other amount.

For the purposes of subparagraph b of the first paragraph, the undepreciated capital cost, on the date described in the third paragraph for the corporation or partnership, in respect of the large investment project, of depreciable property of a prescribed class in relation to the separate business referred to in subparagraph a of the first paragraph, is deemed to include the amount that is the amount by which the total depreciation, within the meaning of paragraph b of section 93, allowed to the corporation or partnership, as the case may be, before that date, in respect of property of that class, exceeds the aggregate of 102 all amounts each of which is an amount that the corporation or partnership, as the case may be, included, under section 94, in respect of property of that class, in computing its income for a taxation year or fiscal period that ended before that date.

The date to which the second paragraph refers is the date of the beginning of the tax-free period in respect of the large investment project or, in the case of a deemed large investment project within the meaning of section 737.18.17.1.1, of the first large investment project, unless the corporation or partnership acquired all or substantially all of the recognized business in relation to the large investment project and the Minister of Finance authorized the transfer of the carrying out of the project to the corporation or partnership, according to the qualification certificate issued to the corporation or partnership, in relation to the project, in which case it is the date of acquisition of the recognized business.

Where a large investment project concerns the development of a digital platform, the income or loss of a corporation or partnership in relation to the project determined in accordance with the first paragraph is only to take into account the income reasonably attributable to the use of the digital platform, which includes the fees and royalties charged by the corporation or partnership for the use of that platform, the part of the subscription fees to that platform that can reasonably be considered to have been paid for its use, except for any part of the fees paid as consideration for services received or property acquired, the amounts paid by a third party to use it as a gateway to the third party’s own website, or any other similar amount.

The income or loss of a corporation or partnership from its eligible activities in relation to a deemed large investment project within the meaning of section 737.18.17.1.1, for a taxation year or fiscal period that ends after the last day of the tax-free period in respect of the first large investment project (in this section referred to as the “particular day”) is deemed to be equal to

(a)  where the taxation year or fiscal period includes the particular day, the amount determined by the formula

A − {A × [B/(B + C)] × D}; or

(b)  in any other case, the amount determined by the formula

A × [C/(B + C)].

In the formulas in the fifth paragraph,

(a)  A is the income or loss of the corporation for the taxation year, or of the partnership for the fiscal period, from its eligible activities in relation to the deemed large investment project, otherwise determined;

(b)  B is the total qualified capital investments of the corporation or partnership, in relation to the first large investment project, on the date of the beginning of the tax-free period in respect of the project;

(c)  C is the total qualified capital investments of the corporation or partnership, in relation to the second large investment project, on the date of the beginning of the tax-free period in respect of the project; and

(d)  D is the proportion that the number of days in the taxation year or fiscal period that follow the particular day is of the number of days in that taxation year or fiscal period.

2015, c. 21, s. 260; 2019, c. 14, s. 199.

2015-10-21

737.18.17.2. For the purposes of this Title, to determine the income or loss of a corporation for a taxation year, or of a partnership for a fiscal period, from its eligible activities in relation to a large investment project, the income or loss is to be computed as if

(a)  the eligible activities were the carrying on of a separate business; and

(b)  the corporation or partnership were deducting in computing its income for the taxation year or fiscal period and had deducted in computing its income for any preceding taxation year or fiscal period, in relation to the separate business, the maximum amount in respect of any reserve, allowance or other amount.

For the purposes of subparagraph b of the first paragraph, the following rules must be taken into consideration:

(a)  the undepreciated capital cost, on the date described in the third paragraph for the corporation or partnership, in respect of the large investment project, of depreciable property of a prescribed class in relation to the separate business referred to in subparagraph a of the first paragraph, is deemed to include the amount that is the amount by which the total depreciation, within the meaning of paragraph b of section 93, allowed to the corporation or partnership, as the case may be, before that date, in respect of property of that class, exceeds the aggregate of all amounts each of which is an amount that the corporation or partnership, as the case may be, included, under section 94, in respect of property of that class, in computing its income for a taxation year or fiscal period ending before that date; and

(b)  the eligible incorporeal capital amount of the corporation or partnership, in respect of the separate business referred to in subparagraph a of the first paragraph, on the date described in the third paragraph for the corporation or partnership, in relation to the large investment project, is deemed to include the amount that is the amount by which the aggregate of all amounts each of which is an amount that the corporation or partnership, as the case may be, deducted in computing its income from the separate business, under paragraph b of section 130, for a taxation year or fiscal period that ended before that date, exceeds the aggregate of all amounts each of which is an amount that the corporation or partnership, as the case may be, included in computing its income from the separate business under section 105 for such a taxation year or fiscal period.

The date to which subparagraphs a and b of the second paragraph refer is the date of the beginning of the tax-free period in respect of the large investment project, unless the corporation or partnership acquired all or substantially all of the recognized business in relation to the large investment project and the Minister of Finance authorized the transfer of the carrying out of the project to the corporation or partnership, according to the qualification certificate issued to the corporation or partnership, in relation to the project, in which case it is the date of acquisition of the recognized business.

2015, c. 21, s. 260.