Income Tax Application Rules (R.S.C., 1985, c. 2 (5th Supp.))

Act current to 2019-06-20 and last amended on 2017-01-01. Previous Versions

PART IIncome Tax Application Rules, 1971 (continued)

Special Transitional Rules (continued)

Marginal note:Change of use of property before 1972

  •  (1) For the purposes of paragraph 40(2)(b) and the definition principal residence in section 54 of the amended Act, where a taxpayer owned, on December 31, 1971, a property that is a housing unit, a leasehold interest in a housing unit or a share of the capital stock of a cooperative housing corporation, if the housing unit was, or if the share was acquired for the sole purpose of acquiring the right to inhabit, a housing unit owned by the corporation that was ordinarily inhabited by the taxpayer, the taxpayer began at any time thereafter but before 1972 to use the property for the purpose of gaining or producing income therefrom, or for the purpose of gaining or producing income from a business, and the taxpayer elected in the taxpayer’s return of income for the 1974 or 1975 taxation year as if the taxpayer had begun to use the property for the purpose of gaining or producing income therefrom of for the purpose of gaining or producing income from a business on January 1, 1972, the taxpayer shall be deemed to have made an election under subsection 45(2) of the amended Act in the taxpayer’s return of income for the 1972 taxation year and to have so begun to use the property.

  • Marginal note:No capital cost allowance while election in force

    (2) Where the taxpayer has made the election described in subsection (1), no amount may be deducted under paragraph 20(1)(a) of the amended Act for the 1974 and subsequent taxation years in respect of property referred to in that subsection while the election remains in force.

Marginal note:Deduction from income of petroleum or natural gas corporation

  •  (1) A corporation whose principal business is production, refining or marketing of petroleum, petroleum products or natural gas or exploring or drilling for petroleum or natural gas may deduct, in computing its income for a taxation year, the lesser of

    • (a) the total of such of the drilling and exploration expenses, including all general geological and geophysical expenses, incurred by it on or in respect of exploring or drilling for petroleum or natural gas in Canada as were incurred during the calendar years 1949 to 1952, to the extent that they were not deductible in computing income for a preceding taxation year, and

    • (b) of that total, an amount equal to its income for the taxation year if no deduction were allowed under this section or section 65, 66 or 66.1 of the amended Act minus the deductions allowed for the year under subsections (9), (10) and (25) of this section and sections 112 and 113 of the amended Act.

  • Marginal note:Deduction from income of mining corporation

    (2) A corporation whose principal business is mining or exploring for minerals may deduct, in computing its income for a taxation year, the lesser of

    • (a) the total of such of the prospecting, exploration and development expenses incurred by it in searching for minerals in Canada as were incurred during 1952, to the extent that they were not deductible in computing income for a preceding taxation year, and

    • (b) of that total, an amount equal to its income for the taxation year if no deduction were allowed under this section or section 65, 66 or 66.1 of the amended Act minus the deductions allowed for the year under subsections (9), (10) and (25) of this section and sections 112 and 113 of the amended Act,

    if the corporation has filed certified statements of those expenses and has satisfied the Minister that it has been actively engaged in prospecting and exploring for minerals in Canada by means of qualified persons and has incurred the expenses for those purposes.

  • Marginal note:Deduction from income of petroleum or natural gas corporation or mining corporation

    (3) A corporation whose principal business is

    • (a) production, refining or marketing of petroleum, petroleum products or natural gas, or exploring or drilling for petroleum or natural gas, or

    • (b) mining or exploring for minerals,

    may deduct, in computing its income for a taxation year, the lesser of

    • (c) the total of such of

      • (i) the drilling and exploration expenses, including all general geological and geophysical expenses, incurred by it on or in respect of exploring or drilling for petroleum or natural gas in Canada, and

      • (ii) the prospecting, exploration and development expenses incurred by it in searching for minerals in Canada,

      as were incurred after 1952 and before April 11, 1962, to the extent that they were not deductible in computing income for a preceding taxation year, and

    • (d) of that total, an amount equal to its income for the taxation year if no deduction were allowed under this section or section 65, 66 or 66.1 of the amended Act minus the deductions allowed for the year under subsections (1), (2), (9), (10) and (25) of this section and sections 112 and 113 of the amended Act.

