I-3 - Taxation Act

Section 1029.8.19.7 Disposition versions

2007-11-07

1029.8.19.7. For the purposes of the first paragraph of section 1029.8.19.2, in respect of a scientific research and experimental development project referred to in that paragraph or in respect of the carrying out of such a project, and for the purposes of the second paragraph of that section, in respect of a contract for work relating to scientific research and experimental development referred to in that paragraph, or in respect of the performance of the contract, a contribution whether in the form of a payment in currency, a transfer of ownership of a property, an assignment of the use or of the right to use a property, referred to in subparagraph a of the third paragraph of section 1029.8.19.2, is deemed, subject to a determination to the contrary by the Minister, not to be a contribution in respect of the project or its carrying out, or in respect of the contract or its performance, as the case may be, if

(a)  the contribution results from the acquisition of a property or the provision of a service following a transaction occurring in the ordinary course of a business carried on by the taxpayer, the partnership, the member or a person referred to in the first or second paragraph of section 1029.8.19.2;

(b)  the property or the provision of the service that is the subject of the transaction is acquired or supplied for an amount not exceeding its fair market value if the person or the partnership making the contribution is the purchaser of the property or of the provision of the service and for an amount that is not less than its fair market value if the person or the partnership making the contribution is the person or partnership disposing of the property or supplying the provision of the service; and

(c)  the contribution is not in the form of an expenditure made to undertake the scientific research and experimental development referred to in the first paragraph of section 1029.8.19.3 or the work relating to scientific research and experimental development referred to in the second paragraph of section 1029.8.19.3, or to cause such scientific research and experimental development or such work relating to scientific research and experimental development to be undertaken.

1995, c. 63, s. 151; 1997, c. 3, s. 71; 1997, c. 14, s. 209; 2002, c. 40, s. 113; 2003, c. 9, s. 188; 2004, c. 21, s. 281; 2007, c. 12, s. 141.

2006-03-01

1029.8.19.7. For the purposes of the first paragraph of sections 1029.8.19.2 and 1029.8.19.5, in respect of a scientific research and experimental development project referred to in that paragraph or in respect of the carrying out of such a project, and for the purposes of the second paragraph of those sections, in respect of a contract for work relating to scientific research and experimental development referred to in that paragraph, or in respect of the performance of the contract, the following rules apply:

(a)  a contribution whether in the form of a payment in currency, a transfer of ownership of a property, an assignment of the use or of the right to use a property, referred to, as the case may be, in subparagraph a of the third paragraph of section 1029.8.19.2 or subparagraph c of the third paragraph of section 1029.8.19.5, is deemed, subject to a determination to the contrary by the Minister, not to be a contribution in respect of the project or the carrying out thereof, or in respect of the contract or the performance thereof, as the case may be, where

i.  the contribution results from the acquisition of property or the provision of a service following a transaction occurring in the ordinary course of a business carried on by the taxpayer, the partnership, the member or a person referred to in the first or second paragraph, as the case may be, of section 1029.8.19.2 or 1029.8.19.5,

ii.  the property or the provision of the service that is the subject of the transaction is acquired or supplied for an amount not exceeding its fair market value where the person or the partnership making the contribution is the purchaser of the property or of the provision of the service and for an amount that is not less than its fair market value where the person or the partnership making the contribution is the person or partnership who or that is disposing of the property or supplying the provision of the service, and

iii.  in respect of a contribution referred to in the first or second paragraph of section 1029.8.19.2, the contribution is not in the form of an expenditure made to undertake the scientific research and experimental development referred to in the first paragraph of section 1029.8.19.3 or the work relating to scientific research and experimental development referred to in the second paragraph of that section 1029.8.19.3, or to cause such scientific research and experimental development or such work relating to scientific research and experimental development to be undertaken; and

(b)  where the intellectual property relating to a particular technology is, at a particular time, disposed of by an eligible public research centre, within the meaning of paragraph a.1 of section 1029.8.1, by an eligible university entity, within the meaning of paragraph f of that section, by a person that is not dealing at arm’s length at that time with that centre or entity, by a partnership of which that centre or entity is a member, or by any person designated by the Minister in accordance with section 1029.8.19.2 or 1029.8.19.5, in this paragraph referred to as the “transferee”, to a corporation, as consideration for the issue to the transferee by the corporation of shares with full voting rights of the corporation’s capital stock for an amount that is not less than the fair market value of that intellectual property, and the corporation, or a partnership of which the corporation is a member, enters into a contract referred to in any of sections 1029.7, 1029.8, 1029.8.6 and 1029.8.7 with that centre or entity, the disposition is deemed not to be a contribution in respect of that project or the carrying out thereof or in respect of that contract or the performance thereof.

1995, c. 63, s. 151; 1997, c. 3, s. 71; 1997, c. 14, s. 209; 2002, c. 40, s. 113; 2003, c. 9, s. 188; 2004, c. 21, s. 281.