Income Tax Act (R.S.C., 1985, c. 1 (5th Supp.))

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Act current to 2019-06-06 and last amended on 2019-04-01. Previous Versions

PART IIncome Tax (continued)

DIVISION EComputation of Tax (continued)

SUBDIVISION BRules Applicable to Corporations

Marginal note:Rate for corporations

  •  (1) The tax payable under this Part for a taxation year by a corporation on its taxable income or taxable income earned in Canada, as the case may be, (in this section referred to as its “amount taxable”) for the year is, except where otherwise provided,

    • (a) 38% of its amount taxable for the year.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1970-71-72, c. 63, s. 1“123”
  • 1984, c. 29, s. 90
  • 1986, c. 55, s. 42
  • 1988, c. 28, s. 250, c. 55, s. 100

Marginal note:Corporation surtax

 There shall be added to the tax otherwise payable under this Part for each taxation year by a corporation (other than a corporation that was throughout the year an investment corporation or a non-resident-owned investment corporation) an amount equal to that proportion of 5% of the amount, if any, by which

  • (a) the tax payable under this Part by the corporation for the year determined without reference to this section, sections 123.2 and 126 (except for the purposes of subsection 125(1) and section 125.1), subsections 127(3) and (5), 127.2(1) and 127.3(1) of this Act and paragraph 123(1)(b) and subsection 127(13) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, and as if subsection 124(1) of this Act were read without reference to the words “in a province” in that subsection

exceeds

  • (b) in the case of a Canadian-controlled private corporation to which subsection 125(1) applies, the amount, if any, by which

    • (i) 15% of the least of the amounts, if any, determined under paragraphs 125(1)(a) to (c) in respect of the corporation for the year

    exceeds

    • (ii) the amount, if any, determined under paragraph 125.1(1)(b) in respect of the corporation for the year,

  • (c) in the case of a mutual fund corporation, the least of the amounts that would be determined under paragraphs (a) to (c) of the description of A in the definition refundable capital gains tax on hand in subsection 131(6) in respect of the corporation for the year if this Act were read without reference to this section, and

  • (d) in any other case, nil

that the number of days in that portion of the year that is after June 30, 1985 and before 1987 is of the number of days in the year.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1972, c. 9, s. 2
  • 1985, c. 45, s. 69
  • 1986, s. 6, s. 69, c. 55, s. 43

 [Repealed, 2006, c. 4, s. 72]

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • R.S., 1985, c. 1 (5th Supp.), s. 123.2
  • 1994, c. 7, Sch. VIII, s. 61
  • 1996, c. 21, s. 24
  • 1999, c. 22, s. 45
  • 2001, c. 17, s. 111
  • 2005, c. 30, s. 9
  • 2006, c. 4, s. 72

Marginal note:Refundable tax on CCPC’s investment income

 There shall be added to the tax otherwise payable under this Part for each taxation year by a corporation that is throughout the year a Canadian-controlled private corporation an amount equal to 10 2/3% of the lesser of

  • (a) the corporation’s aggregate investment income for the year (within the meaning assigned by subsection 129(4)), and

  • (b) the amount, if any, by which its taxable income for the year exceeds the least of the amounts determined in respect of it for the year under paragraphs 125(1)(a) to (c).

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1996, c. 21, s. 25
  • 2016, c. 11, s. 6
Corporation Tax Reductions

Marginal note:Definitions

  •  (1) The definitions in this subsection apply in this section.

    CCPC rate reduction percentage

    CCPC rate reduction percentage[Repealed, 2003, c. 15, s. 78(1)]

    full rate taxable income

    full rate taxable income of a corporation for a taxation year is

    • (a) if the corporation is not a corporation described in paragraph (b) or (c) for the year, the amount by which that portion of the corporation’s taxable income for the year (or, for greater certainty, if the corporation is non-resident, that portion of its taxable income earned in Canada for the year) that is subject to tax under subsection 123(1) exceeds the total of

      • (i) if an amount is deducted under subsection 125.1(1) from the corporation’s tax otherwise payable under this Part for the year, the amount obtained by dividing the amount so deducted by the corporation’s general rate reduction percentage for the taxation year,

      • (ii) if an amount is deducted under subsection 125.1(2) from the corporation’s tax otherwise payable under this Part for the year, the amount determined, in respect of the deduction, by the formula in that subsection,

      • (iii) the corporation’s income for the year from a personal services business, and

      • (iv) if the corporation is a credit union throughout the year and the corporation deducted an amount for the year under subsection 125(1) (because of the application of subsections 137(3) and (4)), the amount, if any, that is the product of the amount, if any, determined for B in subsection 137(3) multiplied by the amount determined for C in subsection 137(3) in respect of the corporation for the year;

    • (b) if the corporation is a Canadian-controlled private corporation throughout the year, the amount by which that portion of the corporation’s taxable income for the year that is subject to tax under subsection 123(1) exceeds the total of

      • (i) the amounts that would, if paragraph (a) applied to the corporation, be determined under subparagraphs (a)(i) to (iv) in respect of the corporation for the year,

      • (ii) the least of the amounts, if any, determined under paragraphs 125(1)(a) to (c) in respect of the corporation for the year, and

      • (iii) except for a corporation that is, throughout the year, a cooperative corporation (within the meaning assigned by subsection 136(2)) or a credit union, the corporation’s aggregate investment income for the year, within the meaning assigned by subsection 129(4); and

      • (iv) [Repealed, 2003, c. 15, s. 78(2)]

    • (c) if the corporation is throughout the year an investment corporation, a mortgage investment corporation or a mutual fund corporation, nil. (revenu imposable au taux complet)

    general rate reduction percentage

    general rate reduction percentage of a corporation for a taxation year is the total of

    • (a) that proportion of 7% that the number of days in the taxation year that are before 2008 is of the number of days in the taxation year,

    • (b) that proportion of 8.5% that the number of days in the taxation year that are in 2008 is of the number of days in the taxation year,

    • (c) that proportion of 9% that the number of days in the taxation year that are in 2009 is of the number of days in the taxation year,

    • (d) that proportion of 10% that the number of days in the taxation year that are in 2010 is of the number of days in the taxation year,

    • (e) that proportion of 11.5% that the number of days in the taxation year that are in 2011 is of the number of days in the taxation year, and

    • (f) that proportion of 13% that the number of days in the taxation year that are after 2011 is of the number of days in the taxation year. (pourcentage de réduction du taux général)

  • Marginal note:General deduction from tax

    (2) There may be deducted from a corporation’s tax otherwise payable under this Part for a taxation year the product obtained by multiplying the corporation’s general rate reduction percentage for the year by the corporation’s full rate taxable income for the year.

  • (3) [Repealed, 2003, c. 15, s. 78(5)]

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2001, c. 17, s. 112
  • 2003, c. 15, s. 78, c. 28, s. 12
  • 2006, c. 4, s. 73
  • 2007, c. 2, s. 32, c. 29, s. 14, c. 35, s. 181
  • 2013, c. 33, s. 12, c. 34, s. 261, c. 40, s. 54
 
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