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  1. Income Tax Act - R.S.C., 1985, c. 1 (5th Supp.) (Section 127)
    Marginal note:Logging tax deduction
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    • (5) There may be deducted from the tax otherwise payable by a taxpayer under this Part for a taxation year an amount not exceeding the lesser of

      • (a) the total of

        • (i) the taxpayer’s investment tax credit at the end of the year in respect of property acquired before the end of the year, of the taxpayer’s apprenticeship expenditure for the year or a preceding taxation year, of the taxpayer’s flow-through mining expenditure for the year or a preceding taxation year, of the taxpayer’s pre-production mining expenditure for the year or a preceding taxation year or of the taxpayer’s SR&ED qualified expenditure pool at the end of the year or at the end of a preceding taxation year, and

        • (ii) the lesser of

          • (A) the taxpayer’s investment tax credit at the end of the year in respect of property acquired in a subsequent taxation year, of the taxpayer’s apprenticeship expenditure for a subsequent taxation year, of the taxpayer’s flow-through mining expenditure for a subsequent taxation year, of the taxpayer’s pre-production mining expenditure for a subsequent taxation year or of the taxpayer’s SR&ED qualified expenditure pool at the end of the subsequent taxation year to the extent that an investment tax credit was not deductible under this subsection for the subsequent taxation year, and

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    • (8.2) For the purposes of subsection 127(8.1), a taxpayer’s expenditure base in respect of a partnership at the end of a taxation year of the partnership is the lesser of

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      • (b) that proportion of the lesser of

        • (i) the total of all amounts each of which is, if the partnership were a person and its fiscal period were its taxation year,

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          • (B) the amount that would be the SR&ED qualified expenditure pool of the partnership at the end of the year, and

        [...]

    • [...]

    • (9) In this section,

      investment tax credit

      investment tax credit  of a taxpayer at the end of a taxation year means the amount, if any, by which the total of

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      • (a.1) 15% of the amount by which the taxpayer’s SR&ED qualified expenditure pool at the end of the year exceeds the total of all amounts each of which is the super-allowance benefit amount for the year in respect of the taxpayer in respect of a province,

      [...]

      • (f) the total of all amounts each of which is an amount deducted under subsection 127(5) from the tax otherwise payable under this Part by the taxpayer for a preceding taxation year in respect of property acquired, or an expenditure incurred, in the year or in any of the 10 taxation years immediately preceding or the 2 taxation years immediately following the year, or in respect of the taxpayer’s SR&ED qualified expenditure pool at the end of such a year,

      [...]

      SR&ED qualified expenditure pool

      SR&ED qualified expenditure pool  of a taxpayer at the end of a taxation year means the amount determined by the formula

      [...]

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    • (10.1) For the purposes of paragraph (e) of the definition investment tax credit in subsection (9), if a corporation was throughout a taxation year a Canadian-controlled private corporation, there shall be added in computing the corporation’s investment tax credit at the end of the year the amount that is 20% of the least of

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      • (b) the amount by which the corporation’s SR&ED qualified expenditure pool at the end of the year exceeds the total of all amounts each of which is the super-allowance benefit amount for the year in respect of the corporation in respect of a province; and

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    • (13) Where a taxpayer (referred to in this subsection and subsections 127(15) and 127(16) as the “transferor”) and another taxpayer (referred to in this subsection and subsection 127(15) as the “transferee”) file with the Minister an agreement or an amended agreement in respect of a particular taxation year of the transferor, the least of

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      • (b) the amount that but for the agreement would be the transferor’s SR&ED qualified expenditure pool at the end of the particular year, and

      • (c) the total of all amounts each of which is an amount that, if the transferor were dealing at arm’s length with the transferee, would be a contract payment

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        • (iii) that would be in respect of

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          • (B) an amount added because of this subsection to the transferor’s SR&ED qualified expenditure pool at the end of the particular year where the amount is attributable to an expenditure in respect of the scientific research and experimental development

      [...]

      and where the total of all amounts each of which is an amount specified in an agreement filed with the Minister under this subsection in respect of a particular taxation year of a transferor exceeds the amount that would be the transferor’s SR&ED qualified expenditure pool at the end of the particular year if no agreement were filed with the Minister in respect of the particular year, the least of the amounts determined under paragraphs 127(13)(a) to 127(13)(c) in respect of each such agreement is deemed to be nil.

