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O. Reg. 499/00: GENERAL

filed August 31, 2000 under Corporations Tax Act, R.S.O. 1990, c. C.40

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ontario regulation 499/00

made under the

corporations tax act

Made: August 30, 2000
Filed: August 31, 2000

Amending Reg. 183 of R.R.O. 1990

(General)

1. Subsection 703 (2) of Regulation 183 of the Revised Regulations of Ontario, 1990 is amended by adding the following paragraph:

24. Ford Credit Canada Limited, for a taxation year ending after December 31, 1999.

2. (1) Paragraph 2 of subsection 905 (3) of the Regulation is revoked and the following substituted:

2. The corporation has carried on its sound recording business throughout the period of 24 months that ends immediately before the beginning of the taxation year.

(2) Paragraph 4 of subsection 905 (3) of the Regulation is revoked and the following substituted:

4. For a taxation year that commences before May 2, 2000, less than 50 per cent of the corporation’s taxable income for either the taxation year or the preceding taxation year is earned for the purposes of Part II of the Act in a jurisdiction other than Ontario.

4.1 For a taxation year that commences after May 1, 2000, less than 50 per cent of the corporation’s taxable income for the preceding taxation year is earned for the purposes of Part II of the Act in a jurisdiction other than Ontario.

(3) Paragraph 6 of subsection 905 (3) of the Regulation is revoked.

(4) Section 905 of the Regulation is amended by adding the following subsections:

(3.1) If a corporation (the “new corporation”) has been formed as a result of an amalgamation or merger of two or more corporations (the “predecessor corporations”), the new corporation shall be deemed,

(a) to meet the condition described in paragraph 2 of subsection (3) for a taxation year,

(i) if one of the predecessor corporations has carried on its sound recording business throughout the period of 24 months that ends immediately before the beginning of the taxation year, or

(ii) if the new corporation plus one of the predecessor corporations have, in total, carried on a sound recording business throughout the period of 24 months that ends immediately before the beginning of the taxation year;

(b) to meet the condition described in paragraph 4 or 4.1, as the case may be, of subsection (3) for the first taxation year of the new corporation if the predecessor corporations would be considered together to earn less than 50 per cent of their taxable income for the preceding taxation year in a jurisdiction other than Ontario; and

(c) to meet the condition described in paragraph 8 of subsection (3) if the plan for the distribution of a sound recording is implemented within the period specified in that paragraph by at least one of the predecessor corporations.

(3.2) If a subsidiary controlled corporation is wound up into a corporation (the “parent corporation”), the parent corporation shall be deemed,

(a) to meet the condition described in paragraph 2 of subsection (3) for a taxation year,

(i) if the subsidiary controlled corporation has carried on its sound recording business throughout the period of 24 months that ends immediately before the beginning of the taxation year, or

(ii) if the parent corporation plus the subsidiary controlled corporation have, in total, carried on a sound recording business throughout the period of 24 months that ends immediately before the beginning of the taxation year;

(b) if the winding-up occurred in the taxation year, to meet the condition described in paragraph 4 or 4.1, as the case may be, of subsection (3) for the taxation year if the parent corporation and the subsidiary controlled corporation would be considered together to earn less than 50 per cent of their taxable income for the preceding taxation year in a jurisdiction other than Ontario; and

(c) to meet the condition described in paragraph 8 of subsection (3) if the plan for the distribution of a sound recording is implemented within the period specified in that paragraph by the subsidiary controlled corporation.

(3.3) The following rules apply for the purposes of paragraphs 2, 4, 4.1 and 8 of subsection (3):

1. If a sound recording business carried on by a corporation was previously carried on by a sole proprietor or by a partnership, the sole proprietor or partnership shall be deemed to be a corporation for the period of time that he, she or it carried on the business before its incorporation and the corporation shall be deemed to be the same corporation as, and a continuation of, the deemed corporation.

2. If all or substantially all of the assets used in a sound recording business are transferred by a corporation (the “transferor”) to another corporation (the “transferee”) and if section 85 of the Income Tax Act (Canada) applies to the transfer, the transferee shall be deemed to be the same corporation as, and a continuation of, the transferor with respect to the operation of the business.

3. (1) Subject to subsections (2) and (3), this Regulation comes into force on the day it is filed.

(2) Section 1 shall be deemed to have come into force on January 1, 2000.

(3) Section 2 shall be deemed to have come into force on January 2, 1999.