I-3 - Taxation Act

Section 771.8.5 Disposition versions

2007-11-07

771.8.5. The amount that, for the purposes of paragraph j of subsection 1 of section 771, is to be determined under this section in respect of a corporation for a taxation year is the amount determined by the formula

A × B × C.

In the formula in the first paragraph,

(a)  A is,

i.  if the corporation’s taxation year includes the first or the last day of its eligibility period, or if a part of the year is excluded from its eligibility period because of the application of the fourth paragraph of section 771.1, the proportion that the number of days in the year that are included in the corporation’s eligibility period is of the number of days in the year, and

ii.  in any other case, 1;

(b)  B is

i.  75%, if the corporation is referred to in subparagraph iii of paragraph a of section 771.12 and any of the following conditions is met:

(1)  the certificate referred to in paragraph a of section 771.12 and held by the corporation provides for the application of that rate, or

(2)  subject to the third paragraph, control of the corporation was acquired at the beginning of the year or of a preceding taxation year, but after 11 June 2003, by a person or a group of persons, and

ii.  100%, in any other case; and

(c)  C is the lesser of

i.  the amount by which its income for the year from an eligible business carried on by it in Canada exceeds its loss for the year from such a business, and

ii.  the amount by which the taxable income of the corporation for the year exceeds the aggregate of the amount determined in respect of the corporation for the year under section 771.0.2.2 and the portion of that income that is not, because of an Act of the Legislature of Québec, subject to tax under this Part.

The condition set out in subparagraph 2 of subparagraph i of subparagraph b of the second paragraph is deemed not to be met if the acquisition of control

(a)  occurs before 1 July 2004 and Investissement Québec certifies that it results from a transaction that was sufficiently advanced on 11 June 2003 and was binding on the parties on that date;

(b)  is by an exempt corporation, by a person or group of persons that controls an exempt corporation, or by a group of persons each member of which is an exempt corporation or a person who, alone or together with other members of the group, controls such a corporation;

(c)  derives from the exercise after 11 June 2003 of one or more rights described in paragraph b of section 20 that were acquired before 12 June 2003; or

(d)  derives from the performance after 11 June 2003 of one or more obligations described in the third paragraph of section 21.3.5 that were contracted before 12 June 2003.

1997, c. 85, s. 162; 2000, c. 39, s. 88; 2005, c. 23, s. 106; 2006, c. 13, s. 61; 2007, c. 12, s. 87.

2006-06-13

771.8.5. The amount that, for the purposes of paragraph j of subsection 1 of section 771, is to be determined under this section in respect of a corporation for a taxation year is the amount determined by the formula

A × B × C.

In the formula in the first paragraph,

(a)  A is,

i.  if the corporation’s taxation year includes the last day of its eligibility period, the proportion that the number of days in the year that are included in the eligibility period of the corporation is of the number of days in the year, and

ii.  in any other case, 1;

(b)  B is

i.  75%, if the corporation is referred to in subparagraph iii of paragraph a of section 771.12 and any of the following conditions is met:

(1)  the certificate referred to in paragraph a of section 771.12 and held by the corporation provides for the application of that rate, or

(2)  subject to the third paragraph, control of the corporation was acquired at the beginning of the year or of a preceding taxation year, but after 11 June 2003, by a person or a group of persons, and

ii.  100%, in any other case; and

(c)  C is the lesser of

i.  the amount by which its income for the year from an eligible business carried on by it in Canada exceeds its loss for the year from such a business, and

ii.  the amount by which the taxable income of the corporation for the year exceeds the aggregate of the amount determined in respect of the corporation for the year under section 771.0.2.2 and the portion of that income that is not, because of an Act of the Legislature of Québec, subject to tax under this Part.

The condition set out in subparagraph 2 of subparagraph i of subparagraph b of the second paragraph is deemed not to be met if the acquisition of control

(a)  occurs before 1 July 2004 and Investissement Québec certifies that it results from a transaction that was sufficiently advanced on 11 June 2003 and was binding on the parties on that date;

(b)  is by an exempt corporation, by a person or group of persons that controls an exempt corporation, or by a group of persons each member of which is an exempt corporation or a person who, alone or together with other members of the group, controls such a corporation;

(c)  derives from the exercise after 11 June 2003 of one or more rights described in paragraph b of section 20 that were acquired before 12 June 2003; or

(d)  derives from the performance after 11 June 2003 of one or more obligations described in the third paragraph of section 21.3.5 that were contracted before 12 June 2003.

1997, c. 85, s. 162; 2000, c. 39, s. 88; 2005, c. 23, s. 106; 2006, c. 13, s. 61.

2006-03-01

771.8.5. The amount that, for the purposes of paragraph j of subsection 1 of section 771, is to be determined under this section in respect of a corporation for a taxation year is the amount determined by the formula

A × B × C.

In the formula in the first paragraph,

(a)  A is,

i.  if the corporation’s taxation year includes the last day of its eligibility period, the proportion that the number of days in the year that are included in the eligibility period of the corporation is of the number of days in the year, and

ii.  in any other case, 1;

(b)  B is

i.  75%, if the corporation is referred to in subparagraph iii of paragraph a of section 771.12 and any of the following conditions is met:

(1)  the certificate referred to in paragraph a of section 771.12 and held by the corporation provides for the application of that rate, or

(2)  subject to the third paragraph, control of the corporation was acquired at the beginning of the year or of a preceding taxation year, but after 11 June 2003, by a person or a group of persons, and

ii.  100%, in any other case; and

(c)  C is the lesser of

i.  the amount by which its income for the year from an eligible business carried on by it in Canada exceeds its loss for the year from such a business, and

ii.  the amount by which the taxable income of the corporation for the year exceeds the aggregate of the amount determined in respect of the corporation for the year under section 771.0.2.2 and the portion of that income that is not, because of an Act of the Legislature of Québec, subject to tax under this Part.

The condition set out in subparagraph 2 of subparagraph i of subparagraph b of the second paragraph is deemed not to be met if

(a)  the acquisition of control occurs after 11 June 2003 but before 1 July 2004 and Investissement Québec certifies that the acquisition of control results from a transaction that was sufficiently advanced on 11 June 2003 and was binding on the parties on that date;

(b)  the person acquiring control of the corporation or, if control is acquired by a group of persons, each of the persons forming the group, is an exempt corporation; or

(c)  the acquisition of control derives from the exercise after 11 June 2003 of one or more rights described in paragraph b of section 20 that were acquired before 12 June 2003.

1997, c. 85, s. 162; 2000, c. 39, s. 88; 2005, c. 23, s. 106.