I-3 - Taxation Act

Section 737.18.17.5 Disposition versions

2024-05-07

737.18.17.5. A corporation that, in a taxation year, carries on a recognized business in relation to a large investment project or is a member of a partnership that carries on such a recognized business in the partnership’s fiscal period ending in that year may, subject to the third paragraph, deduct in computing its taxable income for the year, if a certificate has been issued for the year or fiscal period in relation to the large investment project, an amount not exceeding the portion of its income for the year that may reasonably be considered to be equal, as the case may be,

(a)  where subparagraph b does not apply, to the lesser of the amount determined in accordance with section 737.18.17.6, in respect of the corporation for the year, and the aggregate of

i.  the amount determined by the formula

(A – B) – C, and

ii.  the aggregate of all amounts each of which is the corporation’s share of the amount determined, in respect of such a partnership of which the corporation is a member, by the formula

(D – E) – F; or

(b)  if the certificate certifies that the corporation or the partnership, as the case may be, has elected to use the alternate computation method provided for in section 737.18.17.5.1, to the lesser of the amount determined in respect of the corporation for the year in accordance with that section and of its adjusted taxable income for that year.

In the formulas in the first paragraph,

(a)  A is the aggregate of all amounts each of which is equal to the amount obtained by multiplying the corporation’s income for the taxation year from its eligible activities, in relation to a large investment project, by the proportion that the number of days in the corporation’s tax-free period for the year, in relation to the large investment project, is of the number of days in the year;

(b)  B is the aggregate of all amounts each of which is equal to the amount obtained by multiplying the corporation’s loss for the taxation year from its eligible activities, in relation to a large investment project, by the proportion that the number of days in the corporation’s tax-free period for the year, in relation to the large investment project, is of the number of days in the year;

(c)  C is the prior loss attributable to eligible activities of the corporation for the year;

(d)  D is the aggregate of all amounts each of which is equal to the amount obtained by multiplying the partnership’s income for the fiscal period from its eligible activities, in relation to a large investment project, by the proportion that the number of days in the partnership’s tax-free period for the fiscal period, in relation to the large investment project, is of the number of days in the fiscal period;

(e)  E is the aggregate of all amounts each of which is equal to the amount obtained by multiplying the partnership’s loss for the fiscal period from its eligible activities, in relation to a large investment project, by the proportion that the number of days in the partnership’s tax-free period for the fiscal period, in relation to the large investment project, is of the number of days in the fiscal period; and

(f)  F is the prior loss attributable to eligible activities of the partnership for the fiscal period.

A corporation may deduct an amount under the first paragraph in computing its taxable income for a taxation year only if it encloses, with the fiscal return it is required to file under section 1000 for the year,

(a)  the prescribed form containing prescribed information; and

(b)  in relation to each large investment project referred to in the first paragraph of the corporation or of a partnership of which the corporation is a member,

i.  the financial statements relating to the eligible activities of the corporation or partnership, in relation to the large investment project, for the taxation year or fiscal period, as the case may be, unless it made a computation method election in relation to the project,

ii.  a copy of the qualification certificate issued to the corporation or partnership in respect of the large investment project,

iii.  a copy of the certificate issued for the corporation’s taxation year or the partnership’s fiscal period, as the case may be, in relation to the large investment project,

iv.  where the large investment project is a project of the partnership, a copy of each agreement referred to in section 737.18.17.10 or 737.18.17.10.1 in respect of the partnership’s fiscal period that ends in the taxation year or in a preceding taxation year, in relation to the project, unless it has already been filed, and

v.  where the corporation or partnership acquired or sold all or substantially all of the recognized business in relation to the large investment project, a copy of the agreement referred to in section 737.18.17.12 in respect of the transfer, unless it has already been filed.

If a particular corporation that carries out one or more large investment projects has not made a computation method election in respect of any of those projects, a partnership of which it is a member is deemed, for the purpose of applying this section and section 737.18.17.1 to a taxation year of the corporation, not to have made a computation method election in respect of any of its large investment projects and, for that purpose, the certificate issued to the partnership for its fiscal period that ends in the year, in relation to a large investment project, is deemed, for the purposes of subparagraph b of the first paragraph, not to certify that the partnership has elected to use the alternate computation method.