  • Marginal note:Deduction from income of petroleum corporation, etc.

    (4) A corporation whose principal business is

    • (a) production, refining or marketing of petroleum, petroleum products or natural gas, or exploring or drilling for petroleum or natural gas,

    • (b) mining or exploring for minerals,

    • (c) processing mineral ores for the purpose of recovering metals therefrom,

    • (d) a combination of

      • (i) processing mineral ores for the purpose of recovering metals therefrom, and

      • (ii) processing metals recovered from the ores so processed,

    • (e) fabricating metals, or

    • (f) operating a pipeline for the transmission of oil or natural gas,

    may deduct, in computing its income for a taxation year, the lesser of

    • (g) the total of such of

      • (i) the drilling and exploration expenses, including all general geological and geophysical expenses incurred by it on or in respect of exploring or drilling for petroleum or natural gas in Canada, and

      • (ii) the prospecting, exploration and development expenses incurred by it in searching for minerals in Canada,

      as were incurred after April 10, 1962 and before 1972, to the extent that they were not deductible in computing income for a preceding taxation year, and

    • (h) of that total, an amount equal to its income for the taxation year if no deduction were allowed under this subsection or section 65, 66 or 66.1 of the amended Act minus the deductions allowed for the year under subsection 66(2) and sections 112 and 113 of the amended Act.

  • Marginal note:Application of para. (4)(g)

    (5) In applying paragraph (4)(g) to a corporation described in paragraph (4)(f), the reference in paragraph (4)(g) to “April 10, 1962” shall be read as a reference to “June 13, 1963”.

  • (6) to (8) [Repealed, 1997, c. 25, s. 73]

  • Marginal note:Deduction from income from businesses of associations, etc.

    (9) There may be deducted in computing the income of a taxpayer for a taxation year from the businesses of all associations, partnerships or syndicates formed for the purpose of exploring or drilling for petroleum or natural gas and of which the taxpayer was a member or partner, the lesser of

    • (a) the total of the taxpayer’s share of such of the drilling and exploration expenses, including all general geological and geophysical expenses, incurred by all those associations, partnerships or syndicates while the taxpayer was a member or partner thereof, on or in respect of exploring or drilling for petroleum or natural gas in Canada as were incurred after 1948 and before April 11, 1962, to the extent that they were not deductible in computing the taxpayer’s income for a preceding taxation year, and

    • (b) of that total, an amount equal to the taxpayer’s income from the businesses of all those associations, partnerships or syndicates for the taxation year, computed before making any deduction under this section or section 65, 66 or 66.1 of the amended Act.

  • Marginal note:Idem

    (10) There may be deducted in computing the income of a taxpayer for a taxation year from the businesses of all associations, partnerships or syndicates formed for the purpose of exploring or drilling for petroleum or natural gas and of which the taxpayer was a member or partner, the lesser of

    • (a) the total of the taxpayer’s share of such of the drilling and exploration expenses, including all general geological and geophysical expenses incurred by all those associations, partnerships or syndicates while the taxpayer was a member or partner thereof, on or in respect of exploring or drilling for petroleum or natural gas in Canada as were incurred after April 10, 1962 and before 1972, to the extent that they were not deductible in computing the taxpayer’s income for a preceding taxation year, and

    • (b) of that total, an amount equal to the taxpayer’s income from the businesses of all those associations, partnerships or syndicates for the taxation year computed before making any deduction under this section or section 65, 66 or 66.1 of the amended Act, minus the deduction allowed for the year under subsection (9) of this section.