    • (14) Where

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      • (b) the agreement includes a statement identifying the amount specified in the agreement for the purpose of subsection 127(13), or a part of that amount, as being related to

        • (i) a particular qualified expenditure included in the value of A in the formula in the definition SR&ED qualified expenditure pool in subsection 127(9) for the purpose of determining the transferor’s SR&ED qualified expenditure pool at the end of the year, or

        • (ii) a particular amount included in the value of B in the formula in that definition for the purpose of determining the transferor’s SR&ED qualified expenditure pool at the end of the year that is deemed by paragraph 127(14)(d) to be a qualified expenditure, and

      [...]

      • (d) the amount so identified that is included in the value of B in the formula in that definition for the purpose of determining the transferee’s SR&ED qualified expenditure pool at the end of the taxation year of the transferee is deemed to be a qualified expenditure either of a current nature or of a capital nature, incurred by the transferee in that year, where the particular expenditure or the particular amount was an expenditure of a current nature or of a capital nature, as the case may be, and

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  2. Income Tax Act - R.S.C., 1985, c. 1 (5th Supp.) (Section 162)
    Marginal note:Failure to file return of income
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    • Marginal note:Failure to provide claim preparer information

      (5.1) Every person or partnership who makes, or participates in, assents to or acquiesces in the making of, a false statement or omission in respect of claim preparer information required to be included in an SR&ED form is jointly and severally, or solidarily, liable, together with any claim preparer of the form, to a penalty equal to $1,000.

    • Marginal note:Due diligence

      (5.2) A claim preparer of an SR&ED form is not liable for a penalty under subsection (5.1) in respect of a false statement or omission if the claim preparer has exercised the degree of care, diligence and skill to prevent the making of the false statement or omission that a reasonably prudent person would have exercised in comparable circumstances.

    • (5.3) The following definitions apply in this subsection and subsections (5.1) and (5.2).

      claim preparer

      claim preparer , of an SR&ED form, means a person or partnership who agrees to accept consideration to prepare, or assist in the preparation of, the form but does not include an employee who prepares, or assists in the preparation of, the form in the course of performing their duties of employment. (préparateur)

      claim preparer information

      claim preparer information  means prescribed information regarding

      • (a) the identity of the claim preparer, if any, of an SR&ED form, and

      SR&ED form

      SR&ED form  means a prescribed form required to be filed under subsection 37(11). (formulaire de RS&DE)

    [...]


  3. Income Tax Act - R.S.C., 1985, c. 1 (5th Supp.) (Section 37)
    Marginal note:Scientific research and experimental development
    •  (1) Where a taxpayer carried on a business in Canada in a taxation year, there may be deducted in computing the taxpayer’s income from the business for the year such amount as the taxpayer claims not exceeding the amount, if any, by which the total of

      [...]

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      • (e) that part of the total of all amounts each of which is an amount deducted under subsection 127(5) in computing the tax payable under this Part by the taxpayer for a preceding taxation year where the amount can reasonably be attributed to

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        • (iii) an amount included because of paragraph 127(13)(e) in the taxpayer’s SR&ED qualified expenditure pool at the end of a preceding taxation year within the meaning assigned by subsection 127(9),

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    • Marginal note:SR&ED in the exclusive economic zone

      (1.3) For the purposes of this section and section 127 of this Act and Part XXIX of the Income Tax Regulations, an expenditure is deemed to have been made by a taxpayer in Canada if the expenditure is

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    • Marginal note:Salary or wages for SR&ED outside Canada

      (1.4) For the purposes of this section, section 127 and Part XXIX of the Income Tax Regulations, the amount of a taxpayer’s expenditure for a taxation year determined under subsection (1.5) is deemed to be made in the taxation year in respect of scientific research and experimental development carried on in Canada by the taxpayer.

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