For the purposes of subparagraph ii of subparagraph a of the first paragraph, the corporation’s share of an amount, for a fiscal period of a partnership, is equal to the agreed proportion of that amount in respect of the corporation for the partnership’s fiscal period.

2015, c. 21, s. 260; 2024, c. 11, s. 63.

2015-10-21

737.18.17.5. A corporation that, in a taxation year, carries on a recognized business in relation to a large investment project or is a member of a partnership that carries on such a recognized business in the partnership’s fiscal period ending in that year, may, subject to the third paragraph, deduct in computing its taxable income for the year, if a certificate has been issued for the year or fiscal period in relation to the large investment project, an amount not exceeding the portion of its income for the year that may reasonably be considered to be equal to the lesser of the amount determined in accordance with section 737.18.17.6, in respect of the corporation for the year, and the aggregate of

(a)  the amount determined by the formula

(A - B) - C; and

(b)  the aggregate of all amounts each of which is the corporation’s share of the amount determined, in respect of such a partnership of which the corporation is a member, by the formula

(D - E) - F.

In the formulas in the first paragraph,

(a)  A is the aggregate of all amounts each of which is equal to the amount obtained by multiplying the corporation’s income for the taxation year from its eligible activities, in relation to a large investment project, by the proportion that the number of days in the corporation’s tax-free period for the year, in relation to the large investment project, is of the number of days in the year;

(b)  B is the aggregate of all amounts each of which is equal to the amount obtained by multiplying the corporation’s loss for the taxation year from its eligible activities, in relation to a large investment project, by the proportion that the number of days in the corporation’s tax-free period for the year, in relation to the large investment project, is of the number of days in the year;

(c)  C is the prior loss attributable to eligible activities of the corporation for the year;

(d)  D is the aggregate of all amounts each of which is equal to the amount obtained by multiplying the partnership’s income for the fiscal period from its eligible activities, in relation to a large investment project, by the proportion that the number of days in the partnership’s tax-free period for the fiscal period, in relation to the large investment project, is of the number of days in the fiscal period;

(e)  E is the aggregate of all amounts each of which is equal to the amount obtained by multiplying the partnership’s loss for the fiscal period from its eligible activities, in relation to a large investment project, by the proportion that the number of days in the partnership’s tax-free period for the fiscal period, in relation to the large investment project, is of the number of days in the fiscal period; and

(f)  F is the prior loss attributable to eligible activities of the partnership for the fiscal period.

A corporation may deduct an amount under the first paragraph in computing its taxable income for a taxation year only if it encloses, with the fiscal return it is required to file under section 1000 for the year,

(a)  the prescribed form containing prescribed information; and

(b)  in relation to each large investment project referred to in the first paragraph of the corporation or of a partnership of which the corporation is a member,

i.  the financial statements relating to the eligible activities of the corporation or partnership, in relation to the large investment project, for the taxation year or fiscal period, as the case may be,

ii.  a copy of the qualification certificate issued to the corporation or partnership in respect of the large investment project,

iii.  a copy of the certificate issued for the corporation’s taxation year or the partnership’s fiscal period, as the case may be, in relation to the large investment project,

iv.  where the large investment project is a project of the partnership, a copy of each agreement referred to in section 737.18.17.10 in respect of the fiscal period of the partnership that ends in the taxation year or in a preceding taxation year, in relation to the project, unless it has already been filed, and

v.  where the corporation or partnership acquired or sold all or substantially all of the recognized business in relation to the large investment project, a copy of the agreement referred to in section 737.18.17.12 in respect of the transfer, unless it has already been filed.

For the purposes of subparagraph b of the first paragraph, the corporation’s share of an amount, for a fiscal period of a partnership, is equal to the agreed proportion of that amount in respect of the corporation for the partnership’s fiscal period.

2015, c. 21, s. 260.