  • Marginal note:Deduction from income of corporation

    (11) A corporation, other than a corporation described in subsection (4), may deduct, in computing its income for a taxation year, the lesser of

    • (a) the total of such of

      • (i) the drilling and exploration expenses, including all general geological and geophysical expenses, incurred by it on or in respect of exploring or drilling for petroleum or natural gas in Canada, and

      • (ii) the prospecting, exploration and development expenses incurred by it in searching for minerals in Canada,

      as were incurred after April 10, 1962 and before 1972, to the extend that they were not deductible in computing income for a preceding taxation year, and

    • (b) of that total, an amount that would be equal to the total of

      • (i) its income for the taxation year from operating an oil or gas well in Canada in which the corporation has an interest,

      • (ii) its income for the taxation year from royalties in respect of an oil or gas well in Canada,

      • (iii) any amount included in computing its income for the taxation year because of subsection (17), and

      • (iv) the amount, if any, included under paragraph 59(3.2)(b) or (c) of the amended Act in computing its income for the year,

      if no deduction were allowed under this section or section 65, 66 or 66.1 of the amended Act minus the deductions allowed for the year under subsections (9) and (10) of this section and subsection 66(2) of the amended Act.

  • Marginal note:Deduction by individual of exploration expenses

    (12) There may be deducted, in computing an individual’s income for a taxation year, the lesser of

    • (a) the total of such of

      • (i) the drilling and exploration expenses, including all general geological and geophysical expenses, incurred by the individual on or in respect of exploring or drilling for petroleum or natural gas in Canada, and

      • (ii) the individual’s share of the drilling and exploration expenses, including all general geological and geophysical expenses, incurred by all associations, partnerships or syndicates described in subsection (9), while the individual was a member or partner thereof, on or in respect of exploring or drilling for petroleum or natural gas in Canada,

      as were incurred after April 10, 1962 and before 1972, to the extent that they were not deductible in computing the individual’s income for a preceding taxation year, and

    • (b) of that total, an amount that would be equal to the total of

      • (i) the individual’s income for the taxation year from a business that consisted of the operation of an oil or gas well in Canada in which the individual had an interest,

      • (ii) the individual’s income for the taxation year from royalties in respect of an oil or gas well in Canada,

      • (iii) any amount included in computing the individual’s income for the taxation year because of subsection (17), and

      • (iv) the amount, if any, included under paragraph 59(3.2)(b) or (c) of the amended Act in computing the individual’s income for the year,

      if no deduction were allowed under this section or section 65, 66 or 66.1 of the amended Act, minus the deductions allowed for the year under subsections (9) and (10) of this section.

  • Marginal note:Limitation re payments for exploration and drilling rights

    (13) In computing a deduction under subsection (1), (3) or (9), no amount shall be included in respect of a payment for or in respect of a right, licence or privilege to explore for, drill for or take petroleum or natural gas, acquired before April 11, 1962, other than an annual payment not exceeding $1 per acre.

  • Marginal note:Exploration and drilling rights; payments deductible

    (14) Where an association, partnership or syndicate described in subsection (9) or a corporation or individual has, after April 10, 1962 and before 1972, acquired under an agreement or other contract or arrangement a right, licence or privilege to explore for, drill for or take in Canada petroleum, natural gas or other related hydrocarbons (except coal) under which agreement, contract or arrangement there was not acquired any other right to, over or in respect of the land in respect of which such right, licence or privilege was so acquired except the right

    • (a) to explore for, drill for or take materials and substances (whether liquid or solid and whether hydrocarbons or not) produced in association with the petroleum, natural gas or other related hydrocarbons (except coal) or found in any water contained in an oil or gas reservoir, or

    • (b) to enter on, use and occupy as much of the land as is necessary for the purpose of exploiting the right, licence or privilege,

    an amount paid in respect of the acquisition thereof that was paid

    • (c) before 1972, shall, for the purposes of subsections (4), (7), (10), (11) and (12), be deemed to be a drilling or exploration expense on or in respect of exploring or drilling for petroleum or natural gas in Canada incurred at the time of its payment,

    • (d) after 1971 and before May, 7, 1974, shall, for the purposes of the amended Act, be deemed to be Canadian exploration and development expenses (within the meaning assigned by subsection 66(15) of the amended Act) incurred at the time of its payment, and

    • (e) after May 6, 1974, shall, for the purposes of the amended Act, be deemed to be a Canadian development expense (within the meaning assigned by subsection 66.2(5) of the amended Act) incurred at the time of its payment.

