Income Tax Regulations (C.R.C., c. 945)

Regulations are current to 2014-09-29 and last amended on 2014-06-19. Previous Versions

 For the purpose of determining the taxable capital employed in Canada of a corporation for a taxation year under subsection 181.2(1) of the Act, the prescribed proportion of the corporation’s taxable capital (as determined under Part I.3 of the Act) for the year is the amount determined by the formula

A × (B / C)

where

A 
is the taxable capital (as determined under Part I.3 of the Act) of the corporation for the year,
B 
is the total of all amounts each of which is the amount, determined in accordance with Part IV (or, in the case of an airline corporation, that would be so determined if the corporation had a permanent establishment in every province and if paragraphs 407(1)(a) and (b) were read without reference to the words “in Canada”), of the corporation’s taxable income earned in the year in a particular province or the amount of its taxable income that would, pursuant to that Part, be earned in the year in a province if all permanent establishments of the corporation in Canada were in a province, and
C 
is the corporation’s taxable income for the year,

except that, where the corporation’s taxable income for the year is nil, the corporation shall, for the purposes of this section, be deemed to have a taxable income for the year of $1,000.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending regulations. SOR/94-298, s. 2;
  • SOR/94-686, ss. 43(F);
  • 79(F).

 For the purposes of paragraph (b) of the definition “Canadian surtax payable” in subsection 125.3(4) of the Act, the prescribed proportion of the amount determined under section 123.2 of the Act in respect of a corporation for a taxation year is the amount determined by the formula

A × (B / C)

where

A 
is the amount determined under section 123.2 of the Act in respect of the corporation for the year;
B 
is
  • (a) where the corporation carried on a life insurance business at any time in the year, the corporation’s taxable capital (as determined under Part I.3 of the Act) for the year, and

  • (b) in any other case, the corporation’s taxable capital employed in Canada (as would be determined under Part I.3 of the Act if that Part were read without reference to paragraphs 181.3(1)(a) and (b) thereof) for the year; and

C 
is the corporation’s taxable capital (as determined under Part I.3 of the Act) for the year.
  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending regulations. SOR/94-298, s. 2;
  • SOR/94-686, s. 79(F).

 For the purposes of Part VI of the Act,

  • (a“Canadian assets” of a corporation that is a financial institution (as defined in subsection 190(1) of the Act) at any time in a taxation year means, in respect of that year, the amount that would be determined under the definition “Canadian assets” in section 8600 in respect of the corporation for the year if the reference in that definition to “subsection 181(1)” were read as a reference to “subsection 190(1)” and paragraph (b) of that definition were read as follows:

    • “(b) the total determined under section 190.14 of the Act in respect of the corporation’s investments for the year in financial institutions related to it;”;

  • (b“total assets” of a corporation that is a financial institution (as defined in subsection 190(1) of the Act) at any time in a taxation year means, in respect of that year, the amount that would be determined under the definition “total assets” in section 8600 in respect of the corporation for the year if the reference in that definition to “subsection 181(1)” were read as a reference to “subsection 190(1)” and paragraph (b) of that definition were read as follows:

    • “(b) the total determined under section 190.14 of the Act in respect of the corporation’s investments for the year in financial institutions related to it;”

  • (c“attributed surplus”, “Canadian reserve liabilities” and “total reserve liabilities” have the same respective meanings as in section 8600.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts and regulations. SOR/94-298, s. 2;
  • SOR/94-686, s. 79(F);
  • 2013, c. 33, s. 39(E).