Income Tax Act

Marginal note:Corporation surtax

• 123.2 (1) There shall be added to the tax otherwise payable under this Part for each taxation year by a corporation an amount equal to the corporation’s specified percentage for the taxation year multiplied by 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 123.3, 123.4 and 125 to 126 and subsections 127(3), (5), (27) to (31), (34) and (35) and 137(3) and as if subsection 124(1) did not contain the words “in a province”

  exceeds

  • (b) in the case of a corporation that was throughout the year an investment corporation or a mutual fund corporation, the amount determined for A in the definition refundable capital gains tax on hand in subsection 131(6) in respect of the corporation for the year, and

  • (c) in any other case, nil.

• Marginal note:Specified percentage

  (2) The specified percentage of a corporation for a taxation year is

  • (a) if the taxable capital employed in Canada of the corporation for the taxation year is equal to or less than $50,000,000, that pro- portion of 4% that the number of days in the taxation year that are before 2008 is of the number of days in the taxation year; and

  • (b) if paragraph (a) does not apply, the percentage determined by the formula

    A + B[(C - $50,000,000)/$25,000,000]

    where

    A

    is that proportion of 4% that the number of days in the taxation year that are before 2008 is of the number of days in the taxation year,

    B

    is that proportion of 4% that the number of days in the taxation year that are after 2007 is of the number of days in the taxation year; and

    C

    is the lesser of $75,000,000 and the taxable capital employed in Canada of the corporation for the taxation year.

• Marginal note:Taxable income

  (3) For the purpose of subsection (2), the taxable capital employed in Canada of a corporation for a particular taxation year is

  • (a) if the corporation is associated with one or more other corporations in the particular taxation year, the total of all amounts each of which is the taxable capital employed in Canada (within the meaning assigned by subsection 181.2(1) or 181.3(1) or section 181.4, as the case may be) of the corporation, or of such an associated corporation, for its last taxation year that ended in the calendar year preceding the calendar year in which the particular taxation year ends; and

  • (b) if the corporation is not associated with one or more other corporations in the particular taxation year, the taxable capital employed in Canada (within the meaning assigned by subsection 181.2(1) or 181.3(1) or section 181.4, as the case may be) of the corporation for the particular taxation year.