I-3 - Taxation Act

Section 119.5 Disposition versions

2006-03-01

119.5. Notwithstanding any other provision of this Part, except for the purposes of subparagraph i of paragraph d.2 of subsection 1 of section 771 and sections 771.2.1.2, 771.8.3 and 771.8.5, the taxable income of a corporation that has issued an obligation that is at any time a development bond is deemed, for a taxation year that includes a period throughout which the obligation was a development bond, to be an amount equal to the aggregate of its taxable income otherwise determined for the year and the amount paid or payable, depending on the method regularly followed in computing the income of the corporation, as interest on the obligation in respect of that period, at a time when

(a)  the corporation was not a qualified corporation; or

(b)  (paragraph repealed);

(c)  all or substantially all of the proceeds from the issue of the obligation cannot reasonably be regarded as having been used by the corporation or a corporation with which it was not dealing at arm’s length in the financing of a qualified business carried on in Canada immediately before the time of the issue of the obligation.

1982, c. 5, s. 36; 1984, c. 15, s. 27; 1987, c. 67, s. 30; 1989, c. 5, s. 37; 1992, c. 1, s. 25; 1994, c. 22, s. 84; 1995, c. 63, s. 28; 1997, c. 3, s. 71; 1997, c. 85, s. 50; 2000, c. 39, s. 12; 2005, c. 38, s. 61.