  • Marginal note:Idem

    (15) In applying subsection (14) for the purposes of subsection (7), the expression “after April 10, 1962 and before 1972” in subsection (14) shall be read as “after April 10, 1962 and before April 27, 1965”.

  • Marginal note:Receipts for exploration or drilling rights included in income

    (16) Where a right, licence or privilege to explore for, drill for or take in Canada petroleum, natural gas or other related hydrocarbons (except coal) was disposed of after April 10, 1962 and before October 23, 1968

    • (a) by a corporation described in subsection (4),

    • (b) by a corporation, other than a corporation described in subsection (4), that was at the time of acquisition of the right, licence or privilege a corporation described in subsection (4), or

    • (c) by an association, partnership or syndicate described in subsection (9),

    any amount received by the corporation, association, partnership or syndicated as consideration for the disposition thereof shall be included in computing its income for its fiscal period in which the amount was received, unless the corporation, association, partnership or syndicate

    • (d) acquired the right, licence or privilege by inheritance or bequest, or

    • (e) acquired the right, licence or privilege before April 11, 1962 and disposed of it before November 9, 1962.

  • Marginal note:Idem

    (17) Where a right, licence or privilege to explore for, drill for or take in Canada petroleum, natural gas or other related hydrocarbons (except coal) that was acquired after April 10, 1962 and before 1972 by an individual or a corporation other than a corporation described in subsection (4), was subsequently disposed of before October 23, 1968, any amount received by the taxpayer as consideration for the disposition thereof shall be included in computing the taxpayer’s income for the taxation year in which the amount was received, unless the right, licence or privilege was acquired by the taxpayer by inheritance or bequest.

  • Marginal note:Idem

    (18) Subsections (16) and (17) do not apply to any disposition by an association, partnership or syndicate described in subsection (9) or a corporation or an individual of any right, licence or privilege described in subsection (14) or (16) unless the right, licence or privilege was acquired by the association, partnership, syndicate or corporation or individual, as the case may be, under an agreement, contract or arrangement described in subsection (14).

  • Marginal note:Idem

    (19) For the purposes of subsections (16) and (17),

    • (a) where an association, partnership or syndicate described in subsection (9) or a corporation or an individual has disposed of any interest in land that includes a right, licence or privilege described in subsection (14) that was acquired under an agreement, contract or arrangement described in that subsection, the proceeds of disposition of the interest shall to be deemed to be proceeds of disposition of the right, licence or privilege; and

    • (b) where an association, partnership or syndicate described in subsection (9) or a corporation or an individual has acquired a right, licence or privilege described in subsection (14) under an agreement, contract or arrangement described in that subsection and subsequently disposes of any interest

      • (i) in the right, licence or privilege, or

      • (ii) in the production of wells situated on the land to which the right, licence or privilege relates,

      the proceeds of disposition of the interest shall be deemed to be proceeds of disposition of the right, licence or privilege.

  • Marginal note:Idem

    (20) Subsections (11), (12) and (17) do not apply in computing the income for a taxation year of a taxpayer whose business includes trading or dealing in rights, licences or privileges to explore for, drill for or take in Canada petroleum, natural gas or other related hydrocarbons (except coal).

