Budget Implementation Act, 2018, No. 1 (S.C. 2018, c. 12)

(a) that is a Canadian exploration expense incurred by a corporation after March 2018 and before 2020 (including, for greater certainty, an expense that is deemed by subsection 66(12.66) to be incurred before 2020) in conducting mining exploration activity from or above the surface of the earth for the purpose of determining the existence, location, extent or quality of a mineral resource described in paragraph (a) or (d) of the definition mineral resource in subsection 248(1),

(c) an amount in respect of which is renounced in accordance with subsection 66(12.6) by the corporation to the taxpayer (or a partnership of which the taxpayer is a member) under an agreement described in that subsection and made after March 2018 and before April 2019, and

(d) that is not an expense that was renounced under subsection 66(12.6) to the corporation (or a partnership of which the corporation is a member), unless that renunciation was under an agreement described in that subsection and made after March 2018 and before April 2019; (dépense minière déterminée)

(a) may, on sending the notice of assessment for the year, refund without application an amount (in this Act referred to as its “dividend refund” for the year) in respect of taxable dividends paid by the corporation on shares of its capital stock in the year, and at a time when it was a private corporation, equal to the total of

• (i) in respect of eligible dividends, an amount equal to the lesser of

  • (A) 38 1/3% of the total of all eligible dividends paid by it in the year, and

  • (B) its eligible refundable dividend tax on hand at the end of the year, and

• (ii) in respect of taxable dividends (other than eligible dividends), an amount equal to the total of

  • (A) the lesser of

    • (I) 38 1/3% of the total of all taxable dividends (other than eligible dividends) paid by it in the year, and

    • (II) its non-eligible refundable dividend tax on hand at the end of the year, and

  • (B) either

    • (I) if the amount determined under subclause (A)(I) exceeds the amount determined under subclause (A)(II), the lesser of

      1 the amount of the excess, and

      2 the amount by which the corporation’s eligible refundable dividend tax on hand at the end of the year exceeds the amount, if any, determined under subparagraph (i) for the year, and

    • (II) in any other case, nil; and

Marginal note:Dividends paid to bankrupt controlling corporation

(1.1) In determining the dividend refund for a taxation year ending after 1977 of a particular corporation, no amount may be included under clause (1)(a)(i)(A), subclause (1)(a)(ii)(A)(I) or sub-subclause (1)(a)(ii)(B)(I)1 in respect of a taxable dividend paid to a shareholder that

Marginal note:2019 transitional RDTOH

(5) The following rules apply to a corporation’s first taxation year in respect of which the definition eligible refundable dividend tax on hand in subsection (4) applies:

• (a) if the corporation is a Canadian-controlled private corporation throughout the taxation year and its preceding taxation year and is not a corporation in respect of which an election under subsection 89(11) applies to the taxation year or the preceding taxation year,

  • (i) for the purpose of applying paragraph (b) of the definition eligible refundable dividend tax on hand in respect of the corporation at the end of the taxation year, the corporation’s eligible refundable dividend tax on hand at the end of its preceding taxation year is deemed to be the amount, if any, that is the lesser of

    • (A) the amount determined by the formula

      A − B

      where

      A

      is the corporation’s refundable dividend tax on hand at the end of its preceding taxation year, and

      B

      is the corporation’s dividend refund for its preceding taxation year, and

    • (B) the amount determined by the formula

      (C − D) × E

      where

      C

      is the corporation’s general rate income pool at the end of its preceding taxation year,

      D

      is the amount, if any, by which

      • (I) the total of all amounts each of which is an eligible dividend paid by the corporation in its preceding taxation year

      exceeds

      • (II) the total of all amounts each of which is an excessive eligible dividend designation made by the corporation in its preceding taxation year, and

      E

      is 38 1/3%, and

  • (ii) for the purpose of applying paragraph (c) of the definition non-eligible refundable dividend tax on hand in respect of the corporation at the end of the taxation year, the corporation’s non-eligible refundable dividend tax on hand at the end of its preceding taxation year is deemed to be the amount determined by the formula

    A − B

    where

    A

    is the amount determined under clause (a)(i)(A) in respect of the corporation at the end of the preceding taxation year, and

    B

    is the amount determined under clause (a)(i)(B) in respect of the corporation at the end of the preceding taxation year; and

• (b) in any other case, for the purpose of applying paragraph (b) of the definition eligible refundable dividend tax on hand in respect of the corporation at the end of the taxation year, the corporation’s eligible refundable dividend tax on hand at the end of its preceding taxation year is deemed to be the amount that would be determined for clause (a)(i)(A) if paragraph (a) applied to the corporation in respect of the taxation year.

Marginal note:2019 transitional RDTOH — amalgamations

(5.1) Subsection (5) applies with such modifications as are necessary for the purpose of applying paragraph 87(2)(aa) in respect of a corporation if

• (a) the corporation is a predecessor corporation (within the meaning assigned by subsection 87(1)) in respect of an amalgamation (within the meaning assigned by subsection 87(1));

• (b) the corporation has an amount of refundable dividend tax on hand at the end of its taxation year that ends because of paragraph 87(2)(a); and

• (c) the first taxation year of the new corporation (within the meaning assigned by subsection 87(1)) in respect of the amalgamation is one to which the definition eligible refundable dividend tax on hand in subsection (4) applies.