Income Tax Act

Marginal note:Surtax

• 182 (1) Every corporation shall pay a tax under this Part for each taxation year equal to 50% of the corporation’s Part I tax on tobacco manufacturing profits for the year.

• Marginal note:Definitions

  (2) In this Part,

  exempt activity

  activité exclue

  exempt activity, of a particular corporation, means

  • (a) farming; or

  • (b) processing leaf tobacco, if

    • (i) that processing is done by, and is the principal business of, the particular corporation,

    • (ii) the particular corporation does not manufacture any tobacco product, and

    • (iii) the particular corporation is not related to any other corporation that carries on tobacco manufacturing (determined, in respect of the other corporation, as if the particular corporation did not exist and the definition tobacco manufacturing were read without reference to the words “in Canada”); (activité exclue)

  Part I tax on tobacco manufacturing profits

  impôt de la partie I sur les bénéfices de fabrication du tabac

  Part I tax on tobacco manufacturing profits of a corporation for a taxation year means 21% of the amount determined by the formula

  (A × B/C) - D

  where

  A

  is the amount that would be the corporation’s Canadian manufacturing and processing profits for the year, within the meaning assigned by subsection 125.1(3), if the total of all amounts, each of which is the corporation’s loss for the year from an active business, other than tobacco manufacturing, carried on by it in Canada, were equal to the lesser of

  • (a) that total otherwise determined, and

  • (b) the total of all amounts, each of which is the amount of the corporation’s income for the year from an active business, other than tobacco manufacturing, carried on by it in Canada,

  B

  is the corporation’s tobacco manufacturing capital and labour cost for the year,

  C

  is the total of the corporation’s cost of manufacturing and processing capital for the year and its cost of manufacturing and processing labour for the year, within the meanings assigned by regulations made for the purposes of section 125.1, and

  D

  is

  • (a) where the corporation is a Canadian-controlled private corporation throughout the year, the corporation’s business limit for the year as determined for the purpose of section 125, and

  • (b) in any other case, nil; (impôt de la partie I sur les bénéfices de fabrication du tabac)

  tobacco manufacturing

  fabrication du tabac

  tobacco manufacturing means any activity, other than an exempt activity, relating to the manufacture or processing in Canada of tobacco or tobacco products in or into any form that is, or would after any further activity become, suitable for smoking; (fabrication du tabac)

  tobacco manufacturing capital and labour cost

  coût en capital et en main-d’oeuvre lié à la fabrication du tabac

  tobacco manufacturing capital and labour cost of a corporation for a taxation year means the total of the amounts that would be the corporation’s cost of manufacturing and processing capital for the year and its cost of manufacturing and processing labour for the year, within the meanings assigned by regulations made for the purpose of section 125.1, if the manufacturing or processing referred to in the definition qualified activities in those regulations were tobacco manufacturing. (coût en capital et en main-d’oeuvre lié à la fabrication du tabac)