  • Marginal note:Bonus payments

    (21) Notwithstanding subsection (13), where a corporation whose principal business is of the class described in paragraph (3)(a) or (b) or an association, partnership or syndicate formed for the purpose of exploring or drilling for petroleum or natural gas has after 1952 paid an amount (other than a rental or royalty) to the government of Canada or a province for

    • (a) the right to explore for petroleum or natural gas on a specified parcel of land in Canada (which right is, for greater certainty, declared to include a right of the type commonly referred to as a “licence”, “permit” or “reservation”), or

    • (b) a legal lease of the right to take or remove petroleum or natural gas from a specified parcel of land in Canada,

    and before April 11, 1962 acquired the rights in respect of which the amount was so paid and, before any well came into production on the land in reasonable commercial quantities, the corporation, association, partnership or syndicate surrendered all the rights so acquired (including, in respect of a right of the kind described in paragraph (a), all rights thereunder to any lease and all rights under any lease made thereunder) without receiving any consideration therefor or repayment of any part of the amount so paid, the amount so paid shall, for the purposes of subsections (3), (4), (7), (9) and (10) of this section, and for the purposes of subsections 66(1), (10) and (10.1) and the definitions Canadian exploration and development expenses in subsection 66(15) and Canadian exploration expense in subsection 66.1(6) of the amended Act, be deemed to have been a drilling or exploration expense on or in respect of exploring or drilling for petroleum or natural gas in Canada or a Canadian exploration expense described in paragraph (a) of the definition Canadian exploration expense in subsection 66.1(6) of the amended Act, as the case may be, incurred by the corporation, association, partnership or syndicate during the taxation year in which the rights were so surrendered.

  • Marginal note:Idem

    (22) In applying the provisions of subsection (25) to determine the amount that may be deducted by a successor corporation in computing its income for a taxation year, where the predecessor corporation has paid an amount (other than a rental or royalty) to the government of Canada or a province for

    • (a) the right to explore for petroleum or natural gas on a specified parcel of land in Canada (which is, for greater certainty, declared to include a right of the type commonly referred to as a “licence”, “permit” or “reservation”), or

    • (b) a legal lease of the right to take or remove petroleum or natural gas from a specified parcel of land in Canada,

    if, before the predecessor corporation was entitled, because of subsection (21), to any deduction in computing its income for a taxation year in respect of the amount so paid, the property of the predecessor corporation was acquired by the successor corporation before April 11, 1962 in the manner set out in subsection (25), and the successor corporation did, before any well came into production in reasonable commercial quantities on the land referred to in paragraph (a) or (b), surrender all the rights so acquired by the predecessor corporation (including in respect of a right of the kind described in paragraph (a), all rights thereunder to any lease and all rights under any lease made thereunder) without receiving any consideration therefor or payment of any part of the amount so paid by the predecessor corporation, the amount so paid by the predecessor corporation shall be added to the amount determined under paragraph 25(c).

  • Marginal note:Expenses incurred for specified considerations not deductible

    (23) For the purposes of this section and section 53 of chapter 25 of the Statutes of Canada, 1949 (Second Session), it is declared that expenses incurred before 1972 by a corporation, association, partnership or syndicate on or in respect of exploring or drilling for petroleum or natural gas in Canada or in searching for minerals in Canada do not and never did include expenses so incurred by that corporation, association, partnership or syndicate under an agreement under which it undertook to incur those expenses in consideration for

    • (a) shares of the capital stock of a corporation that owned or controlled the mineral rights;

    • (b) an option to purchase shares of the capital stock of a corporation that owned or controlled the mineral rights; or

    • (c) a right to purchase shares of the capital stock of a corporation that was to be formed for the purpose of acquiring or controlling the mineral rights.

