I-3 - Taxation Act

Section 418.17 Disposition versions

2020-09-24

418.17. Subject to sections 418.22 and 418.24, where after 31 December 1971 a corporation acquires, in any manner whatsoever, a particular foreign resource property, referred to in this section as “particular property”, it may deduct in computing its income for a taxation year an amount not exceeding the aggregate of all amounts each of which is an amount equal to the lesser of the amount referred to in the second paragraph and the amount referred to in the third paragraph determined in respect of an original owner of the particular property.

The first amount to which the first paragraph refers is equal to the amount by which

(a)  the amount of foreign exploration and development expenses incurred by the original owner before the disposition of the particular property by the original owner, to the extent that those expenses were incurred when the original owner was resident in Canada, were not otherwise deducted in computing the income of the corporation for the year, were not deducted in computing the income of the corporation for any preceding taxation year or in computing the income of any predecessor owner of the particular property for any taxation year and were not deductible in computing the income of the original owner for any taxation year, exceeds

(b)  the aggregate of all amounts by which the amount determined under this paragraph is required, because of section 485.8, to be reduced at or before the end of the year.

The last amount to which the first paragraph refers is equal to the amount by which

(a)  the aggregate of

i.  the part of the corporation’s income for the year, determined before any deduction under any of sections 359 to 419.6, that may reasonably be regarded as attributable to

(1)  the amount included in computing its income for the year under paragraph a of section 330, that may reasonably be regarded as attributable to the disposition by the corporation of any right in or to the particular property, or

(2)  production from the particular property, and

ii.  the lesser of

(1)  the aggregate of all amounts each of which is the amount designated by the corporation for the year in respect of a Canadian resource property owned by the original owner immediately before being acquired with the particular property by the corporation or a predecessor owner of the particular property, not exceeding the amount included in computing the corporation’s income for the year, determined before any deduction under section 88.4 of the Act respecting the application of the Taxation Act (chapter I-4) and sections 359 to 419.6, that may reasonably be regarded as being attributable to the production, after 31 December 1988, from the Canadian resource property, and

(2)  the amount by which 10% of the amount described in the second paragraph for the year in respect of the original owner exceeds the aggregate of all amounts each of which would, but for this subparagraph ii, subparagraph ii of paragraph b and subparagraph ii of subparagraph f of the first paragraph of section 418.26, be determined under this paragraph for the year in respect of the particular property or other foreign resource property owned by the original owner immediately before being acquired with the particular property by the corporation or a predecessor owner of the particular property, exceeds

(b)  the aggregate of

i.  any other amount deducted for the year under this section and section 418.19 as a result of the application of subparagraph c of the first paragraph of section 418.20 that can reasonably be regarded as attributable to the part of its income for the year described in subparagraph i of subparagraph a in respect of the particular property,

ii.  any other amount deducted for the year under this section that can reasonably be regarded as attributable to the part of its income referred to in subparagraph 1 of subparagraph ii of subparagraph a for the year in respect of which an amount is designated by the corporation under the said subparagraph 1, and

iii.  any other amount added, because of section 485.13, in computing the amount determined under subparagraph i of subparagraph a.

Income in respect of which an amount is designated under subparagraph 1 of subparagraph ii of subparagraph a of the third paragraph is deemed, for the purposes of subparagraph iii of subparagraph a of the third paragraph of sections 418.16 and 418.18, subparagraph 2 of subparagraph i of subparagraph a of the third paragraph of section 418.19, subparagraph i of subparagraph c of the first paragraph of section 418.20, subparagraph 2 of subparagraph i of subparagraph a of the third paragraph of section 418.21, paragraph a of section 418.28 of this Act and section 88.4 of the Act respecting the application of the Taxation Act, to the extent that that section refers to clause B of subparagraph i of paragraph d of subsection 25 of section 29 of the Income Tax Application Rules (R.S.C. 1985, c. 2 (5th Suppl.)), not to be attributable to production from a Canadian resource property.

1989, c. 77, s. 49; 1993, c. 16, s. 166; 1995, c. 49, s. 110; 1996, c. 39, s. 118; 1997, c. 3, s. 71; 1998, c. 16, s. 251; 2000, c. 5, s. 293; 2004, c. 8, s. 83; 2009, c. 5, s. 132; 2020, c. 16, s. 191.

2009-05-15

418.17. Subject to sections 418.22 and 418.24, where after 31 December 1971 a corporation acquires, in any manner whatsoever, a particular foreign resource property, referred to in this section as “particular property”, it may deduct in computing its income for a taxation year an amount not exceeding the aggregate of all amounts each of which is an amount equal to the lesser of the amount referred to in the second paragraph and the amount referred to in the third paragraph determined in respect of an original owner of the particular property.

The first amount to which the first paragraph refers is equal to the amount by which

(a)  the amount of foreign exploration and development expenses incurred by the original owner before the disposition of the particular property by the original owner, to the extent that those expenses were incurred when the original owner was resident in Canada, were not otherwise deducted in computing the income of the corporation for the year, were not deducted in computing the income of the corporation for any preceding taxation year or in computing the income of any predecessor owner of the particular property for any taxation year and were not deductible in computing the income of the original owner for any taxation year, exceeds

(b)  the aggregate of all amounts by which the amount determined under this paragraph is required, because of section 485.8, to be reduced at or before the end of the year.

The last amount to which the first paragraph refers is equal to the amount by which

(a)  the aggregate of

i.  the part of the corporation’s income for the year, determined before any deduction under any of sections 359 to 419.6, that may reasonably be regarded as attributable to

(1)  the amount included in computing its income for the year under paragraph a of section 330, that may reasonably be regarded as attributable to the disposition by the corporation of any interest in or right to the particular property, or

(2)  production from the particular property, and

ii.  the lesser of

(1)  the aggregate of all amounts each of which is the amount designated by the corporation for the year in respect of a Canadian resource property owned by the original owner immediately before being acquired with the particular property by the corporation or a predecessor owner of the particular property, not exceeding the amount included in computing the corporation’s income for the year, determined before any deduction under section 88.4 of the Act respecting the application of the Taxation Act (chapter I-4) and sections 359 to 419.6, that may reasonably be regarded as being attributable to the production, after 31 December 1988, from the Canadian resource property, and

(2)  the amount by which 10% of the amount described in the second paragraph for the year in respect of the original owner exceeds the aggregate of all amounts each of which would, but for this subparagraph ii, subparagraph ii of paragraph b and subparagraph ii of subparagraph f of the first paragraph of section 418.26, be determined under this paragraph for the year in respect of the particular property or other foreign resource property owned by the original owner immediately before being acquired with the particular property by the corporation or a predecessor owner of the particular property, exceeds

(b)  the aggregate of

i.  any other amount deducted for the year under this section and section 418.19 as a result of the application of subparagraph c of the first paragraph of section 418.20 that can reasonably be regarded as attributable to the part of its income for the year described in subparagraph i of subparagraph a in respect of the particular property,

ii.  any other amount deducted for the year under this section that can reasonably be regarded as attributable to the part of its income referred to in subparagraph 1 of subparagraph ii of subparagraph a for the year in respect of which an amount is designated by the corporation under the said subparagraph 1, and

iii.  any other amount added, because of section 485.13, in computing the amount determined under subparagraph i of subparagraph a.

Income in respect of which an amount is designated under subparagraph 1 of subparagraph ii of subparagraph a of the third paragraph is deemed, for the purposes of subparagraph iii of subparagraph a of the third paragraph of sections 418.16 and 418.18, subparagraph 2 of subparagraph i of subparagraph a of the third paragraph of section 418.19, subparagraph i of subparagraph c of the first paragraph of section 418.20, subparagraph 2 of subparagraph i of subparagraph a of the third paragraph of section 418.21, paragraph a of section 418.28 of this Act and section 88.4 of the Act respecting the application of the Taxation Act, to the extent that that section refers to clause B of subparagraph i of paragraph d of subsection 25 of section 29 of the Income Tax Application Rules (R.S.C. 1985, c. 2 (5th Suppl.)), not to be attributable to production from a Canadian resource property.

1989, c. 77, s. 49; 1993, c. 16, s. 166; 1995, c. 49, s. 110; 1996, c. 39, s. 118; 1997, c. 3, s. 71; 1998, c. 16, s. 251; 2000, c. 5, s. 293; 2004, c. 8, s. 83; 2009, c. 5, s. 132.

2006-03-01

418.17. Subject to sections 418.22 and 418.24, where after 31 December 1971 a corporation acquires, in any manner whatsoever, a particular foreign resource property, referred to in this section as “particular property”, it may deduct in computing its income for a taxation year an amount not exceeding the aggregate of all amounts each of which is an amount equal to the lesser of the amount referred to in the second paragraph and the amount referred to in the third paragraph determined in respect of an original owner of the particular property.

The first amount to which the first paragraph refers is equal to the amount by which

(a)  the amount of foreign exploration and development expenses incurred by the original owner before the disposition of the particular property by the original owner, to the extent that those expenses were incurred when the original owner was resident in Canada, were not otherwise deducted in computing the income of the corporation for the year, were not deducted in computing the income of the corporation for any preceding taxation year or in computing the income of any predecessor owner of the particular property for any taxation year and were not deductible in computing the income of the original owner for any taxation year, exceeds

(b)  the aggregate of all amounts by which the amount determined under this paragraph is required, because of section 485.8, to be reduced at or before the end of the year.

The last amount to which the first paragraph refers is equal to the amount by which

(a)  the aggregate of

i.  the part of the corporation’s income for the year, determined before any deduction under any of sections 359 to 419.6, that may reasonably be regarded as attributable to

(1)  the amount included in computing its income for the year under paragraph a of section 330, that may reasonably be regarded as attributable to the disposition by the corporation of any interest in or right to the particular property, or

(2)  production from the particular property, and

ii.  the lesser of

(1)  the aggregate of all amounts each of which is the amount designated by the corporation for the year in respect of a Canadian resource property owned by the original owner immediately before being acquired with the particular property by the corporation or a predecessor owner of the particular property, not exceeding the amount included in computing the corporation’s income for the year, determined before any deduction under section 88.4 of the Act respecting the application of the Taxation Act (chapter I-4) and sections 359 to 419.6, that may reasonably be regarded as being attributable to the production, after 31 December 1988, from the Canadian resource property, and

(2)  the amount by which 10% of the amount described in the second paragraph for the year in respect of the original owner exceeds the aggregate of all amounts each of which would, but for this subparagraph ii, subparagraph ii of paragraph b and subparagraph ii of paragraph f of section 418.26, be determined under this paragraph for the year in respect of the particular property or other foreign resource property owned by the original owner immediately before being acquired with the particular property by the corporation or a predecessor owner of the particular property, exceeds

(b)  the aggregate of

i.  any other amount deducted for the year under this section and section 418.19 as a result of the application of subparagraph c of the first paragraph of section 418.20 that can reasonably be regarded as attributable to the part of its income for the year described in subparagraph i of subparagraph a in respect of the particular property,

ii.  any other amount deducted for the year under this section that can reasonably be regarded as attributable to the part of its income referred to in subparagraph 1 of subparagraph ii of subparagraph a for the year in respect of which an amount is designated by the corporation under the said subparagraph 1, and

iii.  any other amount added, because of section 485.13, in computing the amount determined under subparagraph i of subparagraph a.

Income in respect of which an amount is designated under subparagraph 1 of subparagraph ii of subparagraph a of the third paragraph is deemed, for the purposes of subparagraph iii of subparagraph a of the third paragraph of sections 418.16 and 418.18, subparagraph 2 of subparagraph i of subparagraph a of the third paragraph of section 418.19, subparagraph i of subparagraph c of the first paragraph of section 418.20, subparagraph 2 of subparagraph i of subparagraph a of the third paragraph of section 418.21, paragraph a of section 418.28 of this Act and section 88.4 of the Act respecting the application of the Taxation Act, to the extent that that section refers to clause B of subparagraph i of paragraph d of subsection 25 of section 29 of the Income Tax Application Rules (Revised Statutes of Canada, 1985, chapter 2, 5th Supplement), not to be attributable to production from a Canadian resource property.

1989, c. 77, s. 49; 1993, c. 16, s. 166; 1995, c. 49, s. 110; 1996, c. 39, s. 118; 1997, c. 3, s. 71; 1998, c. 16, s. 251; 2000, c. 5, s. 293; 2004, c. 8, s. 83.