  • Marginal note:Exception

    (24) Notwithstanding subsection (23), a corporation whose principal business is

    • (a) production, refining or marketing of petroleum, petroleum products or natural gas or exploring or drilling for petroleum or natural gas, or

    • (b) mining or exploring for minerals,

    may deduct, in computing its income for a taxation year, the lesser of

    • (c) the total of such of

      • (i) the drilling and exploration expenses, including all general geological and geophysical expenses, incurred by it on or in respect of exploring or drilling for petroleum or natural gas in Canada, and

      • (ii) the prospecting, exploration and development expenses incurred by it in searching for minerals in Canada,

      as were incurred after 1953 and before 1972,

      • (iii) under an agreement under which it undertook to incur those expenses for a consideration mentioned in paragraph (23)(a), (b) or (c), and

      • (iv) to the extent that they were not deductible in computing income for a preceding taxation year, and

    • (d) of that total, an amount equal to its income for the taxation year if no deduction were allowed under this subsection or subsection (4) or under section 65, 66 or 66.1 of the amended Act minus the deductions allowed for the year under subsection 66(2) and sections 112 and 113 of the amended Act.

    but where a corporation has incurred expenses in respect of which this subsection authorizes deduction from income for a taxation year, no deduction in respect of those expenses may be made in computing the income of any other corporation or from the business of an association, partnership or syndicate for any taxation year.

  • Marginal note:Successor rule

    (25) Notwithstanding subsection (24) and subject to subsections 66.7(6) and (7) of the amended Act, where a corporation (in this subsection referred to as the “successor”) whose principal business is

    • (a) a production, refining or marketing of petroleum, petroleum products or natural gas, or exploring or drilling for petroleum or natural gas, or exploring or drilling for petroleum or natural gas, or

    • (b) mining or exploring for minerals,

    has, at any time after 1954, acquired a particular Canadian resource property (whether by way of a purchase, amalgamation, merger, winding-up or otherwise) from another person whose principal business was a business described in paragraph (a) or (b), there may be deducted by the successor in computing its income for a taxation year an amount not exceeding the total of all amounts each of which is an amount determined in respect of an original owner of the particular property that is the lesser of

    • (c) the total of

      • (i) the drilling and exploration expenses, including all general geological and geophysical expenses, incurred before 1972 by the original owner on or in respect of exploring or drilling for petroleum or natural gas in Canada, and

      • (ii) the prospecting, exploration and development expenses incurred before 1972 by the original owner in searching for minerals in Canada,

      to the extent that those expenses

      • (iii) were not otherwise deducted in computing the income of the successor for the year, were not deducted in computing the income of the successor for any preceding taxation year and were not deductible by the original owner or deducted by any predecessor owner of the particular property in computing income for any taxation year, and

      • (iv) would, but for the provisions of any of this subsection and paragraphs (1)(b), (2)(b), (3)(a), (4)(h) and 24(d), have been deductible in computing the income of the original owner or any predecessor owner of the particular property for the taxation year preceding the taxation year in which the particular property was acquired by the successor, and

    • (d) the amount, if any, by which

      • (i) the part of its income for the year that can reasonably be regarded as being attributable to

        • (A) the amount included in computing its income for the year under paragraph 59(3.2)(c) of the amended Act that can reasonably be regarded as being attributable to the disposition by it in the year or a preceding taxation year of any Canadian resource properties owned by the original owner and each predecessor owner of the particular property before the acquisition of the particular property by the successor to the extent that the proceeds of the disposition have not been included in determining an amount under this clause or clause 66.7(1)(b)(i)(A) or (3)(b)(i)(A) or paragraph 66.7(10)(g) of the amended Act for a preceding taxation year, or

        • (B) production from the particular property, computed as if no deduction were allowed under this section or subdivision e of Division B of Part I of the amended Act,

      exceeds

      • (ii) the total of all other amounts deducted under this subsection and subdivision e of Division B of Part I of the amended Act for the year that can reasonably be regarded as attributable to the part of its income for the year described in subparagraph (i) in respect of the particular property.

  • Marginal note:Definitions

    (25.1) For the purposes of subsection (25), the terms Canadian resource property, original owner, predecessor owner and production have the meanings assigned by subsection 66(15) of the amended Act.

  • Marginal note:Processing or fabricating corporation

    (26) A reference in subsection (3), (21), (24) or (25) to a corporation whose principal business is mining or exploring for minerals shall, for the purposes of this section, be deemed to include a reference to a corporation whose principal business is

    • (a) processing mineral ores for the purpose of recovering metals therefrom,

    • (b) a combination of

      • (i) processing mineral ores for the purpose of recovering metals therefrom, and

      • (ii) processing metals recovered from the ores so processed, or

    • (c) fabricating metals,

    but in applying the provisions of this section to any such corporation the references, respectively, in subsections (3), (21), (24) and (25) to the years 1952, 1953 and 1954 shall be read as a reference in each case to the year 1956.

  • Meaning of drilling and exploration expenses

    (27) For the purposes of this section, drilling and exploration expenses incurred on or in respect of exploring or drilling for petroleum or natural gas in Canada include expenses incurred on or in respect of

    • (a) drilling or converting a well for the disposal of waste liquids from a petroleum or natural gas well in Canada;

    • (b) drilling for water or gas for injection into a petroleum or natural gas formation in Canada; and

    • (c) drilling or converting a well for the injection of water or gas to assist in the recovery of petroleum or natural gas from another well in Canada.

  • Marginal note:Deduction from expenses

    (28) For the purposes of this section, there shall be deducted in computing

    • (a) drilling and exploration expenses incurred by a taxpayer on or in respect of exploring or drilling for petroleum or natural gas in Canada, and

    • (b) prospecting, exploration and development expenses incurred by a taxpayer in searching for minerals in Canada,

    any amount paid to the taxpayer before 1972 under the Northern Mineral Exploration Assistance Regulations made under an appropriation Act that provides for payments in respect of the Northern Mineral Grants Program, and there shall be included in computing those expenses any amount, except an amount in respect of interest, paid by the taxpayer before 1972 under those Regulations to Her Majesty in right of Canada.

  • Inclusion in drilling and exploration expenses

    (30) For the purposes of this section, drilling and exploration expenses incurred on or in respect of exploring or drilling for petroleum or natural gas in Canada include an annual payment made for the preservation of a right, licence or privilege described in subsection (14).

  • Marginal note:General limitation

    (31) Where a corporation, association, partnership or syndicate has incurred expenses the deduction of which from income is authorized under more that one provision of this section, it is not entitled to make the deduction under more than one provision but is entitled to select the provision under which to make the deduction.

  • Marginal note:Deduction for provincial tax

    (32) Where a corporation whose principal business is production, refining or marketing of petroleum, petroleum products or natural gas or exploring or drilling for petroleum or natural gas could have deducted an amount in respect of expenditures of the corporation in connection with exploration or drilling for petroleum or natural gas incurred in a preceding taxation year from the tax payable under a provincial statute for the 1952 or a subsequent taxation year if the provincial statute were applicable to that year, the corporation may deduct from the tax otherwise payable by it under Part I of the amended Act for the year an amount not exceeding the amount that would have been so deductible.

  • Definition of provincial statute

    (33) For the purposes of subsection (32), provincial statute means a statute imposing a tax on the incomes of corporations enacted by the legislature of a province in 1949 and, for the purpose of that subsection, an amount deductible thereunder for one year shall, for the purpose of computing the deduction for a subsequent year, be deemed to have been deductible under the provincial statute.

  • Marginal note:Expenses deductible under certain enactments deemed not otherwise deductible

    (34) Where expenses are or have been, under this section, section 8 of the Income War Tax Act, section 16 of chapter 63 of the Statutes of Canada, 1947, section 16 of chapter 53 of the Statutes of Canada, 1948, section 53 of chapter 25 of the Statutes of Canada, 1949 (Second Session) or section 83A of the former Act, deductible from or in computing a taxpayer’s income, or where any amount is or has been deductible in respect of expenses under any of those provisions from taxes otherwise payable, it is declared that no amount in respect of the same expenses is or has been deductible under any other authority in computing the income or from the income of that taxpayer or any other taxpayer for any taxation year.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • R.S., 1985, c. 2 (5th Supp.), s. 29
  • 1994, c. 7, Sch. II, s. 201
  • 1997, c. 25, s. 73
 
Date modified: