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Taxation Act, 2007, S.O. 2007, c. 11, Sched. A

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Taxation Act, 2007

S.o. 2007, chapter 11
Schedule A

Consolidation Period: From April 19, 2016 to the e-Laws currency date.

Last amendment: 2016, c. 5, Sched. 28.

Legislative History: 2007, c. 11, Sched. B, s. 5; 2008, c. 7, Sched. S; 2008, c. 19, Sched. U; 2008, c. 24, s. 4-9; 2009, c. 18, Sched. 28; 2009, c. 22, s. 100; 2009, c. 33, Sched. 16, s. 12; 2009, c. 34, Sched. U; 2010, c. 1, Sched. 29, s. 1; 2010, c. 13; 2010, c. 21; 2010, c. 23; 2010, c. 26, Sched. 20; CTS 18 AU - 1; 2011, c. 9, Sched. 40; 2012, c. 8, Sched. 56; 2012, c. 9; 2012, c. 13; 2013, c. 2, Sched. 14; 2013, c. 7, s. 8; 2014, c. 7, Sched. 29; 2014, c. 8; CTS 10 JL 14 - 1; 2015, c. 20, Sched. 40; 2015, c. 38, Sched. 20; 2016, c. 5, Sched. 28;

CONTENTS

PART I
INTERPRETATION AND APPLICATION

1.

Interpretation

2.

Application

PART II
INDIVIDUALS — INCOME AND OTHER PERSONAL TAXES

Division A — Interpretation and Liability for Tax

3.

Definitions

4.

Liability for tax

Division B — Personal Income Tax

Subdivision a — Tax Calculation

5.

Personal income tax calculation

6.

Basic personal income tax

7.

Basic personal income tax, inter vivos trust

7.1

Basic personal income tax, trusts, 2016 and subsequent taxation years

Subdivision b — Non-Refundable Tax credits

8.

Rules for non-refundable tax credits

9.

Non-refundable tax credits

10.

Apportionment of non-refundable tax credits

Subdivision c — Additional Taxes

11.

Minimum tax before 2016

12.

Tax on split income, 2015 and previous taxation years

12.1

Tax on split income, 2016 and subsequent taxation years

Subdivision d — Additional Tax Credits before Surtax

13.

Dividend tax credit before 2014

14.

Overseas employment tax credit

15.

Tax credit for minimum tax

Subdivision e — Ontario Surtax

16.

Ontario surtax

Subdivision f — Averaging and Adjustments

17.

Qualifying lump-sum amount

18.

CPP or QPP benefits

19.

Additional tax amount, section 40 ITAR

Subdivision g — Ontario Dividend Tax Credit, 2016 and subsequent taxation years

19.1

Ontario dividend tax credit, 2016 and subsequent taxation years

Subdivision h — Minimum Tax, 2016 and subsequent taxation years

19.2

Minimum tax, 2016 and subsequent taxation years

Subdivision i — Additional Tax Credits after Surtax

20.

Ontario tax reduction

20.1

Ontario dividend tax credit for 2014 and 2015

21.

Foreign tax credit

22.

Investment corporation tax credit

Subdivision j — Indexing and Rounding

23.

Annual adjustment

Division C — Ontario Health Premium

24.

Liability for Ontario Health Premium

25.

Report about revenue from the Ontario Health Premium

PART III
CORPORATE TAX

Division A — General

26.

Interpretation

27.

Obligation to pay tax

28.

If corporation is a bankrupt

Division B — Corporate Income Tax

Subdivision a — General Corporate Income Tax, Tax Credits and Surtax

29.

Basic income tax

30.

Change in tax status

31.

Ontario small business deduction

32.

Surtax re Ontario small business deduction

33.

Tax credit for manufacturing, processing, etc.

34.

Foreign tax credit

35.

Credit union tax reduction

Subdivision b — Crown Royalties and Resource Tax Credit

36.

Additional tax re crown royalties

37.

Resource tax credit

Subdivision c — Ontario Research and Development Tax Credit

38.

Definitions

39.

Ontario research and development tax credit deduction

40.

Partnerships

41.

Reduction of eligible expenditures, receipt of assistance

42.

Transfer of eligible expenditures

43.

Waiver of tax credit

44.

Control acquired before the end of the year

45.

Recapture of tax credit

Subdivision d — Transitional Tax Debits and Credits

46.

Definitions

47.

Transitional tax debits and credits

48.

Amount of additional tax

49.

Calculation of amounts for purposes of s. 48

50.

Amount of tax credit

51.

Rules and adjustments if amalgamation or winding-up

52.

Treatment of specified pre-2009 transfers

Subdivision e — Corporate Minimum Tax Credit

53.

Corporate minimum tax credit

Subdivision f — Political Contributions Tax Credit

53.1

Definitions

53.2

Tax credit calculation

Division C — Corporate Minimum Tax

54.

Interpretation

55.

Corporate minimum tax liability, taxation years ending before July 1, 2010

56.

Calculation of corporate minimum tax

57.

Adjusted net income

58.

Eligible losses for a taxation year

59.

Foreign tax credit

60.

Election on transfer of property

61.

Election on replacement of property

62.

Limitation respecting inclusions and deductions

Division D — Special Additional Tax on Life Insurance Corporations

63.

Special additional tax, life insurance corporation

Division E — Capital Tax

Subdivision a —Liability for Capital Tax

64.

Liability for capital tax

Subdivision b —Financial Institutions

65.

Application

66.

Interpretation

67.

Rule for determining values and amounts

68.

Financial institution resident in Canada

69.

Authorized foreign bank

70.

Adjusted taxable paid-up capital

71.

Anti-avoidance

72.

Capital tax payable by a financial institution

73.

Small business investment tax credit

74.

Small business investment tax credit account

75.

Below-prime loan

76.

Patient capital investment

77.

Determination of total assets and gross revenue

78.

Tax credit amount, investment in a community small business investment fund corporation

79.

Small business investment tax credit repayment

Subdivision c — Corporations other than Financial Institutions

80.

Application

81.

Definitions

82.

Capital tax, corporations other than financial institutions

83.

Capital deduction – general rule

83.1

Capital tax credit for manufacturers

PART IV
REFUNDABLE TAX CREDITS

Division A — General

84.

Refundable tax credits, deemed payments on account of tax

85.

Transitional

86.

Change in tax status

Division B — Corporations and Individuals

87.

Qualifying environmental trust tax credit

88.

Co-operative education tax credit

89.

Apprenticeship training tax credit

Division C — Corporations

90.

Ontario computer animation and special effects tax credit

91.

Ontario film and television tax credit

92.

Ontario production services tax credit

93.

Ontario interactive digital media tax credit

93.1

Qualifying digital game corporation’s tax credit

93.2

Specialized digital game corporation’s credit

94.

Ontario sound recording tax credit

95.

Ontario book publishing tax credit

96.

Ontario innovation tax credit

97.

Ontario business-research institute tax credit

Division D — Individuals

Subdivision a — Interpretation

98.

Interpretation

Subdivision b — Property and Sales Tax Credits before 2010

98.1

Interpretation

99.

Property and sales tax credits, individual other than a senior

100.

Property and sales tax credits, seniors

101.

Rules relating to property and sales tax credits

Subdivision c — Ontario Energy and Property Tax Credit for 2010

101.0.1

Definitions

101.1

Ontario energy and property tax credit, individual other than a senior

101.2

Ontario energy and property tax credit, seniors

101.3

Rules relating to Ontario energy and property tax credit

Subdivision d — Other Tax Credits

102.

Political contribution tax credit

103.

Ontario focused flow-through share tax credit

103.1

Children’s activity tax credit

103.1.1

Healthy homes renovation tax credit

PART IV.0.1
NON-REFUNDABLE TAX CREDITS

103.1.2

Community food program donation tax credit for farmers

PART IV.1
ONTARIO TRILLIUM BENEFIT

Ontario Trillium Benefit

103.2

Ontario Trillium Benefit

103.3

Payment of Benefit

Interpretation

103.4

Interpretation

103.5

Qualified dependant

103.6

Qualified relation

103.7

Application of Federal Act

Calculations

103.8

Calculation of Ontario sales tax credit

103.9

Calculation of Ontario energy and property tax credit (other than for seniors)

103.10

Calculation of Ontario energy and property tax credit, seniors

103.11

Rules relating to the Ontario energy and property tax credit

103.12

Calculation of Northern Ontario energy credit

General

103.13

Eligibility where two or more potential claimants

103.14

Effect of death of eligible individual, etc., on calculations

103.15

Repayment of amounts

103.16

No interest payable

103.17

No assignment, etc., of amounts

PART V
ONTARIO CHILD BENEFIT

104.

Ontario child benefit

PART V.1
SENIOR HOMEOWNERS’ PROPERTY TAX GRANT

104.1

Senior homeowners’ property tax grant

PART V.2
ONTARIO TAX EXEMPTION FOR COMMERCIALIZATION

104.2

Definitions and interpretation

104.3

Ontario tax exemption for commercialization

104.4

Certificate of eligibility

104.5

Preliminary determination

104.6

Application for refund

104.7

Recovery of refund

104.8

Offence

104.9

Agreement for the administration of this Part

104.10

Regulations

PART V.3
ONTARIO SALES TAX CREDIT

104.10.1

Discontinuation of tax credit

104.11

Definitions

PART V.5
SMALL BEER MANUFACTURERS’ TAX CREDIT

104.13

Definitions

104.14

Qualifying corporation

104.15

Eligible sale of beer

104.16

Small beer manufacturers’ tax credit

104.17

Application and payment

104.18

Agreement for the administration of this Part

PART V.6
NORTHERN ONTARIO ENERGY CREDIT

104.18.1

Discontinuation of tax credit

104.19

Interpretation

104.20

Northern Ontario energy credit

104.21

Eligibility for the credit

104.22

Amount and payment of credit

104.23

Miscellaneous rules

104.24

Money appropriated by the Legislature

PART V.8
ONTARIO ENERGY AND PROPERTY TAX CREDIT AFTER 2010 AND BEFORE JULY 1, 2012

104.34.1

Discontinuation of tax credit

104.35

Interpretation

104.36

Ontario energy and property tax credit after 2010

104.37

Amount of tax credit, individuals other than seniors

104.38

Amount of tax credit, seniors

104.39

Rules relating to the tax credit

104.40

Repayment

104.41

Deemed exclusion from Estimates

PART VI
CAPITAL GAINS REFUNDS FOR MUTUAL FUNDS

105.

Mutual fund trusts

106.

Mutual fund corporations

PART VII
SPECIAL CASES

Tax Shelters and Avoidance

107.

General rule, tax shelters and tax shelter investments

108.

Avoidance of tax, trusts

109.

Transfer pricing

110.

General anti-avoidance rule

110.1

Reportable transactions

PART VIII
ADMINISTRATION AND ENFORCEMENT

Returns

111.

Returns

Assessments

112.

Original assessment of returns, etc.

113.

Required Ontario assessments and reassessments

114.

Additional reassessments

Payments

115.

Payment by individuals

116.

Payment by corporations

117.

Returns, payments and interest

118.

Daily interest

119.

Amount of instalment on which interest is computed

Penalties

120.

Penalty for failure to file return, etc.

121.

Penalty for repeated failure to report an amount

121.1

Penalty re use, etc., of electronic suppression of sales devices

122.

Late or deficient instalments

Refunds

123.

Refunds

Objections to Assessments

124.

Objections to assessments

Appeals to the Superior Court of Justice

125.

Right of appeal

126.

Reply

127.

Appeal deemed an action

Objections and Appeals — Specified Refunds

127.1

Rules for objections and appeals

Application for Declaration of Law

128.

Application under subrule 14.05 (2), Rules of Civil Procedure

Enforcement

129.

Administration, garnishment, collection, etc.

130.

Taxes, etc., are debts

131.

Certificate of amount payable

132.

Warrant for collection of indebtedness

133.

Acquisition of debtor’s property

134.

Money seized in criminal proceeding

135.

Direction to seize chattels

136.

Demand for payment

137.

Withholding

138.

Joint liability

139.

Directors’ liability

140.

Assessments re ss. 129, 137, 138, 139

General

141.

Records to be kept

142.

Inspections, privilege, information returns and corporate execution

Offences

143.

Offences

144.

Offences, certain

144.1

Offence, electronic suppression of sales devices

145.

Ministerial discretion

146.

Offence, secrecy

147.

Reciprocal provision of information, Minister of Finance

148.

Liability of corporation officers

149.

No decrease in penalties

Procedure and Evidence

150.

Information

151.

Proof

152.

Documents, admissibility

153.

Presumption of authority

154.

Judicial notice

155.

Documents deemed to be signed by Ontario Minister, etc.

156.

Mailing or sending date

156.1

Date when electronic notice sent

157.

Date when assessment made

158.

Forms

159.

Notices, etc., relating to partnerships

Remissions

160.

Remission of Ontario tax

Collection Agreement

161.

Collection agreement

162.

Disclosure of corporate information by the Minister of Government Services

163.

Application of payments by taxpayers

164.

Deductions at source

165.

Adjustments between non-agreeing provinces

Reciprocal Enforcement of Judgments

166.

Enforcement of judgments

PART IX
REGULATIONS, FORMS AND OTHER MATTERS

167.

Regulations, general

168.

Application of Federal regulations

169.

Incorporation by reference

170.

Regulations, Part II

171.

Regulations, Part III

172.

Regulations, Part IV

172.0.1

Regulations, Part IV.1

172.1

Regulations, Part V.5

173.

Regulations, Part VIII

174.

Transitional

175.

Forms

176.

Appropriations

 

Part i
interpretation and application

Interpretation

Definitions

1. (1) In this Act,

“agreeing province” means a province that has entered into an agreement with the Government of Canada under which the Government of Canada will collect taxes payable under the income tax statute of that province and will make payments to that province in respect of the taxes so collected; (“province participante”)

“assessment” includes a reassessment and an additional assessment; (“cotisation”)

“basic rate of tax” means, with respect to a corporation for a taxation year, the corporation’s basic rate of tax for the year as determined under subsection 29 (2); (“taux d’imposition de base”)

“Canadian-controlled private corporation” means a corporation that would be a Canadian-controlled private corporation for the purposes of the Federal Act if the definition of that expression in subsection 125 (7) of that Act were read without reference to clause (d) of the definition; (“société privée sous contrôle canadien”)

“cohabiting spouse or common-law partner” has the meaning assigned by section 122.6 of the Federal Act but, in section 104.1 of this Act, has the meaning assigned in that section; (“conjoint ou conjoint de fait visé”)

“collection agreement” means a collection agreement referred to in section 161; (“accord de perception”)

“deputy head” means the Deputy Minister of Finance or, if a collection agreement is in effect, the Commissioner of Revenue appointed under section 25 of the Canada Revenue Agency Act (Canada); (“sous-ministre”)

“designated corporation” means, with respect to a particular corporation,

(a) a corporation that amalgamated with one or more other corporations to form the particular corporation, if section 87 of the Federal Act applies to the amalgamation,

(b) a corporation that winds up into the particular corporation, if subsection 88 (1) of the Federal Act applies to the winding-up, or

(c) a corporation that is a designated corporation with respect to a corporation that is itself a designated corporation with respect to the particular corporation; (“société désignée”)

“Federal Act” means the Income Tax Act (Canada); (“loi fédérale”)

“federal application rule” means a provision of an Act of Parliament or of the Federal regulations, other than subsection 248 (11) of the Federal Act, that,

(a) affects the application of a provision of the Federal Act or the Federal regulations, or

(b) makes a provision, or the repeal or amendment of a provision, of the Federal Act or Federal regulations apply,

(i) to specified taxation years,

(ii) to specified fiscal periods,

(iii) after a specified time, or

(iv) to transactions or events that occur before or after a specified time or in specified taxation years or specified fiscal periods; (“règle d’application fédérale”)

“Federal Minister” means the Minister of National Revenue for Canada; (“ministre fédéral”)

“Federal regulations” means the regulations made under the Federal Act; (“règlement fédéral”)

“graduated rate estate” means a graduated rate estate as defined in subsection 248 (1) of the Federal Act; (“succession assujettie à l’imposition à taux progressifs”)

“income” means,

(a) in respect of a corporation for a taxation year,

(i) the corporation’s income for the year as determined for the purposes of the Federal Act, if the taxation year ends after December 31, 2008, or

(ii) the corporation’s income for the year as determined for the purposes of Part II of the Corporations Tax Act or the Federal Act, as the context requires, if the taxation year ends before January 1, 2009, or

(b) in respect of an individual for a taxation year,

(i) the total determined under paragraph 114 (a) of the Federal Act in the case of an individual in respect of whom section 114 of the Federal Act applies,

(ii) the amount that would be the individual’s taxable income earned in Canada for the year under subsection 115 (1) of the Federal Act if that subsection ended with clause (1) (c), in the case of an individual not resident in Canada throughout the year, or

(iii) the individual’s income for the year as determined in accordance with and for the purposes of the Federal Act in any other case; (“revenu”)

“income tax statute” means, with reference to a province, the law of that province that imposes a tax similar to the tax imposed under Division B of Part II; (“loi de l’impôt sur le revenu”)

“individual” means a person other than a corporation and includes a trust referred to in subdivision k of Division B of Part I of the Federal Act, a graduated rate estate and a qualified disability trust; (“particulier”)

“limited partner” means, in respect of a partnership, a member of the partnership whose liability as a member of the partnership is limited by operation of a law governing the partnership arrangement, but does not include a member of a partnership whose liability as a member of the partnership is limited solely by operation of a provision of a statute of Canada or a province that limits the member’s liability only for debts, obligations and liabilities of the partnership or a member of the partnership, arising from negligent acts or omissions, from misconduct or from fault of another member of the partnership or an employee, an agent or a representative of the partnership in the course of the partnership business while the partnership is a limited liability partnership; (“commanditaire”)

“Minister of Finance” means the Minister of Finance for Ontario or such other member of the Executive Council as is designated under the Executive Council Act to administer this Act; (“ministre des Finances”)

“notice of assessment” includes a notice of a reassessment and a notice of an additional assessment; (“avis de cotisation”)

“Ontario allocation factor” means, with respect to a corporation for a taxation year ending after December 31, 2008, the fraction equal to “A/B” where,

(a) “A” equals,

(i) the corporation’s Ontario taxable income for the taxation year if the corporation’s taxable income or taxable income earned in Canada, as the case may be, for the taxation year is a positive amount, or

(ii) the amount that would be the corporation’s Ontario taxable income for the taxation year if the corporation’s taxable income or taxable income earned in Canada were $1,000, in any other case, and

(b) “B” equals,

(i) the corporation’s taxable income or taxable income earned in Canada, as the case may be, for the taxation year if it is a positive amount, or

(ii) $1,000, in any other case; (“coefficient de répartition de l’Ontario”)

“Ontario allocation factor” means, in respect of a corporation for a taxation year ending before January 1, 2009, the corporation’s Ontario allocation factor for the year as determined under subsection 12 (1) of the Corporations Tax Act; (“coefficient de répartition de l’Ontario”)

“Ontario Health Premium” means the tax described in Division C of Part II; (“contribution-santé de l’Ontario”)

“Ontario Minister” means the Minister of Finance or, if a collection agreement is in effect, means,

(a) the Receiver General for Canada, in relation to the remittance of an amount as or on account of tax or other amounts payable under this Act, or

(b) the Federal Minister, in relation to any other matter except the administration and enforcement of Part V.2 and section 127.1; (“ministre ontarien”)

“Ontario taxable income” means, with respect to a corporation for a taxation year, the corporation’s taxable income earned in the year in Ontario, as determined under the Federal regulations made under subsection 124 (4) of the Federal Act; (“revenu imposable gagné en Ontario”)

“overpayment” means, with respect to a taxpayer for a taxation year, the taxpayer’s overpayment for the year, as determined under subsection 164 (7) of the Federal Act for the purposes of this Act; (“paiement en trop”)

“permanent establishment”,

(a) has the meaning assigned by subsection 400 (2) of the Federal regulations in the case of a corporation, and

(b) has the meaning assigned by subsection 2600 (2) of the Federal regulations in the case of an individual; (“établissement stable”)

“prescribed” means, unless the context indicates otherwise,

(a) “prescribed” as defined in subsection 248 (1) of the Federal Act, in the application of any provision of the Federal Act, other than subsection 153 (1), that applies for the purposes of this Act, and

(b) prescribed by the regulations or determined in accordance with rules prescribed by the regulations in any other case; (“prescrit”)

“province” means a province of Canada and includes each territory of Canada; (“province”)

“provision” includes, in respect of a statute or regulation, a definition in a provision of the statute or regulation; (“disposition”)

“qualified disability trust” means a qualified disability trust as defined in subsection 122 (3) of the Federal Act; (“fiducie admissible pour personne handicapée”)

“qualifying environmental trust” means a qualifying environmental trust, as defined in subsection 248 (1) of the Federal Act, that is resident in Ontario; (“fiducie pour l’environnement admissible”)

“Receiver General for Canada” means the Receiver General for Canada, but in any provision of the Federal Act that is incorporated by reference in this Act, unless a collection agreement is entered into, a reference to the Receiver General for Canada shall be read and construed for the purposes of this Act as a reference to the Minister of Finance; (“receveur général du Canada”)

“regulation” means, unless the context indicates otherwise, a regulation made under this Act. (“règlement”)  2007, c. 11, Sched. A, s. 1 (1); 2008, c. 7, Sched. S, s. 1; 2008, c. 24, s. 4; 2011, c. 9, Sched. 40, s. 1; 2015, c. 20, Sched. 40, s. 1.

Rules re residency

(2) The following rules apply in determining where an individual is resident in a taxation year for the purposes of this Act:

1. If the individual would, but for this paragraph, be resident in more than one province at a particular time in the year and can reasonably be considered to have had a principal place of residence at that time in one province, the individual is deemed to have resided at that time only in that province.

2. If the individual died in the year, a reference in this Act or the regulations to the “last day” of the year shall, subject to paragraph 3, be read as a reference to the last day in the year when the individual was alive.

3. If the individual  resided in Canada at any time in the year, but ceased to reside in Canada before the end of the year, a reference in this Act or the regulations to the “last day” of the year shall be read as a reference to the last day in the year when the individual resided in Canada.  2007, c. 11, Sched. A, s. 1 (2).

Meaning of “tax payable” re individual

(3) References in this Act to the tax payable by an individual under this Act shall be read as references to the tax payable by the individual as fixed by assessment under this Act, subject to any variation on an objection or appeal under this Act.  2007, c. 11, Sched. A, s. 1 (3).

Meaning of “tax payable” re corporation

(4) The tax payable by a corporation under any division of Part III means the tax payable by the corporation under that division as fixed by assessment under this Act, subject to any variation on an objection or appeal under this Act.  2007, c. 11, Sched. A, s. 1 (4).

Application of Part XVII of the Federal Act

(5) Part XVII of the Federal Act applies for the purposes of this Act with the following exceptions:

1. The definition of “qualifying share” in subsection 248 (1), subsections 248 (2) and (11) and section 260 of the Federal Act do not apply for the purposes of this Act.

2. The definitions of “employed” and “gross revenue” in subsection 248 (1) of the Federal Act do not apply for the purposes of this Act except as they apply for the purposes of provisions of the Federal Act or Federal regulations that apply for the purposes of this Act.

3. A definition in Part XVII of the Federal Act of a word or expression does not apply to the extent that it is at variance with a definition of the same word or expression in this Act that applies in the particular case.  2007, c. 11, Sched. A, s. 1 (5).

Act to be interpreted consistently with Federal Act

(6) In any case of doubt, the provisions of this Act shall be applied and interpreted in a manner consistent with similar provisions of the Federal Act.  2007, c. 11, Sched. A, s. 1 (6).

Modifications of federal provisions

(7) If a provision of the Federal Act or the Federal regulations (in this subsection referred to as the “Federal provision”) is stated in this Act or the regulations to apply for one or more purposes of this Act or the regulations, the Federal provision, as amended from time to time, applies with such modifications as are provided by this Act or the regulations or as the circumstances require as though it had been enacted as a provision of this Act or made as a regulation under this Act and the following rules apply, in addition to those modifications, unless the context indicates otherwise, in applying the Federal provision for those purposes:

1. A reference in the Federal provision to tax or another amount payable under Part I of the Federal Act shall be read as a reference to tax or another amount payable under this Act. 

2. If the Federal provision contains a reference to tax under any of Parts I.1 to XIV of the Federal Act, the Federal provision shall be read without reference to tax under any of those Parts and without reference to any portion of the Federal provision that applies only to or in respect of tax under any of those Parts.

3. If the Federal provision contains a reference to any of Parts I.1 to XIV of the Federal Act or to a provision in any of those Parts, the Federal provision shall be read without reference to that Part or that provision, as the case may be, and without reference to any portion of the Federal provision that applies only because of the application of any of those Parts or a provision in any of those Parts.

4. Subject to paragraph 5, a reference in the Federal provision to one or more provisions of the Federal Act shall be read as a reference to the provisions of this Act that are the same as or similar to those provisions of the Federal Act. 

5. A reference in the Federal provision to one or more provisions of the Federal Act or the Federal regulations that are stated to apply for one or more purposes of this Act shall be read as a reference to those provisions as they apply for the purposes of this Act.

6. A Federal provision that contains a reference to the Bankruptcy and Insolvency Act (Canada) shall be read without reference to that Act.

7. A reference in the Federal provision to “Her Majesty” or “Her Majesty in right of Canada” shall be read as or include a reference to “the Crown in right of Ontario”.

8. A reference in the Federal provision to “Receiver General” shall be read as a reference to the Minister of Finance to the extent that the reference relates to a taxation year of a taxpayer for which a collection agreement is not in effect.

9. A reference in the Federal provision to a word or expression set out in Column 1 of the Table to this subsection shall be read as or to include a reference to the word or expression set out in the same row in Column 2 of the Table:

Table
Words and Expressions

 

Item

Column 1
Word or expression in Federal provision

Column 2
Word or expression to be substituted

1.

Canada Revenue Agency

Ontario Ministry of Finance

2.

Commissioner of Revenue

deputy head

3.

Deputy Attorney General of Canada

Deputy Attorney General of Ontario

4.

Federal Court of Appeal

Ontario Court of Appeal

5.

Federal Courts Act

Courts of Justice Act

6.

Minister

Ontario Minister

7.

Tax Court of Canada

Superior Court of Justice

8.

Tax Court of Canada Act

Courts of Justice Act

9.

Registry of the Tax Court of Canada

local Registrar of the Superior Court of Justice

 

2007, c. 11, Sched. A, s. 1 (7).

Rules for applying Federal provisions

(8) Subject to subsection (7), the following rules apply where a provision of the Federal Act or the Federal regulations (in this subsection referred to as the “Federal provision”) is stated in this Act or the regulations to apply for one or more purposes of this Act or the regulations:

1. Every federal application rule that applies in respect of the Federal provision applies, with necessary modifications, in the application of the Federal provision for the purposes of this Act or the regulations. 

2. Despite paragraph 1 and subject to paragraph 3, any word or expression in the Federal provision that is defined in subsection (1) has the meaning assigned by that subsection unless the context indicates otherwise. 

3. If a word or expression in the Federal provision has a meaning for the purposes of that provision that is assigned by a provision of the Federal Act or the Federal regulations that applies for the purposes of this Act or the regulations, the word or expression has the meaning assigned by that provision in the Federal Act or the Federal regulations.

4. If no federal application rule described in clause (b) of the definition of “federal application rule” in subsection (1) applies to the Federal provision or to an amendment or the repeal of the Federal provision, the Federal provision or the amendment or repeal of the Federal provision, as the case may be, applies for the purposes of this Act and the regulations on the day the Federal provision or the amendment or repeal comes into force.  2007, c. 11, Sched. A, s. 1 (8).

Section Amendments with date in force (d/m/y)

2008, c. 7, Sched. S, s. 1 - 01/01/2008; 2008, c. 24, s. 4 - 10/12/2008

2011, c. 9, Sched. 40, s. 1 - 12/05/2011

2015, c. 20, Sched. 40, s. 1 - 01/01/2016

Application

2. This Act applies only in respect of taxation years ending after December 31, 2008.  2007, c. 11, Sched. A, s. 2.

Part II
Individuals — Income and other Personal Taxes

Division A — Interpretation and Liability for Tax

Definitions

3. (1) In this Part,

“basic personal income tax” means, in respect of an individual for a taxation year, the amount of tax determined in respect of the individual for the year under section 6, 7 or 7.1; (“impôt de base sur le revenu”)

“former Act” means the Income Tax Act; (“ancienne loi”)

“highest tax rate” means,

(a) 12.16 per cent in respect of taxation years ending after December 31, 2011 and before January 1, 2013, and

(b) 13.16 per cent in respect of taxation years ending after December 31, 2012; (“taux d’imposition le plus élevé”)

“income earned in Ontario” means, in respect of an individual for a taxation year, the amount of the individual’s income for the year that would be determined to be earned in the year in Ontario if the rules for determining the amount of the individual’s income earned in the year in a province under subsection 120 (4) of the Federal Act applied; (“revenu gagné en Ontario”)

“income earned outside Ontario” means, in respect of an individual for a taxation year, the amount, if any, by which the individual’s income for the year exceeds the individual’s income earned in Ontario for the year; (“revenu gagné hors de l’Ontario”)

“lowest tax rate” means,

(a) 6.05 per cent in respect of taxation years ending before January 1, 2010, and

(b) 5.05 per cent in respect of taxation years ending after December 31, 2009; (“taux d’imposition le moins élevé”)

“middle tax rate” means 11.16 per cent; (“taux d’imposition moyen”)

“Ontario allocation factor” means, in respect of an individual for a taxation year, the ratio of the amount of the individual’s income earned in Ontario for the year to the amount of the individual’s income for the year; (“coefficient de répartition de l’Ontario”)

“second-highest tax rate” means 12.16 per cent; (“deuxième taux d’imposition le plus élevé”)

“second-lowest tax rate” means 9.15 per cent; (“deuxième taux d’imposition le moins élevé”)

“tax base” means, in respect of an individual for a taxation year,

(a) the individual’s taxable income for the year if the individual is resident in Canada at any time in the year, or

(b) the individual’s taxable income earned in Canada for the year if the individual is not resident in Canada throughout the year; (“assiette fiscale”)

“top marginal tax rate” means 20.53 per cent. (“taux d’imposition marginal supérieur”) 2007, c. 11, Sched. A, s. 3 (1); 2009, c. 34, Sched. U, s. 1; 2012, c. 9, s. 1; 2014, c. 8, s. 1; 2015, c. 20, Sched. 40, s. 2.

References to basic personal income tax under former Act

(2) A reference in any provision in this Part to an individual’s basic personal income tax for a taxation year ending before January 1, 2009 shall be read as a reference to the amount that would have been the individual’s tax payable for that year under subsection 4 (3) of the former Act if that amount were calculated before any deduction permitted under section 4 of that Act and before the addition of any additional taxes payable for that year under any of sections 2.2, 3 and 4.3 to 4.8 of that Act.  2007, c. 11, Sched. A, s. 3 (2).

Section Amendments with date in force (d/m/y)

2009, c. 34, Sched. U, s. 1 - 15/12/2009

2012, c. 9, s. 1 - 01/01/2012

2014, c. 8, s. 1 - 01/01/2014

2015, c. 20, Sched. 40, s. 2 - 01/01/2016

Liability for tax

4. (1) The following individuals shall pay taxes in accordance with this Part for a taxation year ending after December 31, 2008:

1. Every individual who is resident in Ontario on the last day of the year and who has no income earned outside Ontario for the year.

2. Every individual who is resident in Ontario on the last day of the year and who has income earned outside Ontario for the year.

3. Every individual who is not resident in Ontario on the last day of the year but who has income earned in Ontario for the year.  2007, c. 11, Sched. A, s. 4 (1).

Tax exemption

(2) Despite any other provision of this Part, an individual who is exempt from tax under Part I of the Federal Act for a period of time by reason of section 149 of that Act is exempt, to the same extent and for the same period of time, from taxes imposed by this Part, other than taxes under subsection 5 (2).  2007, c. 11, Sched. A, s. 4 (2).

Taxes payable

(3) An individual’s tax payable under this Part for a taxation year is the sum of,

(a) the individual’s tax payable under Division B for the year; and

(b) the individual’s tax payable under Division C for the year.  2007, c. 11, Sched. A, s. 4 (3).

If individual is a bankrupt

(4) Subsection 128 (2) of the Federal Act applies for the purposes of this Act.  2009, c. 18, Sched. 28, s. 1.

Section Amendments with date in force (d/m/y)

2009, c. 18, Sched. 28, s. 1 - 01/01/2009

Division B — Personal Income Tax

Subdivision a — Tax Calculation

Personal income tax calculation 

5. (1) The amount of an individual’s personal income tax payable under this Division for a taxation year is the amount determined as follows:

1. Determine the amount, if any, by which the individual’s basic personal income tax for the year, as determined under this subdivision, exceeds the sum of all non-refundable tax credits under subdivision b that are deducted by the individual for the year.

2. Determine the amount of the individual’s additional tax, if any, payable for the year under subdivision c.

3. Add the amounts determined under paragraphs 1 and 2.

4. Determine the amount, if any, by which the amount determined under paragraph 3 exceeds the sum of all tax credits under subdivision d that are deducted by the individual for the year.

5. Add the following amounts:

i. the amount, if any, determined under paragraph 4,

ii. the amount, if any, of the individual’s surtax for the year, as determined under subdivision e, and

iii. the amount of tax, if any, determined under subdivision f in respect of the individual for the year.

6. Determine the amount, if any, by which the total determined under paragraph 5 exceeds the tax credit under subdivision g deducted by the individual for the year.

7. Add the following amounts:

i. the amount, if any, determined under paragraph 6, and

ii. the amount of the individual’s additional tax, if any, payable for the year under subdivision h.

8. The individual’s personal income tax payable under this Division for the year is the amount, if any, by which the total determined under paragraph 7 exceeds the sum of all tax credits under subdivision i deducted by the individual for the year. 2007, c. 11, Sched. A, s. 5 (1); 2016, c. 5, Sched. 28, s. 1.

Tax payable, qualifying environmental trusts

(2) Despite subsection (1), the amount of tax payable under this Division for a taxation year by an individual that is a qualifying environmental trust at the end of the year is the amount determined by multiplying the amount of the trust’s income for the year for the purposes of Part XII.4 of the Federal Act by the percentage that would be the basic rate of tax for a corporation that has the same taxation year.  2007, c. 11, Sched. A, s. 5 (2).

Section Amendments with date in force (d/m/y)

2016, c. 5, Sched. 28, s. 1 - 19/04/2016

Basic personal income tax

6. (1) The basic personal income tax for a taxation year of an individual ending after December 31, 2013 is the sum of the following amounts:

1. The amount calculated by multiplying the lowest tax rate for the year by the portion of the individual’s tax base for the year that does not exceed $40,120.

2. The amount calculated by multiplying the second-lowest tax rate for the year by the amount by which the individual’s tax base for the year exceeds $40,120 and does not exceed $80,242.

3. The amount calculated by multiplying the middle tax rate for the year by the amount by which the individual’s tax base for the year exceeds $80,242 and does not exceed $150,000.

4. The amount calculated by multiplying the second-highest tax rate for the year by the amount by which the individual’s tax base for the year exceeds $150,000 and does not exceed $220,000.

5. The amount calculated by multiplying the highest tax rate for the year by the amount by which the individual’s tax base for the year exceeds $220,000. 2014, c. 8, s. 2.

Resident with income earned outside Ontario or non-resident

(2) Despite subsection (1), the basic personal income tax for a taxation year of an individual described in paragraph 2 or 3 of subsection 4 (1) is the amount that would otherwise be determined under subsection (1) to be the individual’s basic personal income tax for the year multiplied by the individual’s Ontario allocation factor for the year.  2007, c. 11, Sched. A, s. 6 (2).

Section Amendments with date in force (d/m/y)

2009, c. 18, Sched. 28, s. 2 - 01/01/2009

2012, c. 9, s. 2 - 01.01/2012

2014, c. 8, s. 2 - 01/01/2014

Basic personal income tax, inter vivos trust

7. (1) Despite section 6, the basic personal income tax for a taxation year ending before January 1, 2016 of an individual that is an inter vivos trust to which subsection 122 (1) of the Federal Act applies is calculated by multiplying the trust’s tax base for the year by the highest tax rate for the year.  2007, c. 11, Sched. A, s. 7 (1); 2015, c. 20, Sched. 40, s. 3 (1).

Inter vivos trust with income earned outside Ontario or non-resident

(2) Despite section 6 and subsection (1), the basic personal income tax for a taxation year ending before January 1, 2016 of an inter vivos trust that is an individual described in paragraph 2 or 3 of subsection 4 (1) is the amount that would otherwise be determined under subsection (1) to be the trust’s basic personal income tax for the year multiplied by the trust’s Ontario allocation factor for the year.  2007, c. 11, Sched. A, s. 7 (2); 2015, c. 20, Sched. 40, s. 3 (2).

Section Amendments with date in force (d/m/y)

2015, c. 20, Sched. 40, s. 3 (1, 2) - 01/01/2016

Basic personal income tax, trusts, 2016 and subsequent taxation years

7.1 (1) Despite section 6, the basic personal income tax for a taxation year ending after December 31, 2015 of an individual that is a trust, other than a graduated rate estate or a qualified disability trust, is the total of,

(a) the amount calculated by multiplying the trust’s tax base for the year by the top marginal tax rate for the year; and

(b) the amount determined under subsection (3), if the trust is a trust to which subsection 122 (2) of the Federal Act applies. 2015, c. 20, Sched. 40, s. 4.

Trust with income earned outside Ontario or non-resident, 2016 and subsequent taxation years

(2) Despite section 6 and subsection (1), the basic personal income tax for a taxation year ending after December 31, 2015 of a trust, other than a graduated rate estate or a qualified disability trust, that is an individual described in paragraph 2 or 3 of subsection 4 (1), is the total of,

(a) the amount that would otherwise be determined under clause (1) (a), multiplied by the trust’s Ontario allocation factor for the year; and

(b) the amount determined under subsection (3), if the trust is a trust to which subsection 122 (2) of the Federal Act applies. 2015, c. 20, Sched. 40, s. 4.

Where subsection 122 (2) of the Federal Act applies

(3) The amount determined for the purposes of clauses (1) (b) and (2) (b) is the amount equal to the tax that would be payable under paragraph 122 (1) (c) of the Federal Act if,

(a) “this Part” in subparagraph (i) in the description of A were read as a reference to Division B of Part II of this Act;

(b) “29%” in subparagraph (i) in the description of A were read as a reference to “the top marginal tax rate”; and

(c) “this Part” in the description of B were read as a reference to Division B of Part II of this Act. 2015, c. 20, Sched. 40, s. 4.

Section Amendments with date in force (d/m/y)

2015, c. 20, Sched. 40, s. 4 - 01/01/2016

Subdivision b — Non-Refundable Tax credits

Rules for non-refundable tax credits

8. The following rules apply in determining the amount of any tax credits deductible by an individual under this subdivision: 

1. A trust is not entitled to a tax credit under this subdivision for a taxation year other than a tax credit for charitable donations under subsection 9 (21).

2. In calculating the total amount of tax credits that an individual, other than a trust, may deduct under this subdivision, the individual shall deduct the tax credits to which he or she is entitled under section 9 in the same order as the subsections relating to those tax credits are listed in that section.

3. A reference to an individual’s basic personal income tax for a taxation year is deemed to be a reference to the amount that would be the individual’s basic personal income tax for the year if the individual’s Ontario allocation factor were one.

4. A reference in a subsection of section 9 to a tax credit under another subsection of that section is deemed to be a reference to that other tax credit as it would be determined before the application of section 10.

5. No pension tax credit under subsection 9 (10) or adoption expense tax credit under subsection 9 (11) may be deducted for a taxation year by an individual described in paragraph 3 of subsection 4 (1).

6. Subsections 118 (4), (5) and (6), 118.01 (3) and 118.3 (3) of the Federal Act apply for the purposes of section 9.

7. An individual who becomes bankrupt in a calendar year is entitled to deduct only the amounts described in the following subparagraphs in computing his or her tax payable under this Division for each taxation year that ends in the calendar year:

i. the portions of any tax credits the individual would otherwise be entitled to deduct under subsections 9 (2), (3), (4), (5), (6), (7), (8), (12), (13), (17) and (18) for the taxation year that can reasonably be considered applicable to the taxation year, and

ii. any tax credits the individual would otherwise be entitled to deduct under subsections 9 (9), (10), (11), (15), (16), (20), (21) and (22) for the taxation year that can reasonably be considered wholly applicable to the taxation year.

8. If paragraph 7 applies, the sum of all amounts deductible by the individual for all taxation years of the individual ending in a calendar year shall not exceed the total amount that, if the individual had not become bankrupt in the calendar year, would have been deductible for the taxation year that would have otherwise coincided with the calendar year.

9. An individual who is resident in Canada for only part of a taxation year is entitled to deduct only the amounts described in the following subparagraphs in computing his or her tax payable under this Division for the year:

i. the portions of any tax credits the individual would otherwise be entitled to deduct under subsections 9 (2), (3), (4), (5), (6), (7), (8), (12), (13), (17) and (18) for the year that can reasonably be considered to apply to any period during the year throughout which the individual was resident in Canada, computed as though that period were the whole taxation year,

ii. any tax credits the individual would otherwise be entitled to deduct under subsections 9 (9), (10), (11), (15), (16), (20), (21) and (22) for the year that can reasonably be considered to be wholly applicable to any period in the year throughout which the individual was resident in Canada, computed as though that period were the whole taxation year, and

iii. any tax credits the individual would otherwise be entitled to deduct under section 9 for the year, as determined in accordance with paragraph 10.1, that apply to any period in the year throughout which the individual was not resident in Canada, computed as though that non-resident period was the whole taxation year.

10. If paragraph 9 applies, the sum of all amounts deductible by the individual for a taxation year shall not exceed the total amount that would have been deductible for the year if the individual had been resident in Canada throughout the year.

10.1 An individual who is not resident in Canada at any time in a taxation year is entitled to deduct only the amounts described in subsections 9 (9), (12), (14), (15), (21) and (22) in computing his or her tax payable under this Division for the year, unless all or substantially all of the individual’s income for the year is included in computing his or her taxable income earned in Canada for the year.

11. If a separate return of income with respect to an individual is filed under subsection 70 (2), 104 (23) or 150 (4) of the Federal Act, as it applies for the purposes of this Act, for a particular period and another return of income with respect to the individual is filed under this Act for a period ending in the calendar year in which the particular period ends, the sum of all amounts claimed in the returns under subsections 9 (9), (10), (11), (12), (13), (14), (15), (16), (18), (20), (21) and (22) shall not exceed the total that could be deducted under those subsections with respect to the individual for a taxation year that coincides with the calendar year.

12. For the purposes of determining the amount of tuition and education tax credits under subsection 9 (19) that may be transferred for a taxation year from a spouse, common-law partner, child or grandchild, the person transferring the tax credits shall designate the amount of tuition and education tax credits to be transferred for the year and the maximum amount that may be deducted under subsection 9 (17) or (18) by an individual for a year in respect of these transferred tax credits must not exceed that amount.

13. For the purposes of determining an individual’s entitlement to a deduction under subsection 9 (14) for a taxation year, if the individual was resident in a province other than Ontario on the last day of the preceding taxation year, the amount of the individual’s unused tuition and education tax credits at the end of that preceding year is the amount that would be his or her unused tuition and education tax credits at the end of the preceding year,

i. as determined under the comparable provision of a taxing statute of the other province, calculated as if the percentage applied under the relevant provisions of that statute were, at all material times, the lowest tax rate instead of the percentage applied under those provisions, or

ii. as determined under section 118.61 of the Federal Act, calculated as if the percentage applied under sections 118.5 and 118.6 of that Act in calculating the individual’s tuition and education tax credits were, at all material times, the lowest tax rate instead of the appropriate percentage, if there is no comparable provision of a taxing statute of the other province.

14. A particular person who is resident in a province other than Ontario on the last day of a taxation year is deemed to be resident in Ontario on that day for the purposes of determining the amount of unused tax credits that may be transferred from him or her to an individual who is resident in Ontario on that day.  2007, c. 11, Sched. A, s. 8; 2009, c. 18, Sched. 28, s. 3; 2015, c. 20, Sched. 40, s. 5.

Section Amendments with date in force (d/m/y)

2009, c. 18, Sched. 28, s. 3 - 01/01/2009

2015, c. 20, Sched. 40, s. 5 - 01/01/2009

Non-refundable tax credits

9. (1) Subject to the rules in section 8, an individual may deduct, in computing the amount of his or her tax payable under this Division for a taxation year, the tax credits described in this section to which the individual is entitled for the year.  2007, c. 11, Sched. A, s. 9 (1).

Personal tax credit

(2) If an individual is entitled to a deduction under paragraph 118 (1) (a), (b) or (c) of the Federal Act for a taxation year, the individual is entitled to a personal tax credit for the year calculated by multiplying the lowest tax rate for the year by $8,881.  2007, c. 11, Sched. A, s. 9 (2); 2009, c. 18, Sched. 28, s. 4 (1).

Tax credit for spouse or common-law partner

(3) If an individual is entitled to a deduction under paragraph 118 (1) (a) of the Federal Act for a taxation year, the individual is entitled to a tax credit for the year for a spouse or common-law partner calculated using the formula,

A × [$7,541 – (B – $754)]

in which,

  “A” is the lowest tax rate for the year, and

  “B” is the greater of $754 and the income for the year of the individual’s spouse or common-law partner or, if the individual and the individual’s spouse or common-law partner are living separate and apart at the end of that year by reason of a breakdown of their marriage or common-law partnership, the income of the spouse or common-law partner while married or in the common-law partnership and not separated during the year.

2009, c. 18, Sched. 28, s. 4 (2).

Tax credit for wholly dependent person

(4) If an individual is entitled to a deduction under paragraph 118 (1) (b) of the Federal Act for a taxation year in respect of a wholly dependent person, the individual is entitled to a tax credit for the year in respect of the person calculated using the formula,

A × [$7,541 – (C – $754)]

in which,

  “A” is the lowest tax rate for the year, and

  “C” is the greater of $754 and the income for the year of the person referred to in paragraph 118 (1) (b) of the Federal Act whom the individual supported.

2009, c. 18, Sched. 28, s. 4 (2).

Tax credit for in-home care of a relative

(5) If an individual is entitled to a deduction under paragraph 118 (1) (c.1) of the Federal Act for a taxation year in respect of a relative, the individual is entitled to a tax credit for the year for in-home care of the relative calculated using the formula,

A × ($18,507 – D)

in which,

  “A” is the lowest tax rate for the year, and

  “D” is the greater of the relative’s income for the year and $14,321.

2009, c. 18, Sched. 28, s. 4 (2).

Tax credit for infirm dependant

(6) If an individual is entitled to a deduction under paragraph 118 (1) (d) of the Federal Act for a taxation year in respect of a dependant, the individual is entitled to a tax credit for the year in respect of the dependant calculated using the formula,

A × ($10,136 – E)

in which,

  “A” is the lowest tax rate for the year, and

  “E” is the greater of the dependant’s income for the year and $5,950.

2009, c. 18, Sched. 28, s. 4 (2).

Additional tax credit for infirm dependant

(7) If an individual is entitled to a deduction under paragraph 118 (1) (e) of the Federal Act for a taxation year in respect of a wholly dependent person, the individual is entitled to a tax credit for the year in respect of the person calculated using the formula, 

F – G

in which,

“F” is the individual’s tax credit that would be determined for the year in respect of the person under subsection (5) or (6), as the case may be, if paragraph 118 (4) (c) of the Federal Act did not apply for the purposes of subsection 118 (1) of that Act, and

  “G” is the individual’s tax credit determined for the year in respect of the person under subsection (4).

2007, c. 11, Sched. A, s. 9 (7).

Age tax credit

(8) If an individual is entitled to a deduction under subsection 118 (2) of the Federal Act for a taxation year, the individual is entitled to an age tax credit for the year calculated using the formula,

A × ($4,336 – H)

in which,

  “A” is the lowest tax rate for the year, and

  “H” is 15 per cent of the amount, if any, by which the individual’s income for the year would exceed $32,280 if no amount were included in his or her income in respect of a gain from a disposition of property to which section 79 of the Federal Act applies.

2009, c. 18, Sched. 28, s. 4 (3).

Tax credit for EI premiums and CPP / QPP contributions

(9) If the individual is entitled to a deduction under section 118.7 of the Federal Act for a taxation year, the individual is entitled to a tax credit for the year in respect of any premiums under the Employment Insurance Act (Canada) and any contributions under the Canada Pension Plan, or under a provincial pension plan defined in section 3 of that Act, equal to the amount that would be determined in respect of the individual for the year under section 118.7 of the Federal Act if the reference in that section to the appropriate percentage were read as a reference to the lowest tax rate.  2007, c. 11, Sched. A, s. 9 (9).

Pension tax credit

(10) If an individual is entitled to a deduction under subsection 118 (3) of the Federal Act for a taxation year, the individual is entitled to a pension tax credit for the year calculated using the formula,

A × I

in which,

  “A” is the lowest tax rate for the year, and

“I” is the lesser of $1,228 and,

(a) the amount of the individual’s pension income for the year for the purposes of subsection 118 (3) of the Federal Act, if the individual has reached 65 years of age by the end of the year, or

(b) the amount of the individual’s qualified pension income for the year for the purposes of that subsection, in any other case.

2007, c. 11, Sched. A, s. 9 (10); 2009, c. 18, Sched. 28, s. 4 (4).

Adoption expense tax credit

(11) If an individual is entitled to a deduction under subsection 118.01 (2) of the Federal Act for a taxation year, the individual is entitled to a tax credit for the year for adoption expenses in respect of an eligible child calculated using the formula,

A × J

in which,

  “A” is the lowest tax rate for the year, and

“J” is the lesser of,

(a) $10,835, and

(b) the amount calculated using the formula,

K – L

in which,

“K” is the total of all eligible adoption expenses in respect of the eligible child included in computing a deduction under subsection 118.01 (2) of the Federal Act for the year, and

“L” is the sum of all amounts each of which is the amount of a reimbursement or another form of assistance, other than an amount that is included in computing the individual’s income and that is not deductible in computing the individual’s taxable income, that any individual is or was entitled to receive in respect of an amount included in computing the amount of “K”.

2007, c. 11, Sched. A, s. 9 (11); 2009, c. 18, Sched. 28, s. 4 (5).

Mental or physical impairment tax credit

(12) If an individual is entitled to a deduction under subsection 118.3 (1) of the Federal Act for a taxation year, the individual is entitled to a tax credit for the year in respect of a mental or physical impairment calculated using the formula,

A × ($7,175 + M)

in which,

  “A” is the lowest tax rate for the year, and

“M” is,

(a) if the individual has not reached 18 years of age by the end of the taxation year, the amount, if any, by which $4,185 exceeds the amount, if any, by which the sum of all amounts each of which is an amount paid in the year for the care or supervision of the individual that is included in computing a deduction for a taxation year under section 63, 64 or 118.2 of the Federal Act exceeds $2,451, or

(b) in any other case, nil.

2009, c. 18, Sched. 28, s. 4 (6).

Tax credit for dependant with a mental or physical impairment

(13) If an individual is entitled to a deduction under subsection 118.3 (2) of the Federal Act for a taxation year in respect of a dependant who has a mental or physical impairment, the individual is entitled to a tax credit for the year in respect of that dependant in the amount, if any, by which “N” exceeds “P” where,

  “N” is the amount the dependant is entitled to deduct for the year under subsection (12), and

“P” is the amount, if any, by which the dependant’s basic personal income tax for the year exceeds the sum of the tax credits to which the dependant is entitled for the year under subsections (2), (3), (4), (5), (6), (7), (8), (9) and (10).  2007, c. 11, Sched. A, s. 9 (13).

Tax credit for unused tuition and education tax credits

(14) If an individual is entitled to a deduction under subsection 118.61 (2) of the Federal Act for a taxation year, the individual is entitled to a tax credit for the year in respect of unused tuition and education tax credits equal to the lesser of,

(a) the amount, if any, by which the individual’s basic personal income tax for the year exceeds the sum of the tax credits to which the individual is entitled for the year under subsections (2), (3), (4), (5), (6), (7), (8), (9), (10), (11), (12) and (13); and

(b) the amount of the individual’s unused tuition and education tax credits at the end of the preceding taxation year calculated using the formula,

Q + (R – S ) – (T + U)

in which,

“Q” is the amount of the individual’s unused tuition and education tax credits at the end of the taxation year ending immediately before the preceding taxation year, as determined under this clause or under subsection 4.0.1 (14) of the former Act, as the case may be,

“R” is the sum of the individual’s tuition tax credit and education tax credit for the preceding taxation year, as determined under subsections (15) and (16) or under subsections 4.0.1 (17) and (18) of the former Act, as the case may be,

“S” is the lesser of “R” and the amount, if any, by which the individual’s basic personal income tax for the preceding taxation year exceeds the sum of the tax credits to which the individual is entitled for that year,

(a) under this subsection and subsections (2), (3), (4), (5), (6), (7), (8), (9), (10), (11), (12) and (13), if that taxation year ended after December 31, 2008, or

(b) under paragraphs 1 to 12 of subsection 4 (3.1) of the former Act, in any other case,

“T” is the amount that may be deducted under this subsection or paragraph 12 of subsection 4 (3.1) of the former Act, as the case may be, for the preceding taxation year, and

“U” is the sum of the tuition and education tax credits transferred for the preceding taxation year by the individual to the individual’s spouse, common-law partner, parent or grandparent.

2007, c. 11, Sched. A, s. 9 (14).

Same, taxation years ending after 2016

(14.1) Despite subsection (14), if an individual is entitled to a deduction under subsection 118.61 (2) of the Federal Act for a taxation year that ends after December 31, 2017 and the individual was resident in a province other than Ontario on December 31, 2017, the amount of the individual’s tax credit for the year in respect of unused tuition and education tax credits is nil. 2016, c. 5, Sched. 28, s. 2 (1).

Tuition tax credit

(15) If an individual is entitled to a deduction under subsection 118.5 (1) of the Federal Act for a taxation year ending before January 1, 2018, the individual is entitled to a tuition tax credit for the year equal to the amount that would be determined in respect of the individual for the year under subsection 118.5 (1) of the Federal Act as if,

(a) references to “the appropriate percentage” in that subsection were read as references to “the lowest tax rate”;

(b) references to “any fees for the individual’s tuition paid in respect of the year” in that subsection were read as references to “any fees for the individual’s tuition paid in respect of the portion of the year that ends before September 5, 2017”; and

(c) the reference to “in the year” in paragraph (d) of the subsection were read as “in the year, but before September 5, 2017,”. 2016, c. 5, Sched. 28, s. 2 (2).

Education tax credit

(16) If an individual is entitled to a deduction under subsection 118.6 (2) of the Federal Act for a taxation year that ends before January 1, 2018, the individual is entitled to an education tax credit for the year calculated using the formula,

A × (V + W)

in which,

  “A” is the lowest tax rate for the year,

  “V” is the amount calculated by multiplying $478 by the number of months that are in the taxation year and that end before September 1, 2017 during which the individual is enrolled as a full-time student in a qualifying educational program at a designated educational institution for the purposes of section 118.6 of the Federal Act, and

“W” is the amount calculated by multiplying $143 by the number of months that are in the taxation year and that end before September 1, 2017, other than months described in the definition of “V”, in which the individual is enrolled at a designated educational institution in a specified educational program, for the purposes of section 118.6 of the Federal Act, that provides that each student in the program spend not less than 12 hours in the month on courses in the program.

2007, c. 11, Sched. A, s. 9 (16); 2009, c. 18, Sched. 28, s. 4 (7); 2016, c. 5, Sched. 28, s. 2 (3-5).

Transfer of tax credits from a spouse or common-law partner

(17) If an individual is entitled to a deduction under section 118.8 of the Federal Act for a taxation year, the individual is entitled to a tax credit for the year in respect of a transfer of tax credits from his or her spouse or common-law partner calculated using the formula,

X + Y – Z

in which,

  “X” is the amount, if any, calculated under subsection (19) for the year,

  “Y” is the sum of the tax credits that the spouse or common-law partner is entitled to deduct for the year under subsections (8), (10) and (12), and

  “Z” is the amount, if any, by which “AA” exceeds “BB” where,

“AA” is the amount, if any, by which the basic personal income tax of the spouse or common-law partner for the year exceeds the sum of tax credits the spouse or common-law partner is entitled to deduct for the year under subsections (2), (9) and (14), and

“BB” is the lesser of,

(a) the sum of the tuition tax credit and the education tax credit that the spouse or common-law partner is entitled to deduct for the year under subsections (15) and (16), and

(b) the amount, if any, by which the basic personal income tax of the spouse or common-law partner for the year exceeds the sum of the tax credits the spouse or common-law partner is entitled to deduct for the year under subsections (2), (3), (4), (5), (6), (7), (8), (9), (10), (11), (12), (13) and (14).

2007, c. 11, Sched. A, s. 9 (17).

Transfer of tuition and education tax credits from a child or grandchild

(18) If an individual is entitled to a deduction under section 118.9 of the Federal Act for a taxation year, the individual is entitled to a tax credit for the year in respect of a transfer of tuition and education tax credits from a child or grandchild in the amount calculated under subsection (19).  2007, c. 11, Sched. A, s. 9 (18).

Calculation of transferred tuition and education tax credits

(19) For the purposes of subsection (17) or (18), the amount of tuition and education tax credits transferred for a taxation year by a person to an individual is calculated using the formula,

CC – DD

in which,

“CC”  is the lesser of,

(a) $6,141 multiplied by the lowest tax rate for the year, and

(b) the sum of the tuition tax credit and the education tax credit that the person transferring the tax credits is entitled to deduct for the year under subsections (15) and (16), and

“DD” is the amount, if any, by which the basic personal income tax of the person transferring the tax credits exceeds the sum of the tax credits the person is entitled to deduct for the year under subsections (2), (3), (4), (5), (6), (7), (8), (9), (10), (11), (12), (13) and (14).

2007, c. 11, Sched. A, s. 9 (19); 2009, c. 18, Sched. 28, s. 4 (8).

Medical expense tax credit

(20) If an individual is entitled to a deduction under subsection 118.2 (1) of the Federal Act for a taxation year, the individual is entitled to a tax credit for the year for medical expenses calculated using the formula,

A × [(EE – FF) + GG]

in which,

  “A” is the lowest tax rate for the year,

“EE”  is the sum of the individual’s medical expenses in respect of the individual, the individual’s spouse or common-law partner or the individual’s child who has not reached 18 years of age by the end of the taxation year, that are included in determining the individual’s medical expense credit for the year under subsection 118.2 (1) of the Federal Act,

“FF” is the lesser of $2,010 and 3 per cent of the individual’s income for the year, and

“GG” is the sum of all amounts each of which,

(a) is in respect of a dependant of the individual, within the meaning assigned by subsection 118 (6) of the Federal Act, other than a child of the individual who has not reached 18 years of age by the end of the year, and

(b) is the lesser of $10,835 and the amount that would be determined in respect of the dependant by the formula “E – F” in subsection 118.2 (1) of the Federal Act, if the dollar amount set out in the description of “FF” in this subsection were substituted for the dollar amount set out in the description of “F” in subsection 118.2 (1) of the Federal Act.

2007, c. 11, Sched. A, s. 9 (20); 2009, c. 18, Sched. 28, s. 4 (9, 10).

Charitable donation tax credit

(21) If an individual is entitled to a deduction under subsection 118.1 (3) of the Federal Act for a taxation year and deducts an amount under that subsection, the individual is entitled to a tax credit for the year for charitable and other gifts calculated using the formula,

(A × HH) + [II × (JJ – HH)]

in which,

  “A” is the lowest tax rate for the year,

“HH” is the lesser of $200 and that part of the individual’s total gifts for the year under section 118.1 of the Federal Act that was used to determine the amount deducted by the individual for the year under subsection 118.1 (3) of that Act,

  “II” is,

(a) 17.41 per cent, if the individual is a trust to which subsection 7.1 (1) or (2) applies, or

(b) 11.16 per cent in any other case, and

“JJ” is that part of the individual’s total gifts for the year under section 118.1 of the Federal Act that was used to determine the amount deducted by the individual for the year under subsection 118.1 (3) of the Federal Act.

2008, c. 7, Sched. S, s. 2; 2012, c. 9, s. 3; 2015, c. 20, Sched. 40, s. 6.

Student loan interest tax credit

(22) If an individual is entitled to a deduction under section 118.62 of the Federal Act for a taxation year, the individual is entitled to a tax credit for the year for interest on a student loan equal to the amount that would be determined in respect of the individual for the year under section 118.62 of the Federal Act if the reference in that section to the appropriate percentage were read as a reference to the lowest tax rate.  2007, c. 11, Sched. A, s. 9 (22).

Section Amendments with date in force (d/m/y)

2008, c. 7, Sched. S, s. 2 - 01/01/2009

2009, c. 18, Sched. 28, s. 4 (1-10) - 01/01/2009

2012, c. 9, s. 3 - 01/01/2012

2015, c. 20, Sched. 40, s. 6 - 01/01/2016

2016, c. 5, Sched. 28, s. 2 (1-5) - 19/04/2016

Apportionment of non-refundable tax credits

10. Despite section 9, an individual described in paragraph 2 or 3 of subsection 4 (1) is entitled to deduct, in computing tax payable under this Division for a taxation year, an amount in respect of each tax credit described in subsections 9 (2) to (9) and (12) to (22) not exceeding the amount calculated using the formula,

A × B

in which,

  “A” is the amount of the tax credit determined without reference to this section, and subsections 6 (2), 7 (2) and 7.1 (2), and

  “B” is the individual’s Ontario allocation factor for the year.

2007, c. 11, Sched. A, s. 10; 2015, c. 20, Sched. 40, s. 7.

Section Amendments with date in force (d/m/y)

2015, c. 20, Sched. 40, s. 7 - 01/01/2016

Subdivision c — Additional Taxes

Minimum tax before 2016

11. (1) This section applies if the tax payable by an individual under Part I of the Federal Act for a taxation year that ends before January 1, 2016 is determined under section 127.5 of that Act. 2016, c. 5, Sched. 28, s. 3 (1).

Same

(2) Every individual to whom this section applies for a taxation year that ends before January 1, 2016 shall pay an additional tax for the year calculated using the formula, 

(A – B) × C × D

in which,

  “A” is the amount, if any, by which the individual’s minimum amount for the year as determined under section 127.51 of the Federal Act exceeds the special foreign tax credit of the individual for the year, as determined under subsection 127.54 (2) of the Federal Act,

  “B” is the amount that, but for section 120 of the Federal Act, would be determined under Division E of Part I of the Federal Act to be the individual’s tax payable under the Federal Act for the year,

  “C” is the percentage calculated by dividing the lowest tax rate for the year by the percentage in paragraph 117 (2) (a) of the Federal Act, and

  “D” is the individual’s Ontario allocation factor for the year.

2007, c. 11, Sched. A, s. 11 (2); 2016, c. 5, Sched. 28, s. 3 (2).

Section Amendments with date in force (d/m/y)

2016, c. 5, Sched. 28, s. 3 (1, 2) - 19/04/2016

Tax on split income, 2015 and previous taxation years

12. (1) This section applies to an individual for a taxation year ending before January 1, 2016 if,

(a) the individual is resident in Ontario on the last day of the taxation year;

(b) the individual is a specified individual in relation to the taxation year; and

(c) the individual is liable to pay an amount of tax under subsection 120.4 (2) of the Federal Act for the taxation year.  2007, c. 11, Sched. A, s. 12 (1); 2016, c. 5, Sched. 28, s. 4 (1).

Additional tax

(2) Every individual to whom this section applies for a taxation year shall pay an additional tax for the year calculated by multiplying the highest tax rate for the year by the individual’s split income for the year.  2007, c. 11, Sched. A, s. 12 (2).

Minimum tax amount

(3) Despite any other provision of this Part, if an individual is a specified individual in relation to a taxation year the tax payable under this Division for the year by the individual shall not be less than the amount, if any, by which “A” exceeds “B” where,

  “A” is the amount required to be added under subsection (2), and

  “B” is the total of all amounts each of which is an amount,

(a) that may be deducted under section 13, 20.1 or 21 in computing the individual’s tax payable under this Division for the taxation year, and

(b) that can reasonably be considered to be in respect of an amount included in computing the individual’s split income for the taxation year. 2007, c. 11, Sched. A, s. 12 (3); 2014, c. 7, Sched. 29, s. 1; 2016, c. 5, Sched. 28, s. 4 (2).

Section Amendments with date in force (d/m/y)

2014, c. 7, Sched. 29, s. 1 - 01/01/2014

2016, c. 5, Sched. 28, s. 4 (1, 2) - 19/04/2016

Tax on split income, 2016 and subsequent taxation years

12.1 (1) This section applies to an individual for a taxation year ending after December 31, 2015 if,

(a) the individual is resident in Ontario on the last day of the taxation year;

(b) the individual is a specified individual in relation to the taxation year; and

(c) the individual is liable to pay an amount of tax under subsection 120.4 (2) of the Federal Act for the taxation year. 2016, c. 5, Sched. 28, s. 5.

Additional tax

(2) Every individual to whom this section applies for a taxation year shall pay an additional tax for the year calculated by multiplying the top marginal tax rate for the year by the individual’s split income for the year. 2016, c. 5, Sched. 28, s. 5.

Minimum tax amount

(3) Despite any other provision of this Part, if an individual is a specified individual in relation to a taxation year, the tax payable under this Division for the year by the individual shall not be less than the amount, if any, by which “A” exceeds “B” where,

  “A” is the amount required to be added under subsection (2), and

  “B” is the total of all amounts, each of which is an amount,

(a) that may be deducted under section 13, 19.1, 20.1 or 21 in computing the individual’s tax payable under this Division for the taxation year, and

(b) that can reasonably be considered to be in respect of an amount included in computing the individual’s split income for the taxation year.

2016, c. 5, Sched. 28, s. 5.

Section Amendments with date in force (d/m/y)

2016, c. 5, Sched. 28, s. 5 - 19/04/2016

Subdivision d — Additional Tax Credits before Surtax

Dividend tax credit before 2014

13. (1) In determining the amount of a tax payable under this Division for a taxation year ending before January 1, 2014, an individual who is resident in Ontario on the last day of the year may deduct a dividend tax credit equal to the sum of,

(a) for a taxation year ending before January 1, 2010, 38.4828 per cent of the amount determined in respect of the individual for the year under paragraph 121 (a) of the Federal Act;

(a.1) for a taxation year ending after December 31, 2009 and before January 1, 2014, 33.75 per cent of the amount determined in respect of the individual for the year under paragraph 121 (a) of the Federal Act; and

(b) for a taxation year ending before January 1, 2014, the specified percentage of the amount determined in respect of the individual for the year under paragraph 121 (b) of the Federal Act.  2007, c. 11, Sched. A, s. 13 (1); 2009, c. 34, Sched. U, s. 2 (1); 2014, c. 7, Sched. 29, s. 2 (1-3).

Specified percentage

(2) For the purposes of clause (1) (b), the specified percentage is,

(a) 39.0182 per cent for a taxation year ending before January 1, 2010;

(b) 35.6073 per cent for a taxation year ending after December 31, 2009 and before January 1, 2011;

(c) 38.9403 per cent for a taxation year ending after December 31, 2010 and before January 1, 2012; and

(d) 42.6105 per cent for a taxation year ending after December 31, 2011 and before January 1, 2014.  2008, c. 19, Sched. U, s. 1; 2009, c. 34, Sched. U, s. 2 (2-4); 2014, c. 7, Sched. 29, s. 2 (4).

Section Amendments with date in force (d/m/y)

2008, c. 19, Sched. U, s. 1 - 27/11/2008

2009, c. 34, Sched. U, s. 2 (1-4) - 15/12/2009

2014, c. 7, Sched. 29, s. 2 (1-4) - 01/01/2014

Overseas employment tax credit

14. In determining the amount of tax payable under this Division for a taxation year, an individual who is resident in Ontario on the last day of the year may deduct a tax credit for overseas employment calculated using the formula,

A/B × C

in which,

  “A” is 11.16 per cent,

  “B” is the percentage in paragraph 117 (2) (d) of the Federal Act, and

  “C” is the amount deductible by the individual for the year under section 122.3 of the Federal Act.

2007, c. 11, Sched. A, s. 14; 2009, c. 34, Sched. U, s. 3; 2012, c. 9, s. 4.

Section Amendments with date in force (d/m/y)

2009, c. 34, Sched. U, s. 3 - 01/01/2009

2012, c. 9, s. 4 - 01/01/2012

Tax credit for minimum tax

15. (1) In determining the amount of tax payable under this Division for a taxation year, an individual may deduct a tax credit in respect of minimum tax not exceeding the lesser of,

(a) the amount of the individual’s basic personal income tax for the year, less all amounts deductible for the year under subdivision b and sections 13, 14, 19.1 and 20.1; and

(b) the amount of the individual’s carryforward amount for the year in respect of minimum tax, as determined under the prescribed rules.  2007, c. 11, Sched. A, s. 15 (1); 2008, c. 7, Sched. S, s. 3; 2014, c. 7, Sched. 29, s. 3; 2016, c. 5, Sched. 28, s. 6 (1).

Restriction

(2) No amount may be deducted by an individual for a taxation year under this section if the individual is required to pay an amount under section 11 or 19.2 for the same year.  2007, c. 11, Sched. A, s. 15 (2); 2016, c. 5, Sched. 28, s. 6 (2).

Section Amendments with date in force (d/m/y)

2008, c. 7, Sched. S, s. 3 - 01/01/2009

2014, c. 7, Sched. 29, s. 3 - 01/01/2014

2016, c. 5, Sched. 28, s. 6 (1, 2) - 19/04/2016

Subdivision e — Ontario Surtax

Ontario surtax

16. (1) Subject to subsection (3), the amount of an individual’s surtax for a taxation year is the sum of,

(a) 20 per cent of the amount, if any, by which the gross tax amount of the individual for the year exceeds,

(i) $4,257 if the year ends before January 1, 2010, or

(ii) $4,006 if the year ends after December 31, 2009; and

(b) 36 per cent of the amount, if any, by which the gross tax amount of the individual for the year exceeds,

(i) $5,370 if the year ends before January 1, 2010, or

(ii) $5,127 if the year ends after December 31, 2009.  2009, c. 34, Sched. U, s. 4; 2015, c. 20, Sched. 40, s. 8 (1).

Gross tax amount

(2) The gross tax amount of an individual for a taxation year for the purposes of subsection (1) is the amount of tax that would be payable by the individual for the year under this Division if that amount were determined without reference to this section and sections 12.1, 17, 18, 19, 19.1, 19.2, 20, 20.1, 21, 22 and 103.1.2. 2007, c. 11, Sched. A, s. 16 (2); 2013, c. 7, s. 8 (1); 2016, c. 5, Sched. 28, s. 7.

Exception

(3) The amount of an individual’s surtax for a taxation year of an individual that is a trust to which subsection 7.1 (1) or (2) applies is nil. 2015, c. 20, Sched. 40, s. 8 (2).

Section Amendments with date in force (d/m/y)

2009, c. 18, Sched. 28, s. 5 - 01/01/2009; 2009, c. 34, Sched. U, s. 4 - 15/12/2009

2013, c. 7, s. 8 (1) - 15/08/2014

2015, c. 20, Sched. 40, s. 8 (1, 2) - 01/01/2016

2016, c. 5, Sched. 28, s. 7 - 19/04/2016

Subdivision f — Averaging and Adjustments

Qualifying lump-sum amount

17. There shall be added, in computing the tax payable for a taxation year under this Division by an individual who resides in Ontario on the last day of the taxation year, an amount equal to 38.5 per cent of the amount added under section 120.31 of the Federal Act in computing the individual’s tax payable for the year under the Federal Act.  2007, c. 11, Sched. A, s. 17.

CPP or QPP benefits

18. There shall be added, in computing the tax payable for a taxation year under this Division by an individual who resides in Ontario on the last day of the taxation year, an amount equal to 38.5 per cent of the amount added under section 120.3 of the Federal Act in computing the individual’s tax payable under the Federal Act for the year.  2007, c. 11, Sched. A, s. 18.

Additional tax amount, section 40 ITAR

19. There shall be added, in computing the tax payable under this Division for a taxation year by an individual who resides in Ontario on the last day of the taxation year, an amount equal to 38.5 per cent of the amount of the individual’s tax payable for the year under section 40 of the Income Tax Application Rules (Canada).  2007, c. 11, Sched. A, s. 19.

Subdivision g — Ontario Dividend Tax Credit, 2016 and subsequent taxation years

Ontario dividend tax credit, 2016 and subsequent taxation years

19.1 In determining the amount of tax payable under this Division for a taxation year ending after December 31, 2015, an individual who is resident in Ontario on the last day of the year may deduct an Ontario dividend tax credit under this section equal to the sum of,

(a) 29.5 per cent of any amount required under subparagraph 82 (1) (b) (i) of the Federal Act to be included in computing the individual’s income for the year; and

(b) 36.3158 per cent of any amount required under subparagraph 82 (1) (b) (ii) of the Federal Act to be included in computing the individual’s income for the year. 2016, c. 5, Sched. 28, s. 8.

Section Amendments with date in force (d/m/y)

2016, c. 5, Sched. 28, s. 8 - 19/04/2016

Subdivision h — Minimum Tax, 2016 and subsequent taxation years

Minimum tax, 2016 and subsequent taxation years

19.2 (1) This section applies if the tax payable by an individual under Part I of the Federal Act for a taxation year ending after December 31, 2015 is determined under section 127.5 of that Act. 2016, c. 5, Sched. 28, s. 8.

Same

(2) Every individual to whom this section applies for a taxation year ending after December 31, 2015 shall pay an additional tax for the year equal to the sum of the individual’s basic additional tax for the year and the individual’s surtax on additional tax for the year. 2016, c. 5, Sched. 28, s. 8.

Basic additional tax

(3) An individual’s basic additional tax for a taxation year is equal to the amount calculated using the formula,

(A – B) × C × D

in which,

  “A” is the amount, if any, by which the individual’s minimum amount for the year as determined under section 127.51 of the Federal Act exceeds the special foreign tax credit of the individual for the year, as determined under subsection 127.54 (2) of the Federal Act,

  “B” is the amount that, but for section 120 of the Federal Act, would be determined under Division E of Part I of the Federal Act to be the individual’s tax payable under the Federal Act for the year,

  “C” is the percentage calculated by dividing the lowest tax rate for the year by the percentage in paragraph 117 (2) (a) of the Federal Act, and

  “D” is the individual’s Ontario allocation factor for the year.

2016, c. 5, Sched. 28, s. 8.

Surtax on additional tax

(4) Subject to subsection (6), an individual’s surtax on additional tax for a taxation year is equal to the amount by which “E” exceeds “F”, where,

  “E” is the sum of,

(a) 20 per cent of the amount, if any, by which the gross tax amount of the individual for the year exceeds $4,006, and

(b) 36 per cent of the amount, if any, by which the gross tax amount of the individual for the year exceeds $5,127, and

“F” is the amount of the individual’s surtax for the year as determined under section 16.

2016, c. 5, Sched. 28, s. 8.

Gross tax amount

(5) The gross tax amount of an individual for a taxation year for the purposes of subsection (4) is the sum of the individual’s gross tax amount for the year determined under subsection 16 (2) and the amount of the individual’s basic additional tax determined under subsection (3). 2016, c. 5, Sched. 28, s. 8.

Exception

(6) The surtax on additional tax for a taxation year of an individual that is a trust to which subsection 7.1 (1) or (2) applies is equal to 56 per cent of the amount of the individual’s basic additional tax. 2016, c. 5, Sched. 28, s. 8.

Section Amendments with date in force (d/m/y)

2016, c. 5, Sched. 28, s. 8 - 19/04/2016

Subdivision i — Additional Tax Credits after Surtax

Ontario tax reduction

20. (1) Except as otherwise provided in subsection (9), an individual may deduct in computing his or her tax payable under this Division for a taxation year a tax credit equal to the amount, if any, by which twice the individual’s personal amount for the year exceeds the amount of tax otherwise payable by the individual for the year.  2007, c. 11, Sched. A, s. 20 (1).

Who includes amount in respect of qualified dependant, etc.

(2) If an individual resides with a cohabiting spouse or common-law partner on December 31 in the taxation year and if the individual’s income for the year exceeds the income of the cohabiting spouse or common-law partner for the year, the individual may include an eligible amount in his or her personal amount for the taxation year with respect to a person who is,

(a) a qualified dependant at any time in the taxation year in respect of whom the individual or the cohabiting spouse or common-law partner was an eligible individual; or

(b) a dependant of the individual or the cohabiting spouse or common-law partner who has a mental or physical infirmity.  2007, c. 11, Sched. A, s. 20 (2).

Personal amount

(3) An individual’s personal amount for a taxation year is the amount calculated using the formula:

A + B + C

in which,

  “A” is the amount of the basic reduction for the year,

  “B” is the sum of all amounts each of which is an eligible amount for the year for a dependant of the individual who was under 18 years of age at any time in the year, and

  “C” is the sum of all amounts each of which is an eligible amount for the year in respect of a dependant of the individual who has a mental or physical infirmity.

2007, c. 11, Sched. A, s. 20 (3).

Basic reduction

(4) The basic reduction for a taxation year is $205.  2007, c. 11, Sched. A, s. 20 (4); 2009, c. 18, Sched. 28, s. 6 (1).

Eligible amount, dependant

(5) The eligible amount for a dependant described in subsection (3) for a taxation year is $379.  2007, c. 11, Sched. A, s. 20 (5); 2009, c. 18, Sched. 28, s. 6 (2).

Rules, dependants

(6) An individual may include an amount in respect of a dependant in the calculation of “B” in subsection (3) for a taxation year only if,

(a) the dependant was a qualified dependant at any time in the year; and

(b) the individual or the individual’s cohabiting spouse or common-law partner, if any, with whom the individual resided on December 31 in the year was the eligible individual in respect of the dependant,

(i) immediately before the dependant ceased to be a qualified dependant of the eligible individual, and the dependant did not become the qualified dependant of any other eligible individual during the year, or

(ii) at the end of the year, in any other case.  2007, c. 11, Sched. A, s. 20 (6).

Rules, dependants with a mental or physical infirmity

(7) Subject to subsection (8), an individual may include an eligible amount in respect of a dependant who has a mental or physical infirmity in the calculation of “C” in subsection (3) for a taxation year only if no other person has included an eligible amount in respect of the dependant in the calculation of “B” or “C” in subsection (3) in the determination of that person’s personal amount for the year and,

(a) if the dependant had reached 18 years of age by December 31 in the year, the individual or the individual’s cohabiting spouse or common-law partner, if any, with whom the individual resided on that day is entitled to a deduction in respect of the dependant under subsection 9 (4), (5), (6) or (13) for the year;

(b) if the dependant had not reached 18 years of age by December 31 in the year, the individual or the individual’s cohabiting spouse or common-law partner, if any, with whom the individual resided on that day is entitled to a deduction in respect of the dependant under subsection 9 (13) or would have been entitled to a deduction in respect of the dependant under subsection 9 (5) or (6) for the year if the dependant had reached 18 years of age by December 31 in the year; or 

(c) if the dependant is the individual’s cohabiting spouse or common-law partner at any time in the year, is entitled to a deduction under subsection 9 (12) for the year and is transferring some or all of the deduction to the individual under subsection 9 (17).  2007, c. 11, Sched. A, s. 20 (7); 2008, c. 7, Sched. S, s. 4 (1-3).

Rules, non-cohabiting spouses, etc.

(8) If two individuals who are not cohabiting spouses or common-law partners are each entitled to deduct and are deducting an amount under subsection 9 (6) or (13) for a taxation year in respect of the same dependant who is at least 19 years old, the following rules apply:

1. The individual who is deducting more than 50 per cent of the amount deductible under subsection 9 (6) or (13) in respect of the dependant may include an amount in respect of the dependant in the calculation of “C” in subsection (3) for the year.

2. If each individual is deducting 50 per cent of the amount deductible under subsection 9 (6) or (13) in respect of the dependant, only the individual with the lower income may include an amount in respect of the dependant in the calculation of “C” in subsection (3) for the year.  2007, c. 11, Sched. A, s. 20 (8); 2008, c. 7, Sched. S, s. 4 (4-6).

Exception

(9) No tax credit may be deducted under this section for a taxation year by an individual if,

(a) the individual’s tax payable under Part I of the Federal Act for the year is determined under Division E.1 of that Part;

(b) the individual is not resident in Canada at the beginning of the year;

(c) the individual is resident outside Ontario on December 31 in the year;

(d) the individual’s tax return for the year is filed on his or her behalf by a trustee in bankruptcy under paragraph 128 (2) (e) or (h) of the Federal Act; or

(e) the individual is a trust referred to in subdivision k of Division B of Part I of the Federal Act.  2007, c. 11, Sched. A, s. 20 (9); 2010, c. 1, Sched. 29, s. 1.

Definitions

(10) In this section,

“eligible individual” has the meaning assigned by section 122.6 of the Federal Act; (“particulier admissible”)

“qualified dependant” has the meaning assigned by section 122.6 of the Federal Act; (“personne à charge admissible”)

“tax otherwise payable” means, in respect of an individual for a taxation year, the amount of tax that would be payable under this Division by the individual for the year if that amount were determined without reference to this section and sections 21 and 22. (“impôt payable par ailleurs”)  2007, c. 11, Sched. A, s. 20 (10); 2011, c. 9, Sched. 40, s. 2.

Section Amendments with date in force (d/m/y)

2008, c. 7, Sched. S, s. 4 (1-6) - 01/01/2009

2009, c. 18, Sched. 28, s. 6 (1, 2) - 01/01/2009

2010, c. 1, Sched. 29, s. 1 - 01/01/2009

2011, c. 9, Sched. 40, s. 2 - 12/05/2011

Ontario dividend tax credit for 2014 and 2015

20.1 In determining the amount of tax payable under this Division for a taxation year ending after December 31, 2013 and before January 1, 2016, an individual who is resident in Ontario on the last day of the year may deduct an Ontario dividend tax credit under this section equal to the sum of,

(a) 22.5 per cent of any amount required under subparagraph 82 (1) (b) (i) of the Federal Act to be included in computing the individual’s income for the year in respect of dividends paid before January 1, 2014;

(b) 29.5 per cent of any amount required under subparagraph 82 (1) (b) (i) of the Federal Act to be included in computing the individual’s income for the year in respect of dividends paid after December 31, 2013; and

(c) 36.3158 per cent of any amount required under subparagraph 82 (1) (b) (ii) of the Federal Act to be included in computing the individual’s income for the year. 2014, c. 7, Sched. 29, s. 4; 2016, c. 5, Sched. 28, s. 10.

Section Amendments with date in force (d/m/y)

2014, c. 7, Sched. 29, s. 4 - 01/01/2014

2016, c. 5, Sched. 28, s. 10 - 01/01/2016

Foreign tax credit

21. (1) An individual who was resident in Ontario on the last day of a taxation year, and who had income for the year that included income earned in a country other than Canada in respect of which an amount of non-business-income tax was paid by the individual to the government of that country for the year, may deduct in computing the individual’s tax payable under this Division for the year a foreign tax credit equal to the lesser of “A” and “B” where,

  “A” is the amount, if any, by which the non-business-income tax paid by the individual for the year to the government of each country other than Canada exceeds the sum of,

(a) all amounts, if any, deductible by the individual from tax under the Federal Act for the year under subsection 126 (1), (2.2), (2.21) or (2.22) of that Act, and

(b) the individual’s special foreign tax credit for the year under subsection 127.54 (2) of the Federal Act, and

  “B” is the amount, if any, determined by multiplying the tax otherwise payable by the individual for the taxation year by the ratio of “C” to “D” where,

“C” is the amount, if any, determined in respect of the individual for the year under subparagraph 126 (1) (b) (i) of the Federal Act, and

“D” is the amount, if any, by which “E” exceeds “F” where,

“E” is,

(a)  if section 114 of the Federal Act is not applicable to the individual for the year, the individual’s income earned in Ontario for the year, or

(b)  if section 114 of the Federal Act is applicable to the individual for the year, the amount that would be the individual’s income earned in Ontario for the year if the amount determined under the Federal Act were equal to the individual’s income determined under paragraph 114 (a) of the Federal Act, and

“F” is the amount, if any, determined under subclause 126 (1) (b) (ii) (A) (III) of the Federal Act in respect of the individual for the year.  2007, c. 11, Sched. A, s. 21 (1).

Rules re foreign tax credit

(2) The following rules apply in respect of an individual’s foreign tax credit for a taxation year:

1. Subsection 126 (6) of the Federal Act and the definition of “non-business-income tax” in subsection 126 (7) of the Federal Act apply for the purposes of subsection (1).

2. For the purposes of subsection (1), the expression “tax otherwise payable” by an individual for a taxation year means the amount of tax that would be payable under this Division by the individual for the year if that amount were determined without reference to this section and sections 13, 14, 19.1, 19.2, 20.1 and 22. 2007, c. 11, Sched. A, s. 21 (2); 2014, c. 7, Sched. 29, s. 5; 2016, c. 5, Sched. 28, s. 11.

Section Amendments with date in force (d/m/y)

2014, c. 7, Sched. 29, s. 5 - 01/01/2014

2016, c. 5, Sched. 28, s. 11 - 01/01/2016

Investment corporation tax credit

22. (1) In determining the amount of tax payable for a taxation year under this Division, an individual who is resident in Ontario on the last day of the year and who has been issued one or more tax credit certificates under the Community Small Business Investment Funds Act, 1992 in respect of the year with respect to investments in shares issued by one or more corporations registered under Part III of that Act, may deduct from the amount of his or her tax otherwise payable for the year a tax credit equal to the lesser of “A” and “B” where,

  “A” is the sum of the tax credits listed on those tax credit certificates issued in respect of the year, and

  “B” is the maximum tax credit permitted for the year in respect of investments made by the individual in corporations registered under Part III of that Act.  2007, c. 11, Sched. A, s. 22 (1).

Interpretation, maximum tax credit

(2) The maximum tax credit permitted for a taxation year in respect of investments made by an individual in corporations registered under Part III of the Community Small Business Investment Funds Act, 1992 is,

(a) for the 2009 taxation year, unless otherwise prescribed, the sum of,

(i) the lesser of $1,125 and the amount equal to 15 per cent of the equity capital received from the individual during 2009 or during the first 60 days of 2010 by the corporations on the issue of Class A shares, and

(ii) the lesser of $375 and the amount equal to 5 per cent of the equity capital received from the individual during 2009 or during the first 60 days of 2010 by the corporations on the issue of Class A shares, if the shares were issued by the corporations as research oriented investment funds under subsection 16.1 (2) of the Community Small Business Investment Funds Act, 1992;

(b) for the 2010 taxation year, unless otherwise prescribed, the sum of,

(i) the lesser of $750 and the amount equal to 10 per cent of the equity capital received from the individual during 2010 or during the first 60 days of 2011 by the corporations on the issue of Class A shares, and

(ii) the lesser of $375 and the amount equal to 5 per cent of the equity capital received from the individual during 2010 or during the first 60 days of 2011 by the corporations on the issue of Class A shares, if the shares were issued by the corporations as research oriented investment funds under subsection 16.1 (2) of the Community Small Business Investment Funds Act, 1992; or

(c) for the 2011 taxation year, unless otherwise prescribed, the sum of,

(i) the lesser of $375 and the amount equal to 5 per cent of the equity capital received from the individual during 2011 or during the first 60 days of 2012 by the corporations on the issue of Class A shares, and

(ii) the lesser of $375 and the amount equal to 5 per cent of the equity capital received from the individual during 2011 or during the first 60 days of 2012 by the corporations on the issue of Class A shares, if the shares were issued by the corporations as research oriented investment funds under subsection 16.1 (2) of the Community Small Business Investment Funds Act, 1992.  2008, c. 7, Sched. S, s. 5.

Interpretation

(3) For the purposes of subsection (1), the expression “tax otherwise payable” by an individual for a taxation year means the amount of tax that would be payable for the year under this Division if that amount were determined without reference to this section.  2007, c. 11, Sched. A, s. 22 (3).

Section Amendments with date in force (d/m/y)

2008, c. 7, Sched. S, s. 5 - 01/01/2008

CTS 18 AU 10 - 1

Subdivision j — Indexing and Rounding

Annual adjustment

23. (1) Subject to the regulations, each amount expressed in dollars in the following provisions shall be adjusted in accordance with this section for every taxation year ending after December 31, 2009 or for every taxation year otherwise indicated:

1. Paragraphs 1 and 2 of subsection 6 (1) with respect to taxation years ending after December 31, 2014.

1.1 Paragraph 3 of subsection 6 (1), except for the amount of $150,000, with respect to taxation years ending after December 31, 2014.

2. Subsections 9 (2) to (6), (8), (10), (11), (12), (16), (19) and (20).

Note: On January 1, 2018, paragraph 2 of subsection 23 (1) of the Act is amended by striking out “(12), (16), (19) and (20)” at the end and substituting “(12) and (20)”. (See: 2016, c. 5, Sched. 28, s. 13 (1))

3. Paragraphs 118.2 (2) (b.1), (l.5) and (l.7) of the Federal Act, as they apply in determining the amount of an individual’s medical expense tax credit deductible under subsection 9 (20). 

4. Subclauses 16 (1) (a) (ii) and (b) (ii) with respect to taxation years ending after December 31, 2010.

4.1 Subsection 19.2 (4) with respect to taxation years ending after December 31, 2010.

5. Subsections 20 (4) and (5).

6., 7. Repealed:  2010, c. 26, Sched. 20, s. 1 (3).

7.1 Subsection 103.1 (7) and clause 103.1 (9) (b) with respect to taxation years ending after December 31, 2010.

Note: On January 1, 2017, paragraph 7.1 of subsection 23 (1) of the Act is repealed. (See: 2016, c. 5, Sched. 28, s. 13 (3))

7.2 Subsections 103.8 (3), 103.9 (3) and (4), 103.10 (3) and (4) and 103.12 (3) with respect to taxation years ending on or after December 31, 2010 that would be base taxation years under Part IV.1 if that Part came into effect at the beginning of 2011.

7.3 Subsection 104 (5) with respect to taxation years ending on or after December 31, 2014 that are base taxation years under Part V.

8. Subsection 104.11 (5) with respect to taxation years ending on or after December 31, 2010 that are base taxation years under Part V.3.

8.1 Subsection 104.22 (2) with respect to taxation years ending on or after December 31, 2010 that are base taxation years under Part V.6.

9. Subsections 104.37 (1) and (4) with respect to taxation years ending on or after December 31, 2010 that are base taxation years under Part V.8.

10. Subsections 104.38 (1) and (2.1) with respect to taxation years ending on or after December 31, 2010 that are base taxation years under Part V.8.  2007, c. 11, Sched. A, s. 23 (1); 2009, c. 18, Sched. 28, s. 7; 2009, c. 34, Sched. U, s. 5 (1, 2); 2010, c. 1, Sched. 29, s. 2; 2010, c. 21, s. 1 (1); 2010, c. 23, s. 1; 2010, c. 26, Sched. 20, s. 1 (1-5); 2011, c. 9, Sched. 40, s. 3 (1-3); 2012, c. 9, s. 5; 2014, c. 8, s. 3; 2014, c. 7, Sched. 29, s. 6 (1); 2016, c. 5, Sched. 28, s. 13 (2).

(1.1) Repealed:  2010, c. 26, Sched. 20, s. 1 (6).

Calculation of adjusted income

(2) Each amount referred to in a provision listed in subsection (1), other than a provision to which subsection (3.1) applies, shall be adjusted to the amount calculated using the formula,

A + [A × (B/C – 1)]

in which,

  “A” is the amount that would have been used for the preceding taxation year if it had not been rounded to a whole dollar,

  “B” is the Consumer Price Index for the 12-month period that ended on September 30 of the previous year, and

  “C” is the Consumer Price Index for the 12-month period preceding the 12-month period mentioned in the description of  “B”.

2007, c. 11, Sched. A, s. 23 (2); 2010, c. 26, Sched. 20, s. 1 (7).

Same

(3) For the purposes of subsection (2), the amount of “(B/C – 1)” shall be adjusted each year in such manner as may be prescribed and rounded to the nearest thousandth or, if the result obtained is equidistant between two consecutive thousandths, to the higher thousandth.  2007, c. 11, Sched. A, s. 23 (3).

Calculation of adjusted income, certain tax credits

(3.1) Each amount referred to in a provision listed in paragraph 7.2, 7.3, 8, 8.1, 9 or 10 of subsection (1) shall be adjusted to the amount calculated using the formula,

D + [D × (E/F – 1)]

in which,

  “D” is the amount that would have been used for the base taxation year if it had not been rounded to a whole dollar,

  “E” is the Consumer Price Index for the 12-month period that ended on September 30 of the base taxation year, and

“F” is the Consumer Price Index for the 12-month period preceding the 12-month period mentioned in the description of “E”.

2010, c. 26, Sched. 20, s. 1 (8, 9); 2011, c. 9, Sched. 40, s. 3 (4); 2014, c. 7, Sched. 29, s. 6 (2).

Same

(3.2) For the purposes of subsection (3.1), the amount of “(E/F – 1)” shall be adjusted each year in such manner as may be prescribed and rounded to the nearest thousandth or, if the result obtained is equidistant between two consecutive thousandths, to the higher thousandth.  2010, c. 26, Sched. 20, s. 1 (10).

Rounding

(4) If an amount as adjusted under this section is not a multiple of one dollar, it shall be rounded to the nearest multiple of one dollar or, if the amount is equidistant between two consecutive whole dollar amounts, to the higher dollar amount.  2007, c. 11, Sched. A, s. 23 (4).

Consumer Price Index

(5) In this section, the Consumer Price Index for any 12-month period is the result arrived at by,

(a) determining the sum of the Consumer Price Index for Ontario as published by Statistics Canada under the authority of the Statistics Act (Canada), adjusted in the prescribed manner, for each month in that period;

(b) dividing the sum obtained under clause (a) by 12; and

(c) rounding the result obtained under clause (b) to the nearest one-thousandth or, if the result obtained is equidistant from two consecutive thousandths, to the higher thousandth.  2007, c. 11, Sched. A, s. 23 (5).

Section Amendments with date in force (d/m/y)

2009, c. 18, Sched. 28, s. 7 - 01/01/2009; 2009, c. 34, Sched. U, s. 5 (1-3) - 15/12/2009

2010, c. 1, Sched. 29, s. 2 - 01/01/2010; 2010, c. 21, s. 1 (1, 2) - 29/11/2010; 2010, c. 23, s. 1 -29/11/2010; 2010, c. 26, Sched. 20, s. 1 (1-10) - 08/12/2010

2011, c. 9, Sched. 40, s. 3 (1, 4) - 12/05/2011; 2011, c. 9, Sched. 40, s. 3 (2, 3) - 01/07/2011

2012, c. 9, s. 5 - 01/01/2012

2014, c. 8, s. 3 - 01/01/2014; 2014, c. 7, Sched. 29, s. 6 (1, 2) - 01/07/2015

2016, c. 5, Sched. 28, s. 13 (1) - 01/01/2018; 2016, c. 5, Sched. 28, s. 13 (2) - 19/04/2016; 2016, c. 5, Sched. 28, s. 13 (3) - 01/01/2017

Division C — Ontario Health Premium

Liability for Ontario Health Premium

24. (1) An individual who, in respect of a taxation year, is described in paragraph 1 or 2 of subsection 4 (1) shall pay an Ontario Health Premium for that year.  2007, c. 11, Sched. A, s. 24 (1).

Calculation of Ontario Health Premium

(2) An individual’s Ontario Health Premium for a taxation year is calculated using the formula in the following paragraph that applies to the individual for the year:

1. If the individual’s taxable income for the year does not exceed $20,000, the individual’s Ontario Health Premium for the year is nil.

2. If the individual’s taxable income for the year exceeds $20,000 but does not exceed $36,000, the individual’s Ontario Health Premium for the year is the amount calculated using the formula,

0.06 × A

in which,

“A” is the lesser of $5,000 and the amount of the individual’s taxable income in excess of $20,000 for the year.

3. If the individual’s taxable income for the year exceeds $36,000 but does not exceed $48,000, the individual’s Ontario Health Premium for the year is the amount calculated using the formula,

B + (0.06 × C)

in which,

“B” is $300, and

“C” is the lesser of $2,500 and the amount of the individual’s taxable income in excess of $36,000 for the year.

4. If the individual’s taxable income for the year exceeds $48,000 but does not exceed $72,000, the individual’s Ontario Health Premium for the year is the amount calculated using the formula,

D + (0.25 × E)

in which,

“D” is $450, and

“E” is the lesser of $600 and the amount of the individual’s taxable income in excess of $48,000 for the year.

5. If the individual’s taxable income for the year exceeds $72,000 but does not exceed $200,000, the individual’s Ontario Health Premium for the year is the amount calculated using the formula,

F + (0.25 × G)

in which,

“F” is $600, and

“G” is the lesser of $600 and the amount of the individual’s taxable income in excess of $72,000 for the year.

6. If the individual’s taxable income for the year exceeds $200,000, the individual’s Ontario Health Premium for the year is the amount calculated using the formula,

H + (0.25 × I)

in which,

“H” is $750, and

“I” is the lesser of $600 and the amount of the individual’s taxable income in excess of $200,000 for the year.

2007, c. 11, Sched. A, s. 24 (2).

Exception, trust

(3) Despite subsection (1), an individual is not required to pay an Ontario Health Premium if the individual is a trust.  2007, c. 11, Sched. A, s. 24 (3).

Bankruptcy, before 2010

(4) The following rules apply if an individual is bankrupt in a calendar year before 2010:

1. The individual’s taxable income for the year for the purposes of this section is deemed to be the sum of all amounts, each of which is his or her taxable income for a taxation year ending in the calendar year of bankruptcy.

2. The individual’s Ontario Health Premium for the year shall be allocated to and payable in respect of each taxation year ending in the calendar year of bankruptcy, in amounts reasonably proportionate to the taxable income of the individual for each taxation year ending in the year of bankruptcy.  2007, c. 11, Sched. A, s. 24 (4); 2010, c. 26, Sched. 20, s. 2 (1).

Bankruptcy, after 2009

(4.1) The following rules apply if an individual is bankrupt in a calendar year after 2009:

1. The individual’s taxable income for the calendar year for the purposes of this section is deemed to be the sum of all amounts, each of which is his or her taxable income for a taxation year ending in the calendar year of bankruptcy.

2. The individual’s Ontario Health Premium for the calendar year shall be allocated to and payable in respect of each taxation year ending in the calendar year of bankruptcy in the manner described in paragraphs 3 to 5.

3. For a taxation year that is deemed to end under paragraph 128 (2) (d) of the Federal Act on the day immediately before the day on which the individual became a bankrupt, the amount of the individual’s Ontario Health Premium is the amount that would be determined in accordance with subsection (2) if the taxation year were the only taxation year of the individual ending in the calendar year.

4. For a taxation year in respect of which a return of income under paragraph 128 (2) (e) of the Federal Act is required to be filed, the amount of the individual’s Ontario Health Premium is nil.

5. For a taxation year other than a taxation year described in paragraph 3 or 4, in respect of which a return of income is required to be filed under this Act, the amount of the individual’s Ontario Health Premium is the amount calculated using the formula,

A – B

where,

“A” is the individual’s Ontario Health Premium for the calendar year as determined under subsection (2) as if each reference in that subsection to “taxation year” were read as a reference to “calendar year”, and

“B” is the amount of the individual’s Ontario Health Premium payable in respect of the taxation year described in paragraph 3.

2010, c. 26, Sched. 20, s. 2 (2).

Death

(5) For the purposes of this section, the taxable income of an individual shall not include income that is reported in a return filed as a result of an election made under subsection 70 (2), 104 (23) or 150 (4) of the Federal Act.  2007, c. 11, Sched. A, s. 24 (5).

Section Amendments with date in force (d/m/y)

2010, c. 26, Sched. 20, s. 2 (1, 2) - 08/12/2010

Report about revenue from the Ontario Health Premium

25. The Public Accounts for each fiscal year shall include information about the use of the revenue from the Ontario Health Premium.  2007, c. 11, Sched. A, s. 25.

PART III
Corporate Tax

Division A — General

Interpretation

Definitions

26. (1) In this Part,

“adjusted taxable income” means, in respect of a corporation,

(a) for a taxation year that ended before January 1, 2009, the corporation’s taxable income or taxable income earned in Canada for the year, as the case may be, determined under the Corporations Tax Act, or

(b) for a taxation year ending after December 31, 2008, the amount that would be the corporation’s taxable income or taxable income earned in Canada for the year if,

(i) the amount of the corporation’s adjusted Crown royalties for the year, as determined under subsection 36 (2), were added in determining the corporation’s income for the purposes of the Federal Act for the year, and

(ii) the amount of the corporation’s notional resource allowance for the year under subsection 36 (3) were deducted in determining the corporation’s income for the purposes of the Federal Act for the year; (“revenu imposable rajusté”)

“amalgamated corporation” means a corporation that is a “new corporation” for the purposes of section 87 of the Federal Act; (société issue de la fusion”)

“Canadian reserve liabilities” has the meaning assigned by subsection 2400 (1) of the Federal regulations; (“passif de réserve canadienne”)

“Ontario small business income” means, in respect of a corporation for a taxation year, the amount determined for the year under subsection 31 (3); (“revenu tiré d’une petite entreprise exploitée en Ontario”)

“parent corporation” means a corporation that is a “parent” under subsection 88 (1) of the Federal Act; (“société mère”)

“predecessor corporation” means a corporation that is a predecessor corporation referred to in section 87 of the Federal Act and includes a corporation that was a predecessor corporation of a predecessor corporation; (“société remplacée”)

“small business deduction rate” means, in respect of a corporation for a taxation year, the percentage determined for the corporation for the year under subsection 31 (4); (“taux de la déduction accordée aux petites entreprises”)

“subsidiary corporation” means, except for the purposes of Division D, a corporation that is a “subsidiary” under subsection 88 (1) of the Federal Act; (“filiale”)

“taxable income” means, in respect of a corporation for a taxation year,

(a) the corporation’s taxable income for the year as determined for the purposes of Part II of the Corporations Tax Act or the Federal Act, as the context requires, if the taxation year ended before January 1, 2009, or

(b) the corporation’s taxable income for the year as determined for the purposes of the Federal Act, if the taxation year ends after December 31, 2008; (“revenu imposable”)

“total reserve liabilities” has the meaning assigned by section 8600 of the Federal regulations. (“passif total de réserve”)  2007, c. 11, Sched. A, s. 26 (1).

Ontario domestic factor, corporation resident in Canada

(2) For the purposes of this Part, the Ontario domestic factor for a taxation year of a corporation that is resident in Canada is the ratio of “A” to “B” where,

  “A” is equal to,

(a) the corporation’s Ontario taxable income for the year if the corporation’s taxable income for the year is a positive amount, or

(b) in any other case, the amount that would be the corporation’s Ontario taxable income for the year if the corporation’s taxable income for the year were $1,000, and

  “B” is equal to,

(a) the corporation’s taxable income earned in the year in a province as determined under the Federal regulations made for the purposes of subsection 124 (4) of the Federal Act, if the corporation’s taxable income for the year is a positive amount, or

(b) in any other case, the amount that would be the corporation’s taxable income earned in the year in a province as determined under the Federal regulations made for the purposes of subsection 124 (4) of the Federal Act if the corporation’s taxable income for the year were $1,000.  2007, c. 11, Sched. A, s. 26 (2).

Canadian allocation factor, corporation resident in Canada

(3) For the purposes of this Part, the Canadian allocation factor for a taxation year of a corporation that is resident in Canada is the ratio of “C” to “D” where,

  “C” is equal to,

(a) the corporation’s taxable income earned in the year in a province, as determined under the Federal regulations made for the purposes of subsection 124 (4) of the Federal Act, if the corporation’s taxable income for the year is a positive amount, or

(b) the amount that would be the corporation’s taxable income earned in the year in a province, as determined under the Federal regulations made for the purposes of subsection 124 (4) of the Federal Act if the corporation’s taxable income for the year were $1,000, in any other case, and

  “D” is equal to,

(a) the corporation’s taxable income for the year if it is a positive amount, or

(b) $1,000, in any other case.  2007, c. 11, Sched. A, s. 26 (3).

Non-resident corporation

(4) For the purposes of this Part, if a corporation is a non-resident corporation,

(a) its Ontario domestic factor for a taxation year is equal to its Ontario allocation factor for the year; and

(b) its Canadian allocation factor for a taxation year is one.  2007, c. 11, Sched. A, s. 26 (4).

Foreign allocation factor

(5) For the purposes of this Part, the foreign allocation factor for a taxation year of a corporation that is resident in Canada is one minus the corporation’s Canadian allocation factor for the year.  2007, c. 11, Sched. A, s. 26 (5).

Regulations

(6) A reference in any provision in this Part to something prescribed, determined or defined by the regulations shall be read as a reference to the thing as prescribed, determined or defined by the regulations made for the purposes of the corresponding provision of the Corporations Tax Act unless a regulation has been made under this Act to prescribe, determine or define the thing.  2007, c. 11, Sched. A, s. 26 (6).

Same

(7) A regulation made under the Corporations Tax Act that applies for the purposes of this Part shall be read with such modifications as may be required.  2007, c. 11, Sched. A, s. 26 (7).

Obligation to pay tax

27. (1) Every corporation that has a permanent establishment in Ontario at any time in a taxation year shall, at the time and in the manner required by this Act, pay to the Crown in right of Ontario the taxes for the taxation year imposed by this Part.  2007, c. 11, Sched. A, s. 27 (1).

Exception

(2) Despite subsection (1), if a corporation is exempt from tax by reason of section 149 of the Federal Act, the following rules apply:

1. The corporation is exempt from tax determined under Division B for the same period of time and to the same extent that it is exempt from tax imposed under Part I of the Federal Act by reason of that section.

2. The corporation is exempt from taxes determined under Divisions C, D and E for the same period of time it is totally exempt from tax imposed under Part I of the Federal Act by reason of that section.  2007, c. 11, Sched. A, s. 27 (2).

If corporation is a bankrupt

28. Subsection 128 (1) of the Federal Act applies for the purposes of this Act.  2007, c. 11, Sched. A, s. 28.

Division B — Corporate Income Tax

Subdivision a — General Corporate Income Tax, Tax Credits and Surtax

Basic income tax

29. (1) Every corporation that has a permanent establishment in Ontario at any time in a taxation year shall, in determining the amount of its tax payable under this Division for the taxation year, add the amount of its basic income tax for the year, calculated by multiplying its Ontario taxable income for the year by its basic rate of tax.  2007, c. 11, Sched. A, s. 29 (1).

Basic rate of tax

(2) A corporation’s basic rate of tax for a taxation year is the sum of,

(a) 14 per cent multiplied by the ratio of the number of days in the taxation year that are before July 1, 2010 to the total number of days in the taxation year;

(b) 12 per cent multiplied by the ratio of the number of days in the taxation year that are after June 30, 2010 and before July 1, 2011 to the total number of days in the taxation year;

(c) 11.5 per cent multiplied by the ratio of the number of days in the taxation year that are after June 30, 2011 to the total number of days in the taxation year.

(d), (e) Repealed:  2012, c. 9, s. 6.

2009, c. 34, Sched. U, s. 6; 2010, c. 1, Sched. 29, s. 3; 2012, c. 9, s. 6.

Section Amendments with date in force (d/m/y)

2009, c. 34, Sched. U, s. 6 - 15/12/2009

2010, c. 1, Sched. 29, s. 3 - 15/12/2009

2012, c. 9, s. 6 - 01/07/2012

Change in tax status

30. If at any time a corporation becomes or ceases to be exempt from tax under Part I of the Federal Act on its taxable income otherwise than by reason of paragraph 149 (1) (t) of the Federal Act, the corporation is deemed to be a new corporation whose first taxation year begins at that time for the purposes of applying this Division to the corporation to determine the amount, if any, deductible in computing the amount of the corporation’s tax payable under this Division.  2007, c. 11, Sched. A, s. 30.

Ontario small business deduction

31. (1) A corporation may, in computing the amount of its tax payable under this Division for a taxation year, deduct an Ontario small business deduction if,

(a) the corporation has made a deduction under section 125 of the Federal Act for the year; or

(b) the corporation would have been entitled to a deduction under section 125 of the Federal Act if its business limit for the year under paragraph 125 (1) (c) of that Act had been determined without reference to subsection 125 (5.1) of that Act.  2007, c. 11, Sched. A, s. 31 (1).

Calculation of Ontario small business deduction

(2) A corporation’s Ontario small business deduction for a taxation year is the amount determined by multiplying its Ontario small business income for the year by its small business deduction rate for the year.  2007, c. 11, Sched. A, s. 31 (2).

Ontario small business income

(3) A corporation’s Ontario small business income for a taxation year is the lesser of “A” and “B” where,

  “A” is the amount calculated using the formula,

C × D

in which,

“C” is the least of,

(a) the amount determined under paragraph 125 (1) (a) of the Federal Act in respect of the corporation for the year,

(b) the amount determined under paragraph 125 (1) (b) of the Federal Act in respect of the corporation for the year, and

(c) the corporation’s Ontario business limit for the year, and

“D” is the corporation’s Ontario domestic factor for the year, and

  “B” is the corporation’s Ontario taxable income for the year.

2010, c. 26, Sched. 20, s. 3.

Small business deduction rate

(4) A corporation’s small business deduction rate for a taxation year is the sum of,

(a) 8.5 per cent multiplied by the ratio of the number of days in the taxation year that are before July 1, 2010 to the total number of days in the taxation year;

(b) 7.5 per cent multiplied by the ratio of the number of days in the taxation year that are after June 30, 2010 and before July 1, 2011 to the total number of days in the taxation year;

(c) 7 per cent multiplied by the ratio of the number of days in the taxation year that are after June 30, 2011 to the total number of days in the taxation year.

(d), (e) Repealed:  2012, c. 9, s. 7.

2009, c. 34, Sched. U, s. 7; 2012, c. 9, s. 7.

Ontario business limit

(5) For the purpose of this section, a corporation’s Ontario business limit for a taxation year is $500,000 unless the corporation is associated in the taxation year with one or more other Canadian-controlled private corporations, in which case, except as otherwise provided in this section, its Ontario business limit is nil.  2010, c. 1, Sched. 29, s. 4.

Associated corporations

(5.1) Despite subsection (5), if all the Canadian-controlled private corporations that are associated with each other in a taxation year file with the Federal Minister an agreement under subsection 125 (3) of the Federal Act, the Ontario business limit for the year of each of the corporations is,

(a) if the total of the percentages assigned in the agreement does not exceed 100 per cent, $500,000 multiplied by the percentage assigned to that corporation in the agreement; and

(b) in any other case, nil.  2010, c. 1, Sched. 29, s. 4.

Failure to file agreement

(5.2) Subject to subsection (5.3), if any of the Canadian-controlled private corporations that are associated with each other in a taxation year has failed to file an agreement as contemplated by subsection (5.1) within 30 days after notice in writing by the Federal Minister has been forwarded to any of them that such an agreement is required for the purpose of any assessment of tax under this Part, the Ontario Minister shall, for the purpose of this section, allocate an amount to one or more of them for the taxation year.  2010, c. 1, Sched. 29, s. 4.

Same

(5.3) The total amount allocated by the Ontario Minister under subsection (5.2) must equal the least of the amounts that would, if none of the corporations were associated with any other corporation during the year and if this Act were read without reference to subsection (5.4), be the Ontario business limits of the corporations for the year.  2010, c. 1, Sched. 29, s. 4.

Special rules for Ontario business limit

(5.4) Despite subsections (5) to (5.3),

(a) if a Canadian-controlled private corporation (in this paragraph referred to as the “first corporation”) has more than one taxation year ending in the same calendar year and is associated in two or more of those taxation years with another Canadian-controlled private corporation that has a taxation year ending in that calendar year, the Ontario business limit of the first corporation for each taxation year ending in the calendar year in which it is associated with the other corporation that ends after the first such taxation year ending in that calendar year is, subject to the application of clause (b), an amount equal to the lesser of,

(i) its Ontario business limit determined under subsection (5.1) or (5.2) for the first such taxation year ending in the calendar year, and

(ii) its Ontario business limit determined under subsection (5.1) or (5.2) for the particular taxation year ending in the calendar year; and

(b) if a Canadian-controlled private corporation has a taxation year that is less than 51 weeks, its Ontario business limit for the year is that proportion of its Ontario business limit for the year determined without reference to this clause that the number of days in the year is of 365.  2010, c. 1, Sched. 29, s. 4.

Ontario business limit reduction

(5.5) Despite subsections (5) to (5.4), a Canadian-controlled private corporation’s Ontario business limit for a particular taxation year ending in a calendar year and ending after May 1, 2014 is the amount, if any, by which its Ontario business limit otherwise determined under subsections (5) to (5.4) for the particular taxation year exceeds the amount determined by the formula,

A × (B/$11,250) × C/E

in which,

  “A” is the amount that would, but for this subsection, be the corporation’s business limit for the particular taxation year,

  “B” is the amount determined by the formula,

0.225% × (D − $10 million)

in which,

“D” is,

(a) if, in both the particular taxation year and the preceding taxation year, the corporation is not associated with any corporation, the taxable capital employed in Canada (within the meaning assigned by subsection 181.2 (1) or 181.3 (1) or section 181.4 of the Federal Act, as the case may be) of the corporation for the preceding taxation year,

(b) if, in the particular taxation year, the corporation is not associated with any corporation but was associated with one or more corporations in the preceding taxation year, the taxable capital employed in Canada (within the meaning by subsection 181.2 (1) or 181.3 (1) or section 181.4 of the Federal Act, as the case may be) of the corporation for the particular taxation year, or

(c) if, in the particular taxation year, the corporation is associated with one or more particular corporations, 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 of the Federal Act, as the case may be) of the corporation or of any of the particular corporations for its last taxation year that ended in the preceding calendar year.

  “C” is the number of days in the particular taxation year that are after May 1, 2014, and

  “E” is the total number of days in the particular taxation year. 2014, c. 7, Sched. 29, s. 7.

Specified partnership income

(6) In applying subparagraph 125 (1) (a) (ii) of the Federal Act for the purposes of this section, the reference to “specified partnership income” in that subparagraph shall be read as a reference to the amount that would be determined under the definition of “specified partnership income” in subsection 125 (7) of that Act in respect of a partnership if,

(a) the dollar amount in subparagraph (i) of the description of “M” in that definition were the dollar amount set out in subsection (5); and

(b) subparagraph (ii) of the description of “M” in that definition were read as a reference to the amount obtained,

(i) by dividing the dollar amount set out in subsection (5) by 365 and rounding the result to the next highest whole number if the result is not a whole number, and

(ii) by multiplying the amount determined under subclause (i) by the total of all amounts each of which is the number of days in a fiscal period of the partnership that ends in the taxation year.  2010, c. 1, Sched. 29, s. 4.

Section Amendments with date in force (d/m/y)

2008, c. 7, Sched. S, s. 6 - 01/01/2008

2009, c. 34, Sched. U, s. 7 - 15/12/2009

2010, c. 1, Sched. 29, s. 4 - 18/05/2010; 2010, c. 26, Sched. 20, s. 3 - 08/12/2010

2012, c. 9, s. 7 - 01/07/2012

2014, c. 7, Sched. 29, s. 7 - 24/07/2014

Surtax re Ontario small business deduction

32. (1) Every corporation that has claimed an Ontario small business deduction for a taxation year shall, in computing the amount of its tax payable under this Division for the year, add the amount, if any, of the corporation’s surtax for the year equal to the lesser of,

(a) the amount claimed as a deduction by the corporation under subsection 31 (1) for the year; and

(b) the amount calculated using the formula,

A × (B + C – $500,000) × D/$500,000

in which,

“A” is the corporation’s small business surtax rate for the year as set out in subsection (3),

“B” is the amount of the corporation’s adjusted taxable income for the year,

“C” is the sum of all amounts each of which is the adjusted taxable income of another corporation with which the corporation was associated at any time during the year, for the last taxation year of that associated corporation that ended at or before the end of the corporation’s taxation year, and

“D” is the amount of the corporation’s Ontario small business income for the year.

2007, c. 11, Sched. A, s. 32 (1); 2008, c. 7, Sched. S, s. 7 (1).

Rules for short taxation years and associated corporations

(2) The following rules apply in calculating the amount, if any, of a corporation’s surtax for a taxation year under subsection (1):

1. If the taxation year of the corporation is less than 51 weeks, the adjusted taxable income of the corporation for the year is deemed to be the amount of its adjusted taxable income for the year as otherwise determined multiplied by the ratio of 365 to the number of days in the taxation year.

2. If the taxation year of a corporation (called in this subsection the “associated corporation”) that was associated with the corporation during the corporation’s taxation year is less than 51 weeks and is the only taxation year of the associated corporation ending in the corporation’s taxation year, the adjusted taxable income of the associated corporation for that taxation year is deemed to be the amount of its adjusted taxable income for the year as otherwise determined multiplied by the ratio of 365 to the number of days in that taxation year.

3. If the associated corporation has two or more taxation years ending in the corporation’s taxation year, the adjusted taxable income of the associated corporation for its last taxation year ending in the corporation’s taxation year is deemed to be the sum of all amounts, each of which is the adjusted taxable income of the associated corporation for each taxation year ending in the corporation’s taxation year and during which the associated corporation was at any time associated with the corporation multiplied by the ratio of 365 to the total number of days in all of those taxation years.  2007, c. 11, Sched. A, s. 32 (2).

Small business surtax rate

(3) A corporation’s small business surtax rate for a taxation year is 4.25 per cent multiplied by the ratio of the number of days in the taxation year before July 1, 2010 to the total number of days in the taxation year.  2009, c. 34, Sched. U, s. 8.

Associated corporations

(4) If two corporations would, but for subsection 256 (2) of the Federal Act, not be associated with each other at any time but are each associated with, or are deemed to be associated with, a third corporation at a particular time, the two corporations are deemed for the purposes of this section to be associated with each other at the particular time unless,

(a) the third corporation is not a Canadian-controlled private corporation at the particular time; or

(b) the third corporation elects under subsection 256 (2) of the Federal Act not to be associated with either of the two corporations for its taxation year that includes the particular time.  2007, c. 11, Sched. A, s. 32 (4).

Section Amendments with date in force (d/m/y)

2008, c. 7, Sched. S, s. 7 (1, 2) - 01/01/2008

2009, c. 34, Sched. U, s. 8 - 15/12/2009

Tax credit for manufacturing, processing, etc.

33. (1) A corporation may, in computing the amount of its tax payable under this Division for a taxation year, deduct a tax credit calculated using the formula,

A × B × X

in which,

  “A” is the amount of the corporation’s tax credit base for the year,

  “B” is the corporation’s Ontario domestic factor for the year, and

  “X” is the sum of,

(a) 0.02 multiplied by the ratio of the number of days in the taxation year that are before July 1, 2011 to the total number of days in the taxation year,

(b) 0.015 multiplied by the ratio of the number of days in the taxation year that are after June 30, 2011 to the total number of days in the taxation year.

(c) Repealed: 2012, c. 9, s. 8 (2).

2009, c. 34, Sched. U, s. 9; 2012, c. 9, s. 8.

Tax credit base

(2) For the purposes of this section, a corporation’s tax credit base for a taxation year is the sum of “C” and “D” where,

  “C” is the least of,

(a) the amount of the corporation’s adjusted business income for the year,

(b) the amount of the corporation’s eligible Canadian profits for the year, if the corporation is not a Canadian-controlled private corporation throughout the year,

(c) the amount, if any, by which the amount of the corporation’s eligible Canadian profits for the year exceeds the corporation’s Ontario adjusted small business income for the year, if the corporation is a Canadian-controlled private corporation throughout the year, and

(d) the amount, if any, by which the corporation’s adjusted taxable income for the year exceeds,

(i) if the corporation was a Canadian-controlled private corporation throughout the year, the sum of,

(A)  the corporation’s Ontario adjusted small business income for the year,

(B)  the amount determined by multiplying the corporation’s adjusted taxable income for the year by the corporation’s foreign allocation factor for the year, and

(C)  the corporation’s aggregate investment income for the year, as determined under subsection 129 (4) of the Federal Act,

(ii) if the corporation is resident in Canada but not a Canadian-controlled private corporation throughout the year, the amount determined by multiplying the corporation’s adjusted taxable income for the year by the corporation’s foreign allocation factor for the year, or

(iii) nil, in any other case, and

  “D” is the amount, if any, by which the least of the following amounts exceeds the amount of “C” for the year:

1. The amount determined under clause (a) of the definition of “C” in respect of the corporation for the year.

2. The amount that would be the amount determined under clause (b) or (c) of the definition of “C”, as the case may be, in respect of the corporation for the year if,

i. the definition of “manufacturing or processing” in subsection 125.1 (3) of the Federal Act were read without reference to paragraph (h) of that definition (other than for the purpose of the application of subsection (5) and section 5201 of the Federal regulations), and

ii. paragraph 5 of subsection (7) applied for the purposes of determining the amount of “C”.

3. The amount determined under clause (d) of the definition of “C” in respect of the corporation for the year.  2007, c. 11, Sched. A, s. 33 (2).

Adjusted business income

(3) The adjusted business income of a corporation for a taxation year is the amount, if any, by which “E” exceeds “F” where,

  “E” is the sum of all amounts each of which is the adjusted income of the corporation for the year from an active business carried on in Canada, and

“F” is the sum of all amounts each of which is the adjusted loss of the corporation for the year from an active business carried on in Canada.  2007, c. 11, Sched. A, s. 33 (3).

Eligible Canadian profits

(4) For the purposes of subsection (2), a corporation’s eligible Canadian profits for a taxation year is the sum of,

(a) its Canadian manufacturing and processing profits for the year as determined under subsection 125.1 (3) of the Federal Act;

(b) its mining income for the year, to the extent it is not included in the amount referred to in clause (a); and

(c) the sum of all amounts each of which is the corporation’s income for the year from farming, fishing or logging in Canada, to the extent it is not included in computing an amount referred to in clause (a) or (b).  2007, c. 11, Sched. A, s. 33 (4).

Exception

(5) Despite subsection (4), the amount of a corporation’s eligible Canadian profits for a taxation year is equal to its adjusted business income for that year, if,

(a) the amount by which the sum of its income from all active businesses for the year exceeds the amount that would otherwise be determined under subsection (4) as its eligible Canadian profits for the year is not greater than 20 per cent of the corporation’s adjusted business income for the year; and

(b) the corporation’s adjusted business income for the year does not exceed $250,000.  2007, c. 11, Sched. A, s. 33 (5).

Ontario adjusted small business income

(6) For the purposes of this Part, a corporation’s Ontario adjusted small business income for a taxation year is the amount, if any, calculated using the formula,

G – (H/(B × I))

in which,

  “B”   is the corporation’s Ontario domestic factor for the year,

  “G” is the amount that would be the corporation’s Ontario small business income for the year if its Ontario domestic factor for the year were one,

  “H”   is the amount, if any, of the corporation’s surtax payable for the year under section 32, and

“I” is the corporation’s small business deduction rate for the year.

2007, c. 11, Sched. A, s. 33 (6).

Interpretation

(7) The following rules apply for the purposes of this section:

1. A corporation’s income for a taxation year from farming, fishing, industrial mining operations or logging in Canada is determined in accordance with sections 5200, 5202 and 5204 of the Federal regulations as if,

i. the references in those sections to “manufacturing or processing” were references to “farming”, “fishing”, “industrial mining operations” or “logging”, as the case may be,

ii. qualified activities referred to in those sections were those activities related to the earning of income from farming, fishing, industrial mining operations or logging in Canada, as the case may be,

iii. the definition of “industrial mining operations” that applies for the purposes of this section applied for the purposes of those sections, and

iv. in the case of activities related to the earning of income from farming in Canada, the cost of capital of the corporation included the cost of land owned by the corporation and used by it in its farming business in Canada and the annual rental cost incurred by the corporation for land leased by it and used by it in its farming business in Canada.

2. A corporation’s mining income for a taxation year is the sum of,

i. the amount, if any, by which its mining profits for the year exceed the amount deducted under section 1201 of the Federal regulations in computing the corporation’s income for the year, and

ii. its income for the year from industrial mining operations in Canada, other than income included under subparagraph i. 

3. Subject to paragraph 4, the amount of a corporation’s mining profits for a taxation year is the amount, if any, by which the sum of the amounts determined under the following subparagraphs exceeds the sum of all adjusted losses for the year from the sources described in subparagraph i:

i. the total of the corporation’s adjusted income for the year from,

A. the production and processing in Canada of,

1.  ore, other than iron ore or tar sands ore, from a mineral resource in Canada operated by it to any stage that is not beyond the prime metal stage or its equivalent, and

2.  iron ore from a mineral resource in Canada operated by the corporation to any stage that is not beyond the pellet stage or its equivalent, and

B. the processing in Canada of,

1.  ore, other than iron ore or tar sands ore, from a mineral resource in Canada not operated by the corporation to any stage that is not beyond the prime metal stage or its equivalent, and

2.  iron ore from a mineral resource in Canada not operated by the corporation to any stage that is not beyond the pellet stage or its equivalent, and

ii. if the corporation owns all the issued and outstanding shares of the capital stock of a railway company throughout the year, the amount that may reasonably be considered to be the railway company’s income for its taxation year ending in that year from the transportation of the portion of the corporation’s ore that is described in sub-subparagraph i A.

4. A corporation’s mining profits for a taxation year shall be determined as if the corporation’s adjusted incomes and adjusted losses were computed on the assumption that the corporation had during the year no adjusted income or adjusted loss except from the sources described in subparagraph 3 i and was allowed no deductions in computing its adjusted income for the year other than,

i. amounts deducted or deductible under section 66, 66.1, 66.2, 66.4 or 66.7 of the Federal Act or subsection 17 (2) or (6) or section 29 of the Income Tax Application Rules (Canada) for the year to the extent they have not been taken into account in computing the corporation’s gross resource profits for the year under subsection 1204 (1) of the Federal regulations in respect of production from Canadian fossil fuel sources, and

ii. any other deductions for the year that may reasonably be regarded as applicable to the sources of income described in subparagraph 3 i, other than a deduction permitted under section 1201 of the Federal regulations.

5. For the purposes of determining the amount described in paragraph 2 of the definition of “D” in subsection (2), 

i. electrical energy and steam are deemed to be goods, and

ii. subject to paragraph (l) of the definition of “manufacturing and processing” in subsection 125.1 (3) of the Federal Act, the generation of electrical energy for sale and the production of steam are deemed to be manufacturing or processing.  2007, c. 11, Sched. A, s. 33 (7).

Definitions

(8) In this section,

“adjusted income” or “adjusted loss” from a business means, in respect of a corporation for a taxation year, the amount that would be the corporation’s income or loss from the business if, in computing that amount,

(a) the amount of the corporation’s adjusted Crown royalties for the year in respect of the business, as determined under subsection 36 (2), were added, and

(b) the corporation’s notional resource allowance for the year in respect of the business, under subsection 36 (3), were subtracted; (“revenu rajusté”, “perte rajustée”)

“Canadian fossil fuel source” has the prescribed meaning; (“source canadienne de combustible fossile”)

“industrial mining operations” has the prescribed meaning; (“activités minières industrielles”)

“logging” includes the sale of standing timber, the sale of the right to cut standing timber, the sale of logs, the delivery of logs to a sawmill, pulp or paper plant or other place for processing or manufacturing, the delivery of logs to a carrier for export, the export of logs, the acquisition of standing timber, the cutting of logs from standing timber and any combination of those operations. (“exploitation forestière”)  2007, c. 11, Sched. A, s. 33 (8).

Section Amendments with date in force (d/m/y)

2009, c. 34, Sched. U, s. 9 - 15/12/2009

2012, c. 9, s. 8 (1, 2) - 01/07/2012

Foreign tax credit

34. (1) A corporation that is resident in Canada throughout a taxation year and has foreign investment income for the year may, in computing its tax payable under this Division for the year, deduct a foreign tax credit equal to the lesser of,

(a) the amount calculated under subsection (2) for the year; and

(b) the amount calculated under subsection (3) for the year.  2007, c. 11, Sched. A, s. 34 (1).

Same

(2) For the purposes of clause (1) (a), the amount is determined by multiplying the corporation’s Ontario domestic factor for the taxation year by the amount, if any, by which “A” exceeds “B” where,

  “A” is the portion of the non-business-income tax paid for the year by the corporation to the government of a country other than Canada that relates to foreign investment income of the corporation for the year that is not from a share of the capital stock of a foreign affiliate of the corporation, and

  “B” is the amount deductible by the corporation in respect of the foreign investment income for the year under subsection 126 (1) of the Federal Act.  2007, c. 11, Sched. A, s. 34 (2); 2008, c. 7, Sched. S, s. 8 (1).

Same

(3) For the purposes of clause (1) (b), the amount is calculated using the formula,

C × D × E

in which,

  “C”   is the portion of the corporation’s foreign investment income for the taxation year described in the definition of “A” in subsection (2),

  “D”   is the corporation’s basic rate of tax for the year, and

  “E”   is the corporation’s Ontario allocation factor for the year.

2007, c. 11, Sched. A, s. 34 (3).

Authorized foreign bank

(3.1) For the purposes of this section, an authorized foreign bank is deemed to be resident in Canada for a taxation year with respect to its Canadian banking business for the year and may deduct a foreign tax credit under subsection (1) that is calculated,

(a) as if the reference in the definition of “A” in subsection (2) to “foreign investment income of the corporation” were a reference to only that part of the bank’s foreign investment income that relates to its Canadian banking business; and

(b) as if the references to “country other than Canada” in the definition of “A” in subsection (2) and in the definition of “foreign investment income” in subsection (5) were references to a country that is neither Canada nor any country in which the bank was resident at any time in the year.  2008, c. 7, Sched. S, s. 8 (2).

Application of Federal Act

(4) Subsection 126 (6) of the Federal Act and the definition of “non-business income tax” in subsection 126 (7) of that Act apply for the purposes of this section.  2007, c. 11, Sched. A, s. 34 (4).

Definition

(5) In this section,

“foreign investment income” means, in respect of a corporation, income from sources in a country other than Canada in respect of which the corporation paid non-business-income tax to the government of that country.  2007, c. 11, Sched. A, s. 34 (5).

Section Amendments with date in force (d/m/y)

2008, c. 7, Sched. S, s. 8 (1, 2) - 01/01/2008

Credit union tax reduction

35. A corporation that was a credit union throughout a taxation year may, in computing its tax payable under this Division for the year, deduct the amount, if any, calculated using the formula,

A × (B – C) × D

in which,

  “A” is the small business deduction rate for the corporation for the year,

  “B”   is the lesser of,

(a) the corporation’s taxable income or taxable income earned in Canada, as the case may be, for the year, and

(b) the amount, if any, by which 4/3 of its maximum cumulative reserve at the end of the year, as determined under section 137 of the Federal Act, exceeds its preferred-rate amount at the end of its previous taxation year, as determined under that section,

  “C” is,

(a) the corporation’s Ontario adjusted small business income for the year, as determined under subsection 33 (6), if the corporation is a Canadian-controlled private corporation throughout the year, or

(b) nil, in any other case, and

  “D” is the corporation’s Ontario domestic factor for the year.

2007, c. 11, Sched. A, s. 35.

 

Subdivision b — Crown Royalties and Resource Tax Credit

Additional tax re crown royalties

36. (1) Every corporation that has a permanent establishment in Ontario at any time in a taxation year ending before April 23, 2015 shall, in computing the amount of its tax payable under this Division for the year, add the amount calculated using the formula,

(A – B) × C × D

in which,

  “A” is the amount of the corporation’s adjusted Crown royalties for the year,

  “B” is the corporation’s notional resource allowance for the year,

  “C” is the corporation’s basic rate of tax for the year, and

  “D” is the corporation’s Ontario allocation factor for the year.

2007, c. 11, Sched. A, s. 36 (1); 2015, c. 20, Sched. 40, s. 9 (1).

Transition, April 23, 2015

(1.1) Every corporation that has a permanent establishment in Ontario at any time in a taxation year that includes April 23, 2015 shall, in computing the amount of its tax payable under this Division for the year, add the amount calculated using the formula,

H × J/K

in which,

  “H” is the amount that would be calculated under subsection (1) in respect of the corporation if that subsection applied in the taxation year,

“J” is the number of days in the taxation year that are before April 24, 2015, and

  “K” is the total number of days in the taxation year.

2015, c. 20, Sched. 40, s. 9 (2).

Adjusted Crown royalties

(2) The amount of a corporation’s adjusted Crown royalties for a taxation year is the amount, if any, by which “E” exceeds “F” where,

  “E” is the sum of,

(a) all additional amounts that, if the Corporations Tax Act were to apply for the year, would be added in computing the corporation’s income for the year for the purposes of that Act because of the application of any of subsections 11.0.1 (2), (3) or (5) or 26 (4.1), paragraph 1 of subsection 26 (7) or subsection 31 (1.2) of that Act, and

(b) all amounts each of which would, if the Corporations Tax Act were to apply for the year, be a reduction in the corporation’s share of a loss from a partnership in the year for the purposes of that Act because of the application of subsection 31 (1.2) of that Act, and

“F” is the sum of all amounts each of which would, if the Corporations Tax Act were to apply for the year, be a reduction in the amount added in computing the corporation’s income for the year for the purposes of that Act because of the application of paragraph 2 of subsection 26 (7) of that Act.  2007, c. 11, Sched. A, s. 36 (2).

Notional resource allowance

(3) A corporation’s notional resource allowance for a taxation year shall be determined in the prescribed manner.  2007, c. 11, Sched. A, s. 36 (3).

Section Amendments with date in force (d/m/y)

2015, c. 20, Sched. 40, s. 9 (1, 2) - 04/06/2015

Resource tax credit

37. (1) A corporation may, in computing its tax payable under this Division for a taxation year ending before April 23, 2015, deduct a resource tax credit equal to the lesser of the corporation’s tax payable under this Division for the year, determined without reference to this section, sections 33, 34, 35 and 39, subsection 47 (3) and section 53, and the amount calculated using the formula,

E + [(B – A) × C × D]

in which,

  “A” is the amount of the corporation’s adjusted Crown royalties for the year as determined under subsection 36 (2),

  “B” is the corporation’s notional resource allowance for the year under subsection 36 (3),

  “C” is the corporation’s basic rate of tax for the year,

  “D” is the corporation’s Ontario allocation factor for the year, and

  “E” is the corporation’s resource credit balance at the beginning of the year.

2007, c. 11, Sched. A, s. 37 (1); 2015, c. 20, Sched. 40, s. 10 (1).

Transition, April 23, 2015

(1.1) A corporation may, in computing its tax payable under this Division for a taxation year that includes April 23, 2015, deduct a resource tax credit equal to the lesser of the corporation’s tax payable under this Division for the year, determined without reference to this section, sections 33, 34, 35 and 39, subsection 47 (3) and section 53, and the amount calculated using the formula,

H × J/K

in which,

  “H” is the amount that would be calculated under subsection (1) in respect of the corporation if that subsection applied in the taxation year,

“J” is the number of days in the taxation year that are before April 24, 2015, and

  “K” is the total number of days in the taxation year.

2015, c. 20, Sched. 40, s. 10 (2).

Unused resource tax credits

(1.2) A corporation may, in computing its tax payable under this Division for a taxation year that is one of the first five taxation years beginning after April 23, 2015, deduct a resource tax credit equal to the lesser of the corporation’s tax payable under this Division for the year, determined without reference to this section, sections 33, 34, 35 and 39, subsection 47 (3) and section 53, and the corporation’s resource credit balance at the beginning of the year. 2015, c. 20, Sched. 40, s. 10 (2).

Resource credit balance

(2) For the purposes of this section, a corporation’s resource credit balance at the beginning of a taxation year is the amount calculated using the formula,

F – G

in which,

“F”   is the sum of all amounts each of which is the amount in respect of the corporation for a previous taxation year that would be calculated using the formula in subsection (1) or (1.1) if the corporation’s resource credit balance at the beginning of that year were nil, and

  “G” is the sum of all amounts each of which is an amount the corporation was entitled to deduct under subsection (1), (1.1) or (1.2) in computing its tax payable under this Division for a previous taxation year. 

2007, c. 11, Sched. A, s. 37 (2); 2015, c. 20, Sched. 40, s. 10 (3-5).

Rules for determining resource credit balance

(3) The following additional rules apply for the purposes of this section in determining the amount of a corporation’s resource credit balance at the beginning of a taxation year:

1. An amalgamated corporation is deemed to be the same corporation as and a continuation of each of its predecessor corporations.

2. A parent corporation is deemed, after the last taxation year of its subsidiary corporation, to be the same corporation as and a continuation of the subsidiary corporation.  2007, c. 11, Sched. A, s. 37 (3).

Section Amendments with date in force (d/m/y)

2015, c. 20, Sched. 40, s. 10 (1-5) - 04/06/2015

Subdivision c — Ontario Research and Development Tax Credit

Definitions

38. (1) In this subdivision,

“contract payment” means a payment that is a contract payment for the purposes of section 127 of the Federal Act; (“paiement contractuel”)

“current portion” means, in respect of a corporation’s Ontario research and development tax credit at the end of a taxation year, the sum of,

(a) all amounts each of which is added under clause (a), (a.1), (a.2) or (b) of the definition of “A” in subsection (2) in computing the corporation’s Ontario research and development tax credit at the end of the year, and

(b) all amounts each of which is added under clause (d) or (e) of the definition of “A” in subsection (2) in computing the corporation’s Ontario research and development tax credit at the end of the year by reason of a repayment made by the corporation in the year; (“portion de l’année”)

“eligible expenditure” means, in respect of a corporation, an expenditure attributable to a permanent establishment in Ontario that would be a qualified expenditure for the purposes of section 127 of the Federal Act in respect of scientific research and experimental development carried on in Ontario if that section were read without reference to subsections (18) to (21) of that section; (“dépense admissible”)

“government assistance” has the same meaning as in section 127 of the Federal Act, except that a tax credit under this subdivision is deemed not to be government assistance; (“aide gouvernementale”)

“non-government assistance” has the same meaning as in section 127 of the Federal Act. (“aide non gouvernementale”)  2007, c. 11, Sched. A, s. 38 (1); 2016, c. 5, Sched. 28, s. 14 (1).

Ontario research and development tax credit

(2) Subject to subsections (3) and 43 (2), the amount of a corporation’s Ontario research and development tax credit at the end of a taxation year for the purposes of this subdivision is the amount, if any, by which “A” exceeds “B” where,

  “A” is the sum of,

(a) for a taxation year that ends on or after June 1, 2016 and that does not include May 31, 2016, 3.5 per cent of the corporation’s Ontario SR & ED expenditure pool at the end of the year,

(a.1) for a taxation year that ends on or after June 1, 2016 and that includes May 31, 2016, the amount equal to the corporation’s Ontario SR & ED expenditure pool at the end of the year multiplied by the percentage that is the sum of,

(i) 4.5 per cent multiplied by the ratio of the number of days in the year that are before June 1, 2016 to the total number of days in the year, and

(ii) 3.5 per cent multiplied by the ratio of the number of days in the year that are after May 31, 2016 to the total number of days in the year,

(a.2) for a taxation year that ends before June 1, 2016, 4.5 per cent of the corporation’s Ontario SR & ED expenditure pool at the end of the year,

(b) the sum of amounts required by subsection 40 (1) to be added in computing the corporation’s Ontario research and development tax credit at the end of the year,

(c) the sum of all amounts each of which is an amount determined under clause (a), (a.1), (a.2) or (b) in respect of the corporation for any of the 20 taxation years preceding or the three taxation years following the year,

(d) the sum of,

(i) in respect of eligible expenditures incurred by the corporation in a taxation year that ends on or after June 1, 2016 and that does not include May 31, 2016, all amounts each of which is 3.5 per cent of that part of a repayment, other than a repayment to which clause (e) applies, made by the corporation in the year or in any of the 20 taxation years preceding or the three taxation years following the year that can reasonably be considered to be, for the purposes of section 41, a repayment of government assistance, non-government assistance or a contract payment that reduced, for the purposes of this subdivision, the eligible expenditures incurred by the corporation in that year,

(ii) in respect of eligible expenditures incurred by the corporation in a taxation year that ends on or after June 1, 2016 and that includes May 31, 2016, all amounts each of which is that part of a repayment, other than a repayment to which clause (e) applies, made by the corporation in the year or in any of the 20 taxation years preceding or the three taxation years following the year that can reasonably be considered to be, for the purposes of section 41, a repayment of government assistance, non-government assistance or a contract payment that reduced, for the purposes of this subdivision, the eligible expenditures incurred by the corporation in that year multiplied by the percentage that is the sum of,

A.  4.5 per cent multiplied by the ratio of the number of days in the year that are before June 1, 2016 to the total number of days in the year, and

B.  3.5 per cent multiplied by the ratio of the number of days in the year that are after May 31, 2016 to the total number of days in the year, and

(iii) in respect of eligible expenditures incurred by the corporation in a taxation year that ends before June 1, 2016, all amounts each of which is 4.5 per cent of that part of a repayment, other than a repayment to which clause (e) applies, made by the corporation in the year or in any of the 20 taxation years preceding or the three taxation years following the year that can reasonably be considered to be, for the purposes of section 41, a repayment of government assistance, non-government assistance or a contract payment that reduced, for the purposes of this subdivision, the eligible expenditures incurred by the corporation in that year, and

(e) the sum of all amounts each of which is 4.5 per cent of one-quarter of that part of a repayment made by the corporation in the year or in any of the 20 taxation years preceding or the three taxation years following the year that can reasonably be considered to be, for the purposes of section 41, a repayment of government assistance, non-government assistance or a contract payment that reduced, for the purposes of this subdivision, an eligible expenditure incurred by the corporation in respect of first term shared-use-equipment or second term shared-use-equipment and, for the purposes of this clause, a repayment made by the corporation in any taxation year preceding the first taxation year that ends coincidentally with the first period or the second period in respect of first term shared-use-equipment or second term shared-use-equipment, respectively, is deemed to have been incurred by the corporation in that first taxation year, and

  “B” is the sum of,

(a) the sum of all amounts each of which is an amount deducted under section 39 in computing the corporation’s tax payable under this Division for a preceding taxation year in respect of the current portion of the corporation’s Ontario research and development tax credit at the end of the year or at the end of any of the 20 taxation years preceding or the two taxation years following the year,

(b) the amount determined under subsection 44 (1) where control of the corporation has been acquired by a person or group of persons at any time before the end of the year, and

(c) the amount determined under subsection 44 (2) where control of the corporation has been acquired by a person or group of persons at any time after the end of the year.  2007, c. 11, Sched. A, s. 38 (2); 2016, c. 5, Sched. 28, s. 14 (2-4).

Amounts to be excluded in calculation of credit

(3) In determining the amount of a corporation’s Ontario research and development tax credit at the end of a taxation year, no amount shall be included in an amount determined under any of clause (a), (a.1), (a.2), (b), (c), (d) or (e) of the definition of “A” in subsection (2) in respect of an eligible expenditure that would, if the Federal Act were read without reference to subsections 78 (4) and 127 (26) of that Act, be incurred by the corporation in the course of earning income in a particular taxation year, if,

(a) any of the income is exempt income or is exempt from tax under this Division; or

(b) the corporation does not file with the Federal Minister a form containing the information in respect of the amount as required by paragraph (m) of the definition of “investment tax credit” in subsection 127 (9) of the Federal Act on or before the day that is one year after the corporation’s filing-due date for the particular year.  2007, c. 11, Sched. A, s. 38 (3); 2016, c. 5, Sched. 28, s. 14 (5).

Ontario SR & ED expenditure pool

(4) The amount of a corporation’s Ontario SR & ED expenditure pool at the end of a taxation year for the purposes of this subdivision is nil for a taxation year ending before January 1, 2009 and, for a taxation year ending after December 31, 2008, is the amount calculated using the formula,

C + D – E

in which,

  “C” is the sum of all amounts each of which is an eligible expenditure incurred by the corporation in the year,

  “D” is the sum of all amounts each of which is an amount determined under paragraph 2 of section 42 for the year in respect of the corporation, and in respect of which the corporation has, for the purposes of the value of “B” in the definition of “SR & ED qualified expenditure pool” in subsection 127 (9) of the Federal Act, filed with the Federal Minister a prescribed form containing prescribed information by the day that is 12 months after the corporation’s filing-due date for the year, and

  “E” is the sum of all amounts each of which is an amount determined under paragraph 1 of section 42 for the year in respect of the corporation.

2007, c. 11, Sched. A, s. 38 (4).

Application of certain provisions of s. 127 of the Federal Act

(5) For the purposes of this subdivision, the definitions of “first period”, “first term shared-use-equipment”, “second period” and “second term shared-use-equipment” in subsection 127 (9) of the Federal Act and subsections 127 (11.2), (17) and (26) of the Federal Act apply.  2007, c. 11, Sched. A, s. 38 (5).

Application of other provisions of the Federal Act

(6) A provision of the Federal Act or Federal regulations, other than a provision in section 127 of the Federal Act, that applies for the purposes of applying a provision in section 127 of that Act for the purposes of that Act applies for the purposes of this subdivision, unless otherwise provided in this subdivision.  2007, c. 11, Sched. A, s. 38 (6).

Rules re corporate reorganization

(7) The following rules apply for the purposes of this subdivision:

1. A corporation formed as a result of an amalgamation or merger of two or more predecessor corporations is deemed to be the same corporation as and a continuation of each of its predecessor corporations except for the purposes of determining the amount of tax payable under this Division by the predecessor corporations.

2. A parent corporation is deemed, after the last taxation year of its subsidiary corporation, to be the same corporation as and a continuation of the subsidiary corporation except for the purposes of determining,

i. the amount of tax payable under this Division by the parent corporation for a taxation year ending at or before the end of the last taxation year of its subsidiary, and

ii. the amount of tax payable under this Division by the subsidiary corporation.  2007, c. 11, Sched. A, s. 38 (7).

Section Amendments with date in force (d/m/y)

2016, c. 5, Sched. 28, s. 14 (1-5) - 19/04/2016

Ontario research and development tax credit deduction

39. (1) A corporation may, in computing the amount of its tax payable under this Division for a taxation year, deduct an amount in respect of its Ontario research and development tax credit at the end of the year not exceeding the sum of,

(a) the lesser of,

(i) the amount that would be the corporation’s Ontario research and development tax credit at the end of the year if,

(A) clauses (c), (d) and (e) of the definition of “A” in subsection 38 (2) were read without reference to the expression “or the three taxation years following”,

(B) clause (a) of the definition of “B” in subsection 38 (2) were read without reference to the expression “or the two taxation years following”, and

(C) the definition of “B” in subsection 38 (2) were read without clause (c), and

(ii) the corporation’s tax payable under this Division for the year, determined without reference to this section and section 53; and

(b) the lesser of,

(i) the amount, if any, by which the amount determined for the year under subclause (a) (ii) exceeds the amount determined for the year under subclause (a) (i), and

(ii) the corporation’s eligible future balance at the end of the year.  2007, c. 11, Sched. A, s. 39 (1).

Eligible future balance

(2) For the purposes of subclause (1) (b) (ii), a corporation’s eligible future balance at the end of a taxation year is equal to the amount, if any, by which “A” exceeds “B” where,

  “A” is the amount, if any, by which the corporation’s Ontario research and development tax credit at the end of the year exceeds the amount determined for the year under subclause (1) (a) (i), and

  “B” is the sum of,

(a) the lesser of,

(i) the portion of the amount of “A” attributable to the first taxation year after the taxation year, and

(ii) the amount that would be deductible under this section for the first taxation year after the taxation year if that amount were determined without reference to clause (1) (b),

(b) the lesser of,

(i) the portion of the amount of “A” attributable to the second taxation year after the taxation year, and 

(ii) the amount that would be deductible under this section for the second taxation year after the taxation year if that amount were determined without reference to clause (1) (b), and

(c) the lesser of,

(i) the portion of the amount of “A” attributable to the third taxation year after the taxation year, and 

(ii) the amount that would be deductible under this section for the third taxation year after the taxation year if that amount were determined without reference to clause (1) (b).  2007, c. 11, Sched. A, s. 39 (2).

Partnerships

Allocation of partnership’s tax credit to corporate partner

40. (1) Subject to subsections 38 (3) and 45 (3), if a corporation is a member of a partnership, other than a specified member, in a particular taxation year and an amount is determined in respect of the partnership for its fiscal period that ends in the particular year under clause (a), (a.1), (a.2) or (d) of the definition of “A” in subsection 38 (2), the portion of that amount that can reasonably be considered to be the corporation’s share shall be added in computing the amount of the corporation’s Ontario research and development tax credit at the end of the particular year.  2007, c. 11, Sched. A, s. 40 (1); 2016, c. 5, Sched. 28, s. 15 (1).

Rules re partnerships

(2) The following rules apply in respect of partnerships for the purposes of this subdivision:

1. In determining an amount in respect of a partnership under clause (a), (a.1), (a.2) or (d) of the definition of “A” in subsection 38 (2) for a fiscal period,

i. subsection 38 (3) and sections 42, 43 and 44 do not apply, and

ii. the partnership is deemed to be a corporation and the fiscal period is deemed to be a taxation year.

2. Section 41 applies as if,

i. a partnership were a corporation and each fiscal period were a taxation year, and

ii. a partnership’s filing-due date for a taxation year is the day that would be its filing-due date for the taxation year if it were a corporation.

3. If a fiscal period of a partnership ends in 2008, the fiscal period is deemed to end after December 31, 2008 for the purposes of determining the Ontario SR & ED expenditure pool of a corporation that is a member of the partnership.  2007, c. 11, Sched. A, s. 40 (2); 2016, c. 5, Sched. 28, s. 15 (2).

Specified amount

(3) For the purposes of this section, a partnership’s specified amount for a fiscal period is the amount, if any, by which the sum of the amounts determined under clauses (a), (a.1), (a.2) and (d) of the definition of “A” in subsection 38 (2) in respect of the partnership for the fiscal period exceeds the amount deducted under subsection 45 (3) in respect of the partnership for the fiscal period in computing the amount determined under subsection (1) in respect of the partnership.  2007, c. 11, Sched. A, s. 40 (3); 2016, c. 5, Sched. 28, s. 15 (3).

Allocation to corporate partners of unallocated amounts

(4) For the purposes of subsection (1), if a corporation is a member of a partnership, other than a specified member, throughout a fiscal period of the partnership, there shall be added to the amount, if any, that can reasonably be considered to be the corporation’s share of the partnership’s specified amount for the fiscal period the amount, if any, that is such portion of the amount determined under subsection (5) in respect of that fiscal period as is reasonable in the circumstances having regard to the investment in the partnership, including debt obligations of the partnership, of each of the members of the partnership,

(a) who was a member of the partnership throughout the fiscal period; and

(b) who was not a specified member of the partnership during that fiscal period.  2007, c. 11, Sched. A, s. 40 (4).

Amount of unallocated partnership tax credits

(5) For the purposes of subsection (4), the amount determined under this subsection in respect of a fiscal period of a partnership is the amount by which the partnership’s specified amount for the fiscal period exceeds the sum of,

(a) the sum of all amounts each of which is an amount determined under subsection (1) to be a partner’s share of the partnership’s specified amount for the fiscal period; and

(b) the portion of the partnership’s specified amount for the fiscal period that is attributable to,

(i) the interests in the partnership of individuals who are not specified members of the partnership,

(ii) the interest of another partnership in the partnership, and

(iii) if the fiscal period ends in 2008, the interest in the partnership of each person having a taxation year ending in 2008 in which the fiscal period ends.  2007, c. 11, Sched. A, s. 40 (5).

Section Amendments with date in force (d/m/y)

2016, c. 5, Sched. 28, s. 15 (1-3) - 19/04/2016

Reduction of eligible expenditures, receipt of assistance

41. (1) If, on or before the filing-due date for a taxation year of a corporation, the corporation has received, is entitled to receive or can reasonably be expected to receive a particular amount that is government assistance, non-government assistance or a contract payment that can reasonably be considered to be in respect of scientific research and experimental development, the amount by which the particular amount exceeds all amounts applied for preceding taxation years under this subsection or subsection (2) or (3) in respect of the particular amount shall be applied to reduce the corporation’s eligible expenditures otherwise incurred in the year that can reasonably be considered to be in respect of the scientific research and experimental development.  2007, c. 11, Sched. A, s. 41 (1).

Same

(2) If, on or before the filing-due date for a taxation year of a corporation, the corporation (in this subsection referred to as the “recipient”) has received, is entitled to receive or can reasonably be expected to receive a particular amount that is government assistance, non-government assistance or a contract payment that can reasonably be considered to be in respect of scientific research and experimental development and the particular amount exceeds the sum of the following amounts, the particular amount shall be applied to reduce the sum otherwise determined that is referred to in paragraph 3:

1. All amounts applied for preceding taxation years under this subsection or subsection (1) or (3) in respect of the particular amount, determined before the application of subsection (4) in respect of the recipient’s taxation year.

2. The sum of all amounts each of which would be an eligible expenditure that is incurred by the recipient in its taxation year and that can reasonably be considered to be in respect of the scientific research and experimental development if subsection (1) did not apply to the particular amount.

3. The sum of all amounts each of which would, but for the application of this subsection to the particular amount, be an eligible expenditure,

i. that was incurred by another corporation in a taxation year of the other corporation that ended in the recipient’s taxation year, and

ii. that can reasonably be considered to be in respect of the scientific research and experimental development to the extent that it was performed by the other corporation at a time when the other corporation was not dealing at arm’s length with the recipient.  2007, c. 11, Sched. A, s. 41 (2).

Agreement to allocate

(3) If a particular amount for a taxation year is determined under subsection 127 (20) of the Federal Act as a consequence of an agreement referred to in that subsection between a corporation (in this subsection referred to as the “transferor”) and another corporation (the “transferee”) and subsection 127 (22) of the Federal Act does not apply to the agreement, the lesser of the following two amounts shall be applied to reduce the eligible expenditures otherwise determined that are described in paragraph 2:

1. The portion, if any, of the amount specified in the agreement that can reasonably be considered to be in respect of the amount described in paragraph 2.

2. The sum of all amounts each of which would, but for the agreement, be an eligible expenditure,

i. that was incurred by the transferee in a particular taxation year of the transferee that ended in the transferor’s taxation year, and

ii. that can reasonably be considered to be in respect of the scientific research and experimental development to which the particular amount relates to the extent that it was performed by the transferee at a time when the transferee was not dealing at arm’s length with the transferor.  2007, c. 11, Sched. A, s. 41 (3).

Failure to allocate

(4) If, on or before the filing-due date for a taxation year of a corporation (in this subsection referred to as the “recipient”), the recipient has received, is entitled to receive or can reasonably be expected to receive a particular amount that is government assistance, non-government assistance or a contract payment that can reasonably be considered to be in respect of scientific research and experimental development and subsection (2) does not apply to the particular amount in respect of the year, the lesser of the following two amounts is deemed for the purposes of this subdivision to be an amount of government assistance received by another corporation in respect of the scientific research and experimental development at the end of a particular taxation year of the other corporation that ends in the recipient’s taxation year:

1. The sum of all amounts each of which is an eligible expenditure,

i. that was incurred by the other corporation in the particular taxation year, and

ii. that can reasonably be considered to be in respect of the scientific research and experimental development to the extent that it was performed by the other corporation at a time when the other corporation was not dealing at arm’s length with the recipient.

2. The amount, if any, by which the particular amount exceeds the amount that would be the sum of the amounts applied for the year and preceding taxation years under subsection (1), (2) or (3) in respect of the particular amount, if that sum were determined without reference to the application of this subsection for the year.  2007, c. 11, Sched. A, s. 41 (4); 2009, c. 33, Sched. 16, s. 12.

Repayment of assistance

(5) For the purposes of clause (d) of the definition of “A” in subsection 38 (2), an amount of government assistance, non-government assistance or a contract payment that satisfies all of the following conditions is deemed to be the amount of a repayment by the corporation in a taxation year of the government assistance, non-government assistance or contract payment, as the case may be:

1. The amount was applied under this section to reduce an eligible expenditure that was incurred by the corporation.

2. The amount was not received by the corporation.

3. The amount ceased in the taxation year to be an amount that the corporation can reasonably be expected to receive.  2007, c. 11, Sched. A, s. 41 (5).

Section Amendments with date in force (d/m/y)

2009, c. 33, Sched. 16, s. 12 - 15/12/2009

Transfer of eligible expenditures

42. If a particular amount is deemed under subsection 127 (13) of the Federal Act to be an amount determined in respect of a corporation (in this section called the “transferor”) for a taxation year under paragraph 127 (13) (d) of that Act as a consequence of an agreement or amended agreement referred to in subsection 127 (13) of that Act between the transferor and another corporation (in this section called the “transferee”) and subsection 127 (15) of that Act does not apply to the agreement, the following rules apply:

1. There shall be included in the value of “E” in the calculation of the transferor’s Ontario SR & ED expenditure pool under subsection 38 (4) the portion, if any, of the particular amount that may reasonably be considered to be in respect of the amount that, but for the agreement, would be the transferor’s Ontario SR& ED pool at the end of the year.

2. If subsection 127 (16) of the Federal Act does not apply in respect of the agreement, the amount determined under paragraph 1 is deemed to be an amount determined in respect of the transferee for the purposes of determining the value of “D” in the calculation of the transferee’s Ontario SR & ED expenditure pool under subsection 38 (4) for the transferee’s first taxation year that ends at or after the end of the year.  2007, c. 11, Sched. A, s. 42.

Waiver of tax credit

43. (1) A corporation may waive its eligibility for all or a portion of the current portion of its Ontario research and development tax credit at the end of a taxation year by delivering a written waiver identifying the amounts referred to in clause (a) or (b) of the definition of “current portion” in subsection 38 (1) with its return required to be delivered under this Act for the year or in an amended return for that year.  2007, c. 11, Sched. A, s. 43 (1).

Same

(2) If a corporation files a waiver under subsection (1) in respect of a taxation year, each amount that is relevant to the calculation of an amount identified in the waiver is deemed never to have been paid or incurred for the purposes of the application of this subdivision to the corporation.  2007, c. 11, Sched. A, s. 43 (2).

Control acquired before the end of the year

44. (1) If control of a corporation has been acquired by a person or group of persons at any time (in this subsection referred to as “that time”) before the end of a taxation year of the corporation, the amount determined for the purposes of clause (b) of the definition of “B” in subsection 38 (2) is the amount, if any, by which “A” exceeds “B” where,

  “A” is the amount, if any, by which “C” exceeds “D” where,

“C” is the sum of all amounts added in computing the corporation’s Ontario research and development tax credit at the end of the year in respect of the current portion of its Ontario research and development tax credit at the end of a taxation year ending before that time, and

“D” is the sum of all amounts each of which is an amount included by the corporation under clause (a) of the definition of “B” in subsection 38 (2) in computing its Ontario research and development tax credit at the end of the year under that subsection, to the extent that the amount may reasonably be considered to have been included in respect of the current portion of its Ontario research and development tax credit at the end of a taxation year ending before that time, and

  “B” is the amount that, but for sections 39 and 53, would be the corporation’s tax payable under this Division for the year multiplied by the ratio of “E” to “F” where,

“E” is, if throughout the year the corporation carried on a particular business in the course of which an eligible expenditure was made before that time in respect of which an amount is included in computing its Ontario research and development tax credit at the end of the year, the amount, if any, by which “G” exceeds “H” where,

“G” is the sum of all amounts each of which is,

(a)  its income for the year from the particular business, or

(b)  its income for the year from any other business substantially all the income of which was derived from the sale, leasing, rental or development of properties or the rendering of services similar to the properties sold, leased, rented or developed, or the services rendered, as the case may be, by the corporation in carrying on the particular business before that time, and

“H” is the sum of all amounts each of which is an amount  deducted under paragraph 111 (1) (a) or (d) of the Federal Act for the year by the corporation in respect of a non-capital loss or a farm loss, as the case may be, for a taxation year in respect of the particular business or the other business, and

“F” is the greater of,

(a) the amount determined as “E” for the year, and

(b) the corporation’s taxable income or taxable income earned in Canada, as the case may be, for the year.  2007, c. 11, Sched. A, s. 44 (1).

Control acquired after the end of the year

(2) If control of a corporation has been acquired by a person or group of persons at any time (in this subsection referred to as “that time”) after the end of a particular taxation year of the corporation, the amount determined for the purposes of clause (c) of the definition of “B” in subsection 38 (2) is the amount, if any, by which “I” exceeds “J” where,

“I” is the sum of all amounts each of which is an amount included in computing the corporation’s Ontario research and development tax credit at the end of the particular year in respect of the current portion of its Ontario research and development tax credit at the end of a taxation year ending after that time, and

“J” is the amount that, but for sections 39 and 53, would be the corporation’s tax payable under this Division for the particular year multiplied by the ratio of “K” to “L” where,

“K” is, if the corporation has made an eligible expenditure in the course of carrying on a particular business throughout a taxation year that ends after that time, in respect of which an amount is included in computing its Ontario research and development tax credit at the end of the particular year, the amount, if any, by which “M” exceeds “N” where,

“M” is the sum of all amounts each of which is,

(a)  its income for the particular year from the particular business, or

(b)  if the corporation carried on the particular business in the particular year, its income for the particular year from any other business substantially all the income of which was derived from the sale, leasing, rental or development of properties or the rendering of services similar to the properties sold, leased, rented or developed, or the services rendered, as the case may be, by the corporation in carrying on the particular business before that time, and

“N” is the sum of all amounts each of which is an amount deducted under paragraph 111 (1) (a) or (d) of the Federal Act for the particular year by the corporation in respect of a non-capital loss or a farm loss, as the case may be, for a taxation year in respect of the particular business or the other business, and

“L” is the greater of,

(a) the amount determined as “K” for the particular year, and

(b) the corporation’s taxable income or taxable income earned in Canada, as the case may be, for the particular year.  2007, c. 11, Sched. A, s. 44 (2).

Recapture of tax credit

Definition

45. (1) In this section,

“eligible property” means,

(a) in respect of a corporation, property,

(i) the cost of which was incurred by the corporation in a taxation year ending after December 31, 2008, and

(ii) all or part of the cost of which is an eligible expenditure of the corporation, or

(b) in respect of a partnership, property,

(i) the cost of which was incurred by the partnership in a fiscal period ending in a taxation year of a corporate member of the partnership that ends after December 31, 2008, and

(ii) all or part of the cost of which would be an eligible expenditure of the partnership if the partnership were a corporation.  2007, c. 11, Sched. A, s. 45 (1).

Amount of recapture

(2) Subject to the regulations, there shall be added in computing a corporation’s tax payable under this Division for a taxation year 23.56 per cent of the sum of all amounts each of which is an amount that would be added under subsection 127 (27), (29) or (34) of the Federal Act in computing the corporation’s tax payable under Part I of the Federal Act for the year in respect of an eligible property of the corporation if the definition of “investment tax credit” in subsection 127 (9) of the Federal Act were read without reference to paragraph (e) of that definition.  2007, c. 11, Sched. A, s. 45 (2); 2016, c. 5, Sched. 28, s. 16 (1).

Same, tax credit earned through partnership

(3) Subject to the regulations, there shall be deducted in computing the amount determined under subsection 40 (1) in respect of a partnership at the end of a particular fiscal period 23.56 per cent of the sum of all amounts each of which would be deducted pursuant to subsection 127 (28) or (35) of the Federal Act in computing an amount under subsection 127 (8) of the Federal Act in respect of an eligible property of the partnership at the end of the particular fiscal period, if,

(a) the definition of “investment tax credit” in subsection 127 (9) of the Federal Act were read without reference to paragraph (e) of that definition; and

(b) the amount that would be determined under subsection 127 (8) of the Federal Act, without reference to subsections 127 (28) and (35) of the Federal Act, were a sufficiently high amount.  2007, c. 11, Sched. A, s. 45 (3); 2016, c. 5, Sched. 28, s. 16 (2).

Regulations

(3.1) The Minister of Finance may make regulations,

(a) providing for a different method for determining the amounts under subsection (2) than would otherwise be determined under that subsection;

(b) providing for a different method for determining the amounts to be deducted under subsection (3) than would otherwise be determined under that subsection. 2016, c. 5, Sched. 28, s. 16 (3).

Same

(3.2) A regulation made under subsection (3.1) may provide for different methods of determining the amounts under subsection (2) or (3) that apply to different periods. 2016, c. 5, Sched. 28, s. 16 (3).

Same

(4) If a corporation is a member of a partnership and the sum of all amounts each of which is determined in respect of an eligible property of the partnership for a fiscal period under subsection (3) exceeds the amount that would be determined in respect of the partnership under subsection 40 (1) for the fiscal period if subsection (3) did not apply, the portion of the excess that can reasonably be considered to be the corporation’s share of the excess shall be added in computing the corporation’s tax payable under this Division for the corporation’s taxation year in which the fiscal period ends.  2007, c. 11, Sched. A, s. 45 (4).

Tiered partnership

(5) If a corporation is a member of a particular partnership that is a member of another partnership and an amount would be added to the particular partnership’s tax payable under this Division for the year pursuant to subsection (4) if the particular partnership were a corporation and its fiscal period were its taxation year, that amount is deemed to be an amount that is required by subsection (3) to be deducted in computing the amount under subsection 40 (1) in respect of the particular partnership at the end of the fiscal period.  2007, c. 11, Sched. A, s. 45 (5).

Section Amendments with date in force (d/m/y)

2016, c. 5, Sched. 28, s. 16 (1-3) - 19/04/2016

Subdivision d — Transitional Tax Debits and Credits

Definitions

46. (1) In this subdivision,

“adjusted basic rate” means, in respect of a specified corporation for a taxation year, the product determined by multiplying the corporation’s basic rate of tax for the year by the corporation’s Ontario allocation factor for the year; (“taux de base rajusté”)

“completion time” means, in respect of a winding-up of a subsidiary corporation, the end of the subsidiary corporation’s taxation year during which, for the purposes of paragraph 88 (1) (e.2) of the Federal Act, its assets were distributed to its parent corporation on the winding-up; (“date de réalisation”)

“eligible amalgamation” means, in respect of a particular corporation, an amalgamation or merger of the particular corporation and one or more other corporations to form a new corporation where, 

(a) the amalgamation or merger occurs after December 31, 2008 and does not occur at the new corporation’s transition time,

(b) the new corporation has a permanent establishment in Ontario immediately after the amalgamation or merger,

(c) the particular corporation has a permanent establishment in Ontario immediately before the amalgamation or merger,

(d) the particular corporation was a specified corporation at its transition time or, by operation of subsection 51 (1), was a specified corporation at any time before the amalgamation or merger,

(e) the amalgamation or merger occurs in the amortization period of the new corporation,

(f) the amalgamation or merger would occur before the end of the amortization period of the particular corporation if,

(i) subclause (2) (b) (ii) were read without reference to the words “for any reason other than an eligible amalgamation or eligible post-2008 winding-up of the corporation”, and

(ii) the new corporation were considered to be the same corporation as and a continuation of the particular corporation, and

(g) the amortization period of the new corporation does not end immediately after the beginning of its reference period; (“fusion admissible”)

“eligible post-2008 winding-up” means, in respect of a subsidiary corporation, a winding-up of the subsidiary corporation in the course of which assets are distributed to the subsidiary corporation’s parent corporation where,

(a) the completion time of the winding-up is after December 31, 2008,

(b) for the purposes of paragraph 88 (1) (e.2) of the Federal Act, the parent corporation’s taxation year during which it received the assets of the subsidiary corporation on the winding-up ended after December 31, 2008,

(c) the subsidiary corporation has a permanent establishment in Ontario during its taxation year ending at the completion time,

(d) the parent corporation has a permanent establishment in Ontario during the taxation year in which, for the purposes of paragraph 88 (1) (e.2) of the Federal Act, it received the assets of the subsidiary corporation on the winding-up, and

(e) the time immediately after the completion time is in the amortization period of the subsidiary corporation and is in the amortization period of the parent corporation; (“liquidation postérieure à 2008 admissible”)

“eligible pre-2009 winding-up” means, in respect of a subsidiary corporation, a winding-up of the subsidiary corporation where,

(a) the completion time of the winding-up is after December 31, 2008 and, for the purposes of paragraph 88 (1) (e.2) of the Federal Act, the parent corporation’s taxation year during which it received the assets of the subsidiary corporation on the winding-up ended before January 1, 2009, or

(b) the completion time is before January 1, 2009 and, for the purposes of paragraph 88 (1) (e.2) of the Federal Act, the parent corporation’s taxation year during which it received the assets of the subsidiary corporation on the winding-up ended after December 31, 2008; (“liquidation antérieure à 2009 admissible”)

“federal SR & ED transitional balance” means, in respect of a corporation, its federal SR & ED transitional balance as determined under section 49; (“solde transitoire au titre de la recherche et du développement selon les règles fédérales”)

“new corporation” means a corporation formed as a result of an amalgamation or merger of two or more corporations; (“nouvelle société”)

“reference period” means, in respect of a corporation, the period,

(a) that begins at the beginning of the corporation’s first taxation year ending after December 31, 2008, and

(b) that ends at the earlier of,

(i) the time that is five calendar years after the time immediately before the corporation’s first taxation year ending after December 31, 2008, and

(ii) the end of 2013; (“période de référence”)

“total federal balance” means, in respect of a corporation, its total federal balance as determined under section 48; (“solde fédéral total”)

“total Ontario balance” means, in respect of a corporation, its total Ontario balance as determined under section 48; (“solde ontarien total”)

“transition time” means, in respect of a corporation,

(a) the beginning of the corporation’s first taxation year that begins after 2008 if the previous taxation year is deemed under subsection 249 (3) of the Federal Act to end on the last day of 2008, or

(b) the beginning of the corporation’s taxation year that includes the beginning of 2009 in any other case; (“date de transition”)

“unused credit balance” means, in respect of a corporation, the amount in respect of the corporation determined under subsection 50 (4). (“solde créditeur inutilisé”)  2007, c. 11, Sched. A, s. 46 (1); 2008, c. 7, Sched. S, s. 9 (1, 2).

Amortization period

(2) A corporation’s amortization period for the purposes of this subdivision is the period that begins at the beginning of the corporation’s reference period and that ends at the later of,

(a) the time immediately after the beginning of the corporation’s reference period; and

(b) the earliest of,

(i) the end of the corporation’s reference period,

(ii) the time immediately before the first time in the corporation’s reference period when the corporation ceases to have a permanent establishment in Ontario for any reason other than an eligible amalgamation or eligible post-2008 winding-up of the corporation,

(iii) the time immediately before the first time in the corporation’s reference period when the corporation becomes exempt from tax under Part I of the Federal Act,

(iv) the time immediately before the first time in the corporation’s reference period when the corporation is a party to a transaction or event if it may reasonably be considered, without reference to this subclause, that one of the main purposes of the transaction or event, or a series of transactions or events of which that transaction or event is a part, was to reduce or avoid the inclusion of an amount to be added under this subdivision in computing the corporation’s tax payable under this Division or to increase an amount determined for the corporation under subsection 50 (1),

(v) the time immediately after the beginning of the corporation’s reference period if,

(A) the corporation or another corporation that is a designated corporation with respect to it was a party to a transaction or event at any time before the beginning of the corporation’s reference period, and

(B) it may reasonably be considered, without reference to this subclause, that one of the main purposes of the transaction or event, or a series of transactions or events of which that transaction or event was a part, was to reduce or avoid the inclusion of an amount to be added under this subdivision in computing the corporation’s tax payable under this Division or to increase an amount determined for the corporation under subsection 50 (1), and

(vi) the end of the taxation year for which the corporation makes an election under subsection 47 (2), if the corporation makes an election under that subsection.  2007, c. 11, Sched. A, s. 46 (2); 2008, c. 7, Sched. S, s. 9 (3).

Early termination of amortization period

(3) Despite subsection (2), a specified corporation’s amortization period that would, but for this subsection, end after the end of a taxation year shall be deemed to end at the end of that taxation year if,

(a) the Ontario Minister assesses or reassesses the corporation for the year on the basis that the corporation’s amortization period ends at the end of that year;

(b) the corporation does not object to this treatment within 90 days of its last assessment of tax payable under this Division for the year; and

(c) the amount that would be determined under clause (b) of the definition of “B” in subsection 50 (2) in respect of the corporation for the year would be a positive amount of not more than $1,000 if “F” and “G”, as defined in subsection 50 (2), were each equal to one.  2007, c. 11, Sched. A, s. 46 (3).

Determining the number of days

(4) For the purposes of this subdivision, February 29, 2008 and February 29, 2012 shall not be counted in determining the number of days in a period that would otherwise include either or both of those days.  2007, c. 11, Sched. A, s. 46 (4).

Specified corporation

(5) A corporation is a specified corporation for the purposes of this subdivision if the following conditions are satisfied:

1. The corporation is not exempt at or immediately before its transition time from tax payable under Part I of the Federal Act.

2. Unless a taxation year of the corporation is deemed under subsection 249 (3) of the Federal Act to end on the last day of 2008, the corporation has a taxation year that ends before 2009 and a taxation year that includes the beginning of 2009.

2.1 If a taxation year of the corporation is deemed under subsection 249 (3) of the Federal Act to end on the last day of 2008, the corporation has a taxation year that begins after December 31, 2008.

3. The corporation has a permanent establishment in Ontario at its transition time.

4. The corporation had a permanent establishment in Ontario at any time in its last taxation year ending before 2009 and was subject to tax under Part II of the Corporations Tax Act for that year.

5. If assets of the corporation have been distributed in the course of a winding-up, the winding-up is not an eligible pre-2009 winding-up.  2007, c. 11, Sched. A, s. 46 (5); 2008, c. 7, Sched. S, s. 9 (4).

Section Amendments with date in force (d/m/y)

2008, c. 7, Sched. S, s. 9 (1-4) - 01/01/2008

Transitional tax debits and credits

Liability for additional tax

47. (1) There shall be added in computing a specified corporation’s tax under this Division for a taxation year the amount of additional tax determined as follows:

1. If a regulation is in force limiting the amount of additional tax to be added under this subdivision in computing a specified corporation’s tax under this Division for the taxation year, the amount of the additional tax for the year is the sum of the amount determined under subsection 48 (3) in respect of the corporation for the year if the corporation made an election referred to in clause (b) of the definition of “I” in paragraph 1 of subsection 48 (4) and the lesser of,

i. the maximum amount of additional tax determined in respect of the corporation under that regulation for the year, and

ii. the amount determined under subsection 48 (1) in respect of the corporation for the year.

2. If no regulation described in paragraph 1 is in force in respect of the corporation for the year, the amount of the additional tax for the year is the sum of,

i. the amount determined under subsection 48 (3) in respect of the corporation for the year if an election referred to in clause (b) of the definition of “I” in paragraph 1 of subsection 48 (4) is made, and

ii. the amount determined under subsection 48 (1) in respect of the corporation for the year.  2007, c. 11, Sched. A, s. 47 (1).

Election to pre-pay additional tax

(2) A specified corporation may elect in writing in its return for the year to terminate its amortization period in the year and calculate the amount to be included under subsection (1) in computing its tax under this Division for the year on the basis that its amortization period ended in the year if,

(a) the corporation’s Ontario allocation factor for the year is at least 90 per cent; or

(b) the amount by which “C” in subsection 48 (1) exceeds “D” in that subsection in respect of the corporation for the year is not more than $10,000.  2007, c. 11, Sched. A, s. 47 (2).

Tax credit

(3) There may be deducted in computing a specified corporation’s tax payable under this Division for every taxation year that includes a part of the corporation’s amortization period the amount determined for the year under subsection 50 (1).  2007, c. 11, Sched. A, s. 47 (3).

Amount of additional tax

48. (1) For the purposes of subparagraphs 1 ii and 2 ii of subsection 47 (1), the amount determined under this subsection is calculated using the formula,

A/B × (C – D) × E

in which,

  “A” is,

(a) nil, if the corporation’s amortization period ends before the taxation year,

(a.1) the total number of days in the corporation’s reference period that are on or after the first day of the taxation year, if the corporation’s amortization period ends in the taxation year by reason of subclause 46 (2) (b) (ii), (iii), (iv), (v) or (vi), or

(b) the number of days in the corporation’s reference period that are in the taxation year, in any other case,

  “B” is the number of days in the corporation’s reference period,

  “C” is the corporation’s total federal balance at the end of the taxation year,

  “D” is the corporation’s total Ontario balance at the end of the taxation year, and

  “E” is the corporation’s tax rate for the taxation year for the purposes of this section.

2007, c. 11, Sched. A, s. 48 (1); 2008, c. 7, Sched. S, s. 10 (1).

Tax rate

(2) A corporation’s tax rate for a particular taxation year for the purposes of this section is determined under the following rules:

1. If the corporation’s amortization period ends in the particular taxation year by reason of subclause 46 (2) (b) (iv), the tax rate is,

i. if the particular year is not the corporation’s first taxation year, the corporation’s adjusted basic rate for the particular year determined as if the corporation’s Ontario allocation factor for the particular year were equal to the greater of the corporation’s Ontario allocation factor for the particular year and the corporation’s Ontario allocation factor for its previous taxation year, or

ii. if the particular year is the corporation’s first taxation year, the corporation’s adjusted basic rate for the particular year determined as if the corporation’s Ontario allocation factor for the particular year were equal to the greater of,

A. the corporation’s Ontario allocation factor for the particular year, and

B. the greatest of all amounts each of which is the Ontario allocation factor of another corporation that is a designated corporation with respect to it, for a taxation year of the designated corporation that ends in the calendar year in which the corporation’s particular year ends or in the previous calendar year.

2. If the corporation’s amortization period ends in the particular year by reason of subclause 46 (2) (b) (v), the corporation’s tax rate for the year is the corporation’s adjusted basic rate for the year determined as if the corporation’s Ontario allocation factor for the year were equal to the greatest of,

i. its Ontario allocation factor for the particular year,

ii. all amounts each of which is the corporation’s Ontario allocation factor for a taxation year ending in a calendar year before 2009 in or before which a transaction or event, or all or part of a series of transactions or events, occurred that resulted in subclause 46 (2) (b) (v) applying for the purposes of determining the corporation’s amortization period, and

iii. all amounts each of which is the Ontario allocation factor of a corporation that is a designated corporation with respect to it for a taxation year of the designated corporation that ends in a calendar year described in subparagraph ii.

3. If neither paragraph 1 nor 2 applies for the taxation year, the tax rate is the corporation’s adjusted basic rate for the taxation year.  2007, c. 11, Sched. A, s. 48 (2); 2008, c. 7, Sched. S, s. 10 (2, 3).

Same

(3) For the purposes of paragraphs 1 and 2 of subsection 47 (1), the amount determined under this subsection in respect of a corporation for a taxation year is the lesser of,

(a) the corporation’s post-2008 SR & ED balance at the end of the year, as determined under section 49; and

(b) the corporation’s federal SR & ED transitional balance at the end of the year, as determined under section 49.  2007, c. 11, Sched. A, s. 48 (3).

Total federal balance

(4) For the purposes of the definition of “C” in subsection (1), a corporation’s total federal balance at a particular time is, subject to the regulations, the sum of the following amounts:

1. If the corporation was a specified corporation at its transition time, the amount calculated using the formula,

F + G + H + I + J – K + L + M + N + P + 0.5Q + R + S + S.1

in which,

“F” is the sum of all amounts each of which is, for the purposes of the Federal Act, the corporation’s undepreciated capital cost of a class of depreciable property immediately before its transition time,

“G”   is,

(a) nil, if the corporation is non-resident immediately before its transition time, or

(b) in any other case, the sum of all amounts each of which,

(i)  would be deductible under paragraph 110.1 (1) (a) of the Federal Act in computing the corporation’s taxable income for its last taxation year ending before its transition time if that paragraph were read without reference to the portion of that paragraph following subparagraph (viii), or

(ii)  is deductible under any of paragraphs 110.1 (1) (a.1), (b), (c) and (d) of the Federal Act in computing the corporation’s taxable income for its last taxation year ending before its transition time,

“H” is the sum of all amounts each of which is, for the purposes of the Federal Act, the corporation’s cumulative eligible capital immediately before its transition time in respect of a business,

“I” is,

(a) nil, if control of the corporation was acquired, for the purposes of subsection 37 (6.1) of the Federal Act, by a person or group of persons at the corporation’s transition time,

(b) if clause (a) does not apply and the corporation elects in writing in its return for its first taxation year ending after December 31, 2008 to have this clause apply, the amount, if any, by which “I.1” exceeds the lesser of “I.2” and “I.3” where,

“I.1”  is the amount, if any, by which the amount that would be deductible under subsection 37 (1) of the Federal Act in computing the corporation’s income for its last taxation year ending before its transition time if subsection 37 (6.1) of the Federal Act were read without reference to paragraph (b) of that subsection exceeds the portion of that amount deducted in computing the corporation’s income for its last taxation year ending before the transition time,

“I.2”  is the amount, if any, by which “I.1” exceeds “W” in respect of the corporation under paragraph 1 of subsection (6), and

“I.3”  is the amount, if any, by which the amount that would be the corporation’s total federal balance at its transition time if the election had not been made exceeds the corporation’s total Ontario balance at its transition time, or

(c) the amount of “I.1” in clause (b) in respect of the corporation in any other case,

“J” is,

(a) nil, if control of the corporation was acquired, for the purposes of subsection 66.7 (10) of the Federal Act, by a person or group of persons at the corporation’s transition time, or

(b) in any other case, the sum of,

(i)  the corporation’s cumulative Canadian exploration expense immediately before its transition time, as determined for the purposes of the Federal Act,

(ii)  the corporation’s cumulative Canadian development expense immediately before its transition time, as determined for the purposes of the Federal Act, and

(iii)  the corporation’s cumulative Canadian oil and gas property expense immediately before its transition time, as determined for the purposes of the Federal Act,

“K” is the sum of all amounts each of which is the portion of the amount of “F”, “G”, “H” or “J” that was deducted by the corporation under the Federal Act in computing its income or taxable income for its last taxation year ending before its transition time,

“L” is the amount that would be deductible under paragraph 111 (1) (a) of the Federal Act in computing the corporation’s taxable income for its first taxation year ending after December 31, 2008 if,

(a) that paragraph did not refer to non-capital losses for taxation years following that taxation year,

(b) subsection 111 (5) of the Federal Act were read without reference to the exception provided under paragraph (a) of that subsection, 

(c) subsection 88 (1.1) of the Federal Act were read without reference to the exception provided under paragraph (e) of that subsection, and

(d) the corporation had sufficient incomes from all sources,

“M” is the amount that would be deductible under paragraph 111 (1) (b) of the Federal Act in computing the corporation’s taxable income for its first taxation year ending after December 31, 2008 if,

(a) that paragraph did not refer to net capital losses for taxation years following that taxation year, and

(b) the corporation had sufficient incomes from all sources and sufficient taxable capital gains,

“N” is the sum of all amounts each of which is, for the purposes of the Federal Act, the adjusted cost base to the corporation at its transition time of a partnership interest owned by the corporation,

“P” is the sum of all amounts each of which was deducted as a reserve under paragraph 20 (1) (l), (l.1), (m), (m.1), (n) or (o), subsection 32 (1), section 61.4 or subparagraph 138 (3) (a) (i), (ii) or (iv) of the Federal Act, as it applies for the purposes of the Corporations Tax Act, for the corporation’s last taxation year ending before its transition time,

“Q” is the sum of all amounts each of which was deducted as a reserve under subparagraph 40 (1) (a) (iii) or 44 (1) (e) (iii) of the Federal Act, as it applies for the purposes of the Corporations Tax Act, for the corporation’s last taxation year ending before its transition time,

“R” is the sum of all amounts each of which would be the gain to the corporation under subsection 40 (3) of the Federal Act, as it applies for the purposes of the Corporations Tax Act, from a disposition of a partnership interest at its transition time if paragraph 40 (3) (a) of the Federal Act were read at its transition time without reference to the words “(except paragraph 53 (2) (c))”,

“S” is the sum of all amounts each of which is such portion of an amount, other than a reserve, that was deducted by the corporation under the Corporations Tax Act in computing the corporation’s income, taxable income or taxable income earned in Canada for a taxation year ending on or after December 13, 2006 and before the corporation’s transition time,

(a) that the corporation was entitled to deduct for that year in computing its income, taxable income or taxable income earned in Canada under the Federal Act,

(b) that was not deducted for that year or any subsequent taxation year ending before January 1, 2009 for the purposes of the Federal Act, and

(c) that would not result in a reduction in the amount of the corporation’s total Ontario balance at its transition time if it had not been deducted for that year for the purposes of the Corporations Tax Act and had been deducted instead for the purposes of that Act for its last taxation year ending before its transition time, and

“S.1” is the amount, if any, specified by the corporation under paragraph 28 (1) (b) of the Federal Act in respect of its last taxation year ending before its transition time.

2. The sum of all amounts each of which is an amount required under subsection 51 (1) or section 52 to be added at or before the particular time to the corporation’s total federal balance.

2007, c. 11, Sched. A, s. 48 (4); 2008, c. 7, Sched. S, s. 10 (4).

Reduction of total federal balance

(5) Despite subsection (4), a corporation’s total federal balance at a particular time shall be reduced by the sum of all amounts each of which is an amount required under subsection 52 (4) to be deducted at or before the particular time in computing the corporation’s total federal balance.  2007, c. 11, Sched. A, s. 48 (5).

Total Ontario balance

(6) For the purposes of the definition of “D” in subsection (1), a corporation’s total Ontario balance at a particular time is, subject to the regulations, the sum of:

1. If the corporation was a specified corporation at its transition time, the amount calculated using the formula,

T + U + V + W + X – Y + Z + AA + BB + CC + 0.5DD + EE + EE.1 + FF

in which,

“T” is the sum of all amounts each of which is, for the purposes of the Corporations Tax Act, the corporation’s undepreciated capital cost of a class of depreciable property immediately before its transition time,

“U” is,

(a) nil, if the corporation is non-resident immediately before its transition time, or

(b) in any other case, the sum of all amounts each of which,

(i)  would be deductible under paragraph 110.1 (1) (a) of the Federal Act, as it applies for the purposes of the Corporations Tax Act, in computing the corporation’s taxable income for its last taxation year ending before its transition time if that paragraph were read without reference to the portion of that paragraph following subparagraph (viii), or

(ii)  is deductible under paragraph 110.1 (1) (a.1), (b), (c) or (d) of the Federal Act, as it applies for the purposes of the Corporations Tax Act, in computing the corporation’s taxable income for its last taxation year ending before its transition time,

“V” is the sum of all amounts each of which is, for the purposes of the Corporations Tax Act, the corporation’s cumulative eligible capital immediately before its transition time in respect of a business,

“W” is,

(a) nil, if control of the corporation was acquired, for the purposes of subsection 37 (6.1) of the Federal Act, by a person or group of persons at the corporation’s transition time, or

(b) in any other case, the sum of the corporation’s adjusted Ontario SR & ED incentive balance at the end of its taxation year ending immediately before its transition time and the amount, if any, by which “W.1” exceeds “W.2” where,

“W.1”  is the amount that would be deductible under subsection 37 (1) of the Federal Act, as that subsection applies for the purposes of the Corporations Tax Act, in computing the corporation’s income for its last taxation year ending before its transition time if subsection 37 (6.1) of the Federal Act were read without reference to paragraph (b) of that subsection, and

“W.2”  is the amount in respect of the amount described in the definition of “W.1” that was deducted by the corporation under the Corporations Tax Act in computing its income for its last taxation year ending before its transition time,

“X” is,

(a) nil, if control of the corporation was acquired, for the purposes of subsection 66.7 (10) of the Federal Act, by a person or group of persons at the corporation’s transition time, or

(b) in any other case, the sum of,

(i)  the corporation’s cumulative Canadian exploration expense immediately before its transition time, as determined for the purposes of the Corporations Tax Act,

(ii)  the corporation’s cumulative Canadian development expense immediately before its transition time, as determined for the purposes of the Corporations Tax Act, and

(iii)  the corporation’s cumulative Canadian oil and gas property expense immediately before its transition time, as determined for the purposes of the Corporations Tax Act,

“Y” is the sum of all amounts each of which is the portion of the amount of “T”, “U”, “V” or “X” deducted under the Corporations Tax Act in computing the corporation’s income or taxable income for its last taxation year ending before its transition time,

“Z” is the amount that would be deductible under paragraph 111 (1) (a) of the Federal Act, as it applies for the purposes of the Corporations Tax Act, in computing the corporation’s taxable income for its first taxation year ending after December 31, 2008 if,

(a) that paragraph did not refer to non-capital losses for taxation years following that taxation year,

(b) subsection 111 (5) of the Federal Act were read without reference to the exception provided under paragraph (a) of that subsection,

(c) subsection 88 (1.1) of the Federal Act were read without reference to the exception provided under paragraph (e) of that subsection, and

(d) the corporation had, for the purposes of the Corporations Tax Act, sufficient incomes from all sources,

“AA”   is the amount that would be deductible under paragraph 111 (1) (b) of the Federal Act, as it applies for the purposes of the Corporations Tax Act, in computing the corporation’s taxable income for its first taxation year ending after December 31, 2008 if,

(a) that paragraph did not refer to net capital losses for taxation years following that taxation year, and

(b) the corporation had, for the purposes of the Corporations Tax Act, sufficient incomes from all sources and sufficient taxable capital gains,

“BB” is the sum of all amounts each of which is, for the purposes of the Corporations Tax Act, the adjusted cost base to the corporation at its transition time of a partnership interest owned by the corporation,

“CC”   is the sum of all amounts each of which was deducted as a reserve under paragraph 20 (1) (l), (l.1), (m), (m.1), (n) or (o), subsection 32 (1), section 61.4 or subparagraph 138 (3) (a) (i), (ii) or (iv) of the Federal Act for the corporation’s last taxation year ending before its transition time,

“DD” is the sum of all amounts each of which was deducted as a reserve under subparagraph 40 (1) (a) (iii) or 44 (1) (e) (iii) of the Federal Act for the corporation’s last taxation year ending before its transition time,

“EE” is the sum of all amounts each of which would be the gain to the corporation under subsection 40 (3) of the Federal Act from a disposition of a partnership interest at its transition time if paragraph 40 (3) (a) of the Federal Act were read at its transition time without reference to the words “(except paragraph 53 (2) (c))”,

“EE.1” is the amount, if any, specified by the corporation under paragraph 28 (1) (b) of the Federal Act, as it applies for the purposes of the Corporations Tax Act, in respect of its last taxation year ending before its transition time, and

“FF” is the amount determined under the prescribed rules.

2. The sum of all amounts each of which is an amount required under subsection 51 (1) or section 52 to be added to the corporation’s total Ontario balance at or before the particular time.

2007, c. 11, Sched. A, s. 48 (6); 2008, c. 7, Sched. S, s. 10 (5).

Reduction of total Ontario balance

(7) Despite subsection (6), a corporation’s total Ontario balance at a particular time shall be reduced by the sum of all amounts each of which is an amount required under subsection 52 (4) to be deducted at or before the particular time in computing the corporation’s total Ontario balance.  2007, c. 11, Sched. A, s. 48 (7).

Additional rules

(8) The following rules apply for the purposes of determining a corporation’s total federal balance or total Ontario balance:

1. If the corporation has a transition time and is non-resident immediately before that time,

i. no amount referred to in paragraph 1 of subsection (4) or paragraph 1 of subsection (6) that is or would have been relevant or potentially relevant in the calculation of income from a business shall be included in the corporation’s total federal balance or total Ontario balance under either of those paragraphs unless the business is carried on in Canada and it is not a treaty-protected business,

ii. no amount referred to in paragraph 1 of subsection (4) or paragraph 1 of subsection (6) that is or would have been relevant or potentially relevant in the calculation of a capital gain from the disposition of a property shall be included in the corporation’s total federal balance or total Ontario balance under either of those paragraphs unless the property is taxable Canadian property and is not treaty-protected property, and

iii. no amount referred to in paragraph 1 of subsection (4) or paragraph 1 of subsection (6) that is or would have been relevant or potentially relevant in the calculation of income from property shall be included in the corporation’s total federal balance or total Ontario balance under either of those paragraphs.

2. If the corporation has a transition time and is a life insurer resident in Canada immediately before its transition time,

i. no amount referred to in paragraph 1 of subsection (4) or paragraph 1 of subsection (6) that is or would have been relevant or potentially relevant in the calculation of income carried on from an insurance business shall be included in the corporation’s total federal balance or total Ontario balance under either of those paragraphs unless the corporation carries on its insurance business in Canada, and

ii. no amount referred to in paragraph 1 of subsection (4) or paragraph 1 of subsection (6) that is or would have been relevant or potentially relevant in the calculation of a capital gain from the disposition of a property used or held by the corporation in the course of carrying on an insurance business shall be included in the corporation’s total federal balance or total Ontario balance under either of those paragraphs unless the property is designated insurance property.

3. The amount determined under the definition of “S” in paragraph 1 of subsection (4),

i. is determined for a parent corporation as if the parent corporation were the same corporation and a continuation of a subsidiary corporation if the parent corporation’s transition time is after the end of the taxation year in which, for the purposes of paragraph 88 (1) (e.2) of the Federal Act, it received the assets of the subsidiary corporation in the course of a winding-up, and

ii. is determined in respect of a corporation that is formed as a result of an amalgamation or merger before its transition time as if the corporation were the same corporation as and a continuation of each of its predecessor corporations.  2007, c. 11, Sched. A, s. 48 (8).

Section Amendments with date in force (d/m/y)

2008, c. 7, Sched. S, s. 10 (1-5) - 01/01/2008

Calculation of amounts for purposes of s. 48

Definitions

49. (1) In this section,

“adjusted gross federal investment tax credit” means, in respect of a corporation at the end of a taxation year, the sum of all amounts each of which would be determined in respect of the corporation under paragraph (a.1), (b), (c), (e), (e.1) or (e.2) of the definition of  “investment tax credit” in subsection 127 (9) of the Federal Act at the end of the year in respect of qualified Ontario SR & ED expenditures if every amount added under paragraph (c), (e), (e.1) or (e.2) of that definition in respect of taxation years following the year or in respect of taxation years ending before the time control of the corporation was last acquired by a person or group of persons were not taken into account; (“crédit d’impôt à l’investissement fédéral brut rajusté”)

“federal current SR & ED deficit” means, in respect of a corporation for a taxation year, the amount, if any, that would be the amount by which the total of the amounts determined in respect of the corporation for the year under paragraphs 37 (1) (d) and (e) of the Federal Act exceeds the total of the amounts determined in respect of the corporation for the year under paragraphs 37 (1) (a), (b), (c) and (c.2) of the Federal Act if all amounts determined under those paragraphs for preceding taxation years were not taken into account; (“déficit de l’année au titre de la recherche et du développement selon les règles fédérales”)

“federal current SR & ED limit” means, in respect of a corporation for a taxation year,  the amount, if any, that would be the amount by which the sum of the amounts determined in respect of the corporation for the year under paragraphs 37 (1) (a), (b), (c) and (c.2) of the Federal Act exceeds the sum of the amounts determined in respect of the corporation for the year under paragraphs 37 (1) (d) and (e) of the Federal Act if all amounts determined under those paragraphs for preceding taxation years were not taken into account; (“plafond de l’année au titre de la recherche et du développement selon les règles fédérales”)

“qualified Ontario SR & ED expenditure” means a qualified Ontario SR & ED expenditure for the purposes of section 11.2 of the Corporations Tax Act. (“dépense admissible de recherche et de développement en Ontario”)  2007, c. 11, Sched. A, s. 49 (1).

Post-2008 SR & ED balance

(2) For the purposes of clause 48 (3) (a), a corporation’s post-2008 SR & ED balance at the end of a taxation year is the amount calculated using the formula,

(A + B ) × 0.14 × C

in which,

  “A” is,

(a) if the year ends before January 1, 2016, the amount, if any, by which the amount deducted under subsection 37 (1) of the Federal Act in computing the corporation’s income for the year exceeds the corporation’s cumulative post-2008 SR & ED limit at the end of the year, or

(b) in any other case, the amount deducted under subsection 37 (1) of the Federal Act in computing the corporation’s income for the year, 

  “B” is the corporation’s federal current SR & ED deficit for the year, and

  “C” is the corporation’s relevant Ontario allocation factor.

2007, c. 11, Sched. A, s. 49 (2).

Cumulative post-2008 SR & ED limit

(3) For the purposes of subsection (2), a corporation’s cumulative post-2008 SR & ED limit at the end of a taxation year is the amount, if any, by which the sum of all amounts each of which is the corporation’s federal current SR & ED limit for the year or a preceding taxation year ending after December 31, 2008 exceeds the amount determined by the formula,

D – ((E – F)/(C × 0.14))

in which,

  “C” is the corporation’s relevant Ontario allocation factor,

  “D” is the sum of all amounts each of which is deducted under subsection 37 (1) of the Federal Act in computing the corporation’s income for a preceding taxation year ending after December 31, 2008,

  “E” is the sum of all amounts determined under subsection 48 (3) in respect of the corporation for a preceding taxation year, and

“F” is the portion, if any, of the value of “E” that may reasonably be considered to be attributable to the value of “B” in subsection (2).

2007, c. 11, Sched. A, s. 49 (3).

Federal SR & ED transitional balance

(4) For the purposes of clause 48 (3) (b), a corporation’s federal SR & ED transitional balance at a particular time is the amount calculated using the formula,

(0.14 × C × G) + H – I

in which,

  “C” is the corporation’s relevant Ontario allocation factor,

  “G” is,

(a) the lesser of the amounts determined as “I.2” and “I.3” in clause (b) of the definition of “I” in paragraph 1 of subsection 48 (4) in respect of the corporation, if the corporation makes an election referred to in clause (b) of that definition, or

(b) nil, in any other case,

  “H” is the sum of all amounts each of which is required by subsection 51 (1) to be added in computing the corporation’s federal SR & ED transitional balance at or before the particular time, and

“I” is the sum of all amounts each of which is determined under subsection 48 (3) in respect of the corporation for a taxation year ending before the particular time.

2007, c. 11, Sched. A, s. 49 (4).

Relevant Ontario allocation factor

(5) For the purposes of this section, the relevant Ontario allocation factor of a corporation is the greatest of,

(a) the corporation’s Ontario allocation factor for its taxation year that includes its transition time;

(b) the corporation’s Ontario allocation factor for the taxation year ending in 2006, 2007 or 2008 for which the corporation had the greatest Ontario allocation factor; and

(c) the greatest of all amounts each of which is the weighted Ontario allocation factor for 2006, 2007 or 2008 of the corporation and every corporation, if any, that is a designated corporation with respect to it.  2007, c. 11, Sched. A, s. 49 (5); 2008, c. 7, Sched. S, s. 11 (1).

Exception

(5.1) Despite subsection (5), if a corporation does not have a taxation year that includes the beginning of 2009, its relevant Ontario allocation factor is its Ontario allocation factor for its first taxation year ending after December 31, 2008.  2008, c. 7, Sched. S, s. 11 (2).

Weighted Ontario allocation factor

(6) For the purposes of clause (5) (c), the weighted Ontario allocation factor of two or more corporations for a calendar year is the total of all amounts each of which is calculated in respect of each corporation using the formula,

J × K/L

in which,

“J” is equal to an Ontario allocation factor of the corporation for a taxation year ending in the calendar year,

  “K” is equal to the sum of,

(a) the total qualified Ontario SR & ED expenditures incurred by the corporation in that taxation year, and

(b) the total of all amounts each of which is the corporation’s share of qualified Ontario SR & ED expenditures incurred by a partnership in a fiscal period ending in that taxation year, and

  “L” is the sum of the amounts of “K” for each of the corporations determined under this subsection. 

2007, c. 11, Sched. A, s. 49 (6).

Adjusted Ontario SR & ED incentive balance

(7) For the purposes of clause (b) of the definition of “W” in paragraph 1 of subsection 48 (6), a corporation’s adjusted Ontario SR & ED incentive balance at the end of a taxation year is the amount calculated using the formula,

(M – N – P)/C

in which,

“M” is equal to the corporation’s adjusted gross federal investment tax credit at the end of the year,

  “N” is the amount, if any, by which “Q” exceeds “R” where,

“Q” is the amount, if any, by which the corporation’s adjusted gross federal investment tax credit at the end of the year exceeds the amount that would be the corporation’s adjusted gross federal investment tax credit at the end of the following taxation year if the definition of “investment tax credit” in subsection 127 (9) of the Federal Act were read,

(a) without reference to paragraph (a.1),

(b) without reference to the words “at the end of the year or” in paragraph (e),

(c) without reference to the words “in the year or” in paragraph (e.1), and 

(d) without reference to the words “in the year or” in paragraph (e.2), and

“R” is the sum of,

(a) all amounts deducted by the corporation under subsection 127 (5) or (6) of the Federal Act for the year in respect of the corporation’s adjusted gross federal investment tax credit at the end of the year, and

(b) all amounts deemed to have been deducted by the corporation under subsection 127 (5) of the Federal Act for the year by operation of subsection 127.1 (3) of the Federal Act in respect of the corporation’s adjusted gross federal investment tax credit at the end of the year,

“P” is the sum of,

(a) all amounts deducted by the corporation under subsection 127 (5) or (6) of the Federal Act for a previous taxation year in respect of the corporation’s adjusted gross federal investment tax credit at the end of the year, and

(b) all amounts deemed to have been deducted by the corporation under subsection 127 (5) of the Federal Act for a previous taxation year by operation of subsection 127.1 (3) of the Federal Act in respect of the corporation’s adjusted gross federal investment tax credit at the end of the year, and

  “C” is the corporation’s relevant Ontario allocation factor.

2007, c. 11, Sched. A, s. 49 (7).

Section Amendments with date in force (d/m/y)

2008, c. 7, Sched. S, s. 11 (1, 2) - 01/01/2008

Amount of tax credit

50. (1) For the purposes of subsection 47 (3), the amount that may be deducted in computing a specified corporation’s tax payable under this Division for a taxation year that includes a part of the corporation’s amortization period is determined in the following manner:

1. If a regulation is in force limiting the amount of the tax credit that may be deducted under this subdivision in computing a specified corporation’s tax payable under this Division for a taxation year, the amount of the specified corporation’s tax credit for the year is the sum of,

i. the lesser of,

A. the maximum amount of the tax credit determined in respect of the corporation under that regulation for the year, and

B. the amount determined in respect of the corporation for the year under subsection (2), and

ii. the amount, if any, of the corporation’s unused credit balance that is deductible for the year under subsection (3).

2. If no regulation described in paragraph 1 is in force in respect of the corporation for the year, the amount of the specified corporation’s tax credit for the year is the sum of,

i. the amount determined in respect of the corporation for the year under subsection (2), and

ii. the amount, if any, of the corporation’s unused credit balance that is deductible for the year under subsection (3).  2007, c. 11, Sched. A, s. 50 (1).

Same

(2) For the purposes of sub-subparagraph 1 i B and subparagraph 2 i of subsection (1), the amount determined in respect of the specified corporation for a taxation year is the lesser of “A” and “B” where,

  “A” is the amount calculated using the formula,

C × D/E

in which,

“C” is the amount of tax that would be payable by the corporation for the year under this Division if that amount were determined without reference to section 39, subsection 47 (3), and sections 53 and 53.2,

“D” is the number of days in the corporation’s amortization period that are in the taxation year, and

“E” is the number of days in the taxation year, and

  “B” is,

(a) if the corporation’s amortization period ends in the taxation year and is shorter than the corporation’s reference period because of subclause 46 (2) (b) (ii), (iii) or (vi) or subsection 46 (3), the amount calculated using the formula,

F/G × (H – I) × J

in which,

“F” is the number of days in the corporation’s reference period that are after the beginning of the taxation year,

“G” is the number of days in the corporation’s reference period,

“H” is the corporation’s total Ontario balance at the end of the taxation year,

“I” is the corporation’s total federal balance at the end of the taxation year, and

“J” is the corporation’s adjusted basic rate for the taxation year, or

(b) in any other case, the amount that would be determined under clause (a) if “F” were the number of days in the corporation’s amortization period that are in the taxation year.

2007, c. 11, Sched. A, s. 50 (2); 2009, c. 34, Sched. U, s. 10.

Deduction in respect of unused credit balance

(3) For the purposes of subparagraphs 1 ii and 2 ii of subsection (1), the amount of a specified corporation’s unused credit balance that is deductible in computing its tax payable under this Division for a taxation year is the lesser of,

(a) the amount, if any, by which the amount of “A” in subsection (2) in respect of the corporation for the year exceeds the amount determined in respect of the corporation for the year under subparagraph 1 i or 2 i of subsection (1), whichever is applicable; and

(b) the corporation’s unused credit balance for the year.  2007, c. 11, Sched. A, s. 50 (3).

Unused credit balance

(4) For the purposes of clause (3) (b), a corporation’s unused credit balance for a taxation year that includes any part of the corporation’s amortization period is the amount calculated using the formula, 

K + L – M

in which,

  “K” is the amount, if any, by which the sum of all amounts each of which is the amount, if any, by which “N” exceeds “P” where,

“N” is the amount of “B” under subsection (2) in respect of the corporation for a previous taxation year that ended after December 31, 2008 and that was in the corporation’s amortization period, and

“P” is the amount determined under subparagraph 1 i or 2 i of subsection (1), as the case may be, in respect of the corporation for that previous year,

  “L”   is the sum of all amounts each of which is required to be added under subparagraph 3 iv or 4 iv of subsection 51 (1) in computing the corporation’s unused credit balance for the taxation year or a previous taxation year, and

“M” is the sum of all amounts each of which is an amount determined under subsection (3) in respect of the corporation for a previous taxation year.

2007, c. 11, Sched. A, s. 50 (4).

Section Amendments with date in force (d/m/y)

2009, c. 34, Sched. U, s. 10 - 01/01/2009

Rules and adjustments if amalgamation or winding-up

51. (1) The following rules apply for the purposes of this subdivision:

1. A new corporation formed as a result of an amalgamation or merger that occurs at the new corporation’s transition time is deemed to be the same corporation as, and a continuation of, each of its predecessor corporations,

i. that is not exempt from tax under Part I of the Federal Act for its last taxation year ending immediately before the new corporation’s transition time, and

ii. that has a permanent establishment in Ontario immediately before the new corporation’s transition time.

2. Except as provided in paragraph 1, a new corporation that is formed as a result of an amalgamation or merger at or after the new corporation’s transition time is deemed to be a different corporation from each of its predecessor corporations.

3. If a new corporation is formed as a result of an amalgamation or merger of two or more corporations that is an eligible amalgamation in respect of at least one of the predecessor corporations (referred to as an “eligible predecessor corporation”),

i. the new corporation shall, after the eligible amalgamation, be deemed to be a specified corporation,

ii. the sum of all amounts each of which is an amount determined under subsection (2) in respect of an eligible predecessor corporation shall be added immediately after the eligible amalgamation to the amount of the new corporation’s total federal balance,

iii. the sum of all amounts each of which is an amount determined under subsection (3) in respect of an eligible predecessor corporation shall be added immediately after the eligible amalgamation to the amount of the new corporation’s total Ontario balance,

iv. there shall be added in computing the new corporation’s unused credit balance for a taxation year the sum of all amounts each of which is the amount that would have been the unused credit balance of an eligible predecessor corporation for the taxation year beginning at the time of the eligible amalgamation if the eligible predecessor corporation had had a taxation year beginning at that time, and

v. there shall be added in computing the new corporation’s federal SR & ED transitional balance the sum of all amounts each of which is the amount that would have been the federal SR & ED transitional balance of an eligible predecessor corporation at the time of the eligible amalgamation if the eligible predecessor corporation had had a taxation year beginning at that time.

3.1 If a new corporation is formed as a result of an amalgamation or merger to which paragraph 3 does not apply, and the amalgamation or merger would be an eligible amalgamation in respect of at least one of the predecessor corporations (referred to as an “eligible predecessor corporation”) if clauses (e) to (g) of the definition of “eligible amalgamation” in subsection 46 (1) were not taken into account,

i. the new corporation is deemed to be a specified corporation, and

ii. there shall be added in computing the new corporation’s federal SR & ED transitional balance the sum of all amounts each of which is the amount that would have been the federal SR & ED transitional balance of an eligible predecessor corporation at the time of the amalgamation or merger if the eligible predecessor corporation had had a taxation year beginning at that time.

4. If property of a subsidiary corporation is distributed in the course of an eligible post-2008 winding-up to its parent corporation,

i. the parent corporation is deemed, after the completion time of the winding-up, to be a specified corporation,

ii. the subsidiary corporation is deemed not to have any taxation year that begins after the completion time of the winding-up,

iii. the amount determined under subsection (4) shall be added in computing the amount of the parent corporation’s total federal balance and the amount determined under subsection (5) shall be added in computing the amount of the parent corporation’s total Ontario balance after the completion time of the winding-up,

iv. in determining the parent corporation’s unused credit balance after the completion time of the winding-up, there shall be included the amount that would have been the subsidiary corporation’s unused credit balance for the taxation year immediately following the year that includes the completion time if the subsidiary corporation had continued in existence and subparagraph ii were not taken into account, and

v. there shall be added in determining the parent corporation’s federal SR & ED transitional balance after the completion time of the winding-up the amount that would be the subsidiary corporation’s federal SR & ED transitional balance immediately after the completion time if the subsidiary corporation had continued to exist.

4.1 If property of a subsidiary corporation is distributed in the course of a winding-up to which paragraph 4 does not apply, and the winding-up would be an eligible post-2008 winding-up if clause (e) of the definition of “eligible post-2008 winding-up” in subsection 46 (1) were not taken into account,

i. the parent corporation is deemed, after the completion time of the winding-up, to be a specified corporation, and

ii. there shall be added in computing the parent corporation’s federal SR & ED transitional balance after the completion time of the winding-up the amount that would be the subsidiary corporation’s federal SR & ED transitional balance immediately after the completion time if the subsidiary corporation had continued to exist.

5. If property of a subsidiary corporation is distributed in the course of an eligible pre-2009 winding-up to its parent corporation in circumstances to which clause (b) of the definition of “eligible pre-2009 winding-up” in subsection 46 (1) applies,

i. the parent corporation is deemed, after the completion time of the winding-up, to be a specified corporation if the subsidiary corporation had a permanent establishment in Ontario at any time in the taxation year of the subsidiary corporation ending at the completion time, and

ii. the amount determined under subsection (6) shall be added immediately after the completion time in computing the amount of the parent corporation’s total federal balance, and the amount determined under subsection (7) shall be added immediately after the completion time in computing the amount of the parent corporation’s total Ontario balance.  2007, c. 11, Sched. A, s. 51 (1); 2008, c. 7, Sched. S, s. 12 (1).

Amount to be added to total federal balance, eligible amalgamation

(2) For the purposes of subparagraph 3 ii of subsection (1), the amount is calculated using the formula,

A × (1 – B/C)

in which,

  “A” is the total federal balance of the eligible predecessor corporation, determined immediately before the eligible amalgamation,

  “B” is the number of days in the eligible predecessor corporation’s reference period that are before the eligible amalgamation, and

  “C” is the total number of days in the eligible predecessor corporation’s reference period.

2007, c. 11, Sched. A, s. 51 (2).

Amount to be added to total Ontario balance, eligible amalgamation

(3) For the purposes of subparagraph 3 iii of subsection (1), the amount is calculated using the formula,

D × (1 – B/C)

in which,

  “D” is the total Ontario balance of the eligible predecessor corporation, determined immediately before the eligible amalgamation, and

“B” and “C” have the meanings assigned by subsection (2).

2007, c. 11, Sched. A, s. 51 (3).

Amount to be added to total federal balance, eligible post-2008 winding-up

(4) For the purposes of subparagraph 4 iii of subsection (1), the amount to be added to the parent corporation’s total federal balance is calculated using the formula,

E × F/G × H/I

in which,

  “E” is the subsidiary corporation’s total federal balance at the completion time of the winding-up,

“F” is the number of days in the subsidiary corporation’s reference period that are after the end of the subsidiary corporation’s taxation year ending at the completion time,

  “G” is the total number of days in the subsidiary corporation’s reference period,

  “H”   is the total number of days in the parent corporation’s reference period, and

“I” is the number of days in the parent corporation’s reference period that are after the beginning of the parent corporation’s taxation year that includes the time that is immediately after the completion time.

2007, c. 11, Sched. A, s. 51 (4).

Amount to be added to total Ontario balance, eligible post-2008 winding-up

(5) For the purposes of subparagraph 4 iii of subsection (1), the amount to be added to the parent corporation’s total Ontario balance is calculated using the formula,

J × F/G × H/I

in which,

“J” is the subsidiary corporation’s total Ontario balance at the completion time of the winding-up, and

“F”, “G”, “H” and “I” have the meanings assigned by subsection (4).

2007, c. 11, Sched. A, s. 51 (5).

Amount to be added to total federal balance, eligible pre-2009 winding-up

(6) For the purposes of subparagraph 5 ii of subsection (1), the amount to be added to the parent corporation’s total federal balance is the subsidiary corporation’s total federal balance immediately after the completion time, determined,

(a) as if the subsidiary corporation continued to exist;

(b) as if the subsidiary corporation’s next taxation year ending after that time ended no earlier than January 1, 2009; and

(c) as if any property that is deemed under paragraph 88 (1) (a.2) of the Federal Act not to have been disposed of had been retained until the completion time.  2007, c. 11, Sched. A, s. 51 (6); 2008, c. 7, Sched. S, s. 12 (2).

Amount to be added to total Ontario balance, eligible pre-2009 winding-up

(7) For the purposes of subparagraph 5 ii of subsection (1), the amount to be added to the parent corporation’s total Ontario balance is the subsidiary corporation’s total Ontario balance immediately after the completion time, determined,

(a) as if the subsidiary corporation continued to exist;

(b) as if the subsidiary corporation’s next taxation year ending after that time ended no earlier than January 1, 2009; and

(c) as if any property that is deemed under paragraph 88 (1) (a.2) of the Federal Act not to have been disposed of had been retained until the completion time.  2007, c. 11, Sched. A, s. 51 (7); 2008, c. 7, Sched. S, s. 12 (3).

Section Amendments with date in force (d/m/y)

2008, c. 7, Sched. S, s. 12 (1-3) - 01/01/2008

Treatment of specified pre-2009 transfers

Definitions

52. (1) In this section,

“adjusted cost” means,

(a) with respect to property of a transferee that is eligible capital property for the purposes of the Federal Act, three-quarters of the cost amount to the transferee of the property, as determined for the purposes of the Federal Act or the Corporations Tax Act, as the case may be, and

(b) with respect to any other property of the transferee, the cost amount to the transferee of the property, as determined for the purposes of the Federal Act or the Corporations Tax Act, as the case may be; (“coût rajusté”)

“adjusted proceeds” means,

(a) with respect to property of a transferor that is eligible capital property for the purposes of the Federal Act, three-quarters of the transferor’s proceeds of disposition in respect of the property, as determined for the purposes of the Federal Act or the Corporations Tax Act, as the case may be, and

(b) with respect to any other property of the transferor, the transferor’s proceeds of disposition in respect of the property, as determined for the purposes of the Federal Act or the Corporations Tax Act, as the case may be; (“produit rajusté”)

“relevant time” means, in respect of a disposition of property, the time that is immediately after the disposition; (“moment pertinent”)

“transferee” means a corporation that receives a property on a disposition by a transferor; (“cessionnaire”)

“transferor” means a corporation that disposes of a property. (“cédant”)  2007, c. 11, Sched. A, s. 52 (1); 2008, c. 7, Sched. S, s. 13 (1).

Addition to total federal balance and total Ontario balance

(2) If all of the conditions set out in subsection (3) are satisfied, a transferee that receives property on a disposition by a transferor shall,

(a) add the amount of the transferor’s adjusted proceeds in respect of the property, as determined under the Federal Act, in determining its total federal balance at the relevant time; and

(b) add the amount of the transferor’s adjusted proceeds in respect of the property, as determined under the Corporations Tax Act, in determining its total Ontario balance at the relevant time.  2007, c. 11, Sched. A, s. 52 (2); 2008, c. 7, Sched. S, s. 13 (2).

Same

(3) For the purposes of subsection (2), the conditions are as follows:

1. The transferee and the transferor do not deal at arm’s length with each other at the time of the disposition.

2. The transferee was a specified corporation at its transition time.

3. The relevant time is after the transferee’s transition time.

4. If the disposition is in respect of an eligible pre-2009 winding-up and the transferor is the subsidiary corporation of the transferee, the relevant time is not after the completion time.

5. If the property had been received by the transferee immediately before its transition time, the transaction would have resulted in an increase in one or both of,

i. the amount otherwise determined of the transferee’s total federal balance at its transition time, determined as if no election had been made under clause (b) of the definition of “I” in paragraph 1 of subsection 48 (4), and

ii. the amount otherwise determined of the transferee’s total Ontario balance at its transition time.

6. The relevant time is included in a taxation year of the transferor that ends before January 1, 2009 during which the transferor has a permanent establishment in Ontario.

7. The proceeds of disposition under the Federal Act do not equal the proceeds of disposition under the Corporations Tax Act.  2007, c. 11, Sched. A, s. 52 (3).

Deduction from total federal balance and total Ontario balance

(4) If all of the conditions set out in subsection (5) are satisfied, a transferor that disposes of property to a transferee shall,

(a) subtract the property’s adjusted cost to the transferee at the relevant time, as determined under the Federal Act, in determining its total federal balance at the relevant time; and

(b) subtract the property’s adjusted cost to the transferee at the relevant time, as determined under the Corporations Tax Act, in determining its total Ontario balance at the relevant time.  2007, c. 11, Sched. A, s. 52 (4); 2008, c. 7, Sched. S, s. 13 (3).

Same

(5) For the purposes of subsection (4), the conditions are as follows:

1. The transferee and the transferor do not deal at arm’s length with each other at the time of the disposition.

2. The transferor was a specified corporation at its transition time.

3. The relevant time is after the transferor’s transition time.

4. If the disposition had been made by the transferor immediately before its transition time, the transaction would have resulted in a decrease in one or both of,

i. the amount otherwise determined of the transferor’s total federal balance at its transition time, determined as if no election had been made under clause (b) of the definition of “I” in paragraph 1 of subsection 48 (4), and

ii. the amount otherwise determined of the transferor’s total Ontario balance at its transition time.

5. The relevant time is included in a taxation year of the transferee that ends before January 1, 2009 during which the transferee has a permanent establishment in Ontario.

6. The cost amount under the Federal Act of the property to the transferee immediately after the disposition does not equal its cost amount under the Corporations Tax Act.  2007, c. 11, Sched. A, s. 52 (5).

Section Amendments with date in force (d/m/y)

2008, c. 7, Sched. S, s. 13 (1-3) - 01/01/2008

Subdivision e — Corporate Minimum Tax Credit

Corporate minimum tax credit

53. (1) A corporation may, in computing the amount of its tax payable under this Division for a taxation year, deduct a corporate minimum tax credit equal to the least of the following amounts:

1. The amount of the corporation’s corporate minimum tax account for the year.

2. The amount, if any, by which “A” exceeds “B” where,

“A” is the amount that would be the corporation’s tax payable under this Division for the year if this Act were read without reference to this section, and

“B” is the total amount that would be deemed by subsection 84 (1) to be paid on account of the corporation’s tax payable under this Act for the year if that subsection were read without reference to paragraph 1.

3. The amount, if any, by which “A” exceeds “C” where,

“A” has the same meaning as in paragraph 2, and

“C” is the amount equal to,

(a) in the case of a corporation that is not a life insurance corporation, the amount, if any, by which the corporation’s corporate minimum tax for the year determined under Division C, before any deduction permitted under subsection 56 (2), exceeds the amount, if any, of the corporation’s foreign tax credit for the year for the purposes of that Division as determined under section 59, or

(b) in the case of a life insurance corporation, the greater of,

(i)  the corporation’s corporate minimum tax for the year determined under Division C, before any deduction permitted under subsection 56 (2), and

(ii)  the amount determined to be “A” in subsection 63 (1).  2007, c. 11, Sched. A, s. 53 (1).

Corporate minimum tax account

(2) The amount of a corporation’s corporate minimum tax account for a taxation year is determined as follows:

1. If the corporation is not a life insurance corporation, the amount of the corporation’s corporate minimum tax account for the year is the sum of all amounts each of which is,

i. the amount of corporate minimum tax payable by the corporation under Part II.1 of the Corporations Tax Act for a previous taxation year that ends before March 23, 2007 and is not earlier than the designated taxation year determined under subsection (3), to the extent that the tax has not been deducted under section 43.1 of the Corporations Tax Act or this section in determining the amount of tax payable by the corporation for a previous taxation year under Part II of the Corporations Tax Act or this Division, or

ii. the amount of corporate minimum tax payable by the corporation under Part II.1 of the Corporations Tax Act or Division C of this Part for a previous taxation year that ends after March 22, 2007 and is not earlier than the 20th taxation year before the taxation year, to the extent that the tax has not been deducted under section 43.1 of the Corporations Tax Act or this section in determining the amount of tax payable by the corporation for a previous taxation year under Part II of the Corporations Tax Act or this Division.

2. If the corporation is a life insurance corporation, the amount of the corporation’s corporate minimum tax account for the year is the sum of all amounts each of which is,

i. the amount determined under subsection (4) in respect of a previous taxation year that ends before March 23, 2007 and is not earlier than the designated taxation year determined under subsection (3), to the extent that the amount has not been deducted under section 43.1 of the Corporations Tax Act or this section in determining the amount of tax payable by the corporation for a previous taxation year under Part II of the Corporations Tax Act or this Division, or

ii. the amount determined under subsection (4) in respect of a previous taxation year that ends after March 22, 2007 and is not earlier than the 20th taxation year before the taxation year, to the extent that the amount has not been deducted under section 43.1 of the Corporations Tax Act or this section in determining the amount of tax payable by the corporation for a previous taxation year under Part II of the Corporations Tax Act or this Division.  2007, c. 11, Sched. A, s. 53 (2).

Designated taxation year

(3) For the purposes of subparagraphs 1 i and 2 i of subsection (2), the designated taxation year of a corporation in respect of a particular taxation year of the corporation is the previous taxation year of the corporation that is the later of,

(a) the 20th taxation year of the corporation before the particular taxation year; and

(b) the 10th taxation year of the corporation before its first taxation year ending after December 31, 2008.  2007, c. 11, Sched. A, s. 53 (3).

Life insurance corporations

(4) For the purposes of subparagraphs 2 i and ii of subsection (2), the amount determined in respect of a previous taxation year is the amount, if any, by which “A.1” exceeds “B.1” where,

“A.1” is,

(a) if the previous year ended after December 31, 2008, the greater of,

(i) the corporation’s corporate minimum tax for the previous year, as determined under Division C of this Part, before any deduction permitted under subsection 56 (2), and

(ii) the amount determined as “A” in subsection 63 (1) in respect of the corporation for the previous year, or

(b) if the previous year ended before January 1, 2009, the corporation’s corporate minimum tax for the previous year, as determined under Part II.1 of the Corporations Tax Act, before any deduction permitted under subsection 57.3 (2) of that Act, and

“B.1” is,

(a) if the previous year ended after December 31, 2008, the amount of tax payable for that year under this Division after all deductions from tax to which the corporation is entitled for that year other than a deduction under this section, or

(b) if the previous year ended before January 1, 2009, the greater of,

(i) the amount that would be determined in respect of the corporation for that year under clause 74.1 (1) (a) of the Corporations Tax Act, and

(ii) the amount of tax payable for that year under Part II of the Corporations Tax Act after all deductions from tax to which the corporation is entitled for that year other than a deduction permitted under any of sections 43.1 to 43.13 of the Corporations Tax Act.  2007, c. 11, Sched. A, s. 53 (4).

Same

(5) The following rules apply in determining the amount of a corporation’s corporate minimum tax account for a taxation year:

1. Tax payable under Part II.1 of the Corporations Tax Act or under Divisions C and D of this Part for a particular taxation year that is otherwise included in the account is deductible before any tax payable under that Part or those Divisions for later years.

2. If there has been an amalgamation of corporations to which section 87 of the Federal Act applies, the amalgamated corporation is deemed to be the same corporation as and a continuation of each predecessor corporation for the purposes of determining an amount of tax under Part II.1 of the Corporations Tax Act or Division C or D of this Part that was,

i. deducted under section 43.1 of the Corporations Tax Act or this section, or

ii. payable by the amalgamated corporation for a previous taxation year.

3. If the rules in subsection 88 (1) of the Federal Act apply to the winding-up of a subsidiary corporation, its parent corporation is deemed to be the same corporation as and a continuation of the subsidiary corporation for the purposes of determining an amount of tax under Part II.1 of the Corporations Tax Act or Division C or D of this Part that was,

i. deducted under section 43.1 of the Corporations Tax Act or this section, or

ii. payable by the parent corporation for a previous taxation year.

4. Subject to paragraphs 5 and 6, if the conditions described in paragraphs 142.7 (12) (a) and (b) of the Federal Act apply in respect of the winding-up of a Canadian affiliate of an entrant bank (within the meaning of subsection 142.7 (1) of that Act) or in respect of the dissolution of a Canadian affiliate of an entrant bank under a dissolution order (within the meaning of subsection 142.7 (12) of that Act), the entrant bank is deemed to be the same corporation as, and a continuation of, the Canadian affiliate for the purposes of determining an amount of tax under Part II.1 of the Corporations Tax Act or Division C or D of this Part that was,

i. deducted under section 43.1 of the Corporations Tax Act or this section, or

ii. payable by the entrant bank for a previous taxation year.

5. Paragraph 4 does not apply unless,

i. before the later of the date determined under paragraph 142.7 (11) (b) of the Federal Act and June 14, 2005,

A. the entrant bank and the Canadian affiliate jointly elected that paragraph 4 of this subsection or paragraph 4 of subsection 43.1 (4) of the Corporations Tax Act applies, if the Canadian affiliate had not been wound up or dissolved before the election was made, or

B. the entrant bank elected that paragraph 4 of this subsection or paragraph 4 of subsection 43.1 (4) of the Corporations Tax Act applies, if the Canadian affiliate had been wound up or dissolved and had ceased to exist before the election was made, or

ii. the entrant bank and the Canadian affiliate jointly elected under paragraph 142.7 (12) (c) of the Federal Act to have section 142.7 of that Act apply.

6. Paragraph 4 applies only to,

i. taxation years for which an election by the affiliate and bank under paragraph 142.7 (12) (c) of the Federal Act applies or to which section 142.7 of that Act would have applied if an election had been made under paragraph 142.7 (12) (c) of that Act, and 

ii. previous taxation years in which a corporate minimum tax credit was earned under section 43.1 of the Corporations Tax Act or under this section.  2007, c. 11, Sched. A, s. 53 (5).

Acquisition of control

(6) Except as permitted under subsection (7), no amount is deductible under this section by a corporation for a taxation year ending after control of the corporation is acquired by a person or group of persons to the extent the amount is in respect of the corporation’s tax payable under Part II.1 of the Corporations Tax Act or Division C or D of this Part for a taxation year ending before the acquisition of control.  2007, c. 11, Sched. A, s. 53 (6).

Exception

(7) If a corporation carried on a business in a taxation year ending before control of the corporation was acquired by a person or group of persons, an amount in respect of its tax payable under Part II.1 of the Corporations Tax Act or Division C or D of this Part for that year is deductible by the corporation for a taxation year ending after the acquisition of control, but only if the same business was carried on by the corporation for profit or with a reasonable expectation of profit throughout that year and only to the extent of the amount calculated using the formula,

D × (E – F)/G

in which,

  “D” is the amount determined under paragraph 3 of subsection (1) in respect of the corporation for that year,

  “E” is the total of the corporation’s income for that year from that business and, if properties were sold, leased, rented or developed or services were rendered in the course of carrying on that business before that time, its income for that year from any other business substantially all of the income of which was derived from the sale, leasing, rental or development, as the case may be, of similar properties or the rendering of similar services,

“F” is the total of all amounts each of which is an amount deducted under paragraph 111 (1) (a) or (d) of the Federal Act in computing its taxable income or taxable income earned in Canada, as the case may be, for that year in respect of a non-capital loss or a farm loss, as the case may be, for a taxation year in respect of that business or the other business, and

  “G” is the greater of,

(a) the amount, if any, by which “E” exceeds “F”, and

(b) the corporation’s taxable income or taxable income earned in Canada, as the case may be, for that year.

2007, c. 11, Sched. A, s. 53 (7).

Subdivision f — Political Contributions Tax Credit

Definitions

53.1 (1) In this subdivision,

“Chief Electoral Officer” means the Chief Electoral Officer appointed under the Election Act; (“directeur général des élections”)

“contribution” means a contribution for the purposes of the Election Finances Act to a registered candidate, registered constituency association or registered party; (“contribution”)

“registered candidate” means a candidate within the meaning of the Election Finances Act who is registered under that Act; (“candidat inscrit”)

“registered constituency association” means a constituency association within the meaning of the Election Finances Act that is registered under that Act; (“association de circonscription inscrite”)

“registered party” means a political party registered under the Election Finances Act. (“parti inscrit”)  2009, c. 18, Sched. 28, s. 8.

Eligible contribution

(2) A contribution made by a corporation during a taxation year to a registered candidate, registered constituency association or registered party is an eligible contribution for the purposes of this subdivision if the receipt required by the Chief Electoral Officer under the Election Finances Act to be issued to the corporation for the contribution is filed with the Ontario Minister with the return required to be filed under this Act for the taxation year.  2009, c. 18, Sched. 28, s. 8.

Eligible contribution balance

(3) The eligible contribution balance of a corporation for a taxation year for the purposes of this subdivision is the amount, if any, calculated using the formula,

A – (B + C)

in which,

  “A” is the sum of all eligible contributions each of which was made by the corporation in the taxation year or in any of the previous 20 taxation years of the corporation,

  “B” is the sum of all eligible contributions each of which,

(a) is included in “A”, and

(b) was deducted in computing the corporation’s taxable income for the purposes of Part II of the Corporations Tax Act for a previous taxation year, and

  “C” is the amount determined in respect of the corporation for the year under subsection (4).

2009, c. 18, Sched. 28, s. 8.

Same

(4) For the purposes of subsection (3), the amount of “C” in respect of a corporation for a taxation year is the sum of all amounts each of which is the amount, if any, determined using the formula,

D/E

in which,

  “D” is the amount of any tax credit deducted under section 53.2 for one of the corporation’s previous 20 taxation years in respect of an eligible contribution included in determining the amount of “A” in subsection (3) for the year, and

  “E” is the corporation’s basic rate of tax for the previous taxation year.

2009, c. 18, Sched. 28, s. 8; 2009, c. 34, Sched. U, s. 11.

Section Amendments with date in force (d/m/y)

2009, c. 18, Sched. 28, s. 8 - 01/01/2009; 2009, c. 34, Sched. U, s. 11 - 01/01/2009

Tax credit calculation

53.2 There may be deducted from the tax otherwise payable by a corporation under this Division for a taxation year the least of,

(a) the product determined by multiplying the corporation’s basic rate of tax for the year by the corporation’s eligible contribution balance for the year;

(b) the amount determined by,

(i) multiplying $15,000 by the indexation factor determined under section 40.1 of the Election Finances Act in respect of the calendar year in which the taxation year ends, and rounding the result to the nearest dollar, and

(ii) multiplying the amount determined under subclause (i) by the corporation’s basic rate of tax for the year; and

(c) the corporation’s tax payable under this Division for the year, determined without reference to this section and sections 39 and 53.  2009, c. 18, Sched. 28, s. 8.

Section Amendments with date in force (d/m/y)

2009, c. 18, Sched. 28, s. 8 - 01/01/2009

Division C — Corporate Minimum Tax

Interpretation

Definitions

54. (1) In this Division,

“associated corporation”, of another corporation for a taxation year, means a corporation that is associated at any time in the year with the other corporation, whether or not either of them is subject to tax under this Act; (“société associée”)

“excluded mark-to-market property” means, in respect of a corporation, property, other than specified mark-to-market property, held by the corporation, and in respect of which,

(a) any mark-to-market changes recognized under generally accepted accounting principles from the beginning to the end of a taxation year of the corporation would be reflected in the calculation of the corporation’s income for the taxation year for the purposes of Division B of Part III if the property were held by the corporation throughout the taxation year, or

(b) if the property is denominated in a foreign currency, any change under generally accepted accounting principles in the value of that currency relative to Canadian currency from the beginning to the end of a taxation year of the corporation would be reflected in the calculation of the corporation’s income for the taxation year for the purposes of Division B of Part III if the property were held by the corporation throughout the taxation year; (“bien évalué à la valeur du marché qui est exclu”)

“fair value” means, in respect of property of a corporation, the amount determined in accordance with generally accepted accounting principles that is the fair value of the property to the corporation, expressed in Canadian currency; (“juste valeur”)

“mark-to-market changes” means, with respect to a specified mark-to-market property or excluded mark-to-market property held by a corporation, changes in the fair value of the property that occur after the corporation acquires the property and before the corporation disposes of the property; (“variation de l’évaluation à la valeur du marché”)

“relevant authority” means, with respect to a life insurance corporation,

(a) the Superintendent of Financial Institutions, if the life insurance corporation is required by law to report to the Superintendent of Financial Institutions, or

(b) the authority in the province under the laws of which the life insurance corporation is incorporated that performs a similar function to the Superintendent of Financial Institutions, in any other case; (“autorité compétente”)

“specified mark-to-market property” means, in respect of a corporation, property, other than excluded mark-to-market property, held by the corporation and in respect of which,

(a) any mark-to-market changes recognized under generally accepted accounting principles from the beginning to the end of a taxation year of the corporation would be reflected in the calculation of the corporation’s net income for the taxation year for the purposes of this Division if the property were held by the corporation throughout the taxation year, or

(b) if the property is denominated in a foreign currency, any change under generally accepted accounting principles in the value of that currency relative to Canadian currency from the beginning to the end of a taxation year of the corporation would be reflected in the calculation of the corporation’s net income for the taxation year for the purposes of this Division if the property were held by the corporation throughout the taxation year; (“bien évalué à la valeur du marché qui est déterminé”)

“total assets” means, subject to subsection (1.1), the amount that would be shown on a corporation’s balance sheet at the end of a taxation year as the corporation’s total assets if the balance sheet were prepared in accordance with generally accepted accounting principles, except that the consolidation and equity methods of accounting are not to be used; (“actif total”)

“total revenue” means, with respect to a corporation for a taxation year, the amount that would be the corporation’s gross revenue for the year as determined in accordance with generally accepted accounting principles, except that the consolidation and equity methods of accounting are not used. (“recettes totales”)  2007, c. 11, Sched. A, s. 54 (1); 2008, c. 7, Sched. S, s. 14 (1, 2).

Adjustment to total assets re: specified mark-to-market property

(1.1) The amount in respect of a specified mark-to-market property to be included in the total assets of a corporation for a taxation year for the purposes of this Division is determined without reference to mark-to-market changes with respect to the specified mark-to-market property.  2008, c. 7, Sched. S, s. 14 (3).

Net income or net loss

(2) For the purposes of this Division, the net income or net loss of a corporation for a taxation year is,

(a) in the case of a corporation resident in Canada, other than a life insurance corporation or a bank, the amount that would be its net income or net loss, before any income taxes, for the fiscal period coinciding with the taxation year, as determined in accordance with generally accepted accounting principles, except that the consolidation and equity methods of accounting are not used;

(b) in the case of a corporation not resident in Canada, other than a life insurance corporation or a bank, the amount that would be its net income or net loss before any income taxes for the fiscal period coinciding with the taxation year, as determined in accordance with generally accepted accounting principles, except that the consolidation and equity methods of accounting are not used, from,

(i) carrying on a business in Canada, and

(ii) property situated in Canada or used in carrying on a business in Canada, including any gains or losses from a disposition of the property or an interest in it;

(c) in the case of a life insurance corporation resident in Canada during the year that carries on business both in and outside Canada during the year, the amount calculated using the formula,

A/B × C

in which,

“A” is the amount of the life insurance corporation’s Canadian reserve liabilities as at the end of the year, 

“B”   is the amount of the life insurance corporation’s total reserve liabilities as at the end of the year, and 

“C”   is the amount of the life insurance corporation’s net income or net loss for the fiscal period coinciding with the taxation year, before the deduction of any income taxes and any tax payable under section 63, as reported in its annual report accepted by the relevant authority or, if the fiscal period does not coincide with the taxation year, a report prepared for the taxation year in accordance with the principles required by the relevant authority, adjusted if necessary so that the consolidation and equity methods of accounting are not used;

(d) in the case of a life insurance corporation other than a corporation referred to in clause (c), the amount of the life insurance corporation’s net income or net loss for the fiscal period coinciding with the taxation year, before the deduction of any income taxes and any tax payable under section 63 as reported in its annual report accepted by the relevant authority or, if the fiscal period does not coincide with the taxation year, a report prepared for the taxation year in accordance with the principles required by the relevant authority, adjusted if necessary so that the consolidation and equity methods of accounting are not used; or

(e) in the case of a bank, the amount of its net income or net loss for the fiscal period coinciding with the taxation year, before any income taxes, as reported in its annual report accepted by the Superintendent of Financial Institutions under the Bank Act (Canada), or if the fiscal period does not coincide with the taxation year, a report prepared for the taxation year in accordance with the principles required by the Superintendent of Financial Institutions, adjusted if necessary so that the consolidation and equity methods of accounting are not used.

2007, c. 11, Sched. A, s. 54 (2).

Total revenue of corporate partner

(3) If a corporation is a partner in a partnership at the end of a fiscal period of the partnership that ends in a taxation year of the corporation, the corporation’s total revenue for the taxation year for the purposes of this Division includes the product of,

(a) the corporation’s percentage share in the partnership at the end of that fiscal period; and

(b) the total revenue of the partnership for that fiscal period.  2007, c. 11, Sched. A, s. 54 (3).

Total assets of corporate partner

(4) If a corporation is a partner in a partnership at the end of the last fiscal period of the partnership that ends in a taxation year of the corporation, the amount of the corporation’s total assets for the taxation year for the purposes of this Division includes the product of,

(a) the corporation’s percentage share in the partnership at the end of that fiscal period; and

(b) the total assets of the partnership at the end of that fiscal period.  2007, c. 11, Sched. A, s. 54 (4).

Partnership

(5) Subject to subsection (6), for the purposes of this Division,

(a) a partnership’s net income or net loss and its total assets and total revenue shall be determined in accordance with generally accepted accounting principles, except that the consolidation and equity methods of accounting shall not be used;

(b) a corporation’s percentage share in a partnership at the end of a fiscal period is the corporation’s direct or indirect percentage interest in the income or loss of the partnership for the fiscal period which shall, if the partnership has no income or loss for the fiscal period, be the percentage that would reasonably be considered to represent the corporation’s direct or indirect percentage interest in the income of the partnership for the fiscal period if the partnership’s income for the fiscal period were $1 million; and

(c) if a corporation has an indirect interest in the partnership at the end of a fiscal period through one or more other partnerships, the fiscal period is deemed to end in a taxation year of the corporation to which it is reasonable to expect that the partnership’s income or loss for the fiscal period would be indirectly allocated under the Federal Act.  2007, c. 11, Sched. A, s. 54 (5); 2008, c. 7, Sched. S, s. 14 (4).

Exception for total assets

(6) The amount in respect of a specified mark-to-market property to be included in the total assets of a partnership for a fiscal period for the purposes of applying subsection (4) to a corporation for a taxation year is determined without reference to any mark-to-market change with respect to the specified mark-to-market property.  2008, c. 7, Sched. S, s. 14 (5).

Same

(7) For the purposes of subsection (6), any mark-to-market changes with respect to property of a partnership are determined as if the partnership were a corporation and its fiscal period were a taxation year.  2008, c. 7, Sched. S, s. 14 (5).

Section Amendments with date in force (d/m/y)

2008, c. 7, Sched. S, s. 14 (1-5) - 01/01/2008

Corporate minimum tax liability, taxation years ending before July 1, 2010

55. (1) For a taxation year that ends before July 1, 2010, and except as otherwise provided under subsection (2), every corporation subject to tax under Division B of this Part is liable to pay to the Crown in right of Ontario a corporate minimum tax for the year as determined under this Division if,

(a) the amount of the corporation’s total assets at the end of the year exceeds $5 million or the amount of the corporation’s total revenue for the year exceeds $10 million; or

(b) the corporation is associated with one or more corporations during the year and,

(i) the sum of the total assets of the corporation as of the end of the taxation year and of each associated corporation as of the end of the associated corporation’s last taxation year ending in the corporation’s taxation year exceeds $5 million, or

(ii) the sum of the total revenue of the corporation for the taxation year and of each associated corporation for the last taxation year of the associated corporation ending in the corporation’s taxation year exceeds $10 million.  2009, c. 34, Sched. U, s. 12; 2010, c. 1, Sched. 29, s. 5.

Same, taxation years ending after June 30, 2010

(1.1) For a taxation year that ends after June 30, 2010, and except as otherwise provided under subsection (2), every corporation subject to tax under Division B of this Part is liable to pay to the Crown in right of Ontario a corporate minimum tax for the year as determined under this Division if,

(a) the amount of the corporation’s total assets at the end of the year equals or exceeds $50 million and the amount of the corporation’s total revenue for the year equals or exceeds $100 million; or

(b) the corporation is associated with one or more corporations during the year and,

(i) the sum of the total assets of the corporation as of the end of the taxation year and of each associated corporation as of the end of the associated corporation’s last taxation year ending in the corporation’s taxation year equals or exceeds $50 million, and

(ii) the sum of the total revenue of the corporation for the taxation year and of each associated corporation for the last taxation year of the associated corporation ending in the corporation’s taxation year equals or exceeds $100 million.  2009, c. 34, Sched. U, s. 12.

Rules for determining if subject to CMT

(2) The following rules apply in determining whether a corporation is subject to tax under this Division for a taxation year:

1. If the taxation year of the corporation is less than 51 weeks, the total revenue of the corporation for the year, before any inclusion in respect of the total revenue of any partnership of which it is a member, is deemed to be the amount otherwise determined, multiplied by the ratio of 365 to the number of days in the taxation year.

2. If the taxation year of an associated corporation referred to in subsection (1) is less than 51 weeks and is the only taxation year of the associated corporation ending in the corporation’s taxation year, the total revenue of the associated corporation for that taxation year, before any inclusion in respect of the total revenue of any partnership of which it is a member, is deemed to be the amount of its total revenue as otherwise determined, multiplied by the ratio of 365 to the number of days in the taxation year.

3. If a fiscal period of a partnership of which a corporation is a member is less than 51 weeks and is the only fiscal period of the partnership ending in the corporation’s taxation year, the total revenue of the partnership for that fiscal period is deemed to be the amount of its total revenue as otherwise determined, multiplied by the ratio of 365 to the number of days in the fiscal period.

4. If an associated corporation referred to in subsection (1) has two or more taxation years ending in the corporation’s taxation year, the total revenue of the associated corporation for the last taxation year ending in the corporation’s taxation year is deemed to be the sum of all amounts each of which is the total revenue of the associated corporation for a taxation year that ended in the corporation’s taxation year and during which the associated corporation was associated with the corporation, multiplied by the ratio of 365 to the total number of days in all of those taxation years. 

5. If a partnership of which the corporation is a member during the taxation year has two or more fiscal periods ending in the corporation’s taxation year, the total revenue of the partnership for the corporation’s taxation year is deemed to be the sum of all amounts each of which is the total revenue of the partnership for a fiscal period that ended in the corporation’s taxation year and during which the corporation was a partner in the partnership, multiplied by the ratio of 365 to the total number of days in all of those fiscal periods.

6. If the corporation is associated with the same associated corporation during the taxation year and during the preceding taxation year, but no taxation year of the associated corporation ends in the corporation’s taxation year, references in this section to the associated corporation’s last taxation year ending in the taxation year of the corporation are deemed to be references to the last taxation year of the associated corporation ending before the commencement of the corporation’s taxation year.  2007, c. 11, Sched. A, s. 55 (2).

Tax exemption

(3) No tax is payable under this Division by a corporation for a taxation year if the corporation is throughout the year,

(a) an investment corporation;

(b) a mortgage investment corporation;

(c) a mutual fund corporation; 

(d) a congregation or business agency to which section 143 of the Federal Act applies; or

(e) a deposit insurance corporation, as defined in section 137.1 of the Federal Act.  2007, c. 11, Sched. A, s. 55 (3).

Section Amendments with date in force (d/m/y)

2009, c. 34, Sched. U, s. 12 - 15/12/2009

2010, c. 1, Sched. 29, s. 5 - 15/12/2009

Calculation of corporate minimum tax

56. (1) The corporate minimum tax payable by a corporation for a taxation year under this Division is the amount calculated using the formula,

(I – L) × A × R

in which,

“I” is the amount of the corporation’s adjusted net income, if any, for the year,

  “L” is the amount of the corporation’s eligible losses, if any, for the year,

  “A” is the corporation’s Ontario allocation factor for the year, and

  “R” is the sum of,

(a) 0.04 multiplied by the ratio of the number of days in the year that are before July 1, 2010 to the total number of days in the year, and

(b) 0.027 multiplied by the ratio of the number of days in the year that are after June 30, 2010 to the total number of days in the year.

2009, c. 34, Sched. U, s. 13.

Deductions from tax

(2) A corporation may deduct from the corporate minimum tax otherwise payable by it under this Division for a taxation year,

(a) the amount of the corporation’s foreign tax credit for the year, as determined under section 59, if the corporation is not a life insurance corporation; and

(b) the amount of tax payable by the corporation under Division B for the year, determined without reference to any deduction under section 53.  2007, c. 11, Sched. A, s. 56 (2).

Section Amendments with date in force (d/m/y)

2009, c. 34, Sched. U, s. 13 - 15/12/2009

Adjusted net income

57. (1) In this Division, a corporation’s adjusted net income for a taxation year is the amount, if any, by which “B” exceeds “C” where,

  “B” is the sum of,

(a) the amount of the corporation’s net income, if any, for the year,

(b) if the corporation would have been entitled to exclude a gain from its taxable income earned in Canada under subparagraph 110 (1) (f) (i) of the Federal Act in respect of the disposition of taxable Canadian property, the amount of any loss in respect of the disposition to the extent the loss has been taken into consideration in the calculation of the corporation’s net income or net loss, as the case may be, for the year,

(c) all amounts included in the computation of the corporation’s income by reason of section 135 of the Federal Act, to the extent that the amounts have not been taken into consideration in the calculation of,

(i) the corporation’s net income or net loss, as the case may be, for the taxation year or a previous taxation year ending after December 31, 2008, or

(ii) the corporation’s net income or net loss, as the case may be, as determined under Part II.1 of the Corporations Tax Act, for a previous taxation year ending before January 1, 2009, and

(d) Repealed:  2008, c. 7, Sched. S, s. 15 (1).

(e) such other amounts as may be determined in accordance with the regulations, and

  “C” is the sum of,

(a) the amount of the corporation’s net loss, if any, for the year,

(b) the total amount of the payments made pursuant to allocations in proportion to patronage to the extent that the amount is deductible under section 135 of the Federal Act in computing the corporation’s income for the year and has not been deducted in computing the corporation’s net income or net loss, as the case may be, for the year,

(c) each of the following amounts to the extent it has been included in the computation of the corporation’s net income or net loss, as the case may be, for the year:

(i) an amount received or receivable by the corporation during the taxation year that is deductible as an amount in respect of a dividend under section 112 or 113 or subsection 138 (6) of the Federal Act in determining the corporation’s taxable income for the taxation year in which the amount is received by the corporation,

(ii) an amount in respect of a dividend received or receivable by the corporation during the year that is excluded under subsection 83 (2) of the Federal Act in the computation of the income of the corporation,

(iii) if the corporation is entitled to exclude an amount from its taxable income earned in Canada under subparagraph 110 (1) (f) (i) of the Federal Act in respect of the disposition of taxable Canadian property, the amount of any gain in respect of the disposition,

(iv) the amount, if any, of the corporation’s income for the year described in paragraph 81 (1) (c) of the Federal Act,

(v) the amount of any gain in respect of the disposition of property by the corporation, if the disposition is described in subparagraph 38 (a.1) (i) or (a.2) (i) of the Federal Act, and

(vi) the amount of any gain in respect of a disposition of property by the corporation that is described in subparagraph 38 (a.1) (iii) or paragraph 38 (a.3) of the Federal Act if the gift to a qualified donee for the purposes of that provision occurs on or after February 26, 2008,

(d) Repealed:  2008, c. 7, Sched. S, s. 15 (2).

(e) an amount equal to three times the amount of tax payable by the corporation for the year under subsection 191.1 (1) of the Federal Act, and

(f) such other amounts as may be determined in accordance with the regulations.  2007, c. 11, Sched. A, s. 57 (1); 2008, c. 7, Sched. S, s. 15; 2008, c. 19, Sched. U, s. 2.

Dividends

(2) Despite subsection 54 (2), no dividend paid or payable by a corporation in a taxation year, other than an amount referred to in subsection 137 (4.1) of the Federal Act, shall be deducted in determining whether the corporation has,

(a) a net income of nil or more for the year for the purposes of clause (a) of the definition of “B” in subsection (1); or

(b) a net loss for the year for the purposes of clause (a) of the definition of “C” in subsection (1).  2007, c. 11, Sched. A, s. 57 (2).

Adjusted net loss

(3) In this Division, a corporation’s adjusted net loss for a taxation year is the amount, if any, by which the amount of “C” as determined for the year under subsection (1) exceeds the amount determined as “B” for the year under that subsection.  2007, c. 11, Sched. A, s. 57 (3).

Interest

(4) In computing its adjusted net income or adjusted net loss for a taxation year under subsection (1) or (3), a corporation may deduct the amount of any interest paid or payable by the corporation that is included in an amount deducted or deductible by the corporation in the year under paragraph 20 (1) (c) or (d) of the Federal Act to the extent that the amount of interest has not been deducted in computing the corporation’s net income or net loss under subsection 54 (2).  2007, c. 11, Sched. A, s. 57 (4).

Corporate partner

(5) If a corporation is a partner in a partnership during a fiscal period of the partnership that ends in a taxation year of the corporation,

(a) the corporation’s adjusted net income for the taxation year includes the product of,

(i) the corporation’s percentage share in the partnership for the fiscal period, and

(ii) the partnership’s adjusted net income for the fiscal period; or

(b) the corporation’s adjusted net loss for the year includes the product of,

(i) the corporation’s percentage share in the partnership for the fiscal period, and

(ii) the partnership’s adjusted net loss for the fiscal period.  2007, c. 11, Sched. A, s. 57 (5).

Adjusted net income or loss of partnership

(6) The adjusted net income or adjusted net loss of a partnership is computed for the purposes of this Division under the provisions of this Division, with such modifications as are necessary, as if the partnership were a corporation and the taxation year of the partnership were its fiscal period.  2007, c. 11, Sched. A, s. 57 (6).

Same

(7) Despite subsection (6), no amount shall be deducted or included more than once in the calculation of the adjusted net income or adjusted net loss of a corporation that is a member of a partnership.  2007, c. 11, Sched. A, s. 57 (7).

Section Amendments with date in force (d/m/y)

2008, c. 7, Sched. S, s. 15 - 01/01/2008; 2008, c. 19, Sched. U, s. 2 - 01/01/2009

Eligible losses for a taxation year

58. (1) Except as provided in subsection (3), the amount of a corporation’s eligible losses for a taxation year that is deducted or deemed to be deducted under this Division for the year is equal to the lesser of “D” and “E” where,

  “D” is the amount, if any, by which “F” exceeds “G” where,

“F” is the sum of all amounts, each of which is,

(a) the corporation’s adjusted net loss under Part II.1 of the Corporations Tax Act for a previous taxation year that,

(i)  ended before March 23, 2007, and

(ii)  is not earlier than the 10th taxation year before the taxation year, or

(b) the corporation’s adjusted net loss under Part II.1 of the Corporations Tax Act or under this Division for a previous taxation year that,

(i)  ends after March 22, 2007, and

(ii)  is not earlier than the 20th taxation year before the taxation year, and

“G” is the sum of all amounts, each of which is an amount included in the amount of “F” that was deducted or is deemed to have been deducted as an eligible loss under Part II.1 of the Corporations Tax Act or this Division for a previous taxation year, and

  “E” is the corporation’s adjusted net income for the taxation year.  2007, c. 11, Sched. A, s. 58 (1); 2010, c. 1, Sched. 29, s. 6.

Same

(2) For the purposes of this Division, the following rules apply in determining the amount of a corporation’s eligible losses for a taxation year:

1. The amount of a corporation’s eligible losses for a previous taxation year is deemed to have been deducted under Part II.1 of the Corporations Tax Act or this Division for the previous taxation year whether or not the corporation was subject to tax imposed under Part II.1 of the Corporations Tax Act or this Division for the previous taxation year.

2. The corporation’s adjusted net loss for the taxation year that is otherwise included in the corporation’s eligible losses for that year shall be deducted or deemed to be deducted under Part II.1 of the Corporations Tax Act or this Division before any amount in respect of the adjusted net loss of the corporation for a subsequent taxation year.  2007, c. 11, Sched. A, s. 58 (2).

Acquisition of control, eligible losses

(3) If at any time control of a corporation is acquired by a person or group of persons, the amount of the corporation’s eligible losses for a taxation year ending after that time shall include only those amounts otherwise included that may reasonably be regarded as the corporation’s losses from carrying on a business before that time,

(a) if that business was carried on by the corporation for profit or with a reasonable expectation of profit throughout that year; and

(b) to the extent of the portion of the corporation’s adjusted net income for that year that is reasonably attributable to that business and, if properties were sold, leased, rented or developed or services rendered in the course of carrying on that business before that time, to any other business substantially all the income of which was derived from the sale, leasing, rental or development, as the case may be, of similar properties or the rendering of similar services.  2007, c. 11, Sched. A, s. 58 (3).

Amalgamation

(4) If there has been an amalgamation of corporations to which section 87 of the Federal Act applies, the amalgamated corporation is deemed to be the same corporation as and a continuation of each predecessor corporation for the purposes of determining the amount of,

(a) the amalgamated corporation’s eligible losses for a taxation year ending after the amalgamation; and

(b) the amalgamated corporation’s eligible losses for a taxation year that were deducted or deemed to have been deducted under Part II.1 of the Corporations Tax Act or this Division for a previous taxation year.  2007, c. 11, Sched. A, s. 58 (4).

Exception

(4.1) If an amalgamation of two or more predecessor corporations occurs after March 21, 2007, subsection (4) does not apply in determining for the purposes of the amalgamated corporation an amount in respect of one of the predecessor corporations if that predecessor corporation was controlled at any time before the amalgamation by any of the other predecessor corporations.  2008, c. 7, Sched. S, s. 16 (1).

Winding-up

(5) If the rules in subsection 88 (1) of the Federal Act apply to the winding-up of a subsidiary corporation that was completed before March 22, 2007, the parent corporation is deemed to be the same corporation as and a continuation of the subsidiary corporation for the purposes of determining the amount of,

(a) the parent corporation’s eligible losses for a taxation year after the winding-up; and

(b) the parent corporation’s eligible losses for a taxation year that were deducted or deemed to have been deducted under Part II.1 of the Corporations Tax Act or this Division for a previous taxation year.  2007, c. 11, Sched. A, s. 58 (5); 2008, c. 7, Sched. S, s. 16 (2).

Winding-up or dissolution of a Canadian affiliate of an entrant bank

(6) If the events described in paragraphs 142.7 (12) (a) and (b) of the Federal Act have occurred with respect to the winding-up of a Canadian affiliate of an entrant bank (within the meaning of subsection 142.7 (1) of that Act) or in respect of the dissolution of a Canadian affiliate of an entrant bank under a dissolution order (within the meaning of subsection 142.7 (12) of that Act), the entrant bank is deemed to be the same corporation as, and a continuation of, the Canadian affiliate for the purposes of determining the amount of,

(a) the entrant bank’s eligible losses for a taxation year after the winding-up or dissolution; and

(b) the entrant bank’s eligible losses for a taxation year that were deducted or deemed to have been deducted under Part II.1 of the Corporations Tax Act or this Division for a previous taxation year.  2007, c. 11, Sched. A, s. 58 (6).

Exception

(7) Subsection (6) does not apply unless,

(a) before the later of June 14, 2005 and the date determined under paragraph 142.7 (11) (b) of the Federal Act,

(i) the entrant bank and the Canadian affiliate jointly elected that subsection 57.5 (10) of the Corporations Tax Act or subsection (6) applied, if the Canadian affiliate had not been wound up or dissolved before the election was made, or

(ii) the entrant bank elected that subsection 57.5 (10) of the Corporations Tax Act or subsection (6) applied, if the Canadian affiliate had been wound up or dissolved and ceased to exist before the election was made; or

(b) the entrant bank and the Canadian affiliate jointly elected under paragraph 142.7 (12) (c) of the Federal Act to have section 142.7 of that Act apply.  2007, c. 11, Sched. A, s. 58 (7).

Application of subs. (6)

(8) Subsection (6) applies only to,

(a) losses for taxation years for which an election by the Canadian affiliate and entrant bank under paragraph 142.7 (12) (c) of the Federal Act applies or to which section 142.7 of the Federal Act would have applied if an election had been made under paragraph 142.7 (12) (c) of that Act; and

(b) losses for previous taxation years in which a loss for the purposes of this section or section 57.5 of the Corporations Tax Act was incurred.  2007, c. 11, Sched. A, s. 58 (8).

Section Amendments with date in force (d/m/y)

2008, c. 7, Sched. S, s. 16 (1, 2) - 01/01/2008

2010, c. 1, Sched. 29, s. 6 - 01/01/2009

Foreign tax credit

59. For the purposes of this Division, a corporation’s foreign tax credit for a taxation year is the amount that would be determined for the year under section 34 if the reference in subsection 34 (1) to the tax payable by the corporation under Division B for the year were read as a reference to the amount of the corporation’s corporate minimum tax for the year determined under this Division before any deduction permitted under subsection 56 (2). 2007, c. 11, Sched. A, s. 59.

Election on transfer of property

60. (1) If during a taxation year a corporation disposed of property to another corporation or acquired property from another corporation and both corporations jointly elected under section 85 of the Federal Act to have the rules in that section apply, or if section 85.1 of that Act applies to the disposition, both corporations may jointly elect in the form approved by the Ontario Minister to have such rules as may be prescribed apply for the purposes of this Division.  2007, c. 11, Sched. A, s. 60 (1).

Same

(2) If during a taxation year a corporation disposed of property to a partnership or acquired property from a partnership and the corporation and all of the members of the partnership have jointly elected under section 85 or 97, as the case may be, of the Federal Act to have the rules of that section apply, the corporation and all of the members of the partnership may jointly elect in the form approved by the Ontario Minister to have such rules as may be prescribed apply for the purposes of this Division.  2007, c. 11, Sched. A, s. 60 (2).

Time of election

(3) An election under subsection (1) or (2) must be made on or before the day that is the earliest of the days on or before which any corporation making the election is required to file a return under this Act for the year in which the disposition or acquisition occurred.  2007, c. 11, Sched. A, s. 60 (3).

Exception

(4) If no corporation making the election is liable to pay tax under this Division for the taxation year in which the transaction occurred, the election may be made on or before the day that is the earliest of the days on or before which any corporation making the election is required to file a return under this Act for the first taxation year for which the corporation is liable to pay tax under this Division.  2007, c. 11, Sched. A, s. 60 (4).

Transitional

(5) The following rules apply if a transaction described in subsection (1) or (2) occurred before January 1, 2009:

1. An election made in accordance with section 57.9 of the Corporations Tax Act is deemed to have been made under this section.

2. If no corporation making the election under section 57.9 of the Corporations Tax Act is liable to pay tax under Part II.1 of that Act for the taxation year in which the transaction occurred or for any subsequent taxation year ending before January 1, 2009, the election shall be made on or before the day that is the earliest of the days on or before which any corporation making the election is required to file a return under this Act for the first taxation year for which the corporation is liable to pay tax under this Division.  2007, c. 11, Sched. A, s. 60 (5).

Election on replacement of property

61. (1) If at any time in a taxation year an amount has become receivable by a corporation as proceeds of disposition of a capital property or eligible capital property and the corporation has elected under subsection 13 (4) or 14 (6) or section 44 of the Federal Act to have the rules in any of those provisions apply, the corporation may elect to have such rules as may be prescribed apply for the purposes of this Division.  2007, c. 11, Sched. A, s. 61 (1).

Time of election

(2) An election under subsection (1) must be made in the corporation’s return under this Act for the taxation year in which it acquired a property which is a replacement property for the purposes of subsection 13 (4), subsection 14 (6) or section 44, as applicable, of the Federal Act.  2007, c. 11, Sched. A, s. 61 (2).

Exception

(3) If the corporation making the election is not liable to pay tax under this Division for the taxation year in which the replacement property was acquired, the election may be made in the corporation’s return under this Act for the first taxation year ending after the replacement property is acquired for which the corporation is liable to pay tax under this Division.  2007, c. 11, Sched. A, s. 61 (3).

Transitional

(4) The following rules apply if a transaction described in subsection (1) occurred before January 1, 2009:

1. An election made in accordance with section 57.10 of the Corporations Tax Act is deemed to have been made under this section.

2. If the corporation making the election under section 57.10 of the Corporations Tax Act is not liable to pay tax under Part II.1 of that Act for the taxation year in which the replacement property was acquired or for any subsequent taxation year ending before January 1, 2009, the election shall be made on or before the day that is the earliest of the days on or before which the corporation is required to file a return under this Act for the first taxation year for which the corporation is liable to pay tax under this Division.  2007, c. 11, Sched. A, s. 61 (4).

Limitation respecting inclusions and deductions

62. (1) Unless a contrary intention is evident, no provision of this Division shall be read or construed to require the inclusion or to permit the deduction, either directly or indirectly, in computing the amount of a corporation’s net income, net loss, adjusted net income or adjusted net loss of any amount to the extent that the amount has already been directly or indirectly included or deducted, as the case may be, in computing such net income, net loss, adjusted net income or adjusted net loss under Part II.1 of the Corporations Tax Act or this Division.  2007, c. 11, Sched. A, s. 62 (1).

Same

(2) In computing a corporation’s net income, net loss, adjusted net income or adjusted net loss under this Division, no deduction shall be made, either directly or indirectly, in respect of a reserve, outlay or expense except to the extent the reserve, outlay or expense, as the case may be, is reasonable in the circumstances.  2007, c. 11, Sched. A, s. 62 (2).

Division D — Special Additional Tax on Life Insurance Corporations

Special additional tax, life insurance corporation

63. (1) Every life insurance corporation that carries on business in Ontario at any time in a taxation year shall pay a tax under this section for the year equal to the amount, if any, by which “A” exceeds “B” where,

  “A” is equal to 1.25 per cent of that proportion of its taxable paid-up capital for the year as determined under this section that the number of days in the year is of 365, and

  “B” is the amount of tax payable by the corporation under Divisions B and C for the year.  2007, c. 11, Sched. A, s. 63 (1).

Taxable paid-up capital, resident corporation

(2) For the purposes of this section, the taxable paid-up capital for a taxation year of a life insurance corporation that is resident in Canada at any time in the year is the amount, if any, calculated using the formula,

A × [(B × C/D) + E – F]

in which,

  “A” is the corporation’s Ontario domestic factor for the year,

  “B” is the sum of,

(a) its capital for the year as determined under subsection (4), and

(b) the amount, if any, determined under subsection (6) for the year in respect of the capital of its foreign insurance subsidiaries, if any,

  “C” is the corporation’s Canadian reserve liabilities as at the end of the year,

  “D” is the sum of,

(a) its total reserve liabilities as at the end of the year, and

(b) the amount, if any, determined under subsection (7) in respect of the total reserve liabilities of its foreign insurance subsidiaries, if any,

  “E” is the amount determined for the year in respect of the corporation under subparagraph 190.11 (b) (ii) of the Federal Act, and

“F” is its capital allowance for the year as determined under this section.

2007, c. 11, Sched. A, s. 63 (2).

Taxable paid-up capital, non-resident corporation

(3) For the purposes of this section, the taxable paid-up capital for a taxation year of a life insurance corporation that throughout the year is not resident in Canada is the amount, if any, calculated using the formula,

A × (G – F)

in which,

  “A” has the meaning ascribed by subsection (2),

  “G” is its capital for the year as determined under subsection (5), and

“F” has the meaning ascribed by subsection (2).

2007, c. 11, Sched. A, s. 63 (3).

Capital, resident life insurance corporation

(4) For the purposes of this section, the capital for a taxation year of a life insurance corporation that is resident in Canada at any time in the year is the amount, if any, determined as of the end of that year by which “H” exceeds “I” where,

  “H” is the sum of,

(a) the amount of its long-term debt, and

(b) the amount of its capital stock or, in the case of a corporation incorporated without share capital, the amount of its members’ contributions, plus the amount of its retained earnings, contributed surplus and any other surpluses, and

“I” is the sum of,

(a) the amount of its deferred tax debit balance or future tax assets, and

(b) the amount of any deficit deducted in computing its shareholders’ equity.  2007, c. 11, Sched. A, s. 63 (4).

Capital, non-resident life insurance corporation

(5) For the purposes of this section, the capital for a taxation year of a life insurance corporation that is not resident in Canada at any time in the year is the amount, if any, calculated as of the end of that year using the formula,

J + K + L + M

in which,

“J” is the greater of,

(a) the amount, if any, by which its surplus funds derived from operations, as of the end of the year, exceeds the sum of all amounts each of which is,

(i) an amount on which it was required or would have been required, but for subsection 219 (5.2) of the Federal Act, to have paid tax under Part XIV of the Federal Act for a previous taxation year, less the portion, if any, of the amount on which tax was payable, or would have been payable, described in subparagraph 219 (4) (a) (i.1) of that Act, or

(ii) an amount on which it was required or would have been required, but for subsection 219 (5.2) of the Federal Act, to have paid tax under subsection 219 (5.1) of that Act for the year because of the transfer of an insurance business to which subsection 138 (11.5) or (11.92) of that Act applied, and

(b) its attributed surplus for the year, as determined under subsection 2400 (1) of the Federal regulations,

  “K” is the amount of its other surpluses, if any, relating to its insurance businesses carried on in Canada,

  “L” is the amount of its long-term debt that may reasonably be regarded as relating to its insurance businesses carried on in Canada, and

“M” is the amount, if any, by which “N” exceeds “P” where,

“N” is the amount of its reserves for the year, other than its reserves in respect of amounts payable out of segregated funds, that may reasonably be regarded as having been established in respect of its insurance businesses carried on in Canada, and

“P” is the sum of,

(a) all amounts each of which is the amount of a reserve, other than a reserve described in subparagraph 138 (3) (a) (i) of the Federal Act, to the extent that it was included in the amount of “N” for the year and was deducted in computing its income for the year,

(b) all amounts each of which is the amount of a reserve described in subparagraph 138 (3) (a) (i) of the Federal Act, to the extent that it was included in the amount of “N” for the year and was deductible under subparagraph 138 (3) (a) (i) of the Federal Act in computing its income for the year, and

(c) all amounts each of which is the amount outstanding at the end of the year, including any accrued interest, in respect of a policy loan within the meaning assigned by subsection 138 (12) of the Federal Act that was made by the corporation, to the extent that it was deducted in computing the amount determined under clause (b). 

2007, c. 11, Sched. A, s. 63 (5).

Capital, foreign insurance subsidiaries

(6) The amount determined for a taxation year in respect of the capital of the foreign insurance subsidiaries of a particular life insurance corporation is the sum of all amounts each of which is the amount determined in respect of a foreign insurance subsidiary of the particular corporation equal to the amount, if any, by which “Q” exceeds “R” where,

  “Q” is the amount that would be the capital of the subsidiary for its last taxation year ending at or before the end of the particular corporation’s taxation year, if the subsidiary were a life insurance corporation resident in Canada at any time in that year, and

  “R” is the sum of all amounts each of which is,

(a) an amount included in “Q” for the year in respect of a share of the subsidiary’s capital stock or its long-term debt that was owned by,

(i) the particular corporation,

(ii) a subsidiary of the particular corporation,

(iii) a corporation that is resident in Canada, carried on a life insurance business in Canada at any time in its last taxation year ending at or before the end of the particular corporation’s taxation year and that is,

(A)  a corporation of which the particular corporation is a subsidiary, or

(B)  a subsidiary of a corporation described in sub-subclause (A), or

(iv) a subsidiary of a corporation described in subclause (iii), or

(b) an amount included in “Q” for the year in respect of any surplus of the subsidiary contributed by a corporation described in any of subclauses (a) (i) to (iv), other than an amount included under clause (a).  2007, c. 11, Sched. A, s. 63 (6).

Total reserve liabilities, foreign insurance subsidiary

(7) The amount determined for a taxation year for the purposes of subsection (2) in respect of the total reserve liabilities of the foreign insurance subsidiaries of a particular life insurance corporation is the sum of all amounts each of which would be the total reserve liabilities of a foreign insurance subsidiary of the particular corporation as at the end of the subsidiary’s last taxation year ending at or before the end of the particular corporation’s taxation year, if the subsidiary were required by law to report to the Superintendent of Financial Institutions for that year.  2007, c. 11, Sched. A, s. 63 (7).

Capital allowance

(8) For the purposes of this section, the capital allowance for a taxation year of a life insurance corporation that carries on business in Canada at any time in the year is the sum of,

(a) $10 million;

(b) one-half of the amount, if any, by which the lesser of $50 million and its taxable capital employed in Canada for the year exceeds $10 million;

(c) one-quarter of the amount, if any, by which the lesser of $100 million and its taxable capital employed in Canada for the year exceeds $50 million;

(d) one-half of the amount, if any, by which the lesser of $300 million and its taxable capital employed in Canada for the year exceeds $200 million; and

(e) three-quarters of the amount, if any, by which its taxable capital employed in Canada for the year exceeds $300 million.  2007, c. 11, Sched. A, s. 63 (8).

Exception

(9) Despite subsection (8) and subject to subsections (10), (11) and (12), if a life insurance corporation is related at the end of a taxation year to another life insurance corporation that carries on business in Canada, its capital allowance for the year is nil.  2007, c. 11, Sched. A, s. 63 (9).

Allocation, related group

(10) A life insurance corporation that carries on business in Canada at any time in a taxation year and is related at the end of the year to another life insurance corporation that carries on business in Canada may file with the Ontario Minister, on behalf of the related group of life insurance corporations of which the corporation is a member, an agreement under which an amount that does not exceed the sum of the following amounts is allocated for the year among the members of the related group:

1. $10 million.

2. one-half of the amount, if any, by which the lesser of the following amounts exceeds $10 million:

i. $50 million, and

ii. the sum of all amounts each of which is the taxable capital employed in Canada of a life insurance corporation for the year that is a member of the related group.

3. one-quarter of the amount, if any, by which the lesser of the following amounts exceeds $50 million:

i. $100 million, and

ii. the sum of all amounts each of which is the taxable capital employed in Canada of a life insurance corporation for the year that is a member of the related group.

4. one-half of the amount, if any, by which the lesser of the following amounts exceeds $200 million:

i. $300 million, and

ii. the sum of all amounts each of which is the taxable capital employed in Canada of a life insurance corporation for the year that is a member of the related group.

5. three-quarters of the amount, if any, by which the sum of all amounts each of which is the taxable capital employed in Canada of a life insurance corporation for the year that is a member of the related group exceeds $300 million.  2007, c. 11, Sched. A, s. 63 (10).

Allocation by Minister

(11) The Ontario Minister may request a life insurance corporation that carries on business in Canada at any time in a taxation year and that, at the end of the year, is related to another life insurance corporation that carries on business in Canada to file with the Ontario Minister an agreement referred to in subsection (10) and, if the corporation does not file the agreement within 30 days after receiving the request, the Ontario Minister may allocate among the members of the related group of life insurance corporations of which the corporation is a member for the year an amount not exceeding the sum of the amounts in respect of the related group under paragraphs 1 to 5 of subsection (10).  2007, c. 11, Sched. A, s. 63 (11).

Same

(12) For the purposes of this section, the least amount allocated for a taxation year to a member of a related group under an agreement described in subsection (10) or by the Ontario Minister under subsection (11) is the capital allowance for the year of that member.  2007, c. 11, Sched. A, s. 63 (12).

Taxable capital employed in Canada

(13) For the purposes of this section, the taxable capital employed in Canada for a taxation year of a life insurance corporation is determined as follows:

1. If the life insurance corporation is resident in Canada at any time in the year, its taxable capital employed in Canada for the year is the amount calculated using the formula,

(B × C/D) + E

in which “B”, “C”, “D” and “E” are the amounts determined under subsection (2) in respect of the corporation for the year.

2. If the life insurance corporation is not resident in Canada at any time in the year, its taxable capital employed in Canada for the year is the amount of its capital for the year, as determined under subsection (5).

2007, c. 11, Sched. A, s. 63 (13).

Application of Federal Act

(14) Subsections 181 (3) and (4) and 190.15 (5) and (6) of the Federal Act apply with necessary modifications for the purposes of this section and, in the application of those subsections,

(a) subsection 1 (7) of this Act does not apply;

(b) references to Part I.3 of the Federal Act shall be read as references to this section; and

(c) the references in subsections 190.15 (5) and (6) of the Federal Act to a corporation’s capital deduction shall be read as references to its capital allowance as determined under this section.  2007, c. 11, Sched. A, s. 63 (14).

Definitions

(15) In this section,

“foreign insurance subsidiary” means, in respect of a particular life insurance corporation at a particular time, a non-resident corporation that,

(a) carried on a life insurance business throughout its last taxation year ending at or before that time,

(b) did not carry on a life insurance business in Canada at any time in its last taxation year ending at or before that time, and

(c) is at that time,

(i) a subsidiary of the particular life insurance corporation, and

(ii) not a subsidiary of any corporation that is resident in Canada that carried on a life insurance business in Canada at any time in its last taxation year ending at or before that time and that is a subsidiary of the particular life insurance corporation; (“filiale d’assurance étrangère”)

“long-term debt” means subordinated indebtedness, within the meaning assigned by the Insurance Companies Act (Canada), evidenced by obligations issued for a term of not less than five years; (“passif à long terme”)

“reserves” means, in respect of a life insurance corporation for a taxation year, the amount at the end of the year of all of the corporation’s reserves, provisions and allowances, other than allowances in respect of depreciation or depletion, and includes any provision in respect of deferred taxes or future tax liabilities; (“réserves”)

“subsidiary” means, in respect of a corporation that in this definition is referred to as the “parent corporation”, a corporation not less than 90 per cent of the issued and outstanding shares of each class of the capital stock of which belong to,

(a) the parent corporation,

(b) a corporation that is a subsidiary of the parent corporation, or

(c) any combination of corporations each of which is a corporation described in clause (a) or (b); (“filiale”)

“Superintendent of Financial Institutions” means the Superintendent of Financial Institutions appointed under the Office of the Superintendent of Financial Institutions Act (Canada); (“surintendant des institutions financières”)

“surplus funds derived from operations” means, in respect of a life insurance corporation as of the end of a taxation year, the amount that would be its surplus funds derived from operations at that time under subsection 138 (12) of the Federal Act, computed as if no tax were payable under Part I.3 or VI of that Act for the year. (“fonds excédentaire résultant de l’activité”)  2007, c. 11, Sched. A, s. 63 (15).

Division E — Capital Tax

Subdivision a —Liability for Capital Tax

Liability for capital tax

64. (1) Subject to subsection (2), every corporation to which subsection 27 (1) applies is liable to pay to the Crown in right of Ontario a capital tax for a taxation year commencing before July 1, 2010,

(a) in the amount calculated under subdivision b in the case of a corporation that is a financial institution for the year; or

(b) in the amount calculated under subdivision c in the case of a corporation that is not a financial institution for the year.  2007, c. 11, Sched. A, s. 64 (1); 2008, c. 7, Sched. S, s. 17.

Exception

(2) The tax imposed by this Division for a taxation year is not payable by,

(a) a corporation that is liable to tax for the year under section 74 of the Corporations Tax Act;

(b) a credit union;

(c) a deposit insurance corporation, as defined in section 137.1 of the Federal Act;

(d) a corporation that is a family farm corporation for the year, other than a corporation in respect of which a determination has been made under subsection 31 (2) of the Federal Act;

(e) a corporation that is a family fishing corporation for the year; or

(f) a corporation to which paragraph 2 of subsection 27 (2) applies.  2007, c. 11, Sched. A, s. 64 (2).

Definitions

(3) In this section,

“family farm corporation” means, in respect of a taxation year, a corporation,

(a) all the shares of the capital stock of which that confer on the holder the right to vote were, throughout the year, owned by,

(i) an individual resident in Canada,

(ii) an individual resident in Canada and a member or members of that individual’s family who were also resident in Canada,

(iii) another family farm corporation, or

(iv) another corporation, all the shares of the capital stock of which that confer on the holder the right to vote were owned directly or indirectly by a person or persons described in subclause (i), (ii) or (iii),

(b) 75 per cent of the assets of which throughout the year were farming assets, and

(c) that, throughout the year, carried on the business of farming in Ontario,

(i) through the employment of a shareholder or a member of the shareholder’s family who was actually engaged in the operation of the farm, or

(ii) in the case of a corporation described in subclause (a) (iii) or (iv), through the employment of the person or persons referred to in subclause (a) (i) or (ii); (“société agricole familiale”)

“family fishing corporation” means, in respect of a taxation year, a corporation,

(a) all the shares of the capital stock of which that confer on the holder the right to vote were, throughout the year, owned by,

(i) an individual resident in Canada,

(ii) an individual resident in Canada and a member or members of that individual’s family who were also resident in Canada,

(iii) another family fishing corporation, or

(iv) another corporation, all the shares of the capital stock of which that confer on the holder the right to vote were owned directly or indirectly by a person or persons described in subclause (i), (ii) or (iii),

(b) 75 per cent of the assets of which throughout the year were fishing assets, and

(c) that, throughout the year, carried on the business of fishing in Ontario,

(i) through the employment of a shareholder or a member of the shareholder’s family who was actually engaged in the operation of the fishing business, or

(ii) in the case of a corporation described in subclause (a) (iii) or (iv), through the employment of the person or persons referred to in subclause (a) (i) or (ii); (“société de pêche familiale”)

“farming” does not include the maintaining of horses for racing; (“agriculture”)

“farming assets” means, in respect of a corporation,

(a) cash, trade accounts receivable, supplies and inventory of commodities or things produced, raised or grown by the corporation through farming,

(b) land, buildings, equipment, machinery and livestock that are used chiefly in the operation of a farm by the corporation,

(c) any right or licence granted or issued under any Act of the Legislature that permits or regulates the production or sale of any commodity or thing produced, raised or grown by the corporation through farming,

(d) the building in which a shareholder of the corporation or one or more members of his or her family reside who are engaged in the operation of a farm if that building is on land that is used or is contiguous to land used by that shareholder or the member or members of his or her family in the operation of the farm,

(e) shares in another family farm corporation, or

(f) the amount owing to the corporation for the balance of the sale price of farming assets described in clause (b) that have been sold by the corporation if,

(i) the amount is secured by a mortgage held by the corporation, and

(ii) the total value of the corporation’s remaining farming assets described in clauses (a) to (e) exceeds 50 per cent of its total assets; (“actif agricole”)

“fishing assets” means, in respect of a corporation,

(a) cash, trade accounts receivable, supplies and inventory used by the corporation in a fishing business,

(b) land, buildings, boats, ships, equipment, machinery and nets that are used by the corporation chiefly in the operation of a fishing business,

(c) any right or licence granted or issued under any Act of the Legislature that permits or regulates the catching or sale of fish by the corporation, and

(d) shares in another family fishing corporation. (“actif de pêche”)  2007, c. 11, Sched. A, s. 64 (3).

Member of family

(4) For the purposes of the definitions of “family farm corporation” and “family fishing corporation” in subsection (3), the following are members of an individual’s family:

1. The individual’s spouse or common-law partner.

2. The individual’s children or other lawful descendants.

3. The individual’s father, mother, grandfather and grandmother.

4. The individual’s brothers and sisters and their lawful descendants.

5. The individual’s uncles and aunts by blood relation and their lawful descendants.

6. The father and mother of the individual’s spouse or common-law partner.

7. The brothers and sisters of the individual’s spouse or common-law partner and their lawful descendants.

8. The spouse or common-law partner of each of the individual’s children.  2007, c. 11, Sched. A, s. 64 (4).

Section Amendments with date in force (d/m/y)

2008, c. 7, Sched. S, s. 17 - 01/01/2008

Subdivision b —Financial Institutions

Application

65. This subdivision applies to corporations only in respect of taxation years commencing before July 1, 2010 for which they are financial institutions.  2007, c. 11, Sched. A, s. 65.

Interpretation

Definitions

66. (1) In this subdivision,

“associated group”, in respect of a corporation or qualifying small business, has the prescribed meaning; (“groupe”)

“average bank prime rate” has the prescribed meaning; (“taux préférentiel bancaire moyen”)

“community small business investment fund corporation” means a corporation registered as a community small business investment fund corporation under the Community Small Business Investment Funds Act, 1992; (“fonds communautaire de placement dans les petites entreprises”)

“disposition” includes an event prescribed to be a disposition for the purposes of this subdivision and excludes an event prescribed not to be a disposition for the purposes of this subdivision; (“disposition”)

“long-term debt” has the meaning assigned by subsection 181 (1) of the Federal Act; (“passif à long terme”)

“qualifying small business” means a business that satisfies the prescribed conditions; (“petite entreprise autorisée”)

“related financial institution” means, in respect of a particular financial institution for a taxation year, another financial institution that is related at the end of the year to the particular financial institution; (“institution financière liée”)

“related insurance corporation” means, in respect of a particular financial institution for a taxation year, an insurance corporation that is related at the end of the year to the particular financial institution; (“compagnie d’assurance liée”)

“reserves” means, in respect of a financial institution for a taxation year, the amount, calculated as of the end of the year, of all of the corporation’s reserves, provisions and allowances, including any provision in respect of deferred taxes or future tax liabilities, but excluding allowances in respect of depreciation or depletion; (“réserves”)

“taxable capital employed in Canada” means, with respect to a financial institution for a taxation year, the financial institution’s taxable capital employed in Canada for the year as determined under section 181.3 of the Federal Act. (“capital imposable utilisé au Canada”)  2007, c. 11, Sched. A, s. 66 (1).

Financial institution

(2) A corporation is a financial institution for a taxation year for the purposes of this Division if, at any time in the year,

(a) it is a bank;

(b) it is authorized under the laws of Canada or a province to carry on the business of offering its services as a trustee to the public;

(c) it is authorized under the laws of Canada or a province to accept deposits from the public and carries on the business of lending money on the security of real estate or investing in mortgages on real estate;

(d) it is a registered securities dealer;

(e) it is a mortgage investment corporation; or

(f) it is a corporation prescribed for the purposes of this subsection.  2007, c. 11, Sched. A, s. 66 (2).

Deposit-taking institution

(3) A corporation is a deposit-taking institution for a taxation year for the purposes of this subdivision if,

(a) it is a financial institution for the year by reason of clause (2) (a), (b) or (c);

(b) it is a corporation all or substantially all of the assets of which are shares or indebtedness of corporations described in clause (a) to which the corporation is related; or

(c) it is a corporation all or substantially all of the assets of which are shares or indebtedness of corporations described in clause (b) to which the corporation is related.  2007, c. 11, Sched. A, s. 66 (3).

Qualifying small business corporation

(4) For the purposes of this subdivision, a corporation is a qualifying small business corporation at a particular time if,

(a) it is a Canadian-controlled private corporation;

(b) it carries on business in Ontario through one or more permanent establishments;

(c) it satisfies the prescribed conditions; and

(d) all or substantially all of the fair market value of the corporation’s assets is attributable to assets used principally in an active business carried on by the corporation primarily in Ontario.  2007, c. 11, Sched. A, s. 66 (4).

Same

(5) A corporation is also a qualifying small business corporation at a particular time for the purposes of this subdivision if it is associated with a corporation referred to in subsection (4) at that time and satisfies such conditions as may be prescribed.  2007, c. 11, Sched. A, s. 66 (5).

Section Amendments with date in force (d/m/y)

CTS 18 AU 10 - 1

Rule for determining values and amounts

67. For the purposes of this subdivision, the carrying value of an asset as of the end of a taxation year and all other amounts required to be determined shall be determined in the same manner as would be required for the purposes of Part I.3 of the Federal Act.  2007, c. 11, Sched. A, s. 67.

Financial institution resident in Canada

Paid-up capital

68. (1) The paid-up capital for a taxation year of a financial institution that is resident in Canada, is the amount, if any, by which “A” exceeds “B” where,

  “A” is the sum of the following amounts, if any, in respect of the financial institution, determined as of the end of the year:

1. Its long-term debt.

2. Its capital stock or, in the case of a financial institution incorporated without share capital, its members’ contributions.

3. Its retained earnings.

4. Its accumulated other comprehensive income.

5. Its contributed surplus and all other surpluses.

6. Its reserves for the year, except to the extent that they were deducted in computing its income under Division B for the year.

  “B” is the sum of the following amounts, if any, in respect of the financial institution, determined as of the end of the year:

1. Its deferred tax debit balance or future tax assets.

2. Its deficit, if any, deducted in computing its shareholders’ equity.

3. Any amount deducted under subsection 130.1 (1) or 137 (2) of the Federal Act in computing its income under Division B for the year, to the extent that the amount can reasonably be regarded as being included in the amount of “A” for the year.

4. Any amount, except to the extent that it has been deducted by the financial institution in computing its income under Part II of the Corporations Tax Act or Division B of this Part for the year or any previous taxation year, that is deductible by the financial institution by reason of the application of subsection 37 (1) of the Federal Act in respect of scientific research and experimental development.  2007, c. 11, Sched. A, s. 68 (1).

Same

(2) The following provisions apply for the purposes of paragraph 4 of the definition of “B” in subsection (1):

1. Paragraph 87 (2) (l) of the Federal Act.

2. Paragraph 88 (1) (e.2) of the Federal Act with respect to the application of paragraph 87 (2) (l) of that Act to a winding-up to which section 88 of that Act applies.  2007, c. 11, Sched. A, s. 68 (2).

Taxable paid-up capital

(3) The taxable paid-up capital for a taxation year of a financial institution that is resident in Canada is the amount, if any, by which the financial institution’s paid-up capital for the year exceeds its investment allowance for the year in respect of all of its assets, each of which is a share of the capital stock or long-term debt of,

(a) a related financial institution that has a permanent establishment in Ontario and is not exempt from tax under this Division or Part III of the Corporations Tax Act; or

(b) a related insurance corporation that has a permanent establishment in Ontario.  2007, c. 11, Sched. A, s. 68 (3).

Investment allowance

(4) The investment allowance for a taxation year of a corporation that is a financial institution resident in Canada in respect of a share of the capital stock or long-term debt of a related financial institution or related insurance corporation is the amount calculated using the formula,

A × B/C

in which,

  “A” is the carrying value of the asset to the corporation as of the end of the year,

  “B” is the Ontario allocation factor of the related financial institution or the related insurance corporation, as the case may be, for its last taxation year ending in the corporation’s year, and

  “C” is the corporation’s Ontario allocation factor for the year.

2007, c. 11, Sched. A, s. 68 (4).

Exception, taxable paid-up capital of eligible institution

(5) Despite subsection (3), the taxable paid-up capital for a taxation year of a financial institution resident in Canada that is an eligible institution for the year is the amount, if any, by which its paid-up capital for the year exceeds its investment allowance for the year in respect of all of its assets, each of which is a share of the capital stock or long-term debt of a corporation that is a qualifying corporation in respect of the eligible institution.  2007, c. 11, Sched. A, s. 68 (5).

Eligible institution

(6) A financial institution is an eligible institution for a taxation year for the purposes of this section if,

(a) its Ontario allocation factor for the year is one; and

(b) it is not controlled, directly or indirectly, at any time in the year by,

(i) another financial institution, other than a corporation prescribed as a financial institution for the purposes of this Division,

(ii) an insurance corporation, or

(iii) a corporation that would be considered to be a financial institution if it carried on business in Canada and had been incorporated in Canada.  2007, c. 11, Sched. A, s. 68 (6).

Investment allowance, eligible institution

(7) The investment allowance of an eligible institution for a taxation year in respect of an asset of the eligible institution that is a share of the capital stock or long-term debt of a qualifying corporation is the carrying value of the asset to the eligible institution as of the end of the year.  2007, c. 11, Sched. A, s. 68 (7).

Qualifying corporation

(8) A corporation is a qualifying corporation in respect of an eligible institution for a taxation year of the eligible institution if the corporation is a financial institution or insurance corporation that,

(a) is related at the end of that year to the eligible institution;

(b) has a permanent establishment in Canada at the end of that year; and

(c) is not exempt from tax under this Division or Part III of the Corporations Tax Act for its last taxation year ending in the year if it is not an insurance corporation.  2007, c. 11, Sched. A, s. 68 (8).

Authorized foreign bank

Paid-up capital

69. (1) The paid-up capital for a taxation year of an authorized foreign bank is the amount determined under paragraph 181.3 (3) (e) of the Federal Act in respect of the authorized foreign bank for the year.  2007, c. 11, Sched. A, s. 69 (1).

Taxable paid-up capital

(2) The taxable paid-up capital for a taxation year of an authorized foreign bank is the amount, if any, by which its paid-up capital for the year exceeds its investment allowance for the year in respect of all amounts each of which is the amount, calculated as of the end of the year before the application of risk weights, that the bank would be required to report under the OSFI risk-weighting guidelines, if those guidelines applied and required a report at that time, of a qualifying investment used or held by the bank in the year in the course of carrying on its Canadian banking business.  2007, c. 11, Sched. A, s. 69 (2).

Investment allowance

(3) The investment allowance for a taxation year of an authorized foreign bank in respect of a qualifying investment is the amount calculated using the formula,

A × B/C

in which,

  “A” is the amount of the qualifying investment, as reported by the authorized foreign bank,

  “B” is the Ontario allocation factor of the related financial institution or the related insurance corporation that issued the investment for its last taxation year ending in the authorized foreign bank’s taxation year, and

  “C” is the Ontario allocation factor of the authorized foreign bank for the year.

2007, c. 11, Sched. A, s. 69 (3).

Qualifying investment

(4) A qualifying investment of an authorized foreign bank is an asset of the bank that is a share of the capital stock or long-term debt of,

(a) a related financial institution that has a permanent establishment in Ontario and is not exempt from tax under this Division or Part III of the Corporations Tax Act; or

(b) a related insurance corporation that has a permanent establishment in Ontario.  2007, c. 11, Sched. A, s. 69 (4).

Adjusted taxable paid-up capital

70. (1) For the purposes of this Division, the adjusted taxable paid-up capital of a financial institution for a taxation year is the amount calculated using the formula,

A + (B/C) – D

in which,

  “A” is,

(a) the amount of the financial institution’s taxable paid-up capital for the year if the financial institution is resident in Canada or is an authorized foreign bank, or

(b) its taxable capital employed in Canada, in any other case,

  “B” is,

(a) the amount of the financial institution’s Canadian tangible property for the year if the financial institution is resident in Canada or is an authorized foreign bank, or

(b) nil, in any other case, 

  “C” is the financial institution’s Canadian allocation factor for the year, and

  “D” is the financial institution’s capital deduction for the year.

2007, c. 11, Sched. A, s. 70 (1).

Canadian tangible property

(2) The amount of a financial institution’s Canadian tangible property for a taxation year is one-third of the sum of all amounts determined under paragraphs 181.3 (1) (a) and (b) of the Federal Act in respect of the institution for the year, measured at the end of the year.  2007, c. 11, Sched. A, s. 70 (2).

Capital deduction

(3) A financial institution’s capital deduction for a taxation year is determined as follows:

1. If the financial institution is related at any time in the year to another corporation that,

i. is a financial institution,

ii. has a permanent establishment in Canada, and

iii. is not exempt from tax payable under,

A. this Division by reason of clause 64 (2) (b), (c), (d), (e) or (f), or

B. Part III of the Corporations Tax Act by reason of subsection 71 (1) of that Act,

the financial institution’s capital deduction for the year is the amount calculated using the formula,

E/F × $15 million

in which,

“E”   is the amount of the financial institution’s taxable capital employed in Canada for the year, and

“F”   is the sum of the amount of “E” for the year and all amounts each of which is the taxable capital employed in Canada of one of those related financial institutions for its last taxation year ending at or before the end of the financial institution’s taxation year.

2. If paragraph 1 does not apply, the financial institution’s capital deduction for the year is $15 million.

2007, c. 11, Sched. A, s. 70 (3).

Limitation

(4) Subsection 181 (4) of the Federal Act applies with necessary modifications for the purposes of this subdivision in determining any amount required to determine a financial institution’s adjusted taxable paid-up capital for a taxation year.  2007, c. 11, Sched. A, s. 70 (4).

Anti-avoidance

71. (1) Despite any other provision in this subdivision, if a financial institution has in a taxation year transferred or disposed of, directly or indirectly, one or more of its assets as part of a transaction, event or series of transactions or events to one or more persons or partnerships that did not deal at arm’s length with the financial institution immediately after the transfer, and the asset or assets had an aggregate carrying value to the financial institution immediately before the transfer that exceeded both $10 million and 25 per cent of the carrying value of the financial institution’s total assets immediately before the transfer, the Ontario Minister may require the financial institution to measure its adjusted taxable paid-up capital for the year as of the day immediately before the commencement of the transaction, event or series of transactions or events rather than at the end of the year.  2007, c. 11, Sched. A, s. 71 (1).

Interpretation

(2) For the purposes of subsection (1), the carrying value of an asset or group of assets shall be determined in accordance with generally accepted accounting principles.  2007, c. 11, Sched. A, s. 71 (2).

Capital tax payable by a financial institution 

72. (1) The amount of capital tax payable by a financial institution under this Division for a taxation year commencing before July 1, 2010 is calculated using the formula,

[A × (B + C) × (D/365)] – E + F

in which,

  “A” is the financial institution’s Ontario allocation factor for the year,

  “B” is the amount determined by multiplying the basic capital tax rate determined under subsection (2) by the lesser of,

(a) the amount of the financial institution’s adjusted taxable paid-up capital for the year, and

(b) its basic capital amount for the year,

  “C” is the amount, if any, calculated by multiplying the additional capital tax rate determined under subsection (4) by the amount, if any, by which the financial institution’s adjusted taxable paid-up capital for the year exceeds its basic capital amount for the year,

  “D” is,

(a) 365 if there are at least 51 weeks in the year, or

(b) the number of days in the year, in any other case, 

  “E” is the financial institution’s small business investment tax credit for the year, as determined under section 73, and

“F” is the financial institution’s small business investment tax credit repayment for the year, as determined under section 79.

2007, c. 11, Sched. A, s. 72 (1).

Basic capital tax rate

(2) The basic capital tax rate for a financial institution for a taxation year is the sum of,

(a) 0.45 per cent multiplied by the ratio of the number of days in the year that are before January 1, 2010 to the total number of days in the year; and

(b) 0.3 per cent multiplied by the ratio of the number of days in the year that are after December 31, 2009 and before July 1, 2010 to the total number of days in the year.

(c) Repealed:  2008, c. 7, Sched. S, s. 18 (1).

2007, c. 11, Sched. A, s. 72 (2); 2008, c. 7, Sched. S, s. 18 (1).

Basic capital amount

(3) A financial institution’s basic capital amount for a taxation year is determined as follows:

1. If the financial institution is related at any time in the year to another corporation that,

i. is a financial institution,

ii. has a permanent establishment in Canada, and

iii. is not exempt from tax payable under,

A. this Division by reason of clause 64 (2) (b), (c), (d), (e) or (f), or

B. Part III of the Corporations Tax Act by reason of subsection 71 (1) of that Act,

the financial institution’s basic capital amount for the year is the amount calculated using the formula,

G/H × $400 million

in which,

“G”   is the amount of the financial institution’s taxable capital employed in Canada for the year, and

“H”   is the sum of the amount of “G” for the year and all amounts each of which is the taxable capital employed in Canada of one of those related financial institutions for its last taxation year ending at or before the end of the financial institution’s taxation year.

2. If paragraph 1 does not apply, the financial institution’s basic capital amount for the year is $400 million.

2007, c. 11, Sched. A, s. 72 (3).

Additional capital tax rate

(4) The additional capital tax rate for a financial institution for a taxation year is determined as follows:

1. If the financial institution is a deposit-taking institution in the taxation year or is related in the year to a deposit-taking institution, the additional capital tax rate is the sum of,

i. 0.675 per cent multiplied by the ratio of the number of days in the year that are before January 1, 2010 to the total number of days in the year, and

ii. 0.45 per cent multiplied by the ratio of the number of days in the year that are after December 31, 2009 and before July 1, 2010 to the total number of days in the year.

iii. Repealed:  2008, c. 7, Sched. S, s. 18 (2).

2. If the financial institution is not a deposit-taking institution in the taxation year and is not related in the year to a deposit-taking institution, the additional capital tax rate is the sum of,

i. 0.54 per cent multiplied by the ratio of the number of days in the year that are before January 1, 2010 to the total number of days in the year, and

ii. 0.36 per cent multiplied by the ratio of the number of days in the year that are after December 31, 2009 and before July 1, 2010 to the total number of days in the year.

iii. Repealed:  2008, c. 7, Sched. S, s. 18 (3).

2007, c. 11, Sched. A, s. 72 (4); 2008, c. 7, Sched. S, s. 18 (2, 3).

Section Amendments with date in force (d/m/y)

2008, c. 7, Sched. S, s. 18 (1-3) - 01/01/2008

Small business investment tax credit

73. (1) For the purposes of the definition of “E” in subsection 72 (1), a financial institution’s small business investment tax credit for a taxation year is such amount as the institution may claim that does not exceed the lesser of,

(a) the amount of its tax earn-back account for the year; and

(b) the amount of its small business investment tax credit account for the year, as determined under section 74.  2007, c. 11, Sched. A, s. 73 (1).

Tax earn-back account

(2) For the purposes of subsection (1), the amount of a financial institution’s tax earn-back account for a taxation year is the amount, if any, by which “A” exceeds “B” where,

  “A” is the sum of its eligible tax for the year and, subject to subsection (3), its three previous taxation years, plus the sum of all small business investment tax credit repayments, if any, under subsection 66.1 (12) of the Corporations Tax Act or section 79 of this Act for its three previous taxation years, and

  “B” is the sum of all small business investment tax credits claimed by the financial institution under subsection 66.1 (2) of the Corporations Tax Act or subsection (1) in its three previous taxation years that were allowed as deductions from amounts included by the financial institution in computing its tax earn-back account for the year.  2007, c. 11, Sched. A, s. 73 (2).

Computation of amount

(3) In computing the amount described in the definition of “A” in subsection (2) for a taxation year, a financial institution may include an amount in respect of its eligible tax for the third taxation year before the year only to the extent that,

(a) the institution has included tax credit amounts under clause 66.1 (4) (a) of the Corporations Tax Act or in the calculation of “A” in subsection 74 (1) in computing its small business investment tax credit account for the year in respect of investments made before December 31 of the calendar year ending in the taxation year; and

(b) the sum of the tax credit amounts referred to in clause (a) exceeds the amount of all small business investment tax credits that were claimed by the financial institution under subsection 66.1 (2) of the Corporations Tax Act or subsection (1) for a previous taxation year.  2007, c. 11, Sched. A, s. 73 (3).

Eligible tax

(4) The amount of a financial institution’s eligible tax for a taxation year for the purposes of subsection (3) is the amount calculated using the formula,

(A – B) × (C × D × 0.2)

in which,

  “A” is the amount of the adjusted taxable paid-up capital of the financial institution for the year as determined under this Division or Division B.1 of Part III of the Corporations Tax Act, as the case may be,

  “B” is the financial institution’s basic capital amount for the year as determined under subsection 72 (3),

  “C” is the financial institution’s Ontario allocation factor for the year, and

  “D” is the sum of,

(a) 0.675 per cent multiplied by the ratio of the number of days in the year that are before January 1, 2010 to the total number of days in the year, and

(b) 0.45 per cent multiplied by the ratio of the number of days in the year that are after December 31, 2009 and before July 1, 2010 to the total number of days in the year.

2007, c. 11, Sched. A, s. 73 (4); 2008, c. 7, Sched. S, s. 19.

Section Amendments with date in force (d/m/y)

2008, c. 7, Sched. S, s. 19 - 01/01/2008

Small business investment tax credit account

74. (1) The amount of a financial institution’s small business investment tax credit account for a taxation year is the amount, if any, by which “A” plus “B” exceeds “C” where,

  “A” is, subject to subsections (3), (4) and (5), the sum of all amounts each of which is a tax credit amount in respect of an eligible investment made before the end of the year by,

(a) the financial institution, if it is a deposit-taking institution,

(b) a specified corporation that was related to the financial institution at the time the investment was made, or

(c)   a deposit-taking institution or an insurance corporation that was related to the financial institution at the time the investment was made, 

  “B” is the sum of all small business investment tax credit repayments required to be paid by the financial institution under subsection 66.1 (12) of the Corporations Tax Act or section 79 of this Act for previous taxation years, and 

  “C” is the sum of,

(a) all amounts each of which is an amount, if any, determined under such rules as may be prescribed in respect of the disposition after May 7, 1996 and before the end of the year of a prescribed investment, and

(b) all small business investment tax credits claimed by the financial institution under subsection 66.1 (2) of the Corporations Tax Act or subsection 73 (1) of this Act for previous taxation years.  2007, c. 11, Sched. A, s. 74 (1).

Eligible investment

(2) For the purposes of this subdivision, an eligible investment is one of the following:

1. A below-prime loan made to a qualifying small business corporation or qualifying small business after May 6, 1997.

2. A patient capital investment made in a qualifying small business or qualifying small business corporation after May 6, 1997.

3. A Class A share issued by a community small business investment fund corporation in consideration for an investment made before January 1, 2004.  2007, c. 11, Sched. A, s. 74 (2).

Limitation

(3) A tax credit amount in respect of an eligible investment made by a specified corporation that is not a financial institution may be included by a financial institution in computing its small business investment tax credit account only in the proportion that the fair market value of the shares of the specified corporation not held by a person unrelated to the financial institution is of the total fair market value of the shares of the specified corporation issued and outstanding at the time that the investment is made.  2007, c. 11, Sched. A, s. 74 (3).

Exception, below-prime loan

(4) No tax credit amount in respect of a below-prime loan may be included by a financial institution in computing its small business investment tax credit account for a taxation year if, as a result of including a tax credit amount in respect of that below-prime loan, the sum of all tax credit amounts calculated for the year and included in computing the financial institution’s small business investment tax credit account for the year in respect of below-prime loans outstanding in the year would exceed 75 per cent of the amount of the financial institution’s tax earn-back account for the year.  2007, c. 11, Sched. A, s. 74 (4).

Eligible investments made by related financial institution or specified corporation 

(5) If a financial institution includes a tax credit amount in the calculation of an amount under clause 66.1 (4) (a) of the Corporations Tax Act or the amount of “A” in subsection (1) in computing its small business investment tax credit account for a taxation year in respect of an eligible investment made by a related deposit-taking institution, a related insurance corporation or a specified corporation, no tax credit amount in respect of the eligible investment may be included in computing the small business investment tax credit account of any other financial institution for any taxation year.  2007, c. 11, Sched. A, s. 74 (5).

Specified corporation

(6) A corporation is a specified corporation with respect to a particular investment in a qualifying small business corporation if,

(a) it is either a specialized financing corporation for the purposes of Part IX of the Bank Act (Canada) or a corporation of a class prescribed for the purposes of this subsection; and

(b) it satisfies such requirements as may be prescribed.  2007, c. 11, Sched. A, s. 74 (6).

Below-prime loan

75. (1) For the purposes of this subdivision, a below-prime loan is a loan for a total amount of not more than $50,000 in respect of which the following conditions are satisfied:

1. If the loan is made at a fixed rate of interest, the rate of interest payable in respect of the loan is less than the average bank prime rate at the time the loan is made.

2. If the loan is made at a floating rate of interest, the agreement in respect of the loan provides that the rate of interest payable in respect of the loan at any time must be less than the average bank prime rate at that time.

3. The loan is not made to a person carrying on a business of a class prescribed for the purposes of this paragraph.

4. The amount of the total assets or the amount of the gross revenue, measured immediately before the loan is made, whichever is greater, of the qualifying small business corporation or qualifying small business to which the loan is made or any associated group of which it is a member, does not exceed $500,000 at the time the loan is made.

5. The loan is not used for such purpose or in such manner as may be prescribed.  2007, c. 11, Sched. A, s. 75 (1).

Deemed qualifying small business corporation or qualifying small business

(2) If the qualifying small business corporation or qualifying small business to which a below-prime loan is made certifies to the financial institution, specified corporation or insurance corporation making the loan that the corporation or business is a qualifying small business corporation or qualifying small business, as the case may be, for the purposes of this subdivision and that the conditions described in paragraphs 3, 4 and 5 of subsection (1) are or will be satisfied, the corporation or business is deemed to be a qualifying small business corporation or qualifying small business for the purposes of this subdivision and the conditions described in paragraphs 3, 4 and 5 of subsection (1) are deemed to be satisfied.  2007, c. 11, Sched. A, s. 75 (2).

Penalty

(3) If a certificate provided by a qualifying small business corporation or qualifying small business under subsection (2) contains a false statement of fact and the Ontario Minister considers that the individual making the statement should reasonably have known that it was false, the corporation or business shall, subject to subsection (4), pay a penalty equal to the lesser of,

(a) $2,000; and

(b) the tax credit amount claimed by a financial institution in respect of the below-prime loan to which the certification relates.  2007, c. 11, Sched. A, s. 75 (3).

Exception

(4) Subsection (3) does not apply if the corporation or business provides evidence that satisfies the Ontario Minister that the individual making the statement believed the fact to be true.  2007, c. 11, Sched. A, s. 75 (4).

Tax credit amount, below-prime loan

(5) For the purposes of the definition of “A” in subsection 74 (1), the tax credit amount in respect of an eligible investment that is a below-prime loan made by a corporation described in clause (a), (b) or (c) of that definition is, for each taxation year in which the loan is outstanding, 4 per cent of the average outstanding balance of the loan during the taxation year.  2007, c. 11, Sched. A, s. 75 (5).

Patient capital investment

76. (1) For the purposes of this subdivision, a patient capital investment is an investment made in a qualifying small business corporation or a qualifying small business that,

(a) satisfies such rules as may be prescribed; and

(b) is not used by the borrower for such purpose or in such manner as may be prescribed.  2007, c. 11, Sched. A, s. 76 (1).

Tax credit amount – patient capital investment

(2) For the purposes of the definition of “A” in subsection 74 (1), the tax credit amount in respect of an eligible investment that is a patient capital investment is the amount determined in accordance with the following rules:

1. In the formulas described in paragraphs 2, 3, 4 and 5 of this subsection,

“D” is the greater of,

(a) 0.0, and

(b) 1– F/$250,000 – H/$50,000,

“E” is the consideration for which the investment was issued,

“F” is the amount not exceeding $250,000, by which the amount of the total assets or the amount of the gross revenue, measured immediately before the investment is made, whichever is greater, of the qualifying small business corporation or qualifying small business or any associated group of which it is a member is greater than $500,000,

“G” is the amount not exceeding $4 million, by which the amount of the total assets or the amount of the gross revenue, measured immediately before the investment is made, whichever is greater, of the qualifying small business corporation or qualifying small business or any associated group of which it is a member is greater than $1 million,

“H” is the lesser of,

(a) $50,000, and

(b) the amount of the consideration in excess of $50,000 for which the investment was issued, and

“I” is the lesser of,

(a) $750,000, and

(b) the amount of the consideration in excess of $250,000 for which the investment was issued.

2. If the investment was issued for consideration of not more than $100,000, the tax credit amount in respect of the investment is the amount calculated using the formula,

[(E × 0.20) + (E × 0.55 × D)] × (1 – (G/$4 million))

3. If the investment was issued for consideration greater than $100,000 but not exceeding $1 million, the tax credit amount in respect of the investment is the amount calculated using the formula,

{(E × 0.10) + [E × 0.10 × (1 – (I/$750,000))]} × (1  – (G/$4 million))

4. If the investment was issued for consideration greater than $1 million, the tax credit amount in respect of the investment is the amount calculated using the following formula:

E × 0.10 × (1 – (G/$4 million))

5. Despite paragraph 2, if the total consideration of all eligible investments issued by a qualifying small business or qualifying small business corporation to a financial institution exceeds $100,000, the tax credit amount in respect of a patient capital investment made by the financial institution in the business or corporation for consideration not exceeding $100,000 is calculated using the formula,

E × 0.20 × (1 – (G/$4 million))

2007, c. 11, Sched. A, s. 76 (2).

Determination of total assets and gross revenue

77. For the purposes of sections 75 and 76, the amount of the total assets and the amount of the gross revenue of the associated group of which a qualifying small business or qualifying small business corporation is a member shall be determined in accordance with the following rules:

1. The total assets of the associated group shall include the total assets of all businesses and corporations in the group.

2. The gross revenue of the associated group shall include the gross revenue of all businesses and corporations in the group.

3. The total assets of a business or corporation in the associated group shall include, if the business or corporation is a member of a partnership that is not a member of the associated group, the same proportion of the total assets of the partnership, as recorded in the books and records of the partnership, as the proportion of the balance of the business’s or corporation’s capital account in the partnership to the total of the capital account balances of all partners of the partnership.

4. The gross revenue of a business or corporation in the associated group shall include, if the business or corporation is a member of a partnership that is not a member of the associated group, the same proportion of the gross revenue of the partnership, as recorded in the books and records of the partnership, as the proportion of the income or loss of the partnership to which the business or corporation is entitled as a partner of the partnership.

5. Except as otherwise provided in this subsection and the regulations, the total assets and the gross revenue of a business or corporation in the associated group shall be determined in accordance with generally accepted accounting principles on an unconsolidated basis.

6. Such other rules as may be prescribed.  2007, c. 11, Sched. A, s. 77.

Tax credit amount, investment in a community small business investment fund corporation

78. (1) The tax credit amount in respect of an eligible investment that is an investment made before January 1, 2004 in a community small business investment fund corporation in accordance with the Community Small Business Investment Funds Act, 1992 is the amount equal to 30 per cent of the amount of equity capital paid by the financial institution, specified corporation or insurance corporation to the corporation on the issuance of Class A shares to the financial institution, specified corporation or insurance corporation.  2007, c. 11, Sched. A, s. 78 (1).

Same

(2) Subsection (1) applies only if the financial institution claiming the tax credit in respect of the investment has applied for the tax credit, in a form approved by the Minister of Finance, and the Minister of Finance has allowed the application.  2007, c. 11, Sched. A, s. 78 (2).

Same

(3) If subsection (1) applies, the financial institution may include in the amount of “A” in subsection 74 (1), in computing its small business investment tax credit account for a taxation year, an additional tax credit amount equal to 30 per cent of the amount of equity capital paid by the financial institution, specified corporation or insurance corporation to the corporation on the issuance of the Class A shares to the financial institution, specified corporation or insurance corporation, to the extent that the corporation has reinvested the capital in eligible investments under the Community Small Business Investment Funds Act, 1992 in the taxation year.  2007, c. 11, Sched. A, s. 78 (3).

Section Amendments with date in force (d/m/y)

CTS 18 AU 10 - 1

Small business investment tax credit repayment

79. For the purposes of the definition of “F” in subsection 72 (1) and the definition of “B” in subsection 74 (1), a financial institution’s small business investment tax credit repayment for a taxation year is equal to the lesser of,

(a) the amount, if any, by which the amount of “C” in subsection 74 (1) as determined for the year exceeds the sum of the amounts of “A” and “B” under that subsection for the year; and

(b) the amount, if any, by which the total of all small business investment tax credits claimed by the financial institution under subsection 66.1 (2) of the Corporations Tax Act or subsection 74 (1) of this Act for previous taxation years exceeds the total of all the financial institution’s small business investment tax credit repayments under this section or subsection 66.1 (12) of the Corporations Tax Act for previous taxation years.  2007, c. 11, Sched. A, s. 79.

Subdivision c — Corporations other than Financial Institutions

Application

80. This subdivision applies to corporations only in respect of taxation years commencing before July 1, 2010 for which they are not financial institutions.  2007, c. 11, Sched. A, s. 80.

Definitions

81. In this subdivision,

“taxable capital” means, with respect to a corporation for a taxation year, the amount that would be the corporation’s taxable capital for the year as determined under section 181.2 of the Federal Act if the amount of its capital, as determined under subsection 181.2 (3) of that Act included its accumulated other comprehensive income at the end of the year; (“capital imposable”)

“taxable capital employed in Canada” means, with respect to a corporation for a taxation year, the corporation’s taxable capital employed in Canada for the year as determined under section 181.4 of the Federal Act. (“capital imposable utilisé au Canada”)  2007, c. 11, Sched. A, s. 81.

Capital tax, corporations other than financial institutions

82. (1) The amount of capital tax payable under this Division by a corporation other than a financial institution for a taxation year commencing before July 1, 2010 is the amount calculated using the formula,

[A × B × (C – D) × E/365] – F

in which,

  “A” is the corporation’s Ontario allocation factor for the year,

  “B” is the corporation’s capital tax rate for the year,

  “C” is,

(a) the amount of the corporation’s taxable capital for the year if the corporation is resident in Canada, or

(b) the amount of the corporation’s taxable capital employed in Canada for the year if the corporation is non-resident,

  “D” is the corporation’s capital deduction for the year,

  “E” is,

(a) 365 days if there are at least 51 weeks in the year, or

(b) the number of days in the year, in any other case, and

“F” is the amount, if any, of the corporation’s capital tax credit for manufacturers for the year, as determined under section 83.1.

2008, c. 7, Sched. S, s. 20 (1).

Capital tax rate

(2) A corporation’s capital tax rate for a taxation year for the purposes of subsection (1) is the sum of,

(a) 0.225 per cent multiplied by the ratio of the number of days in the year that are before January 1, 2010 to the total number of days in the year; and

(b) 0.15 per cent multiplied by the ratio of the number of days in the year that are after December 31, 2009 and before July 1, 2010 to the total number of days in the year.

(c) Repealed:  2008, c. 7, Sched. S, s. 20 (2).

2007, c. 11, Sched. A, s. 82 (2); 2008, c. 7, Sched. S, s. 20 (2).

Section Amendments with date in force (d/m/y)

2008, c. 7, Sched. S, s. 20 (1, 2) - 01/01/2008

Capital deduction – general rule

83. (1) Unless a corporation’s capital deduction for a taxation year is determined under subsection (2), its capital deduction for the year for the purposes of the definition of “D” in subsection 82 (1) is the amount calculated using the formula,

$15 million × A/B

in which,

  “A” is the amount of the corporation’s taxable capital or taxable capital employed in Canada, as the case may be, for the year, and

  “B” is the sum of,

i. the corporation’s taxable capital or taxable capital employed in Canada for the year, and

ii. the taxable capital or taxable capital employed in Canada, as the case may be, of every corporation, if any, (other than a financial institution or corporation that is exempt from tax under this Division or Part III of the Corporations Tax Act) that has a permanent establishment in Canada at any time in the year and with which the corporation is associated for the last taxation year of the associated corporation ending at or before the end of the corporation’s taxation year.

2007, c. 11, Sched. A, s. 83 (1).

Election

(2) If a corporation and every eligible corporation with which it is associated in a taxation year (in this section referred to as the “associated group”) make an election to have this subsection apply, the corporation’s capital deduction for the year for the purposes of the definition of “D” in subsection 82 (1) is calculated using the formula,

C/D

in which,

  “C” is the corporation’s portion, for the year, of the associated group’s net deduction for the calendar year in which the year ends, as determined under subsection (7) or (8), as applicable, and

  “D” is the corporation’s Ontario allocation factor for the year.

2007, c. 11, Sched. A, s. 83 (2).

Eligible corporation

(3) A corporation is an eligible corporation for a taxation year for the purposes of subsection (2) if it has a permanent establishment in Canada at any time in the taxation year referred to in that subsection and is neither a financial institution nor a corporation exempt from tax under this Division or Part III of the Corporations Tax Act.  2007, c. 11, Sched. A, s. 83 (3).

Associated group’s net deduction

(4) For the purposes of this section, an associated group’s net deduction for a calendar year is the sum of the net deductions of each corporation in the associated group for the last taxation year of the corporation ending in the calendar year.  2007, c. 11, Sched. A, s. 83 (4).

Net deduction of a corporation in the associated group

(5) The net deduction of a corporation for a taxation year for the purposes of subsection (4) is the amount calculated using the formula,

E × $15 million × F/G

in which,

  “E” is the corporation’s Ontario allocation factor for the last taxation year ending in the calendar year preceding the calendar year in which the taxation year ends,

“F” is the amount of the total assets of the corporation as recorded in its books and records for the last taxation year ending in the calendar year preceding the calendar year in which the taxation year ends, and

  “G” is the sum of the total assets of each corporation in the associated group as recorded in its books and records for its last taxation year ending in the calendar year preceding the calendar year in which the taxation year ends.

2007, c. 11, Sched. A, s. 83 (5).

Total assets

(6) For the purposes of the definitions of “F” and “G” in subsection (5), the amount of the total assets of a corporation that is not resident in Canada is deemed to be the amount of its total assets situated in Canada.  2007, c. 11, Sched. A, s. 83 (6).

Corporation’s portion of net deduction

(7) If an associated group makes an election under subsection (2) and all of the corporations in the associated group enter into a written allocation agreement that satisfies the following conditions, the corporation’s portion, for a taxation year, of the associated group’s net deduction for the calendar year in which the taxation year ends is the amount determined in accordance with the written allocation agreement:

1. The allocation agreement must allocate among the corporations in the associated group the amount of the associated group’s net deduction for the calendar year in which the corporations’ taxation years end.

2. The amount of the associated group’s net deduction for that calendar year must be determined in accordance with subsection (4).

3. The total of all amounts allocated to each corporation under the agreement must not exceed the associated group’s net deduction for that calendar year.

4. For the taxation year that ends in the calendar year to which the allocation agreement applies, each corporation in the associated group is required to determine its tax payable under this Division in accordance with the allocation agreement.

5. A copy of the allocation agreement must be delivered to the Ontario Minister with the corporation’s tax return for the taxation year in which an amount is claimed under subsection (1).  2007, c. 11, Sched. A, s. 83 (7).

Same, conditions not satisfied

(8) If an associated group makes an election under subsection (2) but subsection (7) does not apply, the corporation’s portion, for a taxation year, of the associated group’s net deduction for the calendar year in which the taxation year ends is nil or such higher amount as may be designated by the Ontario Minister.  2007, c. 11, Sched. A, s. 83 (8).

Capital tax credit for manufacturers

Application

83.1 (1) This section applies to a corporation for a taxation year if the corporation’s Ontario manufacturing labour cost for the taxation year is more than 20 per cent of its total Ontario labour cost for the year.  2008, c. 7, Sched. S, s. 21.

Credit equal to the amount of tax

(2) If the corporation’s Ontario manufacturing labour cost for the year is at least 50 per cent of its total Ontario labour cost for the year, its capital tax credit for manufacturers for the year is the total amount of tax that would, but for this section, be payable by the corporation under this Division for the year.  2008, c. 7, Sched. S, s. 21.

Deduction from tax

(3) If the corporation’s Ontario manufacturing labour cost for the year is less than 50 per cent but more than 20 per cent of its total Ontario labour cost for the year, its capital tax credit for manufacturers for the year is calculated using the formula,

A × ((B – 0.2)/0.3)

in which,

  “A” is the amount of tax that would, but for this section, be payable by the corporation under this Division for the year, and

  “B” is the percentage that its Ontario manufacturing labour cost for the year is of its total Ontario labour cost for the year, expressed in decimals.

2008, c. 7, Sched. S, s. 21.

Ontario manufacturing labour cost

(4) For the purposes of this section, a corporation’s Ontario manufacturing labour cost for a taxation year is the amount that would be its cost of manufacturing and processing labour for the year under Part LII (Canadian Manufacturing and Processing Profits) of the Federal regulations if,

(a) the activities described in paragraphs (a), (b), (e), (f), (g) and (l) of the definition of “manufacturing or processing” in subsection 125.1 (3) of the Federal Act were included in determining what constituted qualified activities under Part LII of those regulations;

(b) references in Part LII of those regulations to qualified activities carried out in Canada were read instead as references to qualified activities carried out in Ontario;

(c) section 5203 of those regulations did not apply; and

(d) paragraph (f) of the definition of “cost of labour” in section 5204 of those regulations did not apply.  2008, c. 7, Sched. S, s. 21.

Total Ontario labour cost

(5) For the purposes of this section, a corporation’s total Ontario labour cost for a taxation year is the amount that would be its cost of labour for the year under Part LII (Canadian Manufacturing and Processing Profits) of the Federal regulations if,

(a) the only salaries and wages taken into account for the purposes of paragraphs (a) and (b) of the definitions of “cost of labour” in sections 5202 and 5204 of those regulations and for the purposes of paragraph (a) of the definitions of “cost of manufacturing and processing labour” in those sections were salaries and wages paid or payable to employees of permanent establishments situated in Ontario;

(b) the reference in paragraph (d) of the definition of “cost of labour” in section 5202 of those regulations to an active business carried on outside Canada were read instead as a reference to an active business carried on outside Ontario; and

(c) the reference in paragraph (e) of the definition of “cost of labour” in section 5204 of those regulations to an active business carried on outside Canada were read instead as a reference to an active business carried on outside Ontario.  2008, c. 7, Sched. S, s. 21.

Section Amendments with date in force (d/m/y)

2008, c. 7, Sched. S, s. 21 - 01/01/2008

Part IV
Refundable Tax Credits

Division A — General

Refundable tax credits, deemed payments on account of tax

84. (1) All amounts claimed by a taxpayer in the taxpayer’s return for a taxation year and allowed to the taxpayer for the year in respect of any of the following tax credits are deemed to have been paid on the taxpayer’s balance-due day for the year on account of the taxpayer’s tax payable under this Act for the year:

1. A qualifying environmental trust tax credit under section 87.

2. A co-operative education tax credit under section 88.

3. An apprenticeship training tax credit under section 89.

4. An Ontario computer animation and special effects tax credit under section 90.

5. An Ontario film and television tax credit under section 91.

6. An Ontario production services tax credit under section 92.

7. An Ontario interactive digital media tax credit under section 93.

8. An Ontario sound recording tax credit under section 94.

9. An Ontario book publishing tax credit under section 95.

10. An Ontario innovation tax credit under section 96.

11. An Ontario business-research institute tax credit under section 97.

12. Property and sales tax credits under section 99 or 100.

12.1 An Ontario energy and property tax credit under section 101.1 or 101.2.

13. A political contribution tax credit under section 102.

14. An Ontario focused flow-through share tax credit under section 103.

15. A children’s activity tax credit under section 103.1.

16. A healthy homes renovation tax credit under section 103.1.1. 2007, c. 11, Sched. A, s. 84 (1); 2009, c. 34, Sched. U, s. 14; 2010, c. 21, s. 2 (1); 2010, c. 23, s. 2; 2012, c. 13, s. 1 (1).

Exception

(2) Subsection (1) does not apply to a person for a taxation year if,

(a) the person’s claim is in a return filed pursuant to an election under subsection 70 (2) or 104 (23), paragraph 128 (2) (e) or (h) or subsection 150 (4) of the Federal Act;

(b) the year ends by reason of the application of paragraph 128 (2) (d) of the Federal Act; or

(c) the person is,

(i) a trust or estate referred to in subdivision k of Division B of Part I of the Federal Act,

(ii) a trust referred to in subsection 149 (5) of the Federal Act,

(iii) an individual exempt from tax for the year under Part II, or

(iv) a corporation exempt from tax for the year under Part III.  2007, c. 11, Sched. A, s. 84 (2).

Death in taxation year

(2.1) If an individual dies in a taxation year ending after December 31, 2008 or a taxation year otherwise indicated, subsection (1) applies to the individual for the year to the extent that the individual, or a legal representative on behalf of the individual, has claimed and the individual has been allowed any of the following tax credits for the year:

1. The tax credits referred to in paragraph 1, 2, 3, 13 or 14 of subsection (1).

2. The tax credit referred to in paragraph 15 of subsection (1), with respect to taxation years ending after December 31, 2009.

3. The tax credit referred to in paragraph 16 of subsection (1), with respect to taxation years ending after December 31, 2011. 2011, c. 9, Sched. 40, s. 4 (2); 2012, c. 13, s. 1 (2).

Claim for tax credit after filing-due date

(3) An individual may claim an amount or additional amount for a taxation year in respect of a tax credit described in any of paragraphs 1, 2, 3, 12, 12.1, 13, 14, 15 and 16 of subsection (1) after the individual’s filing-due date for the year and the Ontario Minister may allow the claim if,

(a) the claim is not made in connection with or for the same year as a remission under the Financial Administration Act (Canada); and

(b) the Ontario Minister is satisfied that the individual would have been entitled, without the application of this subsection, to the amount or additional amount if the claim had been made in the individual’s return for the year.  2007, c. 11, Sched. A, s. 84 (3); 2010, c. 21, s. 2 (2); 2011, c. 9, Sched. 40, s. 4 (3); 2012, c. 13, s. 1 (3).

Same

(4) An amount or additional amount claimed and allowed under subsection (3) is deemed to have been paid on account of the individual’s tax under this Act for a taxation year at such time as the Ontario Minister determines in the period beginning on the individual’s balance-due day for the year and ending on the day on which the individual makes the claim.  2007, c. 11, Sched. A, s. 84 (4).

Partnerships

(5) For greater certainty, in computing any tax credit or other amount under this Part, no amount shall be included in respect of any expenditure incurred by one or more partners on behalf of a partnership, except as expressly otherwise provided by,

(a) the application of subsection 127.41 (1) of the Federal Act for the purposes of section 87; or

(b) any of sections 88, 89, 94, 95 and 97.  2007, c. 11, Sched. A, s. 84 (5).

Section Amendments with date in force (d/m/y)

2009, c. 34, Sched. U, s. 14 - 15/12/2009

2010, c. 21, s. 2 (1, 2) - 29/11/2010; 2010, c. 23, s. 2 - 29/11/2010; 2010, c. 26, Sched. 20, s. 4 - 08/12/2010

2011, c. 9, Sched. 40, s. 4 (1) - 01/01/2009; 2011, c. 9, Sched. 40, s. 4 (2, 3) - 29/11/2010

2012, c. 13, s. 1 (1-3) - 04/10/2012

Transitional

85. (1) If an amount in respect of a taxation year ending before January 1, 2009 is relevant in determining eligibility for or the amount of a tax credit under this Part, the amount shall be calculated in the same manner in which it was calculated for the purposes of the Corporations Tax Act.  2007, c. 11, Sched. A, s. 85 (1).

Regulations

(2) A reference in any provision in this Part to something prescribed, determined or defined by the regulations shall be read as a reference to the thing as prescribed, determined or defined by the regulations made for the purposes of the corresponding provision of the Corporations Tax Act unless a regulation has been made under this Act to prescribe, determine or define the thing.  2007, c. 11, Sched. A, s. 85 (2).

Same

(3) A regulation made under the Corporations Tax Act that applies for the purposes of this Part shall be read with such modifications as may be required.  2007, c. 11, Sched. A, s. 85 (3).

Change in tax status

86. If at any time a corporation becomes or ceases to be exempt from tax under Part I of the Federal Act on its taxable income otherwise than by reason of paragraph 149 (1) (t) of the Federal Act, the corporation is deemed to be a new corporation whose first taxation year begins at that time for the purposes of applying this Part to the corporation in the calculation of the corporation’s entitlements under subsection 84 (1).  2007, c. 11, Sched. A, s. 86.

Division B — Corporations and Individuals

Qualifying environmental trust tax credit

87. The amount of a taxpayer’s qualifying environmental trust tax credit for a taxation year is the amount that would be determined under subsection 127.41 (1) of the Federal Act to be the amount of the person’s “Part XII.4 tax credit” for the year if the tax payable under Part XII.4 of the Federal Act by a qualifying environmental trust for a particular taxation year ending in the taxpayer’s taxation year equalled the amount of tax payable by the trust for the particular year under this Act.  2007, c. 11, Sched. A, s. 87.

Co-operative education tax credit

88. (1) A taxpayer who complies with the requirements of this section may claim an amount for a taxation year in respect of and not exceeding the taxpayer’s co-operative education tax credit for the year.  2007, c. 11, Sched. A, s. 88 (1).

Amount of tax credit

(2) The amount of a taxpayer’s co-operative education tax credit for a taxation year is the sum of,

(a) all amounts each of which is in respect of a qualifying work placement that ends in the year, equal to the lesser of,

(i) the taxpayer’s eligible amount for the year in respect of the qualifying work placement as determined under subsection (8), and

(ii) the maximum amount for the qualifying work placement for the year determined under subsection (2.1); and

(b) the total of all amounts, each of which is an amount determined by multiplying the eligible percentage by the amount of a repayment, if any, made by the taxpayer during the year, of government assistance in respect of a qualifying work placement to the extent the repayment does not exceed the amount of the assistance in respect of the qualifying work placement that,

(i) has not been repaid in a previous taxation year, and

(ii) may reasonably be considered to have reduced the amount of a co-operative education tax credit that would otherwise have been allowed to the taxpayer under this Act, the Corporations Tax Act or the Income Tax Act in respect of the qualifying work placement.  2007, c. 11, Sched. A, s. 88 (2); 2009, c. 18, Sched. 28, s. 9 (1).

Maximum amount for qualifying work placement

(2.1) The maximum amount for a qualifying work placement for a taxation year is the amount calculated using the formula,

($1,000 × X/Y) + [$3,000 × (Y – X)/Y]

in which,

  “X” is the number of consecutive weeks of the qualifying work placement completed by the student before March 27, 2009, and

  “Y” is the total number of consecutive weeks of the student’s qualifying work placement.

2009, c. 18, Sched. 28, s. 9 (2).

Qualifying work placement

(3) For the purposes of this section, a work placement is a qualifying work placement if,

(a) it is a work placement in which a student of an eligible educational institution performs employment duties for a taxpayer under a qualifying co-operative education program offered by the institution;

(b) it satisfies the conditions set out in subsection (4); and

(c) it is certified as a qualifying work placement under subsection (14).  2007, c. 11, Sched. A, s. 88 (3).

Additional conditions

(4) The following are the conditions referred to in clause (3) (b):

1. The work placement has been developed or approved by the institution as a suitable learning situation.

2. The terms of the work placement require the student to engage in productive work during the placement, not just to observe the work of others.

3. The work placement is for a period of,

i. not less than 10 consecutive weeks, if the placement is under a  program referred to in subparagraph 2 i of subsection (5), or

ii. not less than eight consecutive months and not more than 16 consecutive months, if the placement is under a program described in subparagraph 2 ii of subsection (5).

4. The student is entitled to receive remuneration for work performed during the work placement.

5. The terms of the work placement require the corporation to supervise and evaluate the job performance of the student during the placement.

6. The institution monitors the student’s progress in the work placement.  2007, c. 11, Sched. A, s. 88 (4).

Qualifying co-operative education program

(5) An educational program or course of study is a qualifying co-operative education program for the purposes of this section if it meets the following requirements:

1. The program or course of study formally integrates students’ academic studies with work placements.

2. The program or course of study,

i. includes work placements, each of which is at least 10 consecutive weeks and at least half of which are mandatory, that total not more than 75 per cent of the time spent in required academic study and that include mandatory work placements totalling at least 30 per cent of the time spent in required academic study, or

ii. includes one optional work placement of at least eight consecutive months and not more than 16 consecutive months that totals at least 30 per cent and not more than 75 per cent of the time spent in required academic study.

3. All optional work placements taken under the program or course of study must be completed before the start of the final academic term.

4. The program or course of study provides credit towards a post-secondary degree, diploma or certificate granted by an eligible educational institution in respect of qualifying co-operative education programs.

5. All optional qualifying work placements taken by a student under the program or course of study are recorded on the student’s academic transcripts.

6. The Senate, board of governors or other governing body of the eligible educational institution, through its authorized delegate, has given to the Minister of Finance, or to his or her delegate, a document stating that the program or course of study meets the requirements of paragraphs 1 to 5.  2007, c. 11, Sched. A, s. 88 (5).

Division of work placement into consecutive work placements

(6) If a qualifying work placement would otherwise exceed four consecutive months, the following rules apply:

1. The work placement shall be divided into periods of four consecutive months, starting at the beginning of the placement, and each full period of four consecutive months is deemed to be a separate qualifying work placement.

2. If the work placement includes a period of 10 or more consecutive weeks that is not included in a period deemed by paragraph 1 to be a separate qualifying work placement, the period of 10 or more consecutive weeks is deemed to be a separate qualifying work placement.

3. If the work placement includes a period of less than 10 consecutive weeks that is not included in a period deemed by paragraph 1 or 2 to be a separate qualifying work placement, the period of less than 10 consecutive weeks is deemed to form part of the immediately preceding period that is deemed by paragraph 1 to be a separate qualifying work placement.  2007, c. 11, Sched. A, s. 88 (6).

Work placements with associated corporations

(7) Consecutive work placements with two or more associated corporations are deemed to be with only one of the corporations, as designated by the corporations.  2007, c. 11, Sched. A, s. 88 (7).

Eligible amount

(8) A taxpayer’s eligible amount for a taxation year in respect of a qualifying work placement is determined as follows:

1. If the total of all salaries or wages paid by the taxpayer in the previous taxation year is equal to or greater than $600,000, the eligible amount is the sum of,

i. 10 per cent of the sum of all eligible expenditures incurred by the taxpayer in respect of the qualifying work placement before March 27, 2009, and

ii. 25 per cent of the sum of all eligible expenditures incurred by the taxpayer in respect of the qualifying work placement after March 26, 2009.

2. If the total of all salaries or wages paid by the taxpayer in the previous taxation year is not greater than $400,000, the eligible amount is the sum of,

i. 15 per cent of the sum of all eligible expenditures incurred by the taxpayer in respect of the qualifying work placement before March 27, 2009, and

ii. 30 per cent of the sum of all eligible expenditures incurred by the taxpayer in respect of the qualifying work placement after March 26, 2009.

3. If the total of all salaries or wages paid by the taxpayer in the previous taxation year is greater than $400,000 but less than $600,000, the eligible amount is calculated using the formula,

(10% × E) + (25% × F) + [(5% × G) × (1 – H/$200,000)]

in which,

“E” is the sum of all eligible expenditures incurred by the taxpayer in respect of the qualifying work placement before March 27, 2009,

“F” is the sum of all eligible expenditures incurred by the taxpayer in respect of the qualifying work placement after March 26, 2009,

“G” is the sum of all eligible expenditures incurred by the taxpayer in respect of the qualifying work placement, and

“H” is the amount by which the total of all salaries or wages paid by the taxpayer in the previous taxation year exceeds $400,000.

2009, c. 18, Sched. 28, s. 9 (3).

Same

(9) The amount of salaries or wages deemed to have been paid by a corporation in a previous taxation year for the purposes of subsection (8) is the amount that would otherwise be determined for that year if the rules set out in subsections 87 (1.2) and (1.4) of the Federal Act applied.  2007, c. 11, Sched. A, s. 88 (9).

Eligible expenditures

(10) The following amounts paid or payable by a taxpayer in respect of a qualifying work placement are eligible expenditures for a taxation year:

1. An amount paid or payable to a student in the qualifying work placement if,

i. the amount is salary or wages paid or payable on account of employment at a permanent establishment of the taxpayer in Ontario, and

ii. the amount is required by subdivision a of Division B of Part I of the Federal Act to be included, when paid, in the student’s income from a source that is an office or employment.

2. A fee paid or payable to an employment agency in consideration for the provision of services performed by the student in the qualifying work placement, if the services are performed by the student primarily at a permanent establishment of the taxpayer in Ontario.  2007, c. 11, Sched. A, s. 88 (10).

Government assistance

(11) The total of all eligible expenditures made by a taxpayer in respect of a qualifying work placement is the amount otherwise determined less the amount of all government assistance, if any, that, on the taxpayer’s filing-due date for the year, the taxpayer has received, is entitled to receive or may reasonably expect to receive in respect of the eligible expenditures.  2007, c. 11, Sched. A, s. 88 (11).

Exceptions

(12) Despite subsection (10), an expenditure made by a particular taxpayer in respect of a work placement is not an eligible expenditure for the purposes of this section,

(a) to the extent that the amount of the expenditure would not be considered to be reasonable in the circumstances by taxpayers dealing with each other at arm’s length; or

(b) if the work placement is with a taxpayer other than the particular taxpayer.  2007, c. 11, Sched. A, s. 88 (12).

Rules for associated corporations

(13) If a qualifying work placement is deemed by subsection (7) to be a work placement with only one of two or more corporations,

(a) the corporation designated under that subsection is deemed to have paid all amounts referred to in paragraphs 1 and 2 of subsection (10) that were paid or payable by the corporations, and those amounts are deemed not to have been paid or payable by the other corporations; and

(b) the corporation designated under that subsection is deemed to have received or be entitled to receive all government assistance in respect of the work placement that any of the other corporations has received, is entitled to receive or may reasonably expect to receive, and the other corporations are deemed not to have received and not to be entitled to receive that government assistance.  2007, c. 11, Sched. A, s. 88 (13).

Certification of qualifying work placement

(14) Every eligible educational institution in Ontario that has a qualifying co-operative educational program that has qualifying work placements shall certify in a manner or form approved by the Ontario Minister to every taxpayer providing a qualifying work placement that the placement is a qualifying work placement for the purposes of this section, and the certification shall contain the name of the student in the placement and any additional information required by the Ontario Minister.  2007, c. 11, Sched. A, s. 88 (14).

Minister of Finance’s direction and order

(15) If incorrect certifications have been given under subsection (14) or an eligible educational institution has certified a work placement to be a qualifying work placement when it was not, the Minister of Finance may direct the educational institution to cease certifying work placements and may order that all or certain of the work placements of the institution be deemed not to be qualifying work placements for the purposes of this section until the Minister of Finance revokes the direction and order.  2007, c. 11, Sched. A, s. 88 (15).

Resumption of certification

(16) If the Minister of Finance is satisfied that the educational institution will comply with the Minister of Finance’s directions with respect to the accuracy, form and content of certifications to be given under subsection (14), the Minister of Finance, subject to any conditions the Minister of Finance considers reasonable, may revoke the direction and order given under subsection (15), and all work placements that would have otherwise been qualifying work placements while the Minister of Finance’s direction and order were in effect shall, to the extent approved by the Minister of Finance, be considered to be qualifying work placements for the purposes of this section and may be so certified by the educational institution.  2007, c. 11, Sched. A, s. 88 (16).

Directions under Corporations Tax Act and Income Tax Act

(17) Directions and orders of the nature described in subsection (15) that were made under the authority of the Corporations Tax Act or the Income Tax Act shall continue to have the same effect under this Act until revoked by the Minister of Finance in accordance with subsection (16).  2007, c. 11, Sched. A, s. 88 (17).

Partnerships

(18) The following rules apply if a corporation or individual (in this section referred to as the “partner”) is a member of a partnership and the partnership would qualify for a fiscal period ending in a taxation year of the partner for a co-operative education tax credit if the partnership were a corporation or individual, as the case may be, and the fiscal period were its taxation year:

1. Subject to paragraph 2, the portion of that co-operative education tax credit that may reasonably be considered to be the partner’s share of the tax credit may be included in determining the amount of the partner’s co-operative education tax credit for the partner’s taxation year.

2. If the partner or any other member of the partnership bases a claim in respect of the partnership for the taxation year under subsection (19), no amount in respect of the partnership may be included in determining the amount of the partner’s co-operative education tax credit for the partner’s taxation year otherwise than pursuant to subsection (19).  2007, c. 11, Sched. A, s. 88 (18).

Same

(19) If it is acceptable to the Ontario Minister, a partner’s share of a partnership’s co-operative education tax credit determined under subsection (18) for a fiscal period shall be equal to such amount as the partner claims not exceeding the amount, if any, by which the amount of that credit exceeds the total of all amounts each of which is claimed under this section, section 43.4 of the Corporations Tax Act or subsection 8 (15) of the Income Tax Act in respect of the amount of that credit by another partner.  2007, c. 11, Sched. A, s. 88 (19).

Limited partner

(20) Despite subsections (18) and (19), a limited partner’s share of a partnership’s tax credit referred to in subsection (18) is deemed to be nil.  2007, c. 11, Sched. A, s. 88 (20).

Definitions

(21) In this section,

“eligible educational institution” means,

(a) a university or college of applied arts and technology in Ontario, whose enrolment is counted for the purposes of calculating annual operating grants entitlements from the Government of Ontario,

(b) the Michener Institute of Applied Health Sciences,

(c) the Ontario College of Art and Design, and

(d) Redeemer University College; (“établissement d’enseignement autorisé”)

“eligible percentage” means, in respect of a repayment of government assistance, the percentage used in determining the amount of the tax credit under this section, section 43.4 of the Corporations Tax Act or subsection 8 (15) of the Income Tax Act, as the case may be, if the receipt of the government assistance reduced the amount of a tax credit available under the applicable provision; (“pourcentage autorisé”)

“government assistance” means assistance in any form from a government, municipality or other public authority, and includes a grant, subsidy, forgivable loan, deduction from tax or investment allowance, but does not include,

(a) a tax credit under section 39 or this Part, any of sections 43.3 to 43.13 of the Corporations Tax Act or subsection 8 (15) or (16.1) of the Income Tax Act, or

(b) a tax credit under section 125.4, 125.5 or 127 of the Federal Act. (“aide gouvernementale”)  2007, c. 11, Sched. A, s. 88 (21); 2008, c. 19, Sched. U, s. 3.

Section Amendments with date in force (d/m/y)

2008, c. 19, Sched. U, s. 3 - 01/01/2008

2009, c. 18, Sched. 28, s. 9 (1-3) - 01/01/2009

Apprenticeship training tax credit

89. (1) A taxpayer who complies with the requirements of this section may claim an amount for a taxation year in respect of and not exceeding the taxpayer’s apprenticeship training tax credit for the year.  2007, c. 11, Sched. A, s. 89 (1).

Amount of tax credit

(2) The amount of a taxpayer’s apprenticeship training tax credit for a taxation year is the total of all amounts each of which is in respect of a qualifying apprenticeship for the year and each of which is the sum of “A” and “B” where,

  “A” is the lesser of,

(a) the sum of,

(i) the product obtained by multiplying the taxpayer’s specified percentage for the taxation year in respect of eligible expenditures incurred before March 27, 2009 by the taxpayer’s eligible expenditures incurred during the year and before March 27, 2009 in respect of the qualifying apprenticeship,

(ii) the product obtained by multiplying the taxpayer’s specified percentage for the taxation year in respect of eligible expenditures incurred after March 26, 2009 and in respect of an apprenticeship program that commenced before April 24, 2015 by the taxpayer’s eligible expenditures incurred during the year and after March 26, 2009 and in respect of an apprenticeship program that commenced before April 24, 2015, and

(iii) the product obtained by multiplying the taxpayer’s specified percentage for the taxation year in respect of eligible expenditures incurred in respect of an apprenticeship program that commenced on or after April 24, 2015 by the taxpayer’s eligible expenditures incurred during the year and in respect of an apprenticeship program that commenced on or after April 24, 2015, and

(b) the amount calculated under subsection (3), and

  “B” is an amount calculated by multiplying the amount of government assistance repaid by the taxpayer in the year by the percentage determined under subsection (3.1), to the extent that the repayment does not exceed the amount of the government assistance in respect of the qualifying apprenticeship that,

(a) has not been repaid in a previous year, and

(b) may reasonably be considered to have reduced the amount in respect of an apprenticeship training tax credit that would otherwise have been allowed to the taxpayer under this Act, the Corporations Tax Act or the Income Tax Act in respect of the qualifying apprenticeship.  2009, c. 34, Sched. U, s. 15 (1); 2015, c. 20, Sched. 40, s. 11 (1, 2).

Specified percentage, eligible expenditures incurred before March 27, 2009

(2.1) For the purposes of subclause (a) (i) of the definition of “A” in subsection (2), a taxpayer’s specified percentage for the taxation year in respect of eligible expenditures incurred before March 27, 2009 is the following:

1. 25 per cent if the total of all salaries or wages paid by the taxpayer in the previous taxation year is $600,000 or more.

2. The percentage determined by adding 25 per cent and the percentage calculated using the following formula, if the total of all salaries or wages paid by the taxpayer in the previous taxation year is greater than $400,000 but less than $600,000:

0.05 × [1 – (AA/200,000)]

in which,

“AA” is the total amount of salaries or wages paid by the taxpayer in the previous taxation year that is in excess of $400,000.

3. 30 per cent in any other case.  2009, c. 34, Sched. U, s. 15 (1).

Specified percentage, eligible expenditures incurred after March 26, 2009

(2.2) For the purposes of subclause (a) (ii) of the definition of “A” in subsection (2), a taxpayer’s specified percentage for the taxation year in respect of eligible expenditures incurred after March 26, 2009 and in respect of an apprenticeship program that commenced before April 24, 2015 is the following:

1. 35 per cent if the total of all salaries or wages paid by the taxpayer in the previous taxation year is $600,000 or more.

2. The percentage determined by adding 35 per cent and the percentage calculated using the following formula, if the total of all salaries or wages paid by the taxpayer in the previous taxation year is greater than $400,000 but less than $600,000:

0.10 × [1 – (BB/200,000)]

in which,

“BB” is the total amount of salaries or wages paid by the taxpayer in the previous taxation year that is in excess of $400,000.

3. 45 per cent in any other case.  2009, c. 34, Sched. U, s. 15 (1); 2015, c. 20, Sched. 40, s. 11 (3).

Specified percentage, eligible expenditures incurred in respect of an apprenticeship program that commenced on or after April 24, 2015

(2.3) For the purposes of subclause (a) (iii) of the definition of “A” in subsection (2), a taxpayer’s specified percentage for the taxation year in respect of eligible expenses incurred in respect of an apprenticeship program that commenced on or after April 24, 2015 is the following:

1. 25 per cent if the total of all salaries or wages paid by the taxpayer in the previous taxation year is $600,000 or more.

2. The percentage determined by adding 25 per cent and the percentage calculated using the following formula, if the total of all salaries or wages paid by the taxpayer in the previous taxation year is greater than $400,000 but less than $600,000:

0.05 × [1 – (CC/200,000)]

in which,

“CC” is the total amount of salaries or wages paid by the taxpayer in the previous taxation year that is in excess of $400,000.

3. 30 per cent in any other case. 2015, c. 20, Sched. 40, s. 11 (4).

Amount

(3) For the purposes of clause (b) of the definition of “A” in subsection (2), the amount is calculated using the formula,

($5,000 × C/Y) + ($10,000 × D/Y) + ($5,000 × E/Y)

in which,

  “C” is the total number of days in the taxation year that the apprentice was employed by the taxpayer as an apprentice in a qualifying apprenticeship and that were,

(a) before March 27, 2009, and

(b) within the first 36 months of the commencement of the apprentice in the apprenticeship program,

  “D” is the total number of days in the taxation year that the apprentice was employed by the taxpayer as an apprentice in a qualifying apprenticeship in an apprenticeship program that commenced before April 24, 2015 and that were,

(a) after March 2009, and

(b) within the first 48 months of the commencement of the apprentice in the apprenticeship program,

  “E” is the total number of days in the taxation year that the apprentice was employed by the taxpayer as an apprentice in a qualifying apprenticeship that is an apprenticeship program that commenced on or after April 24, 2015 and that were within the first 36 months of the commencement of the apprentice in the apprenticeship program, and

  “Y” is 365 days or, if the taxation year includes February 29, 366 days.

2009, c. 34, Sched. U, s. 15 (1); 2015, c. 20, Sched. 40, s. 11 (5-8).

Same

(3.1) For the purposes of determining the amount of “B” in subsection (2),

(a) if the government assistance was received in respect of eligible expenditures incurred before March 27, 2009, the percentage is the specified percentage that would be determined under subsection (2.1) for the taxation year in which the government assistance was received;

(b) if the government assistance was received in respect of eligible expenditures incurred after March 26, 2009 and in respect of an apprenticeship program that commenced before April 24, 2015, the percentage is the specified percentage that would be determined under subsection (2.2) for the taxation year in which the government assistance was received; and

(c) if the government assistance was received in respect of eligible expenditures incurred in respect of an apprenticeship program that commenced on or after April 24, 2015, the percentage is the specified percentage that would be determined under subsection (2.3) for the taxation year in which the government assistance was received.  2009, c. 34, Sched. U, s. 15 (1); 2015, c. 20, Sched. 40, s. 11 (9-11).

(4), (5) Repealed :  2009, c. 34, Sched. U, s. 15 (1).

Same, amount of salaries or wages

(6) For the purposes of subsections (2.1), (2.2) and (2.3), the amount of salaries or wages paid by a corporation in a previous taxation year is deemed to be the amount that would be calculated if the rules set out in subsections 87 (1.2) and (1.4) of the Federal Act applied.  2007, c. 11, Sched. A, s. 89 (6); 2009, c. 34, Sched. U, s. 15 (2); 2015, c. 20, Sched. 40, s. 11 (12).

Qualifying apprenticeship

(7) For the purposes of this section, a qualifying apprenticeship with a taxpayer is an apprenticeship in respect of which all of the following conditions and such other conditions as may be prescribed by the Minister of Finance are satisfied:

1. Repealed :  2009, c. 34, Sched. U, s. 15 (3).

2. The taxpayer, or the taxpayer acting through a union or a local or joint apprenticeship committee, and the apprentice are participating in an apprenticeship program in which the training agreement has been registered under the Ontario College of Trades and Apprenticeship Act, 2009 or the Apprenticeship and Certification Act, 1998 or in which the contract of apprenticeship has been registered under the Trades Qualification and Apprenticeship Act.

3. The apprenticeship is in a qualifying skilled trade in the opinion of the Minister of Training, Colleges and Universities or a person designated by him or her.  2007, c. 11, Sched. A, s. 89 (7); 2009, c. 22, s. 100 (1); 2009, c. 34, Sched. U, s. 15 (3).

End of apprenticeship

(8) For the purposes of this section, a qualifying apprenticeship is deemed to end on the earlier of the date on which the apprentice is entitled to receive the appropriate certificate under the Ontario College of Trades and Apprenticeship Act, 2009 or a predecessor of that Act and the date, if any, on which the training agreement or contract of apprenticeship is cancelled, suspended or revoked.  2009, c. 22, s. 100 (2).

Eligible expenditure

(9) Subject to subsections (12) and (13), each of the following amounts paid by a taxpayer in respect of a qualifying apprenticeship is an eligible expenditure for the taxation year:

1. An amount paid to an apprentice in a qualifying apprenticeship if,

i. the amount is salary or wages paid on account of employment at a permanent establishment of the taxpayer in Ontario,

ii. the amount is required by subdivision a of Division B of Part I of the Federal Act to be included in the apprentice’s income from a source that is an office or employment,

iii. the amount is incurred before March 27, 2009 and relates to services provided by the apprentice to the taxpayer during the first 36 months of the apprenticeship program and does not relate to services performed before the commencement or after the end of the apprenticeship program,

iv. the amount is incurred after March 26, 2009 and in respect of an apprenticeship program that commenced before April 24, 2015 and relates to services provided by the apprentice to the taxpayer during the first 48 months of the apprenticeship program and does not relate to services performed before the commencement or after the end of the apprenticeship program, and

v. the amount is incurred in respect of an apprenticeship program that commenced on or after April 24, 2015 and relates to services provided by the apprentice to the taxpayer during the first 36 months of the apprenticeship program and does not relate to services performed before the commencement or after the end of the apprenticeship program.

2. A fee paid to an employment agency in consideration for the provision of services performed by the apprentice in the qualifying apprenticeship if,

i. the services are performed by the apprentice primarily at a permanent establishment of the taxpayer in Ontario,

ii. the fee is paid or payable for services performed by the apprentice for the taxpayer,

iii. the fee is incurred before March 27, 2009 and the fee relates to services provided by the apprentice to the taxpayer during the first 36 months of the apprenticeship program and does not relate to services performed before the commencement or after the end of the apprenticeship program,

iv. the fee is incurred after March 26, 2009 and in respect of an apprenticeship program that commenced before April 24, 2015 and the fee relates to services provided by the apprentice to the taxpayer during the first 48 months of the apprenticeship program and does not relate to services performed before the commencement or after the end of the apprenticeship program, and

v. the fee is incurred in respect of an apprenticeship program that commenced on or after April 24, 2015 and the fee relates to services provided by the apprentice to the taxpayer during the first 36 months of the apprenticeship program and does not relate to services performed before the commencement or after the end of the apprenticeship program.  2007, c. 11, Sched. A, s. 89 (9); 2009, c. 34, Sched. U, s. 15 (4-6); 2015, c. 20, Sched. 40, s. 11 (13-18).

Interpretation

(10) For the purposes of this section, an apprenticeship program is deemed to commence on the date that the contract of apprenticeship is or was registered under the Trades Qualification and Apprenticeship Act or the training agreement is registered under the Ontario College of Trades and Apprenticeship Act, 2009 or the Apprenticeship and Certification Act, 1998, as the case may be.  2010, c. 1, Sched. 29, s. 7 (2); 2015, c. 20, Sched. 40, s. 11 (19).

Other eligible expenditures

(11) Subject to subsections (12) and (13), such other expenditures as may be prescribed are eligible expenditures of a taxpayer for a taxation year if the prescribed conditions are satisfied.  2007, c. 11, Sched. A, s. 89 (11).

Exception

(12) An expenditure made by a taxpayer in respect of a qualifying apprenticeship is not an eligible expenditure to the extent that the amount of the expenditure would not be considered to be reasonable in the circumstances by taxpayers dealing with each other at arm’s length.  2007, c. 11, Sched. A, s. 89 (12).

Total eligible expenditures

(13) For the purposes of this section, the total of eligible expenditures made by a taxpayer in respect of a qualifying apprenticeship in a taxation year is calculated using the formula,

F – G

in which,

“F” is the sum of the amounts determined under subsections (9) and (11), and

  “G” is the amount of all government assistance, if any, that, on the taxpayer’s filing-due date for the year, the taxpayer has received, is entitled to receive or may reasonably expect to receive in respect of the eligible expenditures.

2007, c. 11, Sched. A, s. 89 (13).

Employment agencies

(14) If a taxpayer pays a fee to an employment agency in respect of a qualifying apprenticeship that is an eligible expenditure of the taxpayer for a taxation year,

(a) the taxpayer is deemed to employ the apprentice for the purposes of the definitions of “C”, “D” and “E” in subsection (3), and the employment agency is deemed not to employ the apprentice; and

(b) the taxpayer is deemed to be participating in the apprenticeship program for the purposes of paragraph 2 of subsection (7), and the employment agency is deemed not to be participating in the apprenticeship program.  2007, c. 11, Sched. A, s. 89 (14); 2009, c. 34, Sched. U, s. 15 (7); 2015, c. 20, Sched. 40, s. 11 (20).

Limitation

(15) If an amount paid or payable by a taxpayer or a partnership is otherwise used as a basis for a taxpayer claiming a tax credit under section 88, section 43.4 of the Corporations Tax Act or subsection 8 (15) of the Income Tax Act, the amount so paid or payable is deemed to be nil for the purposes of determining the taxpayer’s tax credit under this section.  2007, c. 11, Sched. A, s. 89 (15).

Partnerships

(16) The following rules apply if a corporation or individual (in this section referred to as the “partner”) is a member of a partnership and the partnership would qualify for a fiscal period ending in a taxation year of the partner for an apprenticeship training tax credit if the partnership were a corporation or an individual, as the case may be, and the fiscal period were its taxation year:

1. Subject to paragraph 2, the portion of that apprenticeship training tax credit that may reasonably be considered to be the partner’s share of the tax credit may be included in determining the amount of the partner’s apprenticeship training tax credit for the partner’s taxation year.

2. If the partner or any other member of the partnership bases a claim in respect of the partnership for the taxation year under subsection (17), no amount in respect of the partnership may be included in determining the amount of the partner’s apprenticeship training tax credit for the partner’s taxation year otherwise than pursuant to subsection (17).  2007, c. 11, Sched. A, s. 89 (16).

Same

(17) If it is acceptable to the Ontario Minister, a partner’s share of a partnership’s apprenticeship training tax credit determined under subsection (16) for a fiscal period shall be equal to such amount as the partner claims not exceeding the amount, if any, by which the amount of that credit exceeds the total of all amounts each of which is claimed under this section, section 43.13 of the Corporations Tax Act or subsection 8 (16.1) of the Income Tax Act in respect of the amount of that credit by any other partner.  2007, c. 11, Sched. A, s. 89 (17).

Limited partner

(18) Despite subsections (16) and (17), a limited partner’s share of a partnership’s tax credit referred to in subsection (16) is deemed to be nil.  2007, c. 11, Sched. A, s. 89 (18).

Definitions

(19) In this section,

“apprenticeship program” means a program to which the Ontario College of Trades and Apprenticeship Act, 2009, or a predecessor of that Act applies or applied; (“programme d’apprentissage”)

“government assistance” means assistance in any form from a government, municipality or other public authority, and includes a grant, subsidy, forgivable loan, deduction from tax or investment allowance, but does not include,

(a) a tax credit under section 39 or this Part, any of sections 43.3 to 43.13 of the Corporations Tax Act or subsection 8 (15) or (16.1) of the Income Tax Act, or

(b) a tax credit under section 125.4, 125.5 or 127 of the Federal Act; (“aide gouvernementale”)

“qualifying skilled trade” means an apprenticeship trade designated by the Minister of Finance that is or was regulated under the Ontario College of Trades and Apprenticeship Act, 2009, the Apprenticeship and Certification Act, 1998 or the Trades Qualification and Apprenticeship Act. (“métier spécialisé admissible”) 2007, c. 11, Sched. A, s. 89 (19); 2009, c. 22, s. 100 (4).

Section Amendments with date in force (d/m/y)

2009, c. 22, s. 100 (1, 2, 4) - 08/04/2013; 2009, c. 22, s. 100 (3) - no effect - see 2010, c. 1, Sched. 29, s. 7 (3) - 28/10/2009; 2009, c. 34, Sched. U, s. 15 (1-7) - 27/03/2009

2010, c. 1, Sched. 29, s. 7 (1) - 27/03/2009; 2010, c. 1, Sched. 29, s. 7 (2) - 08/04/2013

2015, c. 20, Sched. 40, s. 11 (1-20) - 04/06/2015

Division C — Corporations

Ontario computer animation and special effects tax credit

90. (1) A corporation that is a qualifying corporation for a taxation year and that complies with the requirements of this section may claim an amount for the year in respect of and not exceeding the corporation’s Ontario computer animation and special effects tax credit for the year.  2007, c. 11, Sched. A, s. 90 (1).

Amount of tax credit

(2) The amount of a qualifying corporation’s Ontario computer animation and special effects tax credit for a taxation year is,

(a) 20 per cent of its qualifying labour expenditures for the year for expenditures incurred on or before April 23, 2015; and

(b) 18 per cent of its qualifying labour expenditures for the year for expenditures incurred after April 23, 2015. 2015, c. 20, Sched. 40, s. 12 (1).

Transitional

(2.1) Despite subsection (2), the amount of a qualifying corporation’s Ontario computer animation and special effects tax credit for a taxation year is 20 per cent of its qualifying labour expenditures for the year for expenditures incurred after April 23, 2015 and before August 1, 2016 in respect of an eligible production if all of the following criteria are satisfied:

1. Before April 24, 2015, the corporation has entered into at least one written agreement in respect of a qualifying labour expenditure for the eligible production with a person that deals at arm’s length with the corporation and any of the following criteria are satisfied:

i. The agreement is in respect of digital animation or digital visual effects for use in the eligible production.

ii. The agreement demonstrates, in the opinion of the Minister of Tourism, Culture and Sport, that the corporation has made a significant commitment to production activities related to the eligible production in Ontario.

2. Before August 1, 2015, the corporation has notified the Ontario Media Development Corporation in writing of its intent to apply for a certificate under subsection (5) in respect of the eligible production.

3. Before August 1, 2016, the corporation has applied to the Ontario Media Development Corporation for a certificate under subsection (5) in respect of the eligible production.

4. Principal photography or key animation for the production commenced before August 1, 2015. 2015, c. 20, Sched. 40, s. 12 (1).

Qualifying labour expenditure

(3) The qualifying labour expenditure of a qualifying corporation for a taxation year is the total of all amounts each of which is the eligible labour expenditure of the corporation in respect of an eligible production for the year.  2007, c. 11, Sched. A, s. 90 (3).

Eligible labour expenditure

(4) The eligible labour expenditure of a qualifying corporation in respect of an eligible production for a taxation year is the amount, if any, by which “A” exceeds “B” where,

  “A” is the corporation’s Ontario labour expenditure for the year for eligible computer animation and special effects activities in respect of the eligible production, determined without reference to any equity investment in the production held by a Canadian government film agency, and

  “B” is an amount in respect of assistance relating to expenditures with respect to the eligible production, other than excluded government assistance, that, on the qualifying corporation’s filing-due date for the year, the qualifying corporation or any other person or partnership has received, is entitled to receive or may reasonably expect to receive, equal to the sum of,

(a) the amount of the assistance directly attributable to the portion of the Ontario labour expenditure referred to in the definition of “A”, and

(b) the amount determined by multiplying the amount of the assistance that is not directly attributable to the portion of the Ontario labour expenditure referred to in the definition of “A” by the ratio of the amount of that portion of the Ontario labour expenditure in respect of the production to the amount of the prescribed cost of eligible computer animation and special effects activities of the eligible production.  2007, c. 11, Sched. A, s. 90 (4).

Application for certificate

(5) In order to be eligible to claim an amount in respect of an Ontario computer animation and special effects tax credit under this section, a qualifying corporation shall apply to the Ontario Media Development Corporation for a certificate for the purposes of this section.  2007, c. 11, Sched. A, s. 90 (5).

Same

(6) A qualifying corporation that applies for a certificate shall provide to the Ontario Media Development Corporation the information specified by the Ontario Media Development Corporation for the purposes of this section.  2007, c. 11, Sched. A, s. 90 (6).

Certificate

(7) If a qualifying corporation provides the information in accordance with subsection (6) in respect of its eligible computer animation and special effects activities for a taxation year, the Ontario Media Development Corporation shall issue a certificate, and any amended certificate it considers appropriate, to the qualifying corporation with respect to its eligible productions for the year, certifying the estimated amount of the corporation’s tax credit under this section for the year in respect of each eligible production.  2007, c. 11, Sched. A, s. 90 (7).

Certificate to be delivered with return

(8) In order to claim an amount under this section for a taxation year, a qualifying corporation shall deliver to the Ontario Minister with its return for the year the certificate most recently issued for the year in respect of its eligible computer animation and special effects activities, or a certified copy of it.  2007, c. 11, Sched. A, s. 90 (8).

Revocation of certificate

(9) A certificate or amended certificate issued under subsection (7) may be revoked if,

(a) an omission or incorrect statement was made for the purpose of obtaining the certificate;

(b) the corporation is not a qualifying corporation; or

(c) the activities are not eligible computer animation and special effects activities for the purposes of this section.  2007, c. 11, Sched. A, s. 90 (9).

Same

(10) A certificate that is revoked is deemed never to have been issued.  2007, c. 11, Sched. A, s. 90 (10).

Definitions

(11) In this section,

“assistance” means an amount that would be included under paragraph 12 (1) (x) of the Federal Act in computing a corporation’s income for a taxation year if that paragraph were read without reference to subparagraphs (v) to (vii); (“aide”)

“Canadian government film agency” means a federal or provincial government agency whose mandate relates to the provision of assistance to film productions in Canada; (“organisme cinématographique gouvernemental canadien”)

“eligible computer animation and special effects activities” means prescribed activities that are carried out in Ontario directly in support of digital animation or digital visual effects for use in an eligible production; (“activités admissibles liées aux effets spéciaux et à l’animation informatiques”)

“eligible production” means a film or television production that,

(a) is produced for commercial exploitation,

(b) is not described in any of subparagraphs (b) (i) to (xi) of the definition of “excluded production” in subsection 1106 (1) of the Federal regulations,

(c) is not a production for which, in the opinion of the Minister of Culture, public financial support would be contrary to public policy, and

(d) is a production in respect of which a certificate has been issued to a qualifying corporation under subsection 91 (15) or 92 (8), if no eligible expenditure in respect of the production is incurred on or before April 23, 2015; (“production admissible”)

“excluded government assistance” means the forms of assistance listed in clauses (a) to (d) of the definition of “government assistance” in this subsection; (“aide gouvernementale exclue”)

“government assistance” means assistance from a government, municipality or other public authority in any form, including a grant, subsidy, forgivable loan, deduction from tax and investment allowance, but not including,

(a) a tax credit under this Part,

(b) a tax credit under any of sections 43.3 to 43.13 of the Corporations Tax Act,

(c) a tax credit under section 125.4 or 125.5 of the Federal Act, or

(d) payments from the 2015 Ontario Production Services and Computer Animation and Special Effects Transitional Fund administered by the Ontario Media Development Corporation; (“aide gouvernementale”)

“Ontario labour expenditure” means, in respect of a qualifying corporation for an eligible production, the amount determined under the prescribed rules; (“dépense de main-d’oeuvre en Ontario”)

“prescribed cost” means, in respect of an eligible production, the amount determined under the prescribed rules; (“coût prescrit”)

“producer” means, in respect of an eligible production, the individual who would be considered to be the producer of the production for the purposes of determining if the production were an eligible Ontario production for the purposes of section 91; (“producteur”)

“qualifying corporation” means a Canadian corporation that,

(a) performs, at a permanent establishment in Ontario operated by it, eligible computer animation and special effects activities,

(i) for an eligible production that it undertakes, or

(ii) for an eligible production under contract with the producer of the production,

(b) is not controlled directly or indirectly in any manner whatever by one or more corporations all or part of whose taxable income is exempt from tax under section 57 of the Corporations Tax Act or Part III of this Act, and

(c) is not a corporation that is a prescribed labour-sponsored venture capital corporation under the Federal regulations. (“société admissible”)  2007, c. 11, Sched. A, s. 90 (11); 2012, c. 8, Sched. 56, s. 1; 2015, c. 20, Sched. 40, s. 12 (2); 2015, c. 38, Sched. 20, s. 1.

Ontario Media Development Corporation

(12) A reference in this section to the Ontario Media Development Corporation includes a reference to such person as the Minister of Culture may designate to carry out the functions of the Ontario Media Development Corporation for the purposes of this section.  2007, c. 11, Sched. A, s. 90 (12).

Section Amendments with date in force (d/m/y)

2012, c. 8, Sched. 56, s. 1 - 20/06/2012

2015, c. 20, Sched. 40, s. 12 (1, 2) - 04/06/2015; 2015, c. 38, Sched. 20, s. 1 - 24/04/2015

Ontario film and television tax credit

91. (1) A corporation that is a qualifying production company for a taxation year and that complies with the requirements of this section may claim an amount for the year in respect of and not exceeding the corporation’s Ontario film and television tax credit for the year.  2007, c. 11, Sched. A, s. 91 (1).

Amount of tax credit

(2) The amount of a qualifying production company’s Ontario film and television tax credit for a taxation year is the sum of the company’s eligible credits for the year in respect of eligible Ontario productions.  2007, c. 11, Sched. A, s. 91 (2).

Eligible credit for first-time production

(3) A qualifying production company’s eligible credit for a taxation year in respect of a first-time production is the sum of the amounts determined under subsections (4) and (5) in respect of the production.  2007, c. 11, Sched. A, s. 91 (3); 2008, c. 7, Sched. S, s. 22 (1); 2009, c. 18, Sched. 28, s. 10 (1).

Pre-2008 expenditures

(4) The amount determined under this subsection in respect of a first-time production for the purposes of subsection (3) is the sum of the amounts determined under the following paragraphs for the portion of the qualifying production company’s qualifying labour expenditure for the production that relates to expenditures incurred after December 31, 2004 and before January 1, 2008:

1. 40 per cent of the lesser of,

i. the amount, if any, by which $240,000 exceeds the total of the company’s qualifying labour expenditures for the production for previous taxation years, and

ii. the company’s qualifying labour expenditure for the taxation year for the production.

2. 30 per cent of the amount, if any, by which the company’s qualifying labour expenditure for the taxation year for the production exceeds the lesser of the amounts, if any, determined under subparagraphs 1 i and ii.

3. If the production is a regional Ontario production, 10 per cent of the company’s qualifying labour expenditure for the taxation year for the production.  2007, c. 11, Sched. A, s. 91 (4); 2008, c. 7, Sched. S, s. 22 (2).

(4.1) Repealed:  2009, c. 18, Sched. 28, s. 10 (2).

Post-2007 expenditures

(5) The amount determined under this subsection in respect of a first-time production for the purposes of subsection (3) is the sum of the amounts determined under the following paragraphs for the portion of the qualifying production company’s qualifying labour expenditure for the production that relates to expenditures incurred after December 31, 2007:

1. 40 per cent of the lesser of,

i. the amount, if any, by which $240,000 exceeds the sum of,

A. the sum of the company’s qualifying labour expenditures for the production for previous taxation years, and

B. the lesser of the amounts, if any, determined under subparagraphs 1 i and ii of subsection (4) in respect of the production for the taxation year, and

ii. the company’s qualifying labour expenditure for the taxation year for the production.

2. 35 per cent of the amount, if any, by which the company’s qualifying labour expenditure for the taxation year for the production exceeds the lesser of the amounts, if any, determined under subparagraphs 1 i and ii.

3. If the production is a regional Ontario production, 10 per cent of the company’s qualifying labour expenditure for the taxation year for the production.  2009, c. 18, Sched. 28, s. 10 (3).

Exception, prescribed tax credit rate for first-time productions

(6) If a percentage is prescribed for the purposes of replacing a percentage set out in paragraph 1, 2 or 3 of subsection (5), the prescribed percentage and not the percentage that it replaces shall apply in determining an amount under that paragraph.  2007, c. 11, Sched. A, s. 91 (6); 2008, c. 7, Sched. S, s. 22 (5); 2009, c. 18, Sched. 28, s. 10 (4).

Small first-time productions, application of subs. (8)

(7) Subsection (8) applies to a first-time production if,

(a) the total amount of a qualifying production company’s qualifying labour expenditures for the first-time production, at the time the production is completed, is $50,000 or less; and

(b) a tax credit under this section or section 43.5 of the Corporations Tax Act in respect of those expenditures has not been claimed by the qualifying production company under subsection (3) or 43.5 (4.1) of the Corporations Tax Act.  2007, c. 11, Sched. A, s. 91 (7).

Rules for small first-time productions

(8) Despite subsection (3), the corporation’s eligible credit in respect of a first-time production for a taxation year is the lesser of the corporation’s qualifying labour expenditure in respect of the production for the year and,

(a) if the production is a regional Ontario production, the amount, if any, by which $20,000 exceeds the total of all tax credits claimed and allowed for previous taxation years under this section or section 43.5 of the Corporations Tax Act in respect of the corporation’s qualifying labour expenditures for the production; or

(b) if the production is not a regional Ontario production, the amount, if any, by which $15,000 exceeds the total of all tax credits claimed and allowed for previous taxation years under this section or section 43.5 of the Corporations Tax Act in respect of the corporation’s qualifying labour expenditures for the production.  2007, c. 11, Sched. A, s. 91 (8).

Production other than first-time or regional production

(9) Subject to subsection (10), the eligible credit of a qualifying production company for a taxation year in respect of an eligible Ontario production that is not a first-time production is the sum of,

(a) 30 per cent of the company’s qualifying labour expenditure for the year in respect of the production, as determined in relation to expenditures incurred after December 31, 2004 and before January 1, 2008 that are included in the Ontario labour expenditure for the year in respect of the production; and

(a.1) Repealed:  2009, c. 18, Sched. 28, s. 10 (5).

(b) 35 per cent of the company’s qualifying labour expenditure for the year in respect of the production, as determined in relation to expenditures incurred after December 31, 2007 that are included in the Ontario labour expenditure for the year in respect of the production.  2007, c. 11, Sched. A, s. 91 (9); 2008, c. 7, Sched. S, s. 22 (6, 7); 2009, c. 18, Sched. 28, s. 10 (5).

Regional Ontario production other than first-time production

(10) The eligible credit of a qualifying production company for a taxation year in respect of an eligible Ontario production that is a regional Ontario production but is not a first-time production is the sum of,

(a) 40 per cent of the company’s qualifying labour expenditure for the year for the production, as determined in relation to expenditures incurred after December 31, 2004 and before January 1, 2008 that are included in the Ontario labour expenditure for the year in respect of the production; and

(a.1) Repealed:  2009, c. 18, Sched. 28, s. 10 (6).

(b) 45 per cent of the company’s qualifying labour expenditure for the year for the production, as determined in relation to expenditures incurred after December 31, 2007 that are included in the Ontario labour expenditure for the year in respect of the production.  2007, c. 11, Sched. A, s. 91 (10); 2008, c. 7, Sched. S, s. 22 (8, 9); 2009, c. 18, Sched. 28, s. 10 (6).

Exception, prescribed tax credit rate

(11) If a percentage is prescribed for the purposes of replacing a percentage set out in subsection (9) or (10), the prescribed percentage and not the percentage that it replaces shall apply in determining an amount under that subsection in respect of the period to which the prescribed percentage applies.  2007, c. 11, Sched. A, s. 91 (11).

Exception

(12) Despite subsections (3) to (11), a qualifying production company’s eligible credit under this section for a taxation year in respect of an eligible Ontario production is nil if the company claims a tax credit in respect of the production for any taxation year under section 43.10 of the Corporations Tax Act or section 92.  2007, c. 11, Sched. A, s. 91 (12).

Application for certificate

(13) In order to be eligible to claim an amount in respect of an Ontario film and television tax credit under this section with respect to a particular production, a qualifying production company shall apply to the Ontario Media Development Corporation, or to another person designated by the Minister of Culture, for certification that the production is an eligible Ontario production for the purposes of this section.  2007, c. 11, Sched. A, s. 91 (13).

Same

(14) A qualifying production company that applies for certification shall provide the information specified for the purposes of this section by the Ontario Media Development Corporation or the person designated by the Minister of Culture to the person who specified that it be provided.  2007, c. 11, Sched. A, s. 91 (14).

Certificate

(15) If the particular production is an eligible Ontario production for the purposes of this section, the Ontario Media Development Corporation or the person designated by the Minister of Culture shall issue to the qualifying production company a certificate and any amended certificates, with each certificate,

(a) certifying that the particular production is an eligible Ontario production for the purposes of this section; and

(b) certifying the estimated amount of the corporation’s eligible credit for the production, for the purposes of this section.  2007, c. 11, Sched. A, s. 91 (15).

Same

(16) In order to claim an amount under this section for a taxation year in respect of a particular production, a qualifying production company must deliver to the Ontario Minister with its return for the year the certificate most recently issued in respect of the production or a certified copy of it.  2007, c. 11, Sched. A, s. 91 (16).

Revocation of certificate

(17) A certificate or amended certificate issued under subsection (15) may be revoked,

(a) if an omission or incorrect statement was made for the purpose of obtaining the certificate;

(b) if the production is not an eligible Ontario production;

(c) if the corporation to which the certificate is issued is not a qualifying production company; or

(d) if the corporation is issued a certificate in respect of the production under section 43.10 of the Corporations Tax Act or section 92.  2007, c. 11, Sched. A, s. 91 (17).

Same

(18) A certificate that is revoked is deemed never to have been issued.  2007, c. 11, Sched. A, s. 91 (18).

Definitions

(19) In this section,

“eligible Ontario production” means a film or television production that satisfies the prescribed conditions; (“production ontarienne admissible”)

“film studio” means,

(a) a building in which sets are used for the purpose of making film or television productions and sound, light and human access are controlled, or

(b) a building in which activities are carried out directly in support of animation if the production is an animated production or contains animated segments; (“studio”)

“first-time production” means an eligible Ontario production that is a first-time production under the prescribed rules; (“première production”)

“Greater Toronto Area” means the geographic area composed of the City of Toronto and the regional municipalities of Durham, Halton, Peel and York; (“Grand Toronto”)

“location day” means, in respect of an eligible Ontario production, a day on which principal photography for the production is done in Ontario outside a film studio; (“jour de tournage en extérieur”)

“Ontario labour expenditure” means the amount determined under the prescribed rules; (“dépense de main-d’oeuvre en Ontario”)

“principal photography” includes key animation if the film or television production is an animated production or contains animated segments; (“principaux travaux de prise de vues”)

“qualifying labour expenditure” means the amount determined under the prescribed rules; (“dépense de main-d’oeuvre admissible”)

“qualifying production company” means a corporation that satisfies the prescribed conditions; (“société de production admissible”)

“regional Ontario production” means an eligible Ontario production,

(a) for which the principal photography in Ontario is done entirely outside the Greater Toronto Area,

(b) for which the principal photography in Ontario is done in whole or in part outside a film studio, but only if,

(i) the number of location days in the Greater Toronto Area for the production does not exceed 15 per cent of the total number of location days in respect of the production, and

(ii) the number of location days for the production is at least five or, in the case of a production that is a television series, is at least equal to the number of episodes in the production, or

(c) for which the principal photography in Ontario consists entirely of animation, but only if no more than 15 per cent of the principal photography in Ontario is done in the Greater Toronto Area. (“production régionale ontarienne”)  2007, c. 11, Sched. A, s. 91 (19); 2009, c. 18, Sched. 28, s. 10 (7); 2009, c. 34, Sched. U, s. 16.

Section Amendments with date in force (d/m/y)

2008, c. 7, Sched. S, s. 22 (1-9) - 01/01/2008

2009, c. 18, Sched. 28, s. 10 (1-7) - 01/01/2009; 2009, c. 34, Sched. U, s. 16 - 01/01/2009

Ontario production services tax credit

92. (1) A corporation that is a qualifying corporation for a taxation year and that complies with the requirements of this section may claim an amount for the year in respect of and not exceeding the corporation’s Ontario production services tax credit for the year.  2007, c. 11, Sched. A, s. 92 (1).

Amount of tax credit

(2) The amount of a qualifying corporation’s Ontario production services tax credit for a taxation year is the sum of the corporation’s eligible credits for the year in respect of eligible productions.  2007, c. 11, Sched. A, s. 92 (2).

Eligible credit

(3) A qualifying corporation’s eligible credit for a taxation year in respect of an eligible production is the sum of,

(a) 18 per cent of the portion of its qualifying Ontario labour expenditure in respect of the production for the year that relates to expenditures incurred after December 31, 2004 and before January 1, 2008;

(a.1) Repealed:  2009, c. 18, Sched. 28, s. 11 (1).

(b) 25 per cent of the portion of its qualifying Ontario labour expenditure in respect of the production for the year that relates to expenditures incurred after December 31, 2007 and before July 1, 2009;

(c) 25 per cent of the portion of its qualifying production expenditure in respect of the production for the year that relates to expenditures incurred after June 30, 2009 and on or before April 23, 2015; and

(d) 21.5 per cent of the portion of its qualifying production expenditure in respect of the production for the year that relates to expenditures incurred after April 23, 2015.  2007, c. 11, Sched. A, s. 92 (3); 2008, c. 7, Sched. S, s. 23 (1-3); 2009, c. 18, Sched. 28, s. 11 (1); 2009, c. 34, Sched. U, s. 17 (1); 2015, c. 20, Sched. 40, s. 13 (1, 2).

Transitional

(3.1) Despite subsection (3), a qualifying corporation’s eligible credit for a taxation year in respect of an eligible production includes 25 per cent of the portion of its qualifying production expenditures in respect of the production for the year that relates to expenditures incurred after April 23, 2015 and before August 1, 2016 if all of the following criteria are satisfied:

1. Before April 24, 2015, the corporation has entered into at least one written agreement in respect of a qualifying production expenditure in respect of the production with a person that deals at arm’s length with the corporation and any of the following criteria are satisfied:

i. The agreement is in respect of services of a producer, a director, a key cast member, a production crew or a post-production crew.

ii. The agreement is in respect of a studio located in Ontario, or a location in Ontario.

iii. The agreement demonstrates, in the opinion of the Minister of Tourism, Culture and Sport, that the corporation has made a significant commitment to production activities in Ontario.

2. Before August 1, 2015, the corporation has applied to the Ontario Media Development Corporation under subsection (6) for a certificate in respect of the production.

3. Principal photography or key animation for the production commenced before August 1, 2015. 2015, c. 20, Sched. 40, s. 13 (3).

Exception, prescribed tax credit rate

(4) If a percentage is prescribed for the purposes of clause (3) (b), (c) or (d), the prescribed percentage and not the percentage set out in that clause shall apply in determining an amount under that clause in respect of the period to which the prescribed percentage applies.  2009, c. 34, Sched. U, s. 17 (2); 2015, c. 20, Sched. 40, s. 13 (4).

Exception

(5) Despite subsections (3) and (4), a qualifying corporation’s eligible credit for a taxation year in respect of an eligible production is nil if the corporation claims a tax credit in respect of the production for any taxation year under section 43.5 of the Corporations Tax Act or section 91.  2007, c. 11, Sched. A, s. 92 (5).

Qualifying production expenditure

(5.1) Subject to subsection (5.1.1), for the purposes of this section, a corporation’s qualifying production expenditure for a taxation year in respect of an eligible production is the amount, if any, by which “A” exceeds “B” where,

  “A” is the sum of,

(a) the corporation’s eligible wage expenditure for the year or a previous taxation year in respect of the production,

(b) the corporation’s eligible service contract expenditure for the year or a previous taxation year in respect of the production,

(c) the amount determined under subsection (5.5) for the year or a previous taxation year in respect of the production, and

(d) the corporation’s eligible tangible property expenditure for the year or a previous taxation year in respect of the production, and

  “B” is the sum of,

(a) all relevant assistance in respect of the production,

(i) that may reasonably be considered to be directly attributable to any amount included in the determination of “A” for the year,

(ii) that, when it was required to file its return under this Act for the year, the corporation or any other person or partnership had received, was entitled to receive or was reasonably expected to receive, to the extent the assistance had not been repaid pursuant to a legal obligation to do so, and

(iii) that has not caused a reduction of any amount included in the determination of “A” for the year in respect of the production,

(b) the sum of all amounts, each of which is the corporation’s qualifying production expenditure in respect of the production for a previous taxation year before the end of which the principal photography of the production began, and

(c) if the corporation is a parent, the sum of all amounts each of which is determined in respect of the production under subsection (5.5) as a consequence of an agreement referred to in that subsection between the corporation and the subsidiary corporation.  2009, c. 34, Sched. U, s. 17 (3); 2015, c. 20, Sched. 40, s. 13 (5).

Same, expenditure not to exceed limit

(5.1.1) A corporation’s qualifying production expenditure for a taxation year that commences on or after April 24, 2015 in respect of an eligible production shall not exceed the corporation’s qualifying production expenditure limit for the taxation year in respect of the eligible production, as determined under subsection (5.1.2). 2015, c. 20, Sched. 40, s. 13 (6).

Qualifying production expenditure limit

(5.1.2) For the purposes of subsection (5.1.1), a corporation’s qualifying production expenditure limit for a taxation year in respect of an eligible production is the amount, if any, by which “C” exceeds “D” where,

  “C” is four times the sum of,

(a) the amount of the corporation’s eligible wage expenditure for the year or a previous taxation year in respect of the production to the extent that the eligible wage expenditure has not been included in the determination of the corporation’s qualifying production expenditure in respect of the production for a previous taxation year,

(b) the amount of the corporation’s eligible service contract expenditure for the year or a previous taxation year in respect of the production that relates to salary and wages paid to Ontario-based individuals in respect of services provided under the contract to the extent that the amount has not been included in the determination of the corporation’s qualifying production expenditure in respect of the production for a previous taxation year, and

(c) the amount determined under subsection (5.5) for the year or a previous year in respect of the production to the extent that the amount has not been included in the determination of the corporation’s qualifying production expenditure in respect of the production for a previous taxation year, and

  “D” is the sum of,

(a) all relevant assistance in respect of the production,

(i) that may reasonably be considered to be directly attributable to any amount included in the determination of “A” under subsection (5.1) for the year,

(ii) that, when it was required to file its return under this Act for the year, the corporation or any other person or partnership had received, was entitled to receive or was reasonably expected to receive, to the extent the assistance had not been repaid pursuant to a legal obligation to do so, and

(iii) that has not caused a reduction of any amount included in the determination of “A” under subsection (5.1) for the year in respect of the production, and

(b) if the corporation is a parent, the sum of all amounts each of which is determined in respect of the production under subsection (5.5) as a consequence of an agreement referred to in that subsection between the corporation and the subsidiary corporation. 2015, c. 20, Sched. 40, s. 13 (6).

Eligible wage expenditure

(5.2) For the purposes of this section and subject to subsection (5.8), a qualifying corporation’s eligible wage expenditure for a taxation year in respect of an eligible production is an amount equal to the salary and wages that are,

(a) reasonable in the circumstances;

(b) directly attributable to the production;

(c) incurred by the corporation in the year or the previous taxation year;

(d) related to services rendered in Ontario for the stages of production of the production after the final script stage to the end of the post-production stage; and

(e) paid by it in the year or within 60 days after the end of the year to the corporation’s employees who were Ontario-based individuals at the time the payments were made (other than amounts incurred in the previous year that were paid within 60 days after the end of the previous year).  2009, c. 34, Sched. U, s. 17 (3); 2015, c. 20, Sched. 40, s. 13 (7).

Eligible service contract expenditure

(5.3) For the purposes of this section and subject to subsections (5.8) and (15), a qualifying corporation’s eligible service contract expenditure for a taxation year in respect of an eligible production is the total of all amounts each of which is the cost of a contract for services that is,

(a) reasonable in the circumstances;

(b) directly attributable to the production;

(c) incurred by the corporation in the year or the previous taxation year;

(d) related to services rendered in Ontario in the year or the previous year to the corporation for the stages of production of the production, after the final script stage to the end of the post-production stage;

(e) paid by it in the year or within 60 days after the end of the year (other than amounts incurred in the previous taxation year that were paid within 60 days after the end of the previous year); and

(f) paid to a person or partnership that carries on a business in Ontario through a permanent establishment and that is,

(i) an Ontario-based individual at the time the amount is paid and who is not an employee of the corporation, provided the services are personally rendered in Ontario in respect of the production by the individual or the individual’s employees at a time when they were Ontario-based individuals,

(ii) another corporation that is a taxable Canadian corporation, provided the services are personally rendered in Ontario in respect of the production by the other corporation’s employees at a time when they were Ontario-based individuals,

(iii) another corporation that is a taxable Canadian corporation, all the issued and outstanding shares of the capital stock of which (except directors’ qualifying shares) belong to an Ontario-based individual and the activities of which consist principally of the provision of the individual’s services, or

(iv) a partnership, each member of which is an Ontario-based individual or a taxable Canadian corporation, provided the services are personally rendered in Ontario in respect of the production by an Ontario-based individual who is a member of the partnership or by the partnership’s employees at a time when they were Ontario-based individuals.  2009, c. 34, Sched. U, s. 17 (3); 2015, c. 20, Sched. 40, s. 13 (8, 9).

Same, security services provided by off-duty police officers

(5.4) Subject to clauses (5.3) (a) to (e) and subsection (5.8), an amount paid in a taxation year or a previous taxation year in respect of an eligible production to a trade union representing members of the Ontario Provincial Police Force or a municipal police force in Ontario for the provision of security services on the set of the production may be included in a corporation’s eligible service contract expenditure for the taxation year in respect of the production.  2009, c. 34, Sched. U, s. 17 (3).

Parent-subsidiary amounts

(5.5) If the corporation has a parent that is a taxable Canadian corporation and if the corporation and the parent have agreed that paragraph (c) of the definition of “Canadian labour expenditure” in subsection 125.5 (1) of the Federal Act applies in respect of the production, the amount determined under this subsection is equal to the reimbursement made by the corporation in the year, or within 60 days after the end of the year (other than amounts incurred by the parent in the previous year that were reimbursed by the corporation within 60 days after the end of the previous year), of an amount that was incurred by the parent in a particular taxation year of the parent in respect of the production, if the amount would be included in the corporation’s eligible wage expenditure or eligible service contract expenditure in respect of the production for the particular taxation year if the corporation had had that particular taxation year and the expenditure had been incurred by the corporation for the same purpose as it was incurred by the parent and paid at the same time and to the same person or partnership as it was paid by the parent.  2009, c. 34, Sched. U, s. 17 (3).

Eligible tangible property expenditure

(5.6) For the purposes of this section and subject to subsections (5.7), (5.8), (16) and (17), a qualifying corporation’s eligible tangible property expenditure for a taxation year in respect of an eligible production is the sum of the amounts described in the following paragraphs:

1. If tangible property is acquired by the corporation, the total of all amounts each of which is an amount calculated in respect of a particular tangible property using the formula,

(A × B × C)/365

in which,

“A” is the undepreciated capital cost of the property at the beginning of the year or, where the property was acquired in the year, the cost of the property,

“B” is the rate applicable to the property under Schedule II of the Federal regulations, and

“C” is the number of days in the taxation year that the tangible property was available for immediate use in respect of the eligible production in Ontario.

2. If tangible property is leased by the corporation, the total of all amounts each of which is the proportion of the lease cost attributable to the use in Ontario of the property in the taxation year in the course of completing the eligible production.  2009, c. 34, Sched. U, s. 17 (3); 2015, c. 20, Sched. 40, s. 13 (10).

Same

(5.7) An expenditure is not included in the eligible tangible property expenditure of a qualifying corporation for a taxation year with respect to an eligible production unless all of the following conditions are satisfied:

1. The property is used in Ontario in a manner that is directly attributable to the eligible production.

2. The property is used during the stages of production of the production, after the final script stage to the end of the post-production stage.

3. The expenditure is incurred by the corporation in the year or the previous taxation year.

4. The expenditure is paid by the corporation in the year or within 60 days after the end of the year (other than amounts incurred in the previous taxation year that were paid within 60 days after the end of the previous year).

5. The expenditure is reasonable in the circumstances.

6. The expenditure is paid to a person or partnership,

i. that is ordinarily engaged in the business of selling or leasing tangible property of the type of tangible property acquired or leased by the corporation,

ii. that carries on business through a permanent establishment in Ontario,

iii. that is a taxable Canadian corporation or an Ontario-based individual at the time the amount is paid or a partnership comprised entirely of members that are taxable Canadian corporations or Ontario-based individuals at the time the amount is paid,

iv. in the case of an individual, who is not an employee of the qualifying corporation, and

v. in the case of a partnership, whose members are not employees of the qualifying corporation.  2009, c. 34, Sched. U, s. 17 (3); 2010, c. 1, Sched. 29, s. 8 (1); 2015, c. 20, Sched. 40, s. 13 (11).

Same

(5.8) A corporation’s qualifying production expenditure in respect of an eligible production does not include expenditures incurred for or on account of,

(a) meals and entertainment (other than reasonable expenditures for food and non-alcoholic beverages provided to individuals working on an eligible production at a studio or location set on a day filming is taking place);

(b) alcoholic beverages;

(c) hotel and living expenses;

(d) remuneration determined by reference to profits or revenues;

(e) an amount to which section 37 of the Federal Act applies; or

(f) for greater certainty, an amount that is not a production cost (including an amount in respect of advertising, marketing, promotion, market research) or an amount related in any way to another film or video production.  2009, c. 34, Sched. U, s. 17 (3).

Application for certificate

(6) In order to be eligible to claim an amount in respect of an Ontario production services tax credit under this section with respect to a particular production, a qualifying corporation shall apply to the Ontario Media Development Corporation, or to another person designated by the Minister of Culture, for certification that the production is an eligible production for the purposes of this section.  2007, c. 11, Sched. A, s. 92 (6).

Same

(7) A qualifying corporation that applies for certification shall provide the information specified for the purposes of this section by the Ontario Media Development Corporation or the person designated by the Minister of Culture to the person who specified that it be provided.  2007, c. 11, Sched. A, s. 92 (7).

Certificate

(8) The Ontario Media Development Corporation or the person designated by the Minister of Culture shall issue to the qualifying corporation a certificate and any amended certificates,

(a) if the particular production is an eligible production for the purposes of this section; and

(b) if the qualifying corporation,

(i) has not claimed a tax credit in respect of the production under section 43.5 of the Corporations Tax Act or section 91, or

(ii) has claimed a tax credit in respect of the production under section 43.5 of the Corporations Tax Act or section 91 which was not allowed on assessment by the Minister of Finance or the Ontario Minister, as the case may be, and the corporation has not objected to the assessment on the issue of the disallowance.  2007, c. 11, Sched. A, s. 92 (8).

Same

(9) Each certificate issued under subsection (8) must certify that the particular production is an eligible production for the purposes of this section and certify the estimated amount of the corporation’s eligible credit for the production for the purposes of this section.  2007, c. 11, Sched. A, s. 92 (9).

Certificate to be delivered with return

(10) In order to claim an amount under this section for a taxation year in respect of a particular production, a qualifying corporation must deliver to the Ontario Minister with its return for the year the certificate most recently issued in respect of the production or a certified copy of the certificate.  2007, c. 11, Sched. A, s. 92 (10).

Revocation of certificate

(11) A certificate or amended certificate issued under subsection (8) may be revoked,

(a) if an omission or incorrect statement was made for the purpose of obtaining the certificate;

(b) if the production is not an eligible production;

(c) if the corporation to which the certificate is issued is not a qualifying corporation; or

(d) if a certificate in respect of the production is issued to the corporation under section 43.5 of the Corporations Tax Act or section 91.  2007, c. 11, Sched. A, s. 92 (11).

Same

(12) A certificate that is revoked is deemed never to have been issued.  2007, c. 11, Sched. A, s. 92 (12).

Definitions

(13) In this section,

“eligible production” means a film or television production that satisfies the prescribed conditions; (“production admissible”)

“Ontario-based individual” means, in relation to an eligible production, an individual who was resident in Ontario at the end of the calendar year immediately before the calendar year in which principal photography for the production commences; (“particulier domicilié en Ontario”)

“parent” means a corporation that owns all the issued and outstanding shares of the capital stock (except directors’ qualifying shares) of another corporation; (“société mère”)

“qualifying corporation” means a corporation that satisfies the prescribed conditions; (“société admissible”)

“qualifying Ontario labour expenditure” means the amount determined under the prescribed rules. (“dépense de main-d’oeuvre admissible en Ontario”)

“relevant assistance” means an amount that satisfies the prescribed conditions; (“aide pertinente”)

“tangible property” means property that can be seen, weighed, measured, felt or touched or that is in any way perceptible to the senses, and is deemed to include software. (“bien corporel”)  2007, c. 11, Sched. A, s. 92 (13); 2009, c. 34, Sched. U, s. 17 (4); 2010, c. 1, Sched. 29, s. 8 (2).

Inflation of tax credit claim

(14) Despite any other provision in this section, if a qualifying corporation has incurred expenditures that are included in its qualifying production expenditure for the year in respect of an eligible production pursuant to a contract with a person or partnership with which the corporation does not deal at arm’s length, and the Ontario Minister reasonably believes that one of the principal purposes of the existence of the contract was to increase the amount of the corporation’s tax credit under this section, the amount of the tax credit will be reduced by the amount of the increase.  2009, c. 34, Sched. U, s. 17 (5).

Same, eligible service contract

(15) For taxation years commencing after April 23, 2015, if a qualifying corporation enters into a contract for service with a person or partnership with which the corporation does not deal at arm’s length, an amount incurred by the corporation pursuant to the contract shall not be included in the corporation’s eligible service contract expenditures for a taxation year in respect of an eligible production for the purposes of subsection (5.3) unless the amount would have been an eligible wage expenditure or eligible service contract expenditure of the person or partnership if,

(a) the person or partnership was a qualifying corporation; and

(b) the expenditure was incurred by the person or partnership in respect of an eligible production. 2015, c. 20, Sched. 40, s. 13 (12).

Same, acquisition of tangible property

(16) For taxation years commencing after April 23, 2015, if a qualifying corporation acquires tangible property from a person or partnership with which the corporation does not deal at arm’s length, for the purposes of determining the corporation’s eligible tangible property expenditure for a taxation year in respect of an eligible production under subsection (5.6), the definition of “A” in paragraph 1 of that subsection shall be read as follows,

  “A” is,

(a) in respect of the year in which the tangible property was acquired, the lesser of,

(i) the corporation’s purchase price of the tangible property,

(ii) the costs of the tangible property to the person or partnership, and

(iii) the undepreciated capital costs of the tangible property at the beginning of the person’s or partnership’s taxation year in which the corporation acquired the tangible property, and

(b) in respect of a year other than the year in which the tangible property was acquired, the amount that would be the undepreciated capital costs of the property at the beginning of the year if the costs of the property had been the amount determined under clause (a). 2015, c. 20, Sched. 40, s. 13 (12).

Same, lease of tangible property

(17) For taxation years commencing after April 23, 2015, if a qualifying corporation leases tangible property from a person or partnership with which the corporation does not deal at arm’s length, then the following rules apply in respect of the lease for the purposes of determining the corporation’s eligible tangible property expenditure for a taxation year in respect of an eligible production under subsection (5.6):

1. If the person or partnership that leases the tangible property to the corporation owns the tangible property, then the amount of the corporation’s eligible tangible property expenditure for the year in respect of that property is the lesser of the amount that would otherwise be determined under paragraph 2 of subsection (5.6) and the amount that would be determined under paragraph 1 of subsection (5.6) if the corporation owned the tangible property.

2. If the person or partnership that leases the tangible property to the corporation has itself leased the tangible property, then the amount of the corporation’s eligible tangible property expenditure for the year in respect of that property is the amount that would be determined under paragraph 2 of subsection (5.6) if the lease cost for the purposes of that paragraph was the lesser of the lease costs of the corporation and the lease costs of the person or partnership. 2015, c. 20, Sched. 40, s. 13 (12).

Exception, parties to certain litigation

(18) A qualifying corporation that was a party to the action in the matter of Rookie Blue Two Inc. v. Her Majesty the Queen, court file number CV-14-499450, decided by the Ontario Superior Court of Justice on March 11, 2015, shall, for the purposes of determining its eligible expenditures with respect to the eligible production referred to in that matter, determine the following expenditures as they would have been determined under this section as it read immediately before the Building Ontario Up Act (Budget Measures), 2015 received Royal Assent:

1. The eligible wage expenditure under subsection (5.2).

2. The eligible service contract expenditure under subsection (5.3).

3. The eligible tangible property expenditure under subsection (5.7). 2015, c. 20, Sched. 40, s. 13 (12).

Section Amendments with date in force (d/m/y)

2008, c. 7, Sched. S, s. 23 (1-4) - 01/01/2008

2009, c. 18, Sched. 28, s. 11 (1, 2) - 01/01/2009; 2009, c. 34, Sched. U, s. 17 (1-5) - 01/07/2009

2010, c. 1, Sched. 29, s. 8 (1, 2) - 01/07/2009

2015, c. 20, Sched. 40, s. 13 (1-6, 8, 10, 12) - 04/06/2015; 2015, c. 20, Sched. 40, s. 13 (7, 9, 11) - 01/07/2009

Ontario interactive digital media tax credit

93. (1) A corporation that complies with the requirements of this section or section 93.1 or 93.2 may claim an amount for the year in respect of and not exceeding the corporation’s Ontario interactive digital media tax credit for the year.  2009, c. 34, Sched. U, s. 18 (1).

Total amount of tax credit under this section and ss. 93.1 and 93.2

(1.1) The amount of a corporation’s Ontario interactive digital media tax credit for a taxation year is the sum of the credits determined under this section and sections 93.1 and 93.2 for the year.  2009, c. 34, Sched. U, s. 18 (1).

Amount of tax credit under this section

(2) Subject to subsections (2.4) to (2.6), the amount of a qualifying corporation’s credit under this section for a taxation year is the sum of the corporation’s eligible credits for the year as determined under this section in respect of eligible products.  2009, c. 34, Sched. U, s. 18 (1).

Non-specified products, other than qualifying small corporations

(2.1) A qualifying corporation’s eligible credit for a taxation year in respect of an eligible product that is not a specified product is, if the corporation is not a qualifying small corporation, the sum of,

(a) 20 per cent of the portion of its qualifying expenditure in respect of the product for the year that relates to expenditures incurred after March 23, 2006 and before March 26, 2008;

(b) 25 per cent of the portion of its qualifying expenditure in respect of the product for the year that relates to expenditures incurred after March 25, 2008 and before March 27, 2009; and

(c) 40 per cent of the portion of its qualifying expenditure in respect of the product for the year that relates to expenditures incurred after March 26, 2009.  2009, c. 34, Sched. U, s. 18 (1).

Non-specified products, qualifying small corporations

(2.2) A qualifying corporation’s eligible credit for a taxation year in respect of an eligible product that is not a specified product is, if the corporation is a qualifying small corporation, the sum of,

(a) 20 per cent of the portion of its qualifying expenditure in respect of the product for the year that relates to expenditures incurred before March 24, 2006;

(b) 30 per cent of the portion of its qualifying expenditure in respect of the product for the year that relates to expenditures incurred after March 23, 2006 and before March 27, 2009; and

(c) 40 per cent of the portion of its qualifying expenditure in respect of the product for the year that relates to expenditures incurred after March 26, 2009.  2009, c. 34, Sched. U, s. 18 (1).

Specified products

(2.3) A qualifying corporation’s eligible credit for a taxation year in respect of an eligible product that is a specified product is the sum of,

(a) 20 per cent of the portion of its qualifying expenditure in respect of the product for the year that relates to expenditures incurred after March 23, 2006 and before March 26, 2008;

(b) 25 per cent of the portion of its qualifying expenditure in respect of the product for the year that relates to expenditures incurred after March 25, 2008 and before March 27, 2009; and

(c) 35 per cent of the portion of its qualifying expenditure in respect of the product for the year that relates to expenditures incurred after March 26, 2009.  2009, c. 34, Sched. U, s. 18 (1).

Claims not allowed under subs. (2.3) and s. 93.1

(2.4) A qualifying corporation’s eligible credit under subsection (2.3) in respect of an eligible product is deemed to be nil for a particular taxation year if the corporation claims a credit under section 93.1 in respect of the eligible product for the year or any previous taxation year.  2009, c. 34, Sched. U, s. 18 (1).

Claims not allowed under this section and s. 93.2

(2.5) Subject to subsection (2.6), a qualifying corporation’s credit under this section in respect of an eligible product for a particular taxation year is deemed to be nil if the corporation claims a credit under section 93.2 in respect of the eligible product for the year.  2009, c. 34, Sched. U, s. 18 (1).

Exception, transition to s. 93.2

(2.6) Subsection (2.5) does not apply in respect of a qualifying corporation for a particular taxation year if the corporation completes an eligible product in the year and the Ontario labour expenditure incurred in respect of the product includes expenditures that were incurred before the later of March 27, 2009 and the beginning of the first taxation year in which the corporation claimed a credit under section 93.2.  2009, c. 34, Sched. U, s. 18 (1).

Qualifying expenditure

(3) The qualifying expenditure of a qualifying corporation for a taxation year is,

(a) in respect of an eligible product that is not a specified product, the amount of its eligible labour expenditure and eligible marketing and distribution expenditure for the year in respect of the product; and 

(b) in respect of an eligible product that is a specified product, the amount of its eligible labour expenditure for the year in respect of the product.  2009, c. 34, Sched. U, s. 18 (1).

Eligible labour expenditure

(4) A qualifying corporation’s eligible labour expenditure for an eligible product for a taxation year is equal to the amount, if any, by which the sum of “A” and “B” exceeds “C” where,

  “A” is the Ontario labour expenditure, if any, incurred by the qualifying corporation in the year for the eligible product,

  “B” is the sum of all amounts, if any, each of which is the Ontario labour expenditure incurred for the eligible product by the qualifying corporation in a previous taxation year or by a qualifying predecessor corporation before the disposition, merger or wind-up, as the case may be, to the extent that,

(a) if development of the product is completed before March 26, 2008, the expenditure is incurred in the 25-month period ending at the end of the month in which development of the eligible product is completed, or

(b) if development of the product is completed after March 25, 2008, the expenditure is incurred in the 37-month period ending at the end of the month in which development of the eligible product is completed, and

  “C” is the sum of “D”, “E” and “F” where,

“D” is the total of all amounts, if any, each of which is the eligible labour expenditure for the eligible product that was included in the determination of the amount of a tax credit claimed under this section, section 93.2 or section 43.11 of the Corporations Tax Act for a previous taxation year by the qualifying corporation or by a qualifying predecessor corporation,

“E” is the total of all amounts, if any, each of which is the eligible labour expenditure for the eligible product that was included in the determination of the amount of a credit claimed under section 93.2 for the year by the qualifying corporation, and

“F” is the total of all government assistance, if any, in respect of the Ontario labour expenditure for the eligible product that, on the qualifying corporation’s filing-due date for the taxation year, the qualifying corporation or any other person or partnership has received, is entitled to receive or may reasonably expect to receive, to the extent that the government assistance has not been included in determining a corporation’s eligible labour expenditures under section 93.2 or been repaid under a legal obligation to do so.  2009, c. 34, Sched. U, s. 18 (1).

Who claims amount in respect of specified product

(5) For the purposes of subsection (4), if a qualifying corporation develops a specified product under a contract entered into after March 23, 2006, only the qualifying corporation is entitled to claim an amount under this section in respect of the specified product.  2007, c. 11, Sched. A, s. 93 (5).

Eligible marketing and distribution expenditure

(6) The eligible marketing and distribution expenditure of a qualifying corporation for an eligible product for a taxation year is the amount that is the lesser of,

(a) the amount, if any, by which $100,000 exceeds the total of all amounts, if any, each of which is the corporation’s eligible marketing and distribution expenditure for the eligible product or a qualifying predecessor corporation’s eligible marketing and distribution expenditure incurred for the eligible product before the disposition, merger or wind-up, as the case may be, that was included in the determination of the corporation’s tax credit under this section or section 43.11 of the Corporations Tax Act for a previous taxation year; and

(b) the amount determined under subsection (7).  2007, c. 11, Sched. A, s. 93 (6).

Same

(7) The amount determined under this subsection for the purposes of clause (6) (b) is calculated using the formula,

F – (G + H + I)

in which,

“F” is the total of all amounts, if any, each of which is a marketing and distribution expenditure in respect of the eligible product incurred by the qualifying corporation in the taxation year or in a previous taxation year or by a qualifying predecessor corporation before the disposition, merger or wind-up, as the case may be, to the extent that it was incurred,

(a) in the month in which development of the eligible product is completed, and

(b) in the period of 24 months before, or in the period of 12 months after, the month in which development of the eligible product is completed,

  “G” is the total amount of all government assistance, if any, for the marketing and distribution expenditures described in the definition of “F” for the eligible product that, on the corporation’s filing-due date for the taxation year, the qualifying corporation or any other person or partnership has received, is entitled to receive or may reasonably expect to receive, to the extent that the government assistance has not been repaid under a legal obligation to do so,

  “H” is the total of all amounts, if any, each of which is an eligible marketing and distribution expenditure for the eligible product that was included in the determination of a tax credit claimed under this section or section 43.11 of the Corporations Tax Act for a previous taxation year by the qualifying corporation or by a qualifying predecessor corporation, and

“I” is the total of all marketing and distribution expenditures described in the definition of “F” for the eligible product that are Ontario labour expenditures of the qualifying corporation or a qualifying predecessor corporation.

2007, c. 11, Sched. A, s. 93 (7).

Application for certificate

(8) In order to be eligible to claim an amount in respect of an Ontario interactive digital media tax credit under this section for a taxation year, a qualifying corporation shall apply to the Ontario Media Development Corporation or a person designated by the Minister of Culture for certification of its eligible products for the purposes of this section.  2007, c. 11, Sched. A, s. 93 (8).

Same

(9) A qualifying corporation that applies for certification shall provide the information specified for the purposes of this section by the Ontario Media Development Corporation or a person designated by the Minister of Culture to the person who specified that it be provided.  2007, c. 11, Sched. A, s. 93 (9).

Certificate

(10) If a qualifying corporation provides the information in accordance with subsection (9) in respect of its eligible products for a taxation year, the Ontario Media Development Corporation or a person designated by the Minister of Culture shall issue a certificate, and any amended certificates it considers appropriate, to the qualifying corporation with respect to its eligible products for the year, certifying in respect of each eligible product,

(a) that the product is an eligible product for the purposes of this section; and

(b) the estimated amount of the corporation’s tax credit under this section applicable to the product.  2007, c. 11, Sched. A, s. 93 (10).

Certificate to be delivered with return

(11) In order to claim an amount under this section for a taxation year, a qualifying corporation must deliver to the Ontario Minister with its return for the year the certificate for the year that is most recently issued under subsection (10), or a certified copy of the certificate.  2007, c. 11, Sched. A, s. 93 (11).

Revocation of certificate

(12) A certificate or amended certificate issued under subsection (10) may be revoked,

(a) if an omission or incorrect statement was made and it is reasonable to believe that, if the omitted information had been disclosed or if the person issuing the certificate had known that the statement was incorrect, he or she would not have issued the certificate;

(b) if none of the products in respect of which the certificate is issued is an eligible product;

(c) if the corporation to which the certificate is issued is not a qualifying corporation; or

(d) if, in determining the amount of its tax credit under this section for a taxation year, the corporation claims another corporation as a qualifying predecessor corporation in respect of an eligible product and the other corporation is not a qualifying predecessor corporation of the corporation before the eligible product becomes the property of or is disposed of to the corporation.  2007, c. 11, Sched. A, s. 93 (12).

Same

(13) A certificate that is revoked is deemed never to have been issued.  2007, c. 11, Sched. A, s. 93 (13).

Definitions

(14) In this section,

“eligible product” means, in respect of a qualifying corporation, a product,

(a) that satisfies the prescribed conditions or that is a specified product, and

(b) for which public financial support would not be contrary to public policy in the opinion of the Ontario Media Development Corporation or, if another person is designated for the purposes of subsection (8), in the opinion of that person; (“produit admissible”)

“government assistance” means assistance from a government, municipality or other public authority in any form, including a grant, subsidy, forgivable loan, deduction from tax and investment allowance, but not including a tax credit under this section or section 43.11 of the Corporations Tax Act; (“aide gouvernementale”)

“marketing and distribution expenditure” means the amount determined under the prescribed rules; (“dépense de commercialisation et de distribution”)

“Ontario labour expenditure” means the amount determined under the prescribed rules; (“dépense de main-d’oeuvre en Ontario”)

“qualifying corporation” means a Canadian corporation,

(a) that satisfies one of the conditions set out in subsection (16),

(b) that is not controlled directly or indirectly in any manner whatever by one or more corporations all or part of whose taxable income is exempt from tax under section 57 of the Corporations Tax Act or Part III of this Act, and

(c) that is not a prescribed labour-sponsored venture capital corporation under the Federal regulations; (“société admissible”)

“qualifying predecessor corporation” means, in respect of a qualifying corporation (the “transferee”), a corporation that was a qualifying corporation in respect of an eligible product and that,

(a) disposes of the eligible product to the transferee in accordance with subsection 85 (1) of the Federal Act if, at the time of the disposition,

(i) the corporation owns all of the issued and outstanding shares of the transferee,

(ii) the transferee owns all of the issued and outstanding shares of the corporation, or

(iii) all of the issued and outstanding shares of the corporation and the transferee are directly or indirectly owned by the same person,

(b) merges with one or more corporations in accordance with section 87 of the Federal Act to form the transferee, or

(c) is wound up in accordance with subsection 88 (1) of the Federal Act; (“société remplacée admissible”) 

“qualifying small corporation”, in respect of a taxation year, means a qualifying corporation where,

(a) the amount of the corporation’s total assets at the end of the year is equal to or less than $10 million and the amount of the corporation’s total revenue for the year is equal to or less than $20 million; or

(b) the corporation is associated with one or more corporations during the year and,

(i) the sum of the total assets of the corporation as of the end of the taxation year and of each associated corporation as of the end of the associated corporation’s last taxation year ending in the corporation’s taxation year is equal to or less than $10 million, and

(ii) the sum of the total revenue of the corporation for the taxation year and of each associated corporation for the last taxation year of the associated corporation ending in the corporation’s taxation year is equal to or less than $20 million. (“petite société admissible”)  2007, c. 11, Sched. A, s. 93 (14); 2009, c. 34, Sched. U, s. 18 (2); 2010, c. 1, Sched. 29, s. 9; 2012, c. 8, Sched. 56, s. 2.

Specified product

(15) A product developed by a qualifying corporation is a specified product for the purposes of this section if the following conditions are satisfied:

1. The product satisfies the prescribed conditions.

2. The product is developed by the qualifying corporation under the terms of an agreement between the qualifying corporation and a purchaser that is a corporation that deals at arm’s length with the qualifying corporation.

3. The product is developed under the agreement for the purpose of sale or license by the purchaser to one or more persons, each of whom deals at arm’s length with the purchaser.

4. If, before April 24, 2015, the Ontario Media Development Corporation issued a certificate under subsection (10) to the qualifying corporation in respect of the product, or sent a letter to notify the qualifying corporation that the product does not qualify for certification, all or substantially all of the product is developed in Ontario by the qualifying corporation.

5. The development of the product is completed by the qualifying corporation after March 23, 2006.  2007, c. 11, Sched. A, s. 93 (15); 2015, c. 38, Sched. 20, s. 2.

Conditions for qualifying corporations

(16) The following are the conditions referred to in clause (a) of the definition of “qualifying corporation” in subsection (14):

1. The corporation commences development of an eligible product at a permanent establishment in Ontario operated by the corporation, but does not complete development of the product before it is transferred to or otherwise becomes the property of another corporation in circumstances described in clause (a), (b) or (c) of the definition of “qualifying predecessor corporation” in subsection (14).

2. The corporation completes, at a permanent establishment in Ontario operated by the corporation, the development of an eligible product received from a qualifying predecessor corporation.

3. The corporation develops an eligible product at a permanent establishment in Ontario operated by the corporation.  2007, c. 11, Sched. A, s. 93 (16).

Ceasing to be a qualifying corporation

(17) Despite paragraph 1 of subsection (16), a qualifying predecessor corporation ceases to be a qualifying corporation with respect to an eligible product immediately after the eligible product becomes the property of or has been disposed of to the other corporation.  2007, c. 11, Sched. A, s. 93 (17).

Amalgamations

(18) Despite the definition of “qualifying small corporation” in subsection (14), a corporation formed as a result of an amalgamation of two or more predecessor corporations is not a qualifying small corporation for the taxation year commencing at the time of the amalgamation unless each predecessor corporation would be considered, but for this subsection, to be a qualifying small corporation for its last taxation year ending immediately before the amalgamation and, for the purposes of this subsection, each predecessor corporation is deemed to have been associated with every other predecessor corporation during the taxation year ending immediately before the amalgamation.  2007, c. 11, Sched. A, s. 93 (18).

Application of s. 55 (2)

(19) Paragraphs 1 to 6 of subsection 55 (2) apply for the purposes of determining if a qualifying corporation is a qualifying small corporation for the purposes of this section.  2009, c. 34, Sched. U, s. 18 (3).

Section Amendments with date in force (d/m/y)

2008, c. 7, Sched. S, s. 24 (1-4) - 26/03/2008

2009, c. 34, Sched. U, s. 18 (1-3) - 27/03/2009

2010, c. 1, Sched. 29, s. 9 - 27/03/2009

2012, c. 8, Sched. 56, s. 2 - 20/06/2012

2015, c. 38, Sched. 20, s. 2 - 24/04/2015

Qualifying digital game corporation’s tax credit

93.1 (1) The amount of a qualifying digital game corporation’s tax credit under this section for a taxation year for the purposes of subsection 93 (1.1) is the total of all amounts each of which is the corporation’s eligible credit for the year in respect of an eligible digital game.  2009, c. 34, Sched. U, s. 19.

Eligible credit, eligible digital games

(2) A qualifying digital game corporation’s eligible credit for a taxation year in respect of an eligible digital game is 35 per cent of its qualifying labour expenditure in respect of the digital game for the year that relates to expenditures incurred after March 26, 2009.  2009, c. 34, Sched. U, s. 19.

Claims not allowed under s. 93 (2.3) and this section

(3) A qualifying digital game corporation’s eligible credit under subsection (2) in respect of an eligible digital game is deemed to be nil for a particular taxation year if the corporation claims a credit under subsection 93 (2.3) in respect of the digital game for any previous taxation year.  2009, c. 34, Sched. U, s. 19; 2010, c. 1, Sched. 29, s. 10 (1).

Claims not allowed under this section and s. 93.2

(4) Subject to subsection (5), a qualifying digital game corporation cannot claim a credit under this section for a particular taxation year in respect of an eligible digital game if the corporation has claimed a credit under section 93.2 in respect of the digital game for the year.  2009, c. 34, Sched. U, s. 19.

Exception, transition to s. 93.2

(5) Subsection (4) does not apply if a qualifying digital game corporation claims a credit under section 93.2 in a taxation year, the 36-month period selected by the corporation for the purposes of paragraph 5 of subsection (9) ends in the year and the Ontario labour expenditure incurred in respect of the digital game includes expenditures that were incurred before the later of March 27, 2009 and the beginning of the first taxation year in which the corporation claimed a credit under section 93.2.  2009, c. 34, Sched. U, s. 19; 2010, c. 1, Sched. 29, s. 10 (2).

Qualifying labour expenditure

(6) The qualifying labour expenditure of a qualifying digital game corporation in respect of an eligible digital game for a taxation year is equal to the amount, if any, by which the sum of “A” and “B” exceeds “C” where,

  “A” is the Ontario labour expenditure, if any, incurred by the qualifying digital game corporation in the year for the eligible digital game, to the extent that the expenditure is incurred in the 36-month period selected by the corporation for the purposes of paragraph 5 of subsection (9),

  “B” is the sum of all amounts, if any, each of which is the Ontario labour expenditure incurred for the eligible digital game by the qualifying digital game corporation in a previous taxation year or by a qualifying predecessor corporation before the merger or wind-up, as the case may be, to the extent that the expenditure is incurred in the 36-month period selected by the corporation for the purposes of paragraph 5 of subsection (9), and

  “C” is the sum of “D”, “E” and “F” where,

“D” is the total of all amounts, if any, each of which is the eligible labour expenditure for the eligible digital game that was included in the determination of the amount of a tax credit claimed under section 93.2 for a previous taxation year by the qualifying digital game corporation, determined in accordance with the rules prescribed by regulation in respect of a digital game that is an eligible digital game for the purposes of section 93.2,

“E” is the total of all amounts, if any, each of which is the eligible labour expenditure for the eligible digital game that was included in the determination of the amount of a credit claimed under section 93.2 for the year by the qualifying digital game corporation, and

“F” is the total of all government assistance, if any, in respect of the Ontario labour expenditure for the eligible digital game that, on the qualifying digital game corporation’s filing-due date for the taxation year, the qualifying digital game corporation or any other person or partnership has received, is entitled to receive or may reasonably expect to receive, to the extent that the government assistance has not been included in determining a corporation’s eligible labour expenditures under section 93.2 or repaid under a legal obligation to do so.  2009, c. 34, Sched. U, s. 19.

Application for certificate

(7) Subsections 93 (8) to (13) apply for the purposes of this section, subject to any prescribed modifications, as if,

(a) each reference in those provisions to “this section” were read as a reference to this section;

(b) each reference in those provisions to a “qualifying corporation” were read as a reference to a “qualifying digital game corporation”; and

(c) each reference in those provisions to an “eligible product” were read as a reference to an “eligible digital game”.  2009, c. 34, Sched. U, s. 19.

Definitions

(8) In this section,

“eligible digital game” means a product in respect of a qualifying digital game corporation that satisfies all of the conditions set out in subsection (9); (“jeu numérique admissible”)

“government assistance” means assistance from a government, municipality or other public authority in any form, including a grant, subsidy, forgivable loan, deduction from tax and investment allowance, but not including a tax credit under subsection 93 (1); (“aide gouvernementale”)

“Ontario labour expenditure” means the amount determined under the prescribed rules; (“dépense de main-d’oeuvre en Ontario”)

“qualifying digital game corporation” means a Canadian corporation,

(a) that carries on through a permanent establishment in Ontario a business that includes the development of digital games,

(b) that is not controlled directly or indirectly in any manner whatever by one or more corporations all or part of whose taxable income is exempt from tax under Part III of this Act,

(c) that is not a prescribed labour-sponsored venture capital corporation under the Federal regulations, and

(d) that is not a taxable Canadian corporation the primary activity of which is to provide the services of a single individual and all the issued and outstanding shares of the capital stock of which (other than directors’ qualifying shares) are owned by that individual; (“société de jeux numériques admissible”)

“qualifying predecessor corporation” means, in respect of a qualifying digital game corporation (the “transferee”), a corporation that was a qualifying digital game corporation in respect of an eligible digital game and that,

(a) merges with one or more corporations in accordance with section 87 of the Federal Act to form the transferee, or

(b) is wound up in accordance with subsection 88 (1) of the Federal Act. (“société remplacée admissible”)  2009, c. 34, Sched. U, s. 19; 2010, c. 1, Sched. 29, s. 10 (3); 2012, c. 8, Sched. 56, s. 3.

Eligible digital game

(9) The following are the conditions referred to in the definition of “eligible digital game” in subsection (8):

1. The product is an interactive digital media product as determined under the prescribed rules.

2. The product is a digital game in the opinion of the Ontario Media Development Corporation or, if another person is designated by the Minister of Culture, in the opinion of that person.

3. The product is developed in whole or in part by the qualifying digital game corporation under the terms of an agreement between the qualifying digital game corporation and a purchaser that is a corporation.

4. The product is developed for the purpose of sale or license by the purchaser to one or more persons, each of whom deals at arm’s length with the purchaser.

5. The qualifying labour expenditure incurred by the qualifying digital game corporation within any period of 36 months that ends in the taxation year is not less than $1,000,000.

6. The qualifying digital game corporation or a qualifying predecessor corporation has not previously claimed a tax credit under this section in respect of the eligible digital game.

7. The product is not used primarily,

i. for interpersonal communication,

ii. to present or promote the qualifying digital game corporation, a qualifying predecessor corporation or the purchaser, or

iii. to present, promote or sell the products or services of the qualifying digital game corporation, a qualifying predecessor corporation or the purchaser.

8. The product is one for which public financial support would not be contrary to public policy in the opinion of the Ontario Media Development Corporation or, if another person is designated for the purposes of subsection 93 (8), as it applies for the purposes of this section, in the opinion of that person.  2009, c. 34, Sched. U, s. 19.

Section Amendments with date in force (d/m/y)

2009, c. 34, Sched. U, s. 19 - 27/03/2009

2010, c. 1, Sched. 29, s. 10 (1-3) - 27/03/2009

2012, c. 8, Sched. 56, s. 3 - 20/06/2012

Specialized digital game corporation’s credit

93.2 (1) The amount of a specialized digital game corporation’s credit under this section for a taxation year for the purposes of subsection 93 (1.1) is 35 per cent of the corporation’s qualifying labour expenditure in respect of eligible digital games for the year that relates to expenditures incurred after March 26, 2009.  2009, c. 34, Sched. U, s. 19.

Qualifying labour expenditure

(2) The qualifying labour expenditure of a specialized digital game corporation in respect of eligible digital games for a taxation year is the total of all amounts each of which is the eligible labour expenditure of the corporation in respect of an eligible digital game for the year.  2009, c. 34, Sched. U, s. 19.

Eligible labour expenditure

(3) The eligible labour expenditure of a specialized digital game corporation in respect of an eligible digital game for a taxation year is the amount, if any, by which “A” exceeds “B” where,

  “A” is the corporation’s Ontario labour expenditure for the year for eligible digital game activities in respect of the eligible digital game, and

  “B” is the total of all government assistance, if any, in respect of the Ontario labour expenditure for eligible digital game activities in respect of the eligible digital game that, on the specialized digital game corporation’s filing-due date for the year, the specialized digital game corporation or any other person or partnership has received, is entitled to receive or may reasonably expect to receive, to the extent that the government assistance has not been repaid under a legal obligation to do so.  2009, c. 34, Sched. U, s. 19; 2010, c. 1, Sched. 29, s. 11 (1, 2).

Application for certificate

(4) In order to be eligible to claim a credit under this section for a taxation year, a specialized digital game corporation shall apply to the Ontario Media Development Corporation or a person designated by the Minister of Culture for certification for the year for the purposes of this section.  2009, c. 34, Sched. U, s. 19.

Same

(5) A specialized digital game corporation that applies for certification under subsection (4) shall provide the information specified for the purposes of this section by the Ontario Media Development Corporation or a person designated by the Minister of Culture to the person who specified that it be provided.  2009, c. 34, Sched. U, s. 19.

Certificate

(6) If a specialized digital game corporation provides the information in accordance with subsection (5) for a taxation year, the Ontario Media Development Corporation or a person designated by the Minister of Culture shall issue a certificate, and any amended certificates it considers appropriate, to the corporation for the year, certifying,

(a) that the corporation is a specialized digital game corporation;

(b) that the corporation’s eligible digital game activities were undertaken in respect of digital games that are eligible digital games or would have been eligible digital games had they been completed before the end of the taxation year; and

(c) the estimated amount of the corporation’s credit under this section for the year in respect of its eligible digital game activities.  2009, c. 34, Sched. U, s. 19; 2010, c. 1, Sched. 29, s. 11 (3-5).

Certificate to be delivered with return

(7) In order to claim an amount under this section for a taxation year, a specialized digital game corporation must deliver to the Ontario Minister with its return for the year the certificate for the year or a certified copy of the certificate.  2009, c. 34, Sched. U, s. 19.

Revocation of certificate

(8) A certificate or amended certificate issued under subsection (6) may be revoked,

(a) if an omission or incorrect statement was made and it is reasonable to believe that, if the omitted information had been disclosed or if the person issuing the certificate had known that the statement was incorrect, he or she would not have issued the certificate;

(b) if none of the activities in respect of which the certificate is issued are eligible digital game activities; or

(c) if the corporation to which the certificate is issued is not a specialized digital game corporation.  2009, c. 34, Sched. U, s. 19; 2010, c. 1, Sched. 29, s. 11 (6).

Same

(9) A certificate that is revoked is deemed never to have been issued.  2009, c. 34, Sched. U, s. 19.

Definitions

(10) In this section,

“eligible digital game” means a product in respect of a specialized digital game corporation that satisfies all of the conditions set out in subsection (11); (“jeu numérique admissible”)

“eligible digital game activities” means activities that are carried out in Ontario and are directly attributable to the development of an eligible digital game; (“activités admissibles de conception d’un jeu numérique”)

“government assistance” means assistance from a government, municipality or other public authority in any form, including a grant, subsidy, forgivable loan, deduction from tax and investment allowance, but not including a tax credit under subsection 93 (1); (“aide gouvernementale”)

“Ontario labour expenditure” means the amount determined under the prescribed rules; (“dépense de main-d’oeuvre en Ontario”)

“specialized digital game corporation” for a taxation year means a Canadian corporation that satisfies all of the conditions set out in subsection (12). (“société de jeux numériques spécialisée”)  2009, c. 34, Sched. U, s. 19; 2010, c. 1, Sched. 29, s. 11 (7, 8).

Eligible digital game

(11) The following are the conditions referred to in the definition of “eligible digital game” in subsection (10):

1. The product is an interactive digital media product as determined under the prescribed rules.

2. The product is a digital game in the opinion of the Ontario Media Development Corporation or, if another person is designated by the Minister of Culture, in the opinion of that person.

3. The product is developed for the purpose of sale or license by the specialized digital game corporation or, if applicable, the purchaser, to one or more persons, each of whom deals at arm’s length with the specialized digital game corporation and the purchaser.

4. The product is not used primarily,

i. for interpersonal communication,

ii. to present or promote the specialized digital game corporation or, if applicable, the purchaser, or

iii. to present, promote or sell the products or services of the specialized digital game corporation or, if applicable, the purchaser.

5. The product is one for which public financial support would not be contrary to public policy in the opinion of the Ontario Media Development Corporation or, if another person is designated for the purposes of subsection 93 (8), as it applies for the purposes of this section, in the opinion of that person.  2009, c. 34, Sched. U, s. 19.

Specialized digital game corporation

(12) The following are the conditions referred to in the definition of “specialized digital game corporation” in subsection (10):

1. The corporation carries on through a permanent establishment in Ontario a business that includes the development of digital games.

2. The corporation’s Ontario labour expenditure for the year in respect of eligible digital games is not less than $1 million.

3. The corporation satisfies one of the following conditions:

i. the total of the salaries and wages incurred by the corporation in the year for services rendered in Ontario that are directly attributable to the development of digital games is not less than 80 per cent of the total of the salaries and wages incurred by the corporation in the year for services rendered in Ontario,

ii. the amount of the corporation’s gross revenue for the year that is directly attributable to the development of digital games is not less than 90 per cent of the corporation’s total gross revenue for the year, or

iii. a condition prescribed for the purposes of this paragraph.

4. The corporation is not controlled directly or indirectly in any manner whatever by one or more corporations all or part of whose taxable income is exempt from tax under Part III of this Act.

5. The corporation is not a prescribed labour-sponsored venture capital corporation under the Federal regulations.

6. The corporation is not a taxable Canadian corporation the primary activity of which is to provide the services of a single individual and all the issued and outstanding shares of the capital stock of which (other than directors’ qualifying shares) are owned by that individual.  2009, c. 34, Sched. U, s. 19; 2010, c. 1, Sched. 29, s. 11 (9); 2012, c. 8, Sched. 56, s. 4.

Section Amendments with date in force (d/m/y)

2009, c. 34, Sched. U, s. 19 - 27/03/2009

2010, c. 1, Sched. 29, s. 11 (1-9) - 27/03/2009

2012, c. 8, Sched. 56, s. 4 - 20/06/2012

Ontario sound recording tax credit

94. (1) A corporation that is an eligible sound recording company for a taxation year and that complies with the requirements of this section may claim an amount for the year in respect of and not exceeding the corporation’s Ontario sound recording tax credit for the year.  2007, c. 11, Sched. A, s. 94 (1).

Amount of tax credit

(2) The amount of a corporation’s Ontario sound recording tax credit for a taxation year is the sum of all amounts, each of which is in respect of an eligible Canadian sound recording in relation to which the corporation is an eligible sound recording company and each of which is equal to 20 per cent of the qualifying expenditures incurred by the corporation before the end of the year in respect of the recording, to the extent that the expenditures were not included in determining the amount of the corporation’s available tax credit under this section or section 43.12 of the Corporations Tax Act for a previous taxation year.  2007, c. 11, Sched. A, s. 94 (2).

Limit on tax credit

(2.1) A corporation may only claim the Ontario sound recording tax credit in respect of a qualifying expenditure incurred on or after April 24, 2015 if the following requirements are met:

1. The expenditure was incurred in respect of an eligible Canadian sound recording that commenced before April 23, 2015.

2. The expenditure was incurred before May 1, 2016.

3. The corporation did not receive an amount from the Ontario Music Fund in respect of the expenditure. 2015, c. 20, Sched. 40, s. 14.

Corporate partner

(3) The following rules apply if a corporation is a member of a partnership at the end of a fiscal period of the partnership in which the partnership would qualify for an Ontario sound recording tax credit in respect of one or more eligible Canadian sound recordings if the partnership were a corporation whose fiscal period was its taxation year, and if the corporation would be an eligible sound recording company for the taxation year in relation to the eligible Canadian sound recordings:

1. Subject to paragraph 2, the portion of the Ontario sound recording tax credit to which the partnership would be entitled if it were a corporation that may reasonably be considered to be the corporation’s share may be included in determining the amount of the corporation’s Ontario sound recording tax credit for the corporation’s taxation year.

2. If the corporation or another member of the partnership bases a claim in respect of the partnership for the fiscal period under subsection (4), no amount in respect of the partnership may be included in determining the amount of the corporation’s Ontario sound recording tax credit for the corporation’s taxation year otherwise than under subsection (4).  2007, c. 11, Sched. A, s. 94 (3).

Same

(4) If it is acceptable to the Ontario Minister, a partner’s share of a partnership’s Ontario sound recording tax credit determined under subsection (3) for a fiscal period shall be equal to such amount as the partner claims not exceeding the amount, if any, by which the amount of that credit exceeds the total of all amounts each of which is claimed under this section or section 43.12 of the Corporations Tax Act in respect of the tax credit by another partner.  2007, c. 11, Sched. A, s. 94 (4).

Limited partner

(5) Despite subsections (3) and (4), a limited partner’s share of an Ontario sound recording tax credit to which a partnership would be entitled if it were a corporation is deemed to be nil.  2007, c. 11, Sched. A, s. 94 (5).

Application for certificate

(6) In order to be eligible to claim an amount in respect of an Ontario sound recording tax credit under this section in respect of a sound recording, a corporation shall apply to the Ontario Media Development Corporation or a person designated by the Minister of Culture for certification that the sound recording is an eligible Canadian sound recording and that the corporation is an eligible sound recording company for the taxation year in relation to the eligible Canadian sound recording.  2007, c. 11, Sched. A, s. 94 (6).

Same

(7) A corporation that applies for certification under this section shall provide to the designated person the information the designated person specifies for the purposes of making the determinations required under subsection (6).  2007, c. 11, Sched. A, s. 94 (7).

Certificate

(8) If the particular sound recording is an eligible Canadian sound recording for the purposes of this section and the corporation is an eligible sound recording company for the taxation year in relation to the recording, the designated person shall issue to the corporation a certificate so certifying.  2007, c. 11, Sched. A, s. 94 (8).

No claim unless certificate delivered

(9) No amount may be claimed under this section for a taxation year in respect of a sound recording unless the corporation delivers to the Ontario Minister, with its return for the year, the certificate issued under this section in respect of the sound recording, or a certified copy of the certificate.  2007, c. 11, Sched. A, s. 94 (9).

Revocation of certificate

(10) A certificate issued under this section may be revoked if,

(a) an omission or incorrect statement was made and it is reasonable to believe that, if the omitted information had been disclosed or if the person designated had known that the statement was incorrect, the designated person would have found that the corporation was not an eligible sound recording company for the purposes of this section or that the recording was not an eligible Canadian sound recording for the purposes of this section;

(b) the corporation is not an eligible sound recording company for the year in relation to the eligible Canadian sound recording; or

(c) the sound recording is not an eligible Canadian sound recording for the purposes of this section.  2007, c. 11, Sched. A, s. 94 (10).

Same

(11) A certificate that is revoked is deemed never to have been issued.  2007, c. 11, Sched. A, s. 94 (11).

Definitions

(12) In this section,

“eligible Canadian sound recording” means a sound recording that satisfies the prescribed rules and is by an emerging Canadian artist or group; (“enregistrement sonore canadien admissible”)

“eligible sound recording company” has the prescribed meaning; (“société d’enregistrement sonore admissible”)

“emerging Canadian artist or group” means an artist or group that satisfies the prescribed rules; (“nouvel artiste ou ensemble canadien”)

“qualifying expenditure” means an amount determined in the prescribed manner in respect of an expenditure that satisfies the prescribed rules. (“dépense admissible”)  2007, c. 11, Sched. A, s. 94 (12).

Section Amendments with date in force (d/m/y)

2015, c. 20, Sched. 40, s. 14 - 04/06/2015

Ontario book publishing tax credit

95. (1) A corporation that is an Ontario book publishing company for a taxation year and complies with the requirements of this section may claim an amount for the year in respect of and not exceeding the corporation’s Ontario book publishing tax credit for the year.  2007, c. 11, Sched. A, s. 95 (1).

Amount of tax credit

(2) The amount of a corporation’s Ontario book publishing tax credit for a taxation year is the sum of all amounts each of which is determined in respect of an eligible literary work and equal to the lesser of,

(a) 30 per cent of the corporation’s qualifying expenditures incurred before the end of the year in respect of the publication of the literary work, to the extent that the expenditures were not included in determining the available credit relating to the publication of the literary work that was included in an amount claimed by the corporation for a previous taxation year under this section or section 43.7 of the Corporations Tax Act; and

(b) $30,000 less the total of all amounts, if any, each of which was claimed in respect of the publication of the literary work under this section or section 43.7 of the Corporations Tax Act.  2007, c. 11, Sched. A, s. 95 (2).

Same, book containing more than one literary work

(3) A book that contains more than one literary work is deemed to be one literary work for the purposes of subsection (2), and the amount of a corporation’s Ontario book publishing tax credit for a taxation year in respect of the book shall not exceed the amount determined under subsection (2).  2007, c. 11, Sched. A, s. 95 (3).

Corporate partner

(4) The following rules apply if a corporation is a member of a partnership and the partnership would qualify for a fiscal period ending in a taxation year of the corporation for an Ontario book publishing tax credit if the partnership were a corporation whose fiscal period was its taxation year:

1. Subject to paragraph 2, the portion of the Ontario book publishing tax credit to which the partnership would be entitled if it were a corporation that may reasonably be considered to be the corporation’s share may be included in determining the amount of the corporation’s Ontario book publishing tax credit for the corporation’s taxation year.

2. If the corporation or another member of the partnership bases a claim in respect of the partnership for the fiscal period under subsection (5), no amount in respect of the partnership may be included in determining the amount of the corporation’s Ontario book publishing tax credit for the corporation’s taxation year otherwise than pursuant to subsection (5).  2007, c. 11, Sched. A, s. 95 (4).

Same

(5) If it is acceptable to the Ontario Minister, a partner’s share of a partnership’s Ontario book publishing tax credit determined under subsection (4) for a fiscal period shall be equal to such amount as the partner claims not exceeding the amount, if any, by which the amount of that credit exceeds the total of all amounts each of which is claimed under this section or section 43.7 of the Corporations Tax Act in respect of the amount of that credit by another partner.  2007, c. 11, Sched. A, s. 95 (5).

Limited partner

(6) Despite subsections (4) and (5), a limited partner’s share of an Ontario book publishing tax credit to which a partnership would be entitled if it were a corporation is deemed to be nil.  2007, c. 11, Sched. A, s. 95 (6).

Ontario book publishing company

(7) A corporation is an Ontario book publishing company for a taxation year if it is a Canadian-controlled corporation throughout the year and is a book publishing company that carries out its business primarily through a permanent establishment of the corporation in Ontario.  2007, c. 11, Sched. A, s. 95 (7).

Application for certificate

(8) In order to be eligible to claim an amount in respect of an Ontario book publishing tax credit under this section with respect to a particular literary work, an Ontario book publishing company shall apply to the Ontario Media Development Corporation or a person designated by the Minister of Culture for certification that the work is an eligible literary work for the purposes of this section.  2007, c. 11, Sched. A, s. 95 (8).

Same

(9) An Ontario book publishing company that applies for certification shall provide to the designated person the information he or she specifies for the purposes of this section.  2007, c. 11, Sched. A, s. 95 (9).

Certificate

(10) If the particular literary work is an eligible literary work for the purposes of this section, the designated person shall issue to the Ontario book publishing company a certificate certifying that the work is an eligible literary work for the purposes of this section.  2007, c. 11, Sched. A, s. 95 (10).

Same

(11) In order to claim an amount under this section for a taxation year in respect of a particular literary work, an Ontario book publishing company must deliver to the Ontario Minister with its return for the year the certificate issued in respect of the work, or a certified copy of the certificate.  2007, c. 11, Sched. A, s. 95 (11).

Revocation of certificate

(12) A certificate issued under subsection (10) may be revoked if,

(a) an omission or incorrect statement was made for the purpose of obtaining the certificate;

(b) the corporation is not an Ontario book publishing company; or

(c) the literary work is not an eligible literary work for the purposes of this section.  2007, c. 11, Sched. A, s. 95 (12).

Same

(13) A certificate that is revoked is deemed never to have been issued.  2007, c. 11, Sched. A, s. 95 (13).

Eligible literary work

(14) A literary work is an eligible literary work if it satisfies the following conditions:

1. The literary work is written by an eligible Canadian author or, if it is written by more than one author, all or substantially all of the work is the work of eligible Canadian authors.

2. The literary work belongs to an eligible category of writing.

3. At least 90 per cent of the literary work is new material that has not been previously published.

4. If the literary work contains pictures and is not a children’s book, the ratio of the amount of text to pictures in the literary work is at least 65 per cent.

5. The literary work is suitable for publication as a bound book having not less than 48 printed pages, unless the literary work is a children’s book.

6. The literary work is not an ineligible publication.  2007, c. 11, Sched. A, s. 95 (14).

Exception

(15) No amount in respect of a tax credit under this section may be claimed by a corporation with respect to the publishing of a literary work if,

(a) the publication date is before May 7, 1997;

(b) the corporation publishes the literary work on consignment or at the expense of another person;

(c) the author of the literary work, a person related to the author or a person who is, or is related to, the subject of the literary work directly or indirectly funds, or guarantees the payment of, any part of the cost of publishing or marketing the literary work;

(d) the corporation is controlled by the author of the literary work, or by a person not dealing at arm’s length with the author;

(e) the publication date of the literary work is before March 27, 2009 and the corporation publishes the literary work other than as a bound hardback, a paperback or a trade paperback book;

(e.1) the publication date of the literary work is after March 26, 2009 and the corporation publishes the literary work other than as a bound hardback, a paperback or a trade paperback book or as a digital or electronic version of the literary work;

(f) the corporation publishes the literary work in an edition of less than 500 copies of a bound book;

(g) the published literary work is not assigned an International Standard Book Number (ISBN);

(h) the corporation does not offer the literary work for sale through an established distributor;

(i) the corporation published fewer than two books during the 12-month period immediately before the taxation year for which the credit under this section is claimed; or

(j) the literary work is published in a book that also contains one or more other literary works and less than all or substantially all of the literary works contained in the book are by eligible Canadian authors.  2007, c. 11, Sched. A, s. 95 (15); 2009, c. 34, Sched. U, s. 20 (1).

Qualifying expenditures

(16) The following amounts in respect of the publishing of an eligible literary work by an Ontario book publishing company are qualifying expenditures of the company for a taxation year:

1. Expenditures incurred by the company in the year in respect of pre-press costs, including,

i. non-refundable monetary advances to the eligible Canadian author of the literary work, and

ii. amounts in respect of activities that reasonably relate to the publishing of the literary work, if the activities are carried out primarily in Ontario, including,

A. salaries or wages paid to employees involved in editing, design and project management,

B. amounts in respect of fees for freelance editing, design and research, and

C. amounts in respect of the cost of art work, developing prototypes, set-up and typesetting.

1.1 Expenditures incurred by the company after March 26, 2009 and in the year in respect of activities that reasonably relate to preparing a literary work for publication in one or more digital or electronic formats, if the activities are carried out primarily in Ontario, including,

i. salaries or wages paid to employees involved in editing, design and project management,

ii. amounts in respect of fees for freelance editing, design and research,

iii. amounts in respect of the cost of art work, developing prototypes and set-up, and

iv. salaries, wages, fees or other amounts in respect of related activities, including scanning, editing, formatting, indexing, encryption and establishing digital rights management or other technological protection measures.

2. One-half of the expenditures incurred by the company in the year for the printing, assembling and binding of the literary work, if those activities are carried out primarily in Ontario.

2.1 One-half of the expenditures incurred by the company after March 26, 2009 and in the year that reasonably relate to transferring a prepared digital or electronic version of the literary work into or onto a form suitable for distribution, if those activities are carried out primarily in Ontario.

3. With respect to expenditures incurred by the company before March 30, 2011, those expenditures incurred in the year that reasonably relate to the marketing of copies of the published literary work and are incurred by the company within 12 months after the date of publication of the literary work, including,

i. expenditures in respect of promotional tours by the eligible Canadian author of the literary work, except that only 50 per cent of expenditures for meals and entertainment are qualifying expenditures,

ii. salaries or wages paid to employees of the company engaged in marketing copies of the published literary work, and

iii. amounts expended in respect of promoting and marketing copies of the published literary work.

4. With respect to expenditures incurred by the company after March 29, 2011, those expenditures incurred in the year that reasonably relate to the marketing of copies of the published literary work and are incurred by the company within the period that begins 12 months before and ends 12 months after the date of publication of the literary work, including,

i. expenditures in respect of promotional tours by the eligible Canadian author of the literary work, except that only 50 per cent of expenditures for meals and entertainment are qualifying expenditures,

ii. salaries or wages paid to employees of the company engaged in marketing copies of the published literary work, and

iii. amounts expended in respect of promoting and marketing copies of the published literary work.  2007, c. 11, Sched. A, s. 95 (16); 2009, c. 34, Sched. U, s. 20 (2); 2010, c. 1, Sched. 29, s. 12; 2011, c. 9, Sched. 40, s. 5.

Restriction

(16.1) An expenditure may not be included under a paragraph of subsection (16) in respect of the publishing of an eligible literary work if the expenditure is also included under another paragraph of that subsection in respect of the publishing of the literary work.  2009, c. 34, Sched. U, s. 20 (3).

Same

(17) The total of all qualifying expenditures made by a corporation in respect of the publishing of an eligible literary work shall be the amount otherwise determined less the amount of all government assistance, if any, in respect of the qualifying expenditures that, on the corporation’s filing-due date for the taxation year for which the tax credit is claimed, the corporation has received, is entitled to receive or may reasonably expect to receive.  2007, c. 11, Sched. A, s. 95 (17).

Corporate reorganizations

(18) Subsection (19) applies if, after December 31, 2001, one of the following events occurs:

1. An Ontario book publishing company (the “transferor”) transfers all or part of its business to another corporation (the “transferee”) in accordance with subsection 85 (1) of the Federal Act.

2. A corporation (the “transferee”) is formed as the result of an amalgamation of an Ontario book publishing company (the “transferor”) with one or more other corporations in accordance with section 87 of the Federal Act.

3. An Ontario book publishing company (the “transferor”) is wound up in accordance with subsection 88 (1) of the Federal Act and its assets and liabilities, if any, are transferred to its parent corporation (the “transferee”).  2007, c. 11, Sched. A, s. 95 (18).

Continuation of corporation

(19) If one of the conditions described in subsection (18) is satisfied, the following rules apply:

1. For the purposes of subsections (2), (8) and (16), the transferee is deemed to be the same corporation as, and a continuation of, the transferor with respect to an eligible literary work or the right to publish an eligible literary work that is transferred to the transferee under paragraph 1, 2 or 3 of subsection (18) and any amount previously claimed under this section or section 43.7 of the Corporations Tax Act by the transferor for a taxation year in respect of the eligible literary work is deemed to have been claimed by the transferee for that previous taxation year.

2. For the purposes of subsections (2), (8) and (16), the transferor ceases, immediately after the eligible literary work is transferred under paragraph 1, 2 or 3 of subsection (18) to be an Ontario book publishing company in respect of the eligible literary work or the right to publish the eligible literary work.

3. For the purpose of clause (15) (i), any books published by the transferor in the 12-month period immediately preceding the taxation year in which the event described in paragraph 1, 2 or 3 of subsection (18) occurs are deemed to have been published by the transferor and the transferee.  2007, c. 11, Sched. A, s. 95 (19).

Definitions

(20) In this section,

“author” includes, in respect of a literary work that is a children’s book, the illustrator of the literary work; (“auteur”)

“book publishing company” means a corporation whose principal business is selecting, editing and publishing books and that,

(a) enters into contractual agreements with authors and copyright holders for the production of literary works in print form,

(b) offers for sale into the retail market the literary works that it publishes,

(c) owns its own inventory or is related to a Canadian-controlled corporation that owns the inventory, or has a contractual arrangement for inventory repurchase or acceptance of book returns, and

(d) bears the financial risks associated with carrying on the business of publishing, or is related to a Canadian-controlled corporation that bears the financial risks associated with carrying on the business; (“maison d’édition”)

“Canadian-controlled corporation” means a corporation that is determined to be Canadian-controlled under sections 26 to 28 of the Investment Canada Act (Canada) for the purposes of that Act and, in the application of those sections for the purposes of this definition, a reference to the Minister shall be read as a reference to the Minister of Finance; (“société sous contrôle canadien”)

“eligible Canadian author” means, with respect to a literary work, an individual,

(a) who, when the contract is entered into to publish the literary work, is ordinarily resident in Canada and is a Canadian citizen or a permanent resident within the meaning of the Immigration and Refugee Protection Act (Canada), and

(b) who, if the literary work is published before March 27, 2009, has not written more than two literary works of the same eligible category of writing that have been previously published, other than a literary work published in an anthology containing two or more literary works by different authors; (“auteur canadien admissible”)

“established distributor” means a person or partnership that has engaged in the business of selling or distributing books to retail stores and educational institutions for more than one year and does not sell directly by retail to an ultimate consumer; (“distributeur établi”)

“government assistance” means assistance from a government, municipality or other public authority in any form, including a grant, subsidy, forgivable loan, deduction from tax and investment allowance, but does not include,

(a) a tax credit under this section or section 96 of this Act or section 43.3 or 43.7 of the Corporations Tax Act, or

(b) a grant that is not specific to a particular eligible literary work; (“aide gouvernementale”)

“ineligible publication” means a literary work that is an ineligible publication under the prescribed rules. (“publication non admissible”)  2007, c. 11, Sched. A, s. 95 (20); 2009, c. 34, Sched. U, s. 20 (4).

Eligible category of writing

(21) For the purposes of this section, the eligible categories of writing are as follows:

1. If the literary work is published on or before May 11, 2005, each of the following is an eligible category of writing:

i. Fiction.

ii. Nonfiction.

iii. Poetry.

iv. Biography.

v. Children’s books.

2. If the literary work is published after May 11, 2005, each of the following is an eligible category of writing:

i. Fiction.

ii. Nonfiction.

iii. Poetry.

iv. Biography.

v. Children’s fiction.

vi. Children’s nonfiction.

vii. Children’s poetry.

viii. Children’s biography.  2007, c. 11, Sched. A, s. 95 (21).

Transitional, eligible Canadian author

(22) In determining if an individual is an eligible Canadian author of a literary work published after May 11, 2005 that is children’s fiction, children’s nonfiction, children’s poetry or children’s biography and whether the individual has more than two literary works of the same eligible category of writing that have been previously published, any children’s books of which the individual is the author that were published before May 12, 2005 shall be classified according to the eligible categories of writing that would apply if the books had been published after May 11, 2005.  2007, c. 11, Sched. A, s. 95 (22).

Section Amendments with date in force (d/m/y)

2009, c. 34, Sched. U, s. 20 (1-4) - 27/03/2009

2010, c. 1, Sched. 29, s. 12 - 27/03/2009

2011, c. 9, Sched. 40, s. 5 - 12/05/2011

Ontario innovation tax credit

96. (1) A corporation that is a qualifying corporation for a taxation year and that complies with the requirements of this section may claim an amount for the year in respect of and not exceeding the corporation’s Ontario innovation tax credit for the year.  2007, c. 11, Sched. A, s. 96 (1).

Amount of tax credit

(2) The amount of a qualifying corporation’s Ontario innovation tax credit for a taxation year that ends on or after June 1, 2016 and that does not include May 31, 2016 is determined as follows:

1. Add the following amounts:

i. the amount of the corporation’s SR & ED qualified expenditure pool at the end of the year,

ii. the amount of its eligible repayments, if any, for the year made in respect of qualified expenditures incurred by the corporation in a taxation year that ends on or after June 1, 2016 and that does not include May 31, 2016,

iii. the amount that is calculated using the formula,

A × (B/0.08)

in which,

“A” is the corporation’s eligible repayments, if any, for the year made in respect of qualified expenditures incurred by the corporation in a taxation year that ends on or after June 1, 2016 and that includes May 31, 2016, and

“B” is the percentage calculated by adding,

(a)  10 per cent multiplied by the ratio of the number of days in the taxation year referred to in the definition of “A” that are before June 1, 2016 to the total number of days in the year, and

(b)  8 per cent multiplied by the ratio of the number of days in that taxation year that are after May 31, 2016 to the total number of days in the year, and

iv. the amount that is equal to 1.25 multiplied by the amount of its eligible repayments, if any, for the year made in respect of qualified expenditures incurred by the corporation in a taxation year that ends before June 1, 2016.

2. Determine the amount of the corporation’s expenditure limit for the year.

3. The amount of the qualifying corporation’s tax credit for the taxation year is determined by multiplying 8 per cent by the lesser of the amounts determined under paragraphs 1 and 2. 2016, c. 5, Sched. 28, s. 17.

Transition, taxation years ending on or after June 1, 2016 that include May 31, 2016

(2.1) The amount of a qualifying corporation’s Ontario innovation tax credit for a taxation year that ends on or after June 1, 2016 and that includes May 31, 2016 is determined as follows:

1. Determine the percentage that is the sum of,

i. 10 per cent multiplied by the ratio of the number of days in the taxation year that are before June 1, 2016 to the total number of days in the year, and

ii. 8 per cent multiplied by the ratio of the number of days in the taxation year that are after May 31, 2016 to the total number of days in the year.

2. Add the following amounts:

i. the amount of the corporation’s SR & ED qualified expenditure pool at the end of the year, and

ii. the amount that is calculated using the formula,

C × (0.1/D)

in which,

“C” is the amount that is equal to the amount of its eligible repayments, if any, for the year made in respect of qualified expenditures incurred by the corporation in a taxation year ending before June 1, 2016, and

“D” is the percentage determined under paragraph 1.

3. Determine the amount of the corporation’s expenditure limit for the year.

4. The amount of the qualifying corporation’s tax credit for the taxation year is determined by multiplying the percentage determined under paragraph 1 by the lesser of the amounts determined under paragraphs 2 and 3. 2016, c. 5, Sched. 28, s. 17.

Transition, taxation years ending before June 1, 2016

(2.2) The amount of a qualifying corporation’s Ontario innovation tax credit for a taxation year that ends before June 1, 2016 is determined as follows:

1. Add the following amounts:

i. the amount of the corporation’s SR & ED qualified expenditure pool at the end of the year, and

ii. the amount of its eligible repayments, if any, for the year.

2. Determine the amount of the corporation’s expenditure limit for the year.

3. The amount of the qualifying corporation’s tax credit for the taxation year is determined by multiplying 10 per cent by the lesser of the amounts determined under paragraphs 1 and 2. 2016, c. 5, Sched. 28, s. 17.

Expenditure limit

(3) Subject to subsection (6) and except as otherwise provided in subsection (4.2), the amount of a corporation’s expenditure limit for the purposes of subsection (2) for a taxation year ending before January 1, 2010 is the amount calculated using the formula,

($7 million – 10A) × (($25 million – B)/$25 million)

in which,

  “A” is the greater of,

(a) $400,000, and

(b) the amount that is,

(i) if the corporation is not associated with any other corporation in the taxation year, the corporation’s taxable income under the Federal Act for its immediately preceding taxation year, determined before taking into consideration the specified future tax consequences for that preceding year, or

(ii) if the corporation is associated with one or more corporations in the taxation year, the associated group’s taxable income for the corporation’s immediately preceding taxation year, as determined under subsection (4), and

  “B” is,

(a) nil if,

(i) the corporation’s specified capital amount for the immediately preceding  taxation year is not more than $25 million and the corporation is not associated with any other corporation in the taxation year, or

(ii) the corporation is associated with one or more corporations in the taxation year and the associated group’s specified capital amount for the preceding taxation year as determined under subsection (4.1) is not more than $25 million, or

(b) in any other case, the lesser of $25 million and the amount by which the corporation’s specified capital amount for the immediately preceding taxation year or, if the corporation is associated with one or more corporations in the taxation year, the associated group’s specified capital amount for the immediately preceding taxation year exceeds $25 million.

2008, c. 19, Sched. U, s. 4 (1); 2010, c. 1, Sched. 29, s. 13 (1).

Expenditure limit, taxation years ending after 2009

(3.1) Subject to subsection (6) and except as otherwise provided in subsection (4.3), the amount of a corporation’s expenditure limit for the purposes of subsection (2) for a taxation year ending after December 31, 2009 is the amount calculated using the formula,

($8 million – 10A) × (($25 million – B)/$25 million)

in which,

  “A” is the greater of,

(a) $500,000, and

(b) the amount that is,

(i) if the corporation is not associated with any other corporation in the taxation year, the corporation’s taxable income under the Federal Act for its immediately preceding taxation year, determined before taking into consideration the specified future tax consequences for that preceding year, or

(ii) if the corporation is associated with one or more corporations in the taxation year, the associated group’s taxable income for the corporation’s immediately preceding taxation year, as determined under subsection (4), and

  “B” is,

(a) nil if,

(i) the corporation’s specified capital amount for the immediately preceding  taxation year is not more than $25 million and the corporation is not associated with any other corporation in the taxation year, or

(ii) the corporation is associated with one or more corporations in the taxation year and the associated group’s specified capital amount for the preceding taxation year as determined under subsection (4.1) is not more than $25 million, or

(b) in any other case, the lesser of $25 million and the amount by which the corporation’s specified capital amount for the immediately preceding taxation year or, if the corporation is associated with one or more corporations in the taxation year, the associated group’s specified capital amount for the immediately preceding taxation year exceeds $25 million.

2010, c. 1, Sched. 29, s. 13 (2).

Associated group’s taxable income

(4) If a corporation is associated with one or more corporations in a particular taxation year, the associated group’s taxable income for the corporation’s immediately preceding taxation year is the sum of,

(a) the corporation’s taxable income under the Federal Act for its last taxation year ending in the last calendar year that ended before the end of the particular taxation year, determined before taking into consideration the specified future tax consequences for that preceding year; and

(b) the sum of all amounts each of which is the taxable income of an associated corporation under the Federal Act for the associated corporation’s last taxation year ending in the last calendar year that ended before the end of the particular taxation year, determined before taking into consideration the specified future tax consequences for that last taxation year.  2008, c. 19, Sched. U, s. 4 (1).

Associated group’s specified capital amount

(4.1) If a corporation is associated with one or more corporations in a particular taxation year, the associated group’s taxable capital amount for the immediately preceding taxation year is the sum of,

(a) the corporation’s specified capital amount for its last taxation year ending in the last calendar year that ended before the end of the particular taxation year; and

(b) the sum of all amounts each of which is the specified capital amount of a corporation with which the corporation is associated in the taxation year, for the associated corporation’s last taxation year ending in the last calendar year that ended before the end of the particular taxation year.  2008, c. 19, Sched. U, s. 4 (1).

Transitional, February 26, 2008

(4.2) A corporation’s expenditure limit for a taxation year that straddles February 26, 2008 is equal to the amount determined by the formula,

A – [(A – B) × (C/D)]

in which,

  “A” is the amount that would be determined in respect of the corporation for the taxation year under subsection (3) if this section were read without reference to this subsection,

  “B” is the amount that would have been determined in respect of the corporation for the taxation year under subsection 43.3 (3.2) of the Corporations Tax Act if the taxation year commenced after May 4, 1999 and before February 26, 2008,

  “C” is the number of days in the taxation year that are before February 26, 2008, and

  “D” is the number of days in the taxation year.

2008, c. 19, Sched. U, s. 4 (1).

Expenditure limit if taxation year begins before 2010

(4.3) A corporation’s expenditure limit for a taxation year that begins before January 1, 2010 and ends on or after that day is the amount calculated using the formula,

A – [(A – B) × (C/D)]

in which,

  “A” is the amount that would be determined in respect of the corporation for the taxation year by using the formula in subsection (3.1),

  “B” is the amount that would be determined in respect of the corporation for the taxation year by using the formula in subsection (3), even though subsection (3) does not apply for the taxation year,

  “C” is the number of days in the taxation year that are before January 1, 2010, and

  “D” is the number of days in the taxation year.

2010, c. 1, Sched. 29, s. 13 (2).

Application of federal rules

(5) Subsections 127 (10.21), (10.22), (10.23), (10.3), (10.4) and (10.6) of the Federal Act apply with necessary modifications for the purposes of subsections (3) and (3.1) and, in the application of those subsections of section 127 of the Federal Act, every reference to a Canadian-controlled private corporation is deemed to be a reference to a qualifying corporation as defined in subsection (7).  2010, c. 1, Sched. 29, s. 13 (3).

Calculation of expenditure limit

(6) The following rules apply for the purposes of subsections (3) and (3.1):

1. A non-resident corporation that has a permanent establishment in Ontario in a taxation year but is not a financial institution, credit union or insurance corporation in the year shall determine its specified capital amount for the year as if it were resident in Canada for the year.

2. A corporation that would be a financial institution in a taxation year if it carried on business in Canada and if it had been incorporated in Canada shall determine its specified capital amount for the taxation year as if it were a financial institution that had a permanent establishment in Ontario at any time in the year.

3. A corporation that is a financial institution and has a permanent establishment in Canada but not in Ontario in a taxation year shall determine its specified capital amount for the year as if it had a permanent establishment in Ontario at any time in the year.

4. A corporation that is an insurance corporation or credit union that was not resident in Canada at any time in a taxation year shall determine its specified capital amount as if it were resident in Canada in the year.

5. A corporation that has a permanent establishment in Canada at any time in a taxation year but not in Ontario shall, if the corporation is not a financial institution, credit union or insurance corporation, determine its specified capital amount as if the corporation were resident in Canada and had a permanent establishment in Ontario at any time in the year.

6. A corporation that does not have a permanent establishment in Canada in a taxation year shall, if the corporation is not an insurance corporation, credit union or a corporation that would be a financial institution if it carried on business in Canada and had been incorporated in Canada, determine its specified capital amount as if the corporation were resident in Canada and had a permanent establishment in Ontario at any time in the year.

7. The taxable income of a non-resident corporation that does not have a permanent establishment in Canada in a taxation year shall, for the purposes of calculating the expenditure limit of the corporation under subsection (3) or (3.1), be determined in accordance with the Federal Act as if the corporation were subject to tax under that Act.  2007, c. 11, Sched. A, s. 96 (6); 2010, c. 1, Sched. 29, s. 13 (4, 5).

Qualifying corporation

(7) A corporation is a qualifying corporation for a taxation year for the purposes of this section if,

(a) it has a permanent establishment in Ontario at any time during the year;

(b) it carries on scientific research and experimental development in Ontario during the year; and

(c) it is eligible to claim an investment tax credit for the year under section 127 of the Federal Act with respect to a qualified expenditure made by the corporation in the year and it files a prescribed form under that section in respect of the investment tax credit.  2007, c. 11, Sched. A, s. 96 (7).

Qualified expenditure

(8) An expenditure made by a corporation is a qualified expenditure for a taxation year for the purposes of this section if,

(a) the expenditure is incurred by the corporation in respect of scientific research and experimental development carried on in Ontario;

(b) the expenditure would be considered to be a qualified expenditure made by the corporation in that year for the purposes of section 127 of the Federal Act; and

(c) the expenditure is incurred by the corporation at a time when the corporation has a permanent establishment in Ontario and the expenditure is attributable to that permanent establishment.  2007, c. 11, Sched. A, s. 96 (8).

SR & ED qualified expenditure pool

(9) The amount of a corporation’s SR & ED qualified expenditure pool at the end of a taxation year for the purposes of this section is the amount that would be determined to be the corporation’s SR & ED qualified expenditure pool at the end of the year under the definition of that expression in subsection 127 (9) of the Federal Act, if the following rules applied in determining that amount:

1. The expression “qualified expenditure” in the definition of “SR & ED qualified expenditure pool” in subsection 127 (9) of the Federal Act means an expenditure that is a qualified expenditure for the purposes of this section.

2. For expenditures made before 2014, only 40 per cent of qualified expenditures of a capital nature for the taxation year may be included in determining the amount of qualified expenditures in the year.

3. Any tax credit available to the corporation under this section or section 39 or 97 of this Act or section 43.3 or 43.9 of the Corporations Tax Act in respect of qualified expenditures is deemed not to be government assistance for the purposes of section 127 of the Federal Act.

4. No amount is required to be deducted in respect of a specified contract payment received, receivable or reasonably expected to be received by the corporation.

5. In determining the amount that is “C” in the formula in the definition of “SR & ED qualified expenditure pool” in subsection 127 (9) of the Federal Act, no amount needs to be included in respect of an amount transferred by the corporation under subsection 127 (13) of that Act to a person not dealing at arm’s length with the corporation, if that person is not eligible to claim, under this Act or under an Act of another province, a tax credit or incentive, other than a deduction under section 37 of the Federal Act as it applies for income tax purposes under this Act and in other provinces, in respect of the amount transferred by the corporation.  2007, c. 11, Sched. A, s. 96 (9); 2015, c. 20, Sched. 40, s. 15.

Interpretation

(10) A provision of the Federal Act or Federal regulations, other than a provision in section 127 of the Federal Act, that applies for the purposes of the application of a provision in section 127 of that Act for the purposes of that Act applies for the purposes of this section, unless otherwise provided in this section.  2007, c. 11, Sched. A, s. 96 (10).

Specified contract payment

(11) For the purposes of this section, a payment is a specified contract payment if,

(a) the payment is a contract payment for the performance of scientific research and experimental development carried on in Ontario; and

(b) the payment is from a corporation that,

(i) does not have a permanent establishment in Ontario, and

(ii) is not entitled to receive a payment from a corporation that is eligible to claim a tax credit under this section or section 43.3 of the Corporations Tax Act in respect of the scientific research and experimental development to which the contract payment relates.  2007, c. 11, Sched. A, s. 96 (11).

Eligible repayments

(12) The amount of a corporation’s eligible repayments for a taxation year for the purposes of this section is the amount calculated using the formula,

C + 0.4 (D + E)

in which,

  “C” is the total of the corporation’s designated repayments, if any, for the year in respect of government assistance, non-government assistance or contract payments relating to qualified expenditures of a current nature,

  “D” is the total of the corporation’s designated repayments, if any, for the year in respect of government assistance, non-government assistance or contract payments relating to qualified expenditures of a capital nature, other than qualified expenditures referred to in paragraph 127 (11.5) (b) of the Federal Act, and

  “E” is 25 per cent of the total of the designated repayments, if any, considered to be repayments made by the corporation in the year, for the purposes of paragraph (e.2) of the definition of “investment tax credit” in subsection 127 (9) of the Federal Act, in respect of government assistance, non-government assistance or contract payments relating to qualified expenditures referred to in paragraph 127 (11.5) (b) of that Act.

2007, c. 11, Sched. A, s. 96 (12).

Designated repayment

(13) An amount repaid in a taxation year by a corporation, or deemed under subsection 127 (10.8) of the Federal Act to be repaid in a taxation year by a corporation, is a designated repayment made by the corporation in the year for the purposes of this section to the extent the repayment may reasonably be considered to be a repayment of,

(a) government assistance, non-government assistance or a contract payment received, receivable or reasonably expected to be received by the corporation, other than a specified contract payment;

(b) an amount that was deducted in determining for the purposes of this section or section 43.3 of the Corporations Tax Act the amount of a qualified expenditure made by the corporation for the taxation year or a previous taxation year;

(c) an amount, the deduction of which in determining for the purposes of this section the amount of a qualified expenditure, resulted in a reduction in the amount of a tax credit that would have otherwise been available to the corporation under this section or section 43.3 of the Corporations Tax Act for the taxation year or a previous taxation year; and

(d) an amount that under section 127 of the Federal Act reduced the amount of a qualified expenditure made by the corporation for the purposes of the definition of “investment tax credit” in subsection 127 (9) of that Act.  2007, c. 11, Sched. A, s. 96 (13).

Waiver of tax credit

(14) A corporation may waive its eligibility for a tax credit, or a portion of a tax credit, under this section for a taxation year by delivering a written waiver with its return required to be delivered under this Act for the year or in an amended return for that year.  2007, c. 11, Sched. A, s. 96 (14).

Same

(15) If a corporation files a waiver under subsection (14) in respect of a taxation year, the corporation is deemed never to have been a qualifying corporation under this section for that year in respect of the tax credit or the portion of the tax credit that is waived.  2007, c. 11, Sched. A, s. 96 (15).

Anti-avoidance

(16) A corporation is not entitled to a tax credit under this section for a taxation year if, as a result of a transaction or event, or a series of transactions or events, it is reasonable for the Ontario Minister to believe that one of the principal purposes of the transaction or event, or series of transactions or events, is to render the corporation eligible to claim a tax credit under this section or section 43.3 of the Corporations Tax Act to which it would not have otherwise been entitled, or a tax credit in an amount in excess of the amount to which it would have otherwise been entitled.  2007, c. 11, Sched. A, s. 96 (16).

Interpretation

(17) For the purposes of this section, the following rules apply:

1. The terms “contract payment”, “government assistance” and “non-government assistance” each have the meaning given to those terms in section 127 of the Federal Act, except that a tax credit under this section, section 43.3 or 43.9 of the Corporations Tax Act or section 97 of this Act is deemed not to be government assistance.

2. Expenditures in respect of scientific research and experimental development will be considered to be of a current or capital nature if they are considered to be such under the Federal Act.  2007, c. 11, Sched. A, s. 96 (17).

Definitions

(18) In this section,

“associated group” means, in respect of a corporation for a taxation year, the corporation and all corporations associated with the corporation in the taxation year; (“groupe”)

“financial institution” means a corporation, other than a credit union, that is a financial institution for the purposes of Division E of Part III; (“institution financière”)

“specified capital amount” means,

(a) in respect of a corporation that is an insurance corporation or credit union for a taxation year, the amount of the corporation’s taxable capital employed in Canada for the year as determined in accordance with Part I.3 of the Federal Act,

(b) in respect of a corporation that is a financial institution for a taxation year, the amount of the corporation’s adjusted taxable paid-up capital for the year,

(i) determined in accordance with Division E of Part III if the year ends after December 31, 2008, or

(ii) determined in accordance with Division B.1 of Part III of the Corporations Tax Act if the year ends before January 1, 2009, or

(c) in respect of a corporation that is not an insurance corporation, credit union or financial institution for a taxation year,

(i) the amount of the corporation’s taxable capital for the year as determined in accordance with Division E of Part III, if the year ends after December 31, 2008, or

(ii) the amount of the corporation’s taxable paid-up capital for the year as determined in accordance with Division B of Part III of the Corporations Tax Act, if the year ends before January 1, 2009. (“montant de capital déterminé”)  2007, c. 11, Sched. A, s. 96 (18); 2008, c. 19, Sched. U, s. 4 (2).

Interpretation re “specified capital amount”

(19) Subclauses (b) (i) and (c) (i) of the definition of “specified capital amount” in subsection (18) continue to apply for the purposes of determining a corporation’s specified capital amount for taxation years ending after June 30, 2010 as if Division E of Part III continued to apply for those taxation years.  2007, c. 11, Sched. A, s. 96 (19).

Section Amendments with date in force (d/m/y)

2008, c. 7, Sched. S, s. 25 - 01/01/2008

2008, c. 19, Sched. U, s. 4 (1, 2) - 26/02/2008

2010, c. 1, Sched. 29, s. 13 (1-5) - 01/01/2010

2015, c. 20, Sched. 40, s. 15 - 04/06/2015

2016, c. 5, Sched. 28, s. 17 - 19/04/2016

Ontario business-research institute tax credit

97. (1) A corporation that is a qualifying corporation in respect of one or more eligible contracts for a taxation year and complies with the requirements of this section may claim an amount for the year in respect of and not exceeding the corporation’s Ontario business-research institute tax credit for the year in respect of the contracts.  2007, c. 11, Sched. A, s. 97 (1).

Amount of tax credit

(2) Subject to subsection (20), the amount of a qualifying corporation’s Ontario business-research institute tax credit for a taxation year is the sum of all amounts, each of which is in respect of an eligible contract and is equal to the amount calculated using the formula,

A × B/C

in which,

  “A” is 20 per cent of the total of all qualified expenditures incurred during the year under the contract by the corporation, to the extent that no tax credit has been claimed under this section or section 43.9 of the Corporations Tax Act for a previous taxation year in respect of the qualified expenditures,

  “B” is the number of days in the year that the corporation is not connected to the eligible research institute that entered into the eligible contract or to any other eligible research institute that carries out the scientific research and experimental development that is to be performed under the contract, and

  “C” is the number of days in the year.

2007, c. 11, Sched. A, s. 97 (2).

Qualifying corporation

(3) A corporation is a qualifying corporation for a taxation year in respect of an eligible contract with an eligible research institute if,

(a) the corporation carries on business in Ontario in the year through a permanent establishment in Ontario; and

(b) the corporation or a partnership of which it is a member, but not a specified member, entered into the contract with the eligible research institute.  2007, c. 11, Sched. A, s. 97 (3).

Corporation connected to an eligible research institute

(4) For the purposes of this section, a corporation is connected to an eligible research institute at any time during a taxation year of the corporation if at that time,

(a) the eligible research institute owned, directly or indirectly in any manner whatever, shares of the capital stock of the corporation that,

(i) carry more than 10 per cent of the voting rights attached to voting securities, within the meaning of the Securities Act, of the corporation, or

(ii) have a fair market value of more than 10 per cent of the fair market value of all of the issued shares of the capital stock of the corporation;

(b) the eligible research institute and the corporation were members of the same partnership or did not deal at arm’s length;

(c) a partnership of which the eligible research institute is a member owned, directly or indirectly in any manner whatever, any of the shares of the corporation; or

(d) the corporation and the eligible research institute are connected under the prescribed rules.  2007, c. 11, Sched. A, s. 97 (4).

Corporate partners

(5) If a corporation is a member, other than a specified member, of a partnership at the end of a fiscal period of the partnership in which the partnership would qualify for an Ontario business-research institute tax credit if the partnership were a corporation whose fiscal period was its taxation year, and if the corporation would be a qualifying corporation in respect of the eligible contract if it instead of the partnership had entered into the contract,

(a) the portion of the qualified expenditures in respect of which the partnership would calculate the tax credit for the taxation year that may reasonably be considered to be the corporation’s share of the qualified expenditures,

(i) is deemed to have been incurred by the corporation and shall be included in determining the total amount of the corporation’s qualified expenditures in respect of the eligible contract for the taxation year in which the partnership’s fiscal period ends, and

(ii) may be included in the determination of the amount of the corporation’s Ontario business-research institute tax credit for the taxation year in which the partnership’s fiscal period ends; and

(b) the corporation’s share of the qualified expenditures shall be the portion of the qualified expenditures that corresponds to the corporation’s share of the income or loss of the partnership for the fiscal period of the partnership ending in the taxation year and, for the purpose of determining the corporation’s share of the tax credit if the partnership has no income or loss for that fiscal period, the partnership’s income for the fiscal period is deemed to be $1 million.  2007, c. 11, Sched. A, s. 97 (5).

Eligible contract

(6) For the purposes of this section, a contract entered into by a corporation or a partnership with an eligible research institute is an eligible contract if,

(a) under the terms of the contract, the eligible research institute agrees to directly perform in Ontario scientific research and experimental development related to a business carried on in Canada by the corporation or partnership, as the case may be, and the corporation or partnership is entitled to exploit the results of the research and development carried out under the agreement; and

(b) the contract is entered into after May 6, 1997 or, if the contract was entered into before May 7, 1997, the terms of the contract as they read on May 7, 1997 provide that the eligible research institute will continue to carry out scientific research and experimental development under the contract until a date after May 6, 1999.  2007, c. 11, Sched. A, s. 97 (6).

Exception, substituted contract

(7) Despite subsection (6), a contract entered into after May 6, 1997 that, but for this subsection, would be an eligible contract shall not be an eligible contract for the purposes of this section if the contract may reasonably be considered to require expenditures for scientific research and experimental development that were to be performed under a contract entered into before May 7, 1997 by the corporation or the partnership or by a person related to the corporation or partnership, as the case may be.  2007, c. 11, Sched. A, s. 97 (7).

Qualified expenditure

(8) Except as otherwise provided in this section, an expenditure incurred under an eligible contract with an eligible research institute is a qualified expenditure under the contract to the extent that,

(a) the expenditure, when it is made, is,

(i) a payment of money made by a qualifying corporation to the eligible research institute under the terms of the contract, or

(ii) a prescribed payment;

(b) the expenditure is incurred in respect of scientific research and experimental development carried on in Ontario directly by the eligible research institute; and

(c) it is an expenditure referred to in subparagraph 37 (1) (a) (i.01), (i.1) or (ii) of the Federal Act that would be a qualified expenditure within the meaning of subsection 127 (9) of that Act, other than an expenditure,

(i) that may reasonably be considered to fund the payment of salary or wages to an employee of the eligible research institute who is connected to the corporation making the expenditure, or

(ii) that is a prescribed type of expenditure.  2007, c. 11, Sched. A, s. 97 (8); 2010, c. 1, Sched. 29, s. 14; 2015, c. 38, Sched. 20, s. 3.

Advance ruling required

(9) Despite subsection (8), an expenditure that would otherwise be a qualified expenditure of a corporation under this section is deemed not to be a qualified expenditure for the purposes of this section unless, before the corporation or partnership incurs the expenditure,

(a) it has applied to the Ontario Minister in the manner and form approved by the Ontario Minister for a ruling with respect to the contract under which the expenditure is to be made, the proposed expenditures to be made under the contract and the arrangements between the parties to the contract and other persons;

(b) it has provided all information specified by the Ontario Minister and any other relevant information and documentation that may reasonably be required by the Ontario Minister in connection with the application for the ruling; and

(c) the Ontario Minister has given a ruling with respect to the contract, the proposed expenditures and whether the parties to the contract and other persons connected directly or indirectly to the arrangements in respect of the contract are considered to be conducting their business and affairs within the spirit and intent of this section at the time the ruling is given.  2007, c. 11, Sched. A, s. 97 (9).

Expenditure under more than one contract

(10) If an expenditure will be applied under more than one contract, a ruling under subsection (9) must be obtained with respect to each of the contracts.  2007, c. 11, Sched. A, s. 97 (10).

Expenditure before ruling obtained

(11) If a corporation or partnership incurs an expenditure under a contract before the Ontario Minister gives a ruling under subsection (9), and the Ontario Minister subsequently gives a favourable ruling, the expenditure is deemed, for the purposes of subsection (9) but not subsection (2), to have been made after the ruling was given if the corporation or partnership applies to the Ontario Minister for the ruling,

(a) within 90 days after the day on which the contract was entered into; or

(b) no later than three years after the day on which the contract was entered into, and the Ontario Minister is satisfied that the corporation or partnership was unable to apply for the ruling at an earlier time through no fault of its own for reasons that were beyond its control.  2007, c. 11, Sched. A, s. 97 (11).

Ontario Minister may dispense with requirement for ruling

(12) The Ontario Minister may give a direction that rulings no longer need to be obtained under this section in respect of contracts entered into after the date of the Ontario Minister’s direction, if the Ontario Minister is satisfied that corporations, their officers, directors and shareholders, partnerships and their members and eligible research institutes are conducting their business and affairs in a manner that meets the spirit and intent of this section, and, subject to subsection (13), subsections (9) to (11) will not apply to qualified expenditures made under contracts entered into after the date of the Ontario Minister’s direction.  2007, c. 11, Sched. A, s. 97 (12).

Ontario Minister may reinstate ruling requirement

(13) The Ontario Minister may, at any time after giving a direction under subsection (12), revoke the direction and give a new direction that subsections (9) to (11) shall apply to qualified expenditures made under contracts entered into after the date of the new direction.  2007, c. 11, Sched. A, s. 97 (13).

Transitional

(14) A direction given by the Minister of Finance under subsection 43.9 (13) of the Corporations Tax Act in respect one or more contracts is deemed to have also been given under subsection (12) of this section.  2007, c. 11, Sched. A, s. 97 (14).

Publication

(15) The Ontario Minister shall publicize directions given under subsections (12) and (13), by bulletin or by any other means of communication that, in the opinion of the Ontario Minister, will bring the directions to the attention of those affected.  2007, c. 11, Sched. A, s. 97 (15).

Reduction in amount of qualified expenditures

(16) The total of all qualified expenditures incurred by a corporation under an eligible contract shall be reduced by any contribution that the corporation, any shareholder of the corporation, any partnership of which the corporation is a member, any partner in that partnership or any person not dealing at arm’s length with the corporation or a shareholder of the corporation has received, is entitled to receive or may reasonably expect to receive from,

(a) the eligible research institute that entered into the eligible contract;

(b) a person who performs scientific research and experimental development that is to be carried out under the contract; or

(c) a person who does not deal at arm’s length with either of them.  2007, c. 11, Sched. A, s. 97 (16).

Exception

(17) Despite subsection (16), if under the terms of an eligible contract between an eligible research institute and a corporation or partnership, the eligible research institute directly funds part of the cost of performing the scientific research and experimental development that is to be carried out under the contract, the expenditures made by the institute in performing the scientific research and experimental development shall not be considered to be a contribution if,

(a) the financial obligations of the corporation or partnership under the contract are not reduced by the amount of any expenditures made by the eligible research institute;

(b) the expenditures made by the eligible research institute are not payments made to or at the direction of the corporation or partnership; and

(c) there is an agreement in writing between the eligible research institute and all other persons who are parties to the eligible contract that provides the terms and conditions under which the eligible research institute would be entitled to recover the amount of its expenditures.  2007, c. 11, Sched. A, s. 97 (17).

Same, transactions in the ordinary course of business

(18) Subsection (16) does not apply in respect of the provision of goods and services in the ordinary course of a business carried on by the corporation or partnership if,

(a) in the case where the corporation or partnership, or another person who does not deal at arm’s length with the corporation or partnership, acquires the goods or services, the price paid by the corporation, partnership or person for the goods or services is not less than their fair market value; and

(b) in the case where the corporation or partnership, or another person who does not deal at arm’s length with the corporation or partnership, is providing the goods or services,

(i) the price for the goods or services is not greater than their fair market value, and

(ii) the expenditures made to acquire the goods or services do not form part of the expenditures made by the eligible research institute for scientific research and experimental development under the eligible contract.  2007, c. 11, Sched. A, s. 97 (18).

Repayment of government assistance

(19) The total of all qualified expenditures made by a corporation for a taxation year under an eligible contract may include an amount that may reasonably be considered to be a repayment of government assistance made by the corporation during the year, to the extent that the amount,

(a) has not been repaid in a previous taxation year; and

(b) may reasonably be considered to have reduced the amount of an Ontario business-research institute tax credit that would otherwise have been allowed to the corporation under this section or section 43.9 of the Corporations Tax Act in respect of the eligible contract.  2007, c. 11, Sched. A, s. 97 (19).

Limit on amount of qualified expenditures

(20) The amount of qualified expenditures under an eligible contract with respect to which a corporation may claim a tax credit under this section shall not exceed the amount that may reasonably be considered to be the amount that would have been expended by the corporation if the corporation had carried out the scientific research and experimental development directly in the same circumstances and under the same conditions as the eligible research institute under the eligible contract.  2007, c. 11, Sched. A, s. 97 (20).

Annual qualified expenditure limit

(21) No tax credit may be claimed by a corporation under this section for a taxation year in respect of qualified expenditures that exceed the corporation’s qualified expenditure limit for the year as determined under the prescribed rules.  2007, c. 11, Sched. A, s. 97 (21).

Subsidiary wholly-owned corporations

(22) An eligible research institute is deemed for the purposes of this section to carry out scientific research and experimental development that is carried out by one of its subsidiary wholly-owned corporations, if the scientific research and experimental development activities are required to be carried out under an eligible contract entered into by the eligible research institute.  2007, c. 11, Sched. A, s. 97 (22).

Subcontracts

(23) If an eligible research institute that entered into an eligible contract with a corporation subsequently enters into a contract with another institute that is an eligible research institute or a specified person and under that second contract the other institute performs part of the scientific research and experimental development that is to be carried out under the eligible contract or the specified person carries out part of the work required to be carried out under the contract, the scientific research and experimental development carried out directly by the other institute or the work carried out by the specified person is deemed to be carried out directly by the eligible research institute under the eligible contract.  2007, c. 11, Sched. A, s. 97 (23).

When employee connected to corporation

(24) For the purposes of this section, where an eligible research institute and a corporation have entered into an eligible contract, an employee of the eligible research institute is connected to the corporation in a taxation year if, at any time in the taxation year of the corporation,

(a) the employee or a person who does not deal at arm’s length with the employee owned, directly or indirectly in any manner whatever, shares of the capital stock of the corporation that,

(i) carry more than 10 per cent of the voting rights attached to voting securities, within the meaning of the Securities Act, of the corporation, or

(ii) have a fair market value of more than 10 per cent of the fair market value of all of the issued shares of the capital stock of the corporation; or

(b) the employee and the corporation are connected under the prescribed rules.  2007, c. 11, Sched. A, s. 97 (24).

Same

(25) For the purposes of subsections (4) and (24), subsection 256 (1.4) of the Federal Act applies with necessary modifications to determine the shares of the capital stock of a corporation that are deemed to be issued and outstanding and owned by a person and the person’s relation to control of the corporation.  2007, c. 11, Sched. A, s. 97 (25).

Interpretation

(26) For the purposes of determining if an expenditure would be a qualified expenditure within the meaning of subsection 127 (9) of the Federal Act for the purposes of this section,

(a) a tax credit under this section or section 96 of this Act or section 43.3 or 43.9 of the Corporations Tax Act is deemed not to be government assistance; and

(b) the reference to “contract payment” in subsection 127 (18) of the Federal Act is deemed for the purposes of paragraph (h) of the definition of “qualified expenditure” in subsection 127 (9) of that Act to exclude prescribed types of payments.  2007, c. 11, Sched. A, s. 97 (26).

Definitions

(27) In this section,

“contribution” means, in respect of an eligible contract, an amount that is not excluded by the prescribed rules and that is,

(a) a payment in money, a transfer of ownership of a property, an assignment of the use of property or of a right to use a property or any other benefit or advantage in any other form or manner, other than a property resulting from scientific research and experimental development undertaken under the eligible contract,

(b) a former, present or future right in the proceeds of disposition of part or all of the intellectual property arising from the scientific research and experimental development undertaken under the eligible contract,

(c) a reimbursement, compensation or guarantee,

(d) a loan or loan guarantee, or

(e) an amount of a prescribed type; (“contribution”)

“eligible research institute” means,

(a) a university or college of applied arts and technology in Ontario, whose enrolment is counted for the purposes of calculating annual operating grants entitlements from the Government of Ontario,

(b) an Ontario Centre of Excellence or a network of Centres of Excellence,

(c) a non-profit organization that is prescribed, is a member of a prescribed class of organizations or meets the prescribed conditions, or

(d) a hospital research institute that meets the prescribed conditions; (“institut de recherche admissible”)

“government assistance” has the same meaning as in section 127 of the Federal Act, except that a tax credit under this section or section 39 or 96 of this Act or section 43.3 or 43.9 of the Corporations Tax Act is deemed not to be government assistance; (“aide gouvernementale”)

“specified person” means, in respect of a contract, a person who is a specified person under the prescribed rules. (“personne déterminée”)  2007, c. 11, Sched. A, s. 97 (27).

Section Amendments with date in force (d/m/y)

2010, c. 1, Sched. 29, s. 14 - 01/01/2009

2015, c. 38, Sched. 20, s. 3 - 01/01/2013

Division D — Individuals

Subdivision a — Interpretation

Interpretation

Definitions

98. (1) In this Division,

“adjusted income” means, in respect of an individual for a taxation year, the individual’s adjusted income as determined for the purposes of subdivision a.1 of Division E of Part I of the Federal Act; (“revenu rajusté”)

“designated principal residence” means, in respect of an individual for a taxation year, a principal residence of the individual, the individual’s qualifying spouse or qualifying common-law partner or both of them, that is designated by the individual for the year in the prescribed manner; (“résidence principale désignée”)

“municipal tax” means,

(a) taxes for municipal and school purposes levied in respect of real property in Ontario but, in the case of real property in the City of Toronto, excluding any tax imposed under Part X of the City of Toronto Act, 2006,

(b) taxes levied for local improvements to real property in Ontario,

(c) taxes levied under the Provincial Land Tax Act, 2006 or Local Roads Boards Act, and

(d) such other type of tax, charge or rate as may be prescribed; (“impôts municipaux”)

“principal residence” means, in respect of an individual, premises, including a mobile home, that are occupied by the individual as the individual’s primary place of residence; (“résidence principale”)

“senior” means, in respect of a taxation year, an individual who has reached 65 years of age by December 31 of the year. (“personne âgée”)  2007, c. 11, Sched. A, s. 98 (1); 2007, c. 11, Sched. B, s. 5 (3); 2008, c. 19, Sched. U, s. 5; 2009, c. 18, Sched. 28, s. 12 (1, 2); 2015, c. 38, Sched. 20, s. 4 (1).

Occupancy cost, single individual

(2) For the purposes of this Division and subject to subsections (2.1), (2.2) and (5), the occupancy cost for a taxation year of an individual who is not a qualifying spouse or qualifying common-law partner at any time in the taxation year is the amount determined as follows:

1. Determine the sum of all amounts, if any, each of which is the amount of municipal tax that was paid for the year by, or on behalf of, the individual in respect of a designated principal residence of the individual that was, during the year, beneficially owned by or held in trust for the use and occupation of the individual.

2. Determine the sum of all amounts, if any, each of which is 20 per cent of the amount of municipal tax paid for the year by, or on behalf of, the individual in respect of a designated principal residence of the individual that was not beneficially owned or held in trust for the individual. 

3. Determine the sum of all amounts, if any, each of which is 20 per cent of the amount of rent paid for the year by, or on behalf of, the individual for a designated principal residence of the individual, to the extent that the rent applied to the period in the year in which the individual occupied the residence as a principal residence.

4. Add the amounts, if any, determined under paragraphs 1, 2 and 3.

5. Add to the amount, if any, determined under paragraph 4, the amount prescribed with respect to a designated principal residence of the individual in the year that was in a student’s residence designated by the Ontario Minister.  2007, c. 11, Sched. A, s. 98 (2); 2009, c. 18, Sched. 28, s. 12 (3, 4); 2010, c. 26, Sched. 20, s. 5 (1-3).

Occupancy cost re mobile home owned by individual

(2.1) For the purposes of this Division and subject to subsection (5), if a designated principal residence for a taxation year of an individual who is not a qualifying spouse or qualifying common-law partner at any time in the year is a mobile home owned by the individual, the individual’s occupancy cost for the year in respect of the mobile home is determined as follows:

1. Determine the sum of all amounts, if any, each of which is the amount paid for the year by, or on behalf of, the individual to the owner of the land on which the mobile home is located that can reasonably be considered to have been paid to compensate the owner for municipal tax assessed against the land for the year.

2. Determine the sum of all amounts, if any, each of which is an amount of municipal tax paid for the year by, or on behalf of, the individual in respect of the mobile home.

3. Add the amounts, if any, determined under paragraphs 1 and 2.  2009, c. 18, Sched. 28, s. 12 (5); 2010, c. 26, Sched. 20, s. 5 (4, 5); 2015, c. 38, Sched. 20, s. 4 (2, 3).

Occupancy cost, single individual re life lease interest, etc.

(2.2) For the purposes of this Division and subject to subsection (5), if a designated principal residence for a taxation year of an individual who is not a qualifying spouse or qualifying common-law partner at any time in the year is occupied by the individual pursuant to a life lease or a lease having a term of 10 years or more, and the individual or a person on behalf of the individual has paid in full for the lease, the individual’s occupancy cost for the year in respect of the designated principal residence is the amount of municipal tax that is reasonably applicable to the residence for the taxation year.  2009, c. 18, Sched. 28, s. 12 (5); 2010, c. 26, Sched. 20, s. 5 (6).

Occupancy cost, qualifying spouse or qualifying common-law partner

(3) For the purposes of this Division and subject to subsections (3.1), (3.2), (4) and (5), if an individual is a qualifying spouse or qualifying common-law partner at any time in a taxation year, the individual’s occupancy cost for the year is the amount determined as follows:

1. Determine the sum of all amounts, if any, each of which is the amount of municipal tax that was paid for the year by, or on behalf of, the individual or the individual’s qualifying spouse or qualifying common-law partner in respect of a designated principal residence of the individual that was, during the year, beneficially owned by either or both of them or held in trust for the use and occupation of either or both of them.

2. Determine the sum of all amounts, if any, each of which is 20 per cent of the amount of municipal tax paid for the year by, or on behalf of, the individual or the individual’s qualifying spouse or qualifying common-law partner in respect of a designated principal residence of the individual that was not beneficially owned by either or both of them and was not held in trust for either or both of them. 

3. Determine the sum of all amounts, if any, each of which is 20 per cent of the amount of rent paid for the year by, or on behalf of, the individual or the individual’s qualifying spouse or qualifying common-law partner for a designated principal residence of the individual, to the extent that the rent applied to the period in the year in which either or both of them occupied the residence as a principal residence.

4. Add the amounts, if any, determined under paragraphs 1, 2 and 3.

5. Add to the amount, if any, determined under paragraph 4, the amount prescribed with respect to a designated principal residence of the individual in the year that was in a student’s residence designated by the Ontario Minister.  2007, c. 11, Sched. A, s. 98 (3); 2009, c. 18, Sched. 28, s. 12 (6, 7); 2010, c. 26, Sched. 20, s. 5 (7-9).

Occupancy cost re mobile home owned by qualifying spouse or qualifying common law partner

(3.1) For the purposes of this Division and subject to subsections (4) and (5), if a designated principal residence for a taxation year of an individual who is a qualifying spouse or qualifying common-law partner at any time in the year is a mobile home owned by the individual or his or her qualifying spouse or qualifying common-law partner, or by both of them, the individual’s occupancy cost in respect of the mobile home for the year is the amount determined as follows:

1. Determine the sum of all amounts, if any, each of which is the amount paid for the year by, or on behalf of, the individual or the individual’s qualifying spouse or qualifying common-law partner to the owner of the land on which the mobile home is located that can reasonably be considered to have been paid to compensate the owner for municipal tax assessed against the land for the year.

2. Determine the sum of all amounts, if any, each of which is an amount of municipal tax paid for the year by, or on behalf of, the individual or the individual’s qualifying spouse or qualifying common-law partner in respect of the mobile home.

3. Add the amounts, if any, determined under paragraphs 1 and 2.  2009, c. 18, Sched. 28, s. 12 (8); 2010, c. 26, Sched. 20, s. 5 (10, 11); 2015, c. 38, Sched. 20, s. 4 (4, 5).

Occupancy cost, qualifying spouse or qualifying common law partner re life lease interest, etc.

(3.2) For the purposes of this Division and subject to subsections (4) and (5), if a designated principal residence for a taxation year of an individual who is a qualifying spouse or qualifying common-law partner at any time in the year is occupied by the individual pursuant to a life lease or a lease having a term of 10 years or more in respect of which the lease was paid in full by, or on behalf of, the individual or the individual’s qualifying spouse or qualifying common-law partner, the individual’s occupancy cost for the year in respect of the designated principal residence is the amount of municipal tax that is reasonably applicable to the residence for the year.  2009, c. 18, Sched. 28, s. 12 (8); 2010, c. 26, Sched. 20, s. 5 (12).

Occupancy cost, if not spouse or partner for entire year

(4) If an individual was a qualifying spouse or qualifying common-law partner for one or more periods during a taxation year but not throughout the year, the individual’s occupancy cost for the year is the sum of the following amounts:

1. The individual’s occupancy cost, as determined under subsection (2), (2.1) or (2.2), as applicable, for the period or periods in the year when the individual was not a qualifying spouse or qualifying common-law partner.

2. The individual’s occupancy cost, as determined under subsection (3), (3.1) or (3.2), as applicable, for the period or periods in the year throughout which the individual was a qualifying spouse or qualifying common-law partner.  2009, c. 18, Sched. 28, s. 12 (9).

Same

(5) The following rules apply in determining the amount of an individual’s occupancy cost for a taxation year:

1. If the individual did not have a qualifying spouse or qualifying common-law partner at any time in the taxation year and occupied a designated principal residence for only part of the year, the individual’s occupancy cost in respect of that designated principal residence for the year must not include,

i. any amounts paid by, or on behalf of, the individual that relate to a period when the residence was not the individual’s designated principal residence, and

ii. the portion of any municipal tax for the year in respect of the residence that can reasonably be considered to relate to the part of the year when the residence was not the individual’s designated principal residence.

1.1 If the individual had a qualifying spouse or qualifying common-law partner at any time in the taxation year but neither of them occupied a particular designated principal residence throughout the year, the occupancy cost in respect of that designated principal residence for the year must not include,

i. any amounts paid by, or on behalf of, the individual or his or her qualifying spouse or qualifying common-law partner that relate to a period when the residence was not the designated principal residence of either of them, and

ii. the portion of any municipal tax for the year in respect of the residence that can reasonably be considered to relate to the part of the year when the residence was not the designated principal residence of either of them.

2. An amount paid on account of municipal tax in respect of a designated principal residence may be included in an amount determined under paragraph 2 of subsection (2) or paragraph 2 of subsection (3) only to the extent that the amount is included by the owner of the residence in computing income under the Federal Act.

3. In determining the amount of rent paid in respect of a designated principal residence for the purposes of paragraph 3 of subsection (2) or paragraph 3 of subsection (3), no amount that may reasonably be considered to have been paid on account of meals or board shall be included.

4. No amount may be included in determining the amount of an individual’s occupancy cost for a taxation year in respect of a principal residence that,

i. consists of premises that are part of a chronic care facility or other similar institution that is prescribed, or that are part of any long-term care home or home for special care, if the facility, institution or home was exempt in whole or in part from municipal tax for the year and for which no grant in lieu of municipal tax is payable by the owner of the facility, institution or home under any statutory authority or, if such a grant in lieu is payable, the owner has not paid it, or

ii. was exempt in whole or in part from municipal tax for the year and for which no grant in lieu of municipal tax is payable by the owner under any statutory authority or, if such a grant in lieu is payable, the owner has not paid it.

5. If neither an individual nor his or her qualifying spouse or qualifying common-law partner owns a designated principal residence of the individual and one of them furnishes work or services to the owner or lessee of the designated principal residence instead of paying full rent for occupation of the designated principal residence, the value of the benefit received from paying less than full rent may, for the purposes of determining the occupancy cost, be included in the rent paid in respect of the designated principal residence to the extent that the value of the benefit is included in the income for the year of the person who furnished the work or services.  2007, c. 11, Sched. A, s. 98 (5); 2009, c. 18, Sched. 28, s. 12 (10); 2010, c. 1, Sched. 29, s. 15 (2, 3); 2010, c. 23, s. 3; 2010, c. 26, Sched. 20, s. 5 (13, 14); 2015, c. 38, Sched. 20, s. 4 (6).

Qualifying spouse, etc.

(6) For the purposes of this Division, a person who is an individual’s spouse or common-law partner at a particular time in the year is the individual’s qualifying spouse or qualifying common-law partner, as the case may be, at that time unless, on December 31 of that year, the individual and the spouse or common-law partner have been living separately and apart,

(a) for at least 90 days as a result of the breakdown of their marriage or common-law partnership; or

(b) because of medical necessity.  2007, c. 11, Sched. A, s. 98 (6).

(7) Repealed:  2010, c. 1, Sched. 29, s. 15 (4).

Section Amendments with date in force (d/m/y)

2007, c. 11, Sched. B, s. 5 (3) - 04/06/2007

2008, c. 19, Sched. U, s. 5 - 01/01/2009

2009, c. 18, Sched. 28, s. 12 (1-10) - 01/01/2009

2010, c. 1, Sched. 29, s. 15 (1, 4) - 15/12/2009; 2010, c. 1, Sched. 29, s. 15 (2) - 18/05/2010; 2010, c. 1, Sched. 29, s. 15 (3) - 01/07/2010; 2010, c. 23, s. 3 - 29/11/2010; 2010, c. 26, Sched. 20, s. 5 (1-14) - 08/12/2010

2015, c. 38, Sched. 20, s. 4 (1-5) - 10/12/2015; 2015, c. 38, Sched. 20, s. 4 (6) - 01/07/2010

Subdivision b — Property and Sales Tax Credits before 2010

Interpretation

Qualified dependant

98.1 An individual is a qualified dependant of another individual for a taxation year for the purposes of this subdivision if he or she would be a qualified dependant for the year for the purposes of subdivision a.1 of Division E of Part I of the Federal Act if the reference in clause (a) of the definition of “qualified dependant” in section 122.6 of the Federal Act to “18 years” were read as “19 years”.  2010, c. 1, Sched. 29, s. 16.

Section Amendments with date in force (d/m/y)

2010, c. 1, Sched. 29, s. 16 - 15/12/2009

Property and sales tax credits, individual other than a senior

99. (1) An individual who is a qualifying individual for a taxation year ending before January 1, 2010 may claim an amount for the year in respect of and not exceeding his or her property and sales tax credits, if any, for the year.  2007, c. 11, Sched. A, s. 99 (1); 2009, c. 34, Sched. U, s. 21.

Qualifying individual

(2) An individual is a qualifying individual for a taxation year for the purposes of this section if, on December 31 in the year, the individual,

(a) is resident in Ontario;

(b) has reached 16 years of age but is not a senior;

(c) does not have a qualifying spouse or qualifying common-law partner who is a senior;

(d) is not a qualified dependant of another individual; and

(e) has not been confined to a prison or similar institution for a total of more than 180 days during the year.  2007, c. 11, Sched. A, s. 99 (2).

Amount of tax credit

(3) Subject to section 101, the amount of a qualifying individual’s property and sales tax credits under this section for a taxation year is the lesser of $1,000 and the amount, if any, calculated using the formula,

(A + B) – [0.02 × (C – $4,000)]

in which,

  “A” is the individual’s property tax credit equal to the sum of,

(a) the lesser of $250 and the individual’s occupancy cost for the year, and

(b) an amount equal to 10 per cent of the individual’s occupancy cost for the year,

  “B” is the individual’s sales tax credit equal to the sum of,

(a) $100 in respect of the individual,

(b) $100 in respect of the individual’s qualifying spouse or qualifying common-law partner, and

(c) $50 in respect of every qualified dependant of the individual, and

  “C” is the greater of $4,000 and the individual’s adjusted income for the year.

2007, c. 11, Sched. A, s. 99 (3); 2008, c. 7, Sched. S, s. 26; 2008, c. 19, Sched. U, s. 6.

Section Amendments with date in force (d/m/y)

2008, c. 7, Sched. S, s. 26 - 01/01/2009; 2008, c. 19, Sched. U, s. 6 - 01/01/2009

2009, c. 34, Sched. U, s. 21 - 15/12/2009

Property and sales tax credits, seniors

100. (1) An individual who is a qualifying individual for a taxation year ending before January 1, 2010 may claim an amount for the year in respect of and not exceeding his or her property and sales tax credits, if any, for the year.  2007, c. 11, Sched. A, s. 100 (1); 2009, c. 34, Sched. U, s. 22 (1).

Qualifying individual

(2) An individual is a qualifying individual for a taxation year for the purposes of this section if, on December 31 in the year, the individual,

(a) is resident in Ontario;

(b) is a senior;

(c) is not a qualified dependant of another individual; and

(d) has not been confined to a prison or similar institution for a total of more than 180 days during the year.  2007, c. 11, Sched. A, s. 100 (2).

Amount of tax credit

(3) Subject to section 101, the amount of a qualifying individual’s property and sales tax credits under this section for a taxation year is,

(a) the amount determined under subsection (4) if the individual does not have a qualifying spouse or qualifying common-law partner throughout the year; or

(b) the amount determined under subsection (5) if the individual has a qualifying spouse or qualifying common-law partner at any time in the year.  2007, c. 11, Sched. A, s. 100 (3).

Amount for purposes of cl. (3) (a)

(4) Subject to subsection (6), the amount for the purposes of clause (3) (a) is the lesser of $1,125 and the amount, if any, calculated using the formula,

(A + B) – [0.04 × (C – $22,000)]

in which,

  “A” is the individual’s property tax credit equal to the sum of,

(a) the lesser of $625 and the individual’s occupancy cost for the year, and

(b) an amount equal to 10 per cent of the individual’s occupancy cost for the year,

  “B” is the individual’s sales tax credit equal to the sum of,

(a) $100 in respect of the individual, and

(b) $50 in respect of every qualified dependant of the individual, and

  “C” is the greater of $22,000 and the individual’s adjusted income for the year.

2008, c. 19, Sched. U, s. 7.

Amount for purposes of cl. (3) (b)

(5) Subject to subsection (6), the amount for the purposes of clause (3) (b) is the lesser of $1,125 and the amount, if any, calculated using the formula,

(A + B) – [0.04 × (C – $24,750)]

in which,

  “A” is the individual’s property tax credit equal to the sum of,

(a) the lesser of $625 and the individual’s occupancy cost for the year, and

(b) an amount equal to 10 per cent of the individual’s occupancy cost for the year,

  “B” is the individual’s sales tax credit equal to the sum of,

(a) $100 in respect of the individual,

(b) $100 in respect of the individual’s qualifying spouse or qualifying common-law partner, and

(c) $50 in respect of every qualified dependant of the individual, and

  “C” is the greater of $24,750 and the individual’s adjusted income for the year.

2008, c. 19, Sched. U, s. 7; 2009, c. 34, Sched. U, s. 22 (2, 3).

Reduction in amount of property tax credit

(6) If an individual receives a grant under section 104.1 for the year, the amount determined in respect of the senior for the year as “A” in subsection (4) or as “A” in subsection (5), as the case may be, is reduced by the amount, if any, by which the sum of “A” and “D” exceeds the greater of “A” and “E” where,

  “A” is the amount determined in respect of the senior for the year as “A” in subsection (4) or as “A” in subsection (5), as the case may be, before the application of this subsection,

  “D” is the amount of the grant under section 104.1 which the individual received for the year, and

  “E” is the amount of the individual’s occupancy cost for the year as determined for the purposes of this Division.

2008, c. 19, Sched. U, s. 7.

Section Amendments with date in force (d/m/y)

2008, c. 7, Sched. S, s. 27 (1, 2) - 01/01/2009

2008, c. 19, Sched. U, s. 7 - 01/01/2009

2009, c. 34, Sched. U, s. 22 (1-3) - 15/12/2009

Rules relating to property and sales tax credits

101. The following rules apply in determining the amount, if any, of an individual’s property and sales tax credits under section 99 or 100 for a taxation year:

1. In determining the amount of the individual’s sales tax credit, no amount in respect of a person shall be included if another individual has included an amount in respect of the same person in determining the amount of his or her sales tax credit for the same year.

2. No amount may be included in determining the individual’s sales tax credit in respect of a qualified dependant who has claimed a sales tax credit for the same year.

3. If another person has included an amount in respect of the individual in determining the other person’s sales tax credit for the year, the individual shall not include an amount in respect of himself or herself in calculating his or her sales tax credit.

4. If two or more individuals inhabit the same principal residence in a taxation year and each of them is entitled to claim a property tax credit for the year in respect of the residence, the total occupancy cost relating to the residence is allocated to each of them according to the following:

i. The beneficial ownership of each of them in the principal residence, if the principal residence is not a non-seasonal mobile home and is not a residence occupied pursuant to a life lease or a lease having a term of 10 years or more.

ii. The portion of the rent for the principal residence that each of them paid in respect of the occupation of the residence in the year.

iii. In the case of a principal residence that is a non-seasonal mobile home owned and occupied by one or both of them, the amount paid for the year by each of them to the owner of the land on which the mobile home is located that can reasonably be considered to have been paid to compensate the owner for municipal tax assessed against the land for the year and the amount of municipal tax that was paid by each of them for the year in respect of the mobile home.

iv. In the case of a principal residence occupied pursuant to a life lease or a lease having a term of 10 years or more where the lease has been paid in full, the same percentage of the amount of municipal tax that is reasonably applicable to the residence for the taxation year as the percentage interest of each of them in the lease.

5. If an individual has a qualifying spouse or qualifying common-law partner at any time in the year, only one of them shall claim any property and sales tax credits for the year to which either or both of them would otherwise be entitled.

6. If an individual has more than one taxation year ending in a calendar year, the individual shall have an occupancy cost for only the last taxation year ending in the calendar year and the amount of that occupancy cost shall be the amount that would be determined if that taxation year included all previous taxation years ending in the calendar year, excluding any portion of the occupancy cost that has been taken into account by the individual’s qualifying spouse or qualifying common-law partner in determining a property tax credit for the year.  2007, c. 11, Sched. A, s. 101; 2009, c. 18, Sched. 28, s. 13.

Section Amendments with date in force (d/m/y)

2009, c. 18, Sched. 28, s. 13 - 01/01/2009

Subdivision c — Ontario Energy and Property Tax Credit for 2010

Definitions

101.0.1 (1) In this subdivision,

“designated long-term care home” means, in respect of an individual, a designated principal residence of the individual that is a long-term care home in Ontario,

(a) that was exempt in whole or in part from municipal tax for the year, and

(b) for which no grant in lieu of municipal tax is payable by the owner under any statutory authority or, if payable, has not been paid; (“foyer de soins de longue durée désigné”)

“qualified dependant” has the meaning assigned by section 122.6 of the Federal Act; (“personne à charge admissible”)

“reserve” has the same meaning as in the Indian Act (Canada). (“réserve”)  2010, c. 1, Sched. 29, s. 17; 2010, c. 23, s. 4 (2, 3).

(2) Repealed:  2010, c. 23, s. 4 (4).

Section Amendments with date in force (d/m/y)

2010, c. 1, Sched. 29, s. 17 - 01/01/2010; 2010, c. 23, s. 4 (1-4) - 29/11/2010

Ontario energy and property tax credit, individual other than a senior

101.1 (1) An individual who is a qualifying individual for a taxation year ending after December 31, 2009 and before January 1, 2011 may claim an amount for the year in respect of and not exceeding his or her Ontario energy and property tax credit, if any, for the year.  2010, c. 23, s. 5 (1).

Qualifying individual

(2) An individual is a qualifying individual for a taxation year for the purposes of this section if, on December 31 in the year, the individual,

(a) is resident in Ontario;

(b) has reached 18 years of age or is a parent who resided with their child or is married or has a common law partner;

(c) is not a senior;

(d) does not have a qualifying spouse or qualifying common-law partner who is a senior; and

(e) has not been confined to a prison or similar institution for a total of more than 90 days during the year.  2009, c. 34, Sched. U, s. 23; 2010, c. 23, s. 5 (2).

Amount of tax credit

(3) Subject to section 101.3, the amount of a qualifying individual’s Ontario energy and property tax credit under this section for a taxation year ending after December 31, 2009 and before January 1, 2011 is the amount, if any, calculated using the formula,

(A + B) – [0.02 × (C – D)]

in which,

  “A” is the individual’s energy amount equal to the lesser of,

(a) $200, and

(b) the sum of,

(i) the amount, if any, of the individual’s occupancy cost for the taxation year less any amount included under paragraph 5 of subsection 98 (2) or paragraph 5 of subsection 98 (3),

(ii) the energy costs, if any, paid for the year by or on behalf of the individual or the individual’s qualifying spouse or qualifying common-law partner in respect of a designated principal residence of the individual on a reserve in Ontario, if the individual is resident on a reserve in Ontario at any time in the year, and

(iii) 20 per cent of the amount, if any, paid by or on behalf of the individual or the individual’s qualifying spouse or qualifying common-law partner for accommodation for the individual at any time in the year in a designated long-term care home,

  “B” is the individual’s property tax amount equal to the least of,

(a) $700,

(b) the individual’s occupancy cost for the year, and

(c) the sum of,

(i) the lesser of $50 and the individual’s occupancy cost for the year, and

(ii) an amount equal to 10 per cent of the individual’s occupancy cost for the year,

  “C” is,

(a) the greater of $20,000 and the individual’s adjusted income for the year, if the individual did not have a qualifying spouse, qualifying common-law partner or qualified dependant on December 31, 2010, or

(b) the greater of $25,000 and the individual’s adjusted income for the year, if the individual had a qualifying spouse, qualifying common-law partner or qualified dependant on December 31, 2010, and

  “D” is,

(a) $20,000, if the individual did not have a qualifying spouse, qualifying common-law partner or qualified dependant on December 31, 2010, or

(b) $25,000, if the individual had a qualifying spouse, qualifying common-law partner or qualified dependant on December 31, 2010.

2010, c. 23, s. 5 (3).

Receipt of a transitional Northern Ontario energy credit under Part V.7

(4) If an individual has a qualified relation on December 31, 2010 and receives a credit under Part V.7 for the taxation year, the individual and not the individual’s qualified relation may claim an amount under this section for the taxation year.  2010, c. 23, s. 5 (3).

Section Amendments with date in force (d/m/y)

2009, c. 34, Sched. U, s. 23 - 15/12/2009

2010, c. 1, Sched. 29, s. 18 (1-5) - 15/12/2009; 2010, c. 23, s. 5 (1-3) - 29/11/2010

Ontario energy and property tax credit, seniors

101.2 (1) An individual who is a qualifying individual for a taxation year ending after December 31, 2009 and before January 1, 2011 may claim an amount for the year in respect of and not exceeding his or her Ontario energy and property tax credit, if any, for the year.  2010, c. 23, s. 6 (1).

Qualifying individual

(2) An individual is a qualifying individual for a taxation year for the purposes of this section if, on December 31 in the year, the individual,

(a) is resident in Ontario;

(b) is a senior; and

(c) has not been confined to a prison or similar institution for a total of more than 90 days during the year.  2009, c. 34, Sched. U, s. 23; 2010, c. 23, s. 6 (2).

(3), (4) Repealed:  2010, c. 1, Sched. 29, s. 19 (1).

Amount of tax credit

(5) Subject to section 101.3, the amount of a qualifying individual’s Ontario energy and property tax credit under this section for a taxation year ending after December 31, 2009 and before January 1, 2011 is the amount, if any, calculated using the formula,

(A + B) – [0.02 × (C – D)]

in which,

  “A” is the individual’s energy amount equal to the lesser of,

(a) $200, and

(b) the sum of,

(i) the amount, if any, of the individual’s occupancy cost for the taxation year less any amount included under paragraph 5 of subsection 98 (2) or paragraph 5 of subsection 98 (3),

(ii) the energy costs, if any, paid for the year by or on behalf of the individual or the individual’s qualifying spouse or qualifying common-law partner in respect of a designated principal residence of the individual on a reserve in Ontario, if the individual is resident on a reserve in Ontario at any time in the year, and

(iii) 20 per cent of the amount, if any, paid by or on behalf of the individual or the individual’s qualifying spouse or qualifying common-law partner for accommodation for the individual at any time in the year in a designated long-term care home,

  “B” is the individual’s property tax amount equal to the least of,

(a) $825,

(b) the individual’s occupancy cost for the year, and

(c) the sum of,

(i) the lesser of $425 and the individual’s occupancy cost for the year, and

(ii) an amount equal to 10 per cent of the individual’s occupancy cost for the year,

  “C” is,

(a) the greater of $25,000 and the individual’s adjusted income for the year, if the individual did not have a qualifying spouse, qualifying common-law partner or qualified dependant on December 31, 2010, or

(b) the greater of $30,000 and the individual’s adjusted income for the year, if the individual had a qualifying spouse, qualifying common-law partner or qualified dependant on December 31, 2010, and

  “D” is,

(a) $25,000, if the individual did not have a qualifying spouse, qualifying common-law partner or qualified dependant on December 31, 2010, or

(b) $30,000, if the individual had a qualifying spouse, qualifying common-law partner or qualified dependant on December 31, 2010.

2010, c. 23, s. 6 (3).

(5.1) Repealed:  2010, c. 23, s. 6 (3).

Reduction in amount of Ontario energy and property tax credit

(6) If an individual receives a grant under section 104.1 for the taxation year, the amount determined in respect of the senior for the year in subsection (5) is reduced by the amount, if any, by which the sum of “E” and “F” exceeds “G” where,

  “E” is the amount, if any, by which the amount determined in respect of the individual under subsection (5) before the application of this subsection exceeds the individual’s energy amount determined as “A” in subsection (5),

“F” is the amount of the grant under section 104.1 which the individual received for the year, and

  “G” is the amount of the individual’s occupancy cost for the year as determined for the purposes of this Division.  2010, c. 23, s. 6 (3).

Receipt of grant under section 104.1

(7) If an individual has a qualifying spouse or qualifying common-law partner on December 31, 2010 and receives a grant under section 104.1 for the taxation year, the individual and not the individual’s qualifying spouse or qualifying common-law partner may claim an amount under this section for the taxation year.  2010, c. 23, s. 6 (3).

Receipt of a transitional Northern Ontario energy credit under Part V.7

(8) If an individual has a qualified relation on December 31, 2010 and receives a credit under Part V.7 for the taxation year, the individual and not the individual’s qualified relation may claim an amount under this section for the taxation year.  2010, c. 23, s. 6 (4).

Section Amendments with date in force (d/m/y)

2009, c. 34, Sched. U, s. 23 - 15/12/2009

2010, c. 1, Sched. 29, s. 19 (1, 6) - 01/01/2010; 2010, c. 1, Sched. 29, s. 19 (2-5) - 15/12/2009; 2010, c. 23, s. 6 (1-4) - 29/11/2010

Rules relating to Ontario energy and property tax credit

101.3 The following rules apply in determining the amount, if any, of an individual’s Ontario energy and property tax credit under section 101.1 or 101.2 for a taxation year:

1. If an individual has a qualifying spouse or qualifying common-law partner at any time in a taxation year,

i. only one of them may claim the Ontario energy and property tax credit for the year, and

ii. for the purposes of determining the amount of the Ontario energy and property tax credit for the year, the occupancy cost for the year of the individual claiming the credit may include the occupancy cost, if any, of his or her qualifying spouse or qualifying common-law partner for the year.

2. If two or more individuals inhabit the same principal residence in a taxation year and each of them is entitled to claim an Ontario energy and property tax credit for the year in respect of the residence, the total occupancy cost relating to the residence is allocated to each of them according to the following:

i. The beneficial ownership of each of them in the principal residence, if the principal residence is not a non-seasonal mobile home and is not a residence occupied pursuant to a life lease or a lease having a term of 10 years or more.

ii. The portion of the rent for the principal residence that each of them paid in respect of the occupation of the residence in the year.

iii. In the case of a principal residence that is a non-seasonal mobile home owned and occupied by one or both of them, the amount paid for the year by each of them to the owner of the land on which the mobile home is located that can reasonably be considered to have been paid to compensate the owner for municipal tax assessed against the land for the year and the amount of municipal tax that was paid by each of them for the year in respect of the mobile home.

iv. In the case of a principal residence occupied pursuant to a life lease or a lease having a term of 10 years or more where the lease has been paid in full, the same percentage of the amount of municipal tax that is reasonably applicable to the residence for the taxation year as the percentage interest of each of them in the lease.

3. If an individual has more than one taxation year ending in a calendar year, the individual shall have an occupancy cost for only the last taxation year ending in the calendar year and the amount of that occupancy cost shall be the amount that would be determined if that taxation year included all previous taxation years ending in the calendar year.  2009, c. 34, Sched. U, s. 23; 2010, c. 23, s. 7.

Section Amendments with date in force (d/m/y)

2009, c. 34, Sched. U, s. 23 - 15/12/2009

2010, c. 23, s. 7 - 29/11/2010

Subdivision d — Other Tax Credits

Political contribution tax credit

102. (1) An individual who is a qualifying individual for a taxation year and who complies with the requirements of this section may claim an amount for the year in respect of and not exceeding his or her political contribution tax credit for the year.  2007, c. 11, Sched. A, s. 102 (1).

Qualifying individual

(2) An individual is a qualifying individual for a taxation year for the purposes of this section if the individual is resident in Ontario on the last day of the taxation year.  2010, c. 26, Sched. 20, s. 6 (1).

Amount of tax credit

(3) The amount of a qualifying individual’s political contribution tax credit for a taxation year is determined as follows:

1. If the sum of all eligible contributions made by the individual during the year does not exceed the first contribution level for the year, the individual’s political contribution tax credit for the year is 75 per cent of the eligible contributions.

2. If the sum of all eligible contributions made by the individual during the year exceeds the first contribution level for the year but does not exceed the second contribution level for the year, the individual’s political contribution tax credit for the year is calculated using the formula,

(A × 0.75) + [(B – A) × 0.5]

in which,

“A” is the first contribution level for the year, and

“B” is the sum of all eligible contributions made by the individual in the year.

3. If the sum of all eligible contributions made by the individual during the year exceeds the second contribution level for the year, the individual’s political contribution tax credit for the year is the lesser of the tax credit limit for the year and the amount calculated using the formula,

(A × 0.75) + [(C – A) × 0.5] + [(B – C) × 0.3333]

in which,

“A” is the first contribution level for the year,

“B” is the sum of all eligible contributions made by the individual in the year, and

“C” is the second contribution level for the year.

2007, c. 11, Sched. A, s. 102 (3); 2014, c. 7, Sched. 29, s. 8.

Requirement to file receipts

(4) A qualifying individual is not eligible to receive a political contribution tax credit for a taxation year under this section unless he or she files with the Ontario Minister the receipt required by the Chief Electoral Officer under the Election Finances Act to be issued to the individual for each eligible contribution.  2010, c. 26, Sched. 20, s. 6 (2).

More than one taxation year

(5) If a qualifying individual has more than one taxation year ending in a calendar year, the individual may claim a tax credit under this section only for the last taxation year ending in the calendar year and shall include in the sum of his or her eligible contributions all eligible contributions each of which was made in that taxation year or in a previous taxation year ending in the calendar year.  2007, c. 11, Sched. A, s. 102 (5).

Definitions

(6) In this section,

“Chief Electoral Officer” means the Chief Electoral Officer appointed under the Election Act; (“directeur général des élections”)

“eligible contributions” means, in respect of an individual for a taxation year, all contributions made by the individual in the year to candidates, constituency associations or parties registered under the Election Finances Act; (“contributions admissibles”)

“first contribution level” means, in respect of a taxation year, the amount determined by multiplying $300 by the indexation factor determined under subsection 40.1 (1) of the Election Finances Act for the five-year period in which the taxation year ends; (“premier niveau de contribution”)

“recorded agent” means a person on record with the Chief Electoral Officer as being authorized to accept contributions on behalf of a political party, constituency association or candidate registered under the Election Finances Act; (“agent désigné”)

“second contribution level” means, in respect of a taxation year, the amount determined by multiplying $1,000 by the indexation factor determined under subsection 40.1 (1) of the Election Finances Act for the five-year period in which the taxation year ends; (“deuxième niveau de contribution”)

“tax credit limit” means, in respect of a taxation year, the amount determined by multiplying $1,000 by the indexation factor determined under subsection 40.1 (1) of the Election Finances Act for the five-year period in which the taxation year ends. (“crédit d’impôt maximal”)  2007, c. 11, Sched. A, s. 102 (6); 2008, c. 7, Sched. S, s. 28 (2); 2010, c. 26, Sched. 20, s. 6 (3).

Section Amendments with date in force (d/m/y)

2008, c. 7, Sched. S, s. 28 (1, 2) - 01/01/2009

2010, c. 26, Sched. 20, s. 6 (1) - 01/01/2009; 2010, c. 26, Sched. 20, s. 6 (2, 3) - 08/12/2010; 2010, c. 1, Sched. 29, s. 20 - 15/12/2009

2014, c. 7, Sched. 29, s. 8 - 01/01/2009

Ontario focused flow-through share tax credit

103. (1) An individual who is a qualifying individual for a taxation year and who complies with the requirements of this section may claim an amount for the year in respect of and not exceeding his or her Ontario focused flow-through share tax credit for the year.  2007, c. 11, Sched. A, s. 103 (1).

Qualifying individual

(2) An individual is a qualifying individual for a taxation year for the purposes of this section if the individual is resident in Ontario on the last day of the taxation year.  2010, c. 26, Sched. 20, s. 7.

Amount of tax credit

(3) The amount of a qualifying individual’s Ontario focused flow-through share tax credit for a taxation year is the sum of all amounts each of which is 5 per cent of the amount of the individual’s eligible Ontario exploration expenditures for the year in respect of an Ontario focused flow-through share that was issued by a mining exploration company and acquired by the individual under an agreement made after October 17, 2000.  2007, c. 11, Sched. A, s. 103 (3).

Eligible Ontario exploration expenditures

(4) The amount of an individual’s eligible Ontario exploration expenditures for a taxation year in respect of an Ontario focused flow-through share is the amount that would be the individual’s flow-through mining expenditure in respect of the share for the year, as determined under the definition of that term in subsection 127 (9) of the Federal Act, if,

(a) the reference to “Canada” in paragraph (f) of the definition of “Canadian exploration expense” in subsection 66.1 (6) of the Federal Act, as that definition applies for the purpose of the definition of “flow-through mining expenditure” in subsection 127 (9) of that Act, were read as a reference to “Ontario”;

(b) the amount of the individual’s flow-through mining expenditure for the year were reduced by the amount of any government assistance or non-government assistance, other than any investment tax credit under subsection 127 (9) of the Federal Act, in respect of expenses included in the individual’s flow-through mining expenditure for the year that, on the individual’s filing-due date for the year, the individual has received, is entitled to receive or may reasonably expect to receive; and

(c) paragraph (a) of the definition of “flow-through mining expenditure” in subsection 127 (9) of the Federal Act were read without reference to the words “and before 2008”.  2007, c. 11, Sched. A, s. 103 (4).

Bankruptcy

(5) The amount of an individual’s eligible Ontario exploration expenditures for a taxation year in respect of an Ontario focused flow-through share is deemed to be nil if the individual was a bankrupt at any time in the taxation year, unless the individual is granted an absolute discharge from bankruptcy before the end of the year.  2007, c. 11, Sched. A, s. 103 (5).

Application and certificate

(6) A qualifying individual is not eligible to receive a tax credit under this section for a taxation year unless he or she,

(a) obtains a certificate in a form approved by the Ontario Minister from the mining exploration company that issued the share, setting out the amount of Canadian exploration expenditures renounced by the company in its taxation year to the holder of the share; and

(b) submits an application for the tax credit and the certificate referred to in clause (a) with the return required to be filed for the year for which the individual claims the tax credit.  2007, c. 11, Sched. A, s. 103 (6).

Definitions

(7) In this section,

“government assistance” means assistance from a government, municipality or other public authority in any form, including a grant, subsidy, forgivable loan, tax credit or deduction from tax and investment allowance, but does not include a tax credit under this section or an investment tax credit under section 127 of the Federal Act; (“aide gouvernementale”)

“mining exploration company” means a corporation that,

(a) has a permanent establishment in Ontario at the time any expenditures are incurred that are renounced to the holder of the share, and

(b) is a principal-business corporation as defined in subsection 66 (15) of the Federal Act; (“compagnie d’exploration minière”)

“Ontario focused flow-through share” means a flow-through share, as defined in subsection 66 (15) of the Federal Act that is issued by a mining exploration company. (“action accréditive ciblée de l’Ontario”)  2007, c. 11, Sched. A, s. 103 (7).

Section Amendments with date in force (d/m/y)

2010, c. 26, Sched. 20, s. 7 - 01/01/2009

Children’s activity tax credit

Definitions

103.1 (1) In this section,

“eligible fitness expense” has the meaning assigned by subsection 122.8 (1) of the Federal Act; (“dépense admissible pour activités physiques”)

“eligible program expense” means, in respect of a qualifying child of an individual for a taxation year, the amount of a fee paid to a qualifying entity (other than an amount paid to a person that is, at the time the amount is paid, the individual’s spouse or common-law partner or another individual who is under 18 years of age) to the extent that the fee is attributable to the cost of registration or membership of the qualifying child in a qualifying program that is not an ineligible program and, for the purposes of this section, that cost,

(a) includes the cost to the qualifying entity of the program in respect of its administration, instruction, rental of required facilities, and uniforms and equipment that are not available to be acquired by a participant in the program for an amount less than their fair market value at the time, if any, they are so acquired, and

(b) does not include,

(i) the cost of accommodation, travel, food or beverages,

(ii) any amount that is an eligible fitness expense,

(iii) any amount deductible under,

(A) section 63 of the Federal Act in computing any person’s income for any taxation year, or

(B) subsection 118.1 (3) or 127 (3) of the Federal Act in computing any person’s tax for any taxation year, or

(iv) any amount that may be claimed by any person under subsection 102 (1) of this Act for any taxation year; (“dépense admissible au titre de programmes”)

“ineligible activity” means an activity or type of activity prescribed by the Minister of Finance for the purposes of this section; (“activité exclue”)

“ineligible program” means a program or type of program prescribed by the Minister of Finance for the purposes of this section; (“programme exclu”)

“qualifying activity” means a supervised activity suitable for children, that is not an ineligible activity, that does not promote illegal activity and that involves one or more of the following:

1. Instruction in one or more of the following:

i. Music.

ii. Dramatic arts.

iii. Dance, if the instruction is not part of a program of physical activity prescribed for the purposes of the definition of “eligible fitness expense” in subsection 122.8 (1) of the Federal Act.

iv. Visual arts.

2. Language instruction.

3. Activities with a substantial focus on wilderness and the natural environment.

4. Activities with a substantial focus on helping children develop and use particular intellectual skills.

5. Structured interaction among children where supervisors teach or help children develop interpersonal skills.

6. Enrichment or tutoring in academic subjects; (“activité admissible”)

“qualifying child” has the meaning assigned by subsection 122.8 (1) of the Federal Act. (“enfant admissible”)  2010, c. 21, s. 3; 2015, c. 38, Sched. 20, s. 5.

Qualifying entity

(2) For the purposes of the definition of “eligible program expense” in subsection (1), a qualifying entity is a person or partnership that offers one or more qualifying programs.  2010, c. 21, s. 3.

Qualifying program

(3) For the purposes of the definition of “eligible program expense” in subsection (1), a qualifying program is,

(a) a weekly program, that is not part of a school’s curriculum, of a duration of eight or more consecutive weeks in which all or substantially all of the activities include a significant amount of qualifying activity;

(b) a program, that is not part of a school’s curriculum, of a duration of five or more consecutive days of which more than 50 per cent of the daily activities include a significant amount of qualifying activity;

(c) a program, that is not part of a school’s curriculum, of a duration of eight or more consecutive weeks, offered to children by a club, association or similar organization (in this section referred to as an “organization”) in circumstances where a participant in the program may select amongst a variety of activities if,

(i) more than 50 per cent of those activities offered to children by the organization are activities that include a significant amount of qualifying activity, or

(ii) more than 50 per cent of the time scheduled for activities offered to children in the program is scheduled for activities that include a significant amount of qualifying activity; or

(d) a membership in an organization, that is not part of a school’s curriculum, of a duration of eight or more consecutive weeks if more than 50 per cent of all the activities offered to children by the organization include a significant amount of qualifying activity.  2010, c. 21, s. 3.

Same, mixed-use facility

(4) For the purposes of the definition of “eligible program expense” in subsection (1), a qualifying program is that portion of a program, which program does not meet the requirements of clause (3) (c) and is not part of a school’s curriculum, of a duration of eight or more consecutive weeks, offered to children by an organization in circumstances where a participant in the program may select amongst a variety of activities,

(a) that is the percentage of those activities offered to children by the organization that are activities that include a significant amount of qualifying activity; or

(b) that is the percentage of the time scheduled for activities in the program that is scheduled for activities that include a significant amount of qualifying activity.  2010, c. 21, s. 3.

Same, membership in organization

(5) For the purposes of the definition of “eligible program expense” in subsection (1), a qualifying program is that portion of a membership in an organization, which membership does not meet the requirements of clause (3) (d) and is not part of a school’s curriculum, of a duration of eight or more consecutive weeks that is the percentage of all the activities offered to children by the organization that are activities that include a significant amount of qualifying activity.  2010, c. 21, s. 3.

Children’s activity tax credit

(6) An individual who is resident in Ontario on the last day of a taxation year ending after December 31, 2009 and before January 1, 2017 may claim an amount for the year in respect of and not exceeding the amount of his or her children’s activity tax credit for the year.  2010, c. 21, s. 3; 2016, c. 5, Sched. 28, s. 18.

Amount of tax credit

(7) The amount of an individual’s children’s activity tax credit for a taxation year is equal to the amount calculated using the formula,

A × B

in which,

  “A” is 10 per cent, and

  “B” is the total of all amounts each of which is, in respect of a qualifying child of the individual for the taxation year, the lesser of $500 and the amount calculated using the formula,

C – D

in which,

“C” is the total of all amounts each of which is an amount paid in the taxation year by the individual, or by the individual’s spouse or common-law partner, that is an eligible fitness expense or an eligible program expense in respect of the qualifying child of the individual, and

“D” is the total of all amounts that any person is or was entitled to receive, each of which relates to an amount included in computing the value of “C” in respect of the qualifying child that is the amount of a reimbursement, allowance or any other form of assistance, other than an amount that is included in computing the income for any taxation year of that person and that is not deductible in computing the taxable income of that person.

2010, c. 21, s. 3.

Amount of tax credit, child with a disability

(8) Despite subsection (7), an individual’s children’s activity tax credit in respect a qualifying child for a taxation year is the amount determined under subsection (9) if the following conditions are satisfied:

1. An amount is deductible in respect of the qualifying child under section 118.3 of the Federal Act in computing any person’s tax payable under Part I of that Act for the taxation year.

2. The sum of the amounts referred to in the definition of “B” in subsection (7) in respect of the qualifying child of an individual is $100 or more.  2010, c. 21, s. 3.

Same

(9) For the purposes of subsection (8), an individual’s children’s activity tax credit in respect of a qualifying child for a taxation year is the sum of,

(a) the amount determined under subsection (7) in respect of the qualifying child for the taxation year; and

(b) the amount equal to $500 multiplied by 10 per cent.  2010, c. 21, s. 3.

Apportionment of tax credit

(10) If more than one individual is entitled to claim an amount under this section for a taxation year in respect of a qualifying child, the total of all amounts that may be claimed under this section in respect of the qualifying child shall not exceed the maximum amount that could be claimed for the year by any one of those individuals in respect of that qualifying child if that individual were the only individual entitled to claim an amount for the year under this section in respect of that qualifying child and, if the individuals cannot agree as to what portion of the amount each can claim, the Ontario Minister may fix the portions.  2010, c. 21, s. 3.

Bankruptcy

(11) Despite clause 84 (2) (b), an individual who becomes bankrupt in a calendar year is entitled to claim, for each taxation year that ends in the calendar year, only such amounts as the individual is entitled to claim for the taxation year under this section as can reasonably be considered wholly applicable to the taxation year, except that the sum of all amounts that may be claimed under this section for all taxation years of the individual ending in the calendar year shall not exceed the total amount that the individual would have been entitled to claim in respect of the calendar year if the individual had not become bankrupt.  2010, c. 21, s. 3.

Part-year residents

(12) An individual who is resident in Canada for only part of a taxation year is entitled to claim for the year only the amount the individual would be entitled to claim for the year under this section that can reasonably be considered wholly applicable to any period in the year throughout which the individual was resident in Canada, computed as though that period were the whole taxation year, except that the amount that may be claimed under this section shall not exceed the amount that the individual would have been entitled to claim under this section if the individual had been resident in Canada throughout the year.  2010, c. 21, s. 3.

Section Amendments with date in force (d/m/y)

2010, c. 21, s. 3 - 29/11/2010

2015, c. 38, Sched. 20, s. 5 - 01/01/2015

2016, c. 5, Sched. 28, s. 18 - 19/04/2016

Healthy homes renovation tax credit

103.1.1 (1) An individual, other than a trust, who is resident in Ontario on the last day of a taxation year ending after December 31, 2011 and before January 1, 2017 may claim an amount in respect of and not exceeding the amount of his or her healthy homes renovation tax credit. 2012, c. 13, s. 2; 2016, c. 5, Sched. 28, s. 19.

Determination of tax credit

(2) The amount of the tax credit under this section for a taxation year ending after December 31, 2012 is determined with reference to qualifying expenditures made or incurred during the taxation year for listed improvements to a qualifying principal residence. 2012, c. 13, s. 2.

Same, 2012 taxation year

(3) The amount of the tax credit under this section for a taxation year ending before January 1, 2013 is determined with reference to qualifying expenditures made or incurred after September 30, 2011 and before January 1, 2013 for listed improvements to a qualifying principal residence. 2012, c. 13, s. 2.

Information concerning tax credit

(4) An individual who wishes to claim the healthy homes renovation tax credit may contact the Ministry of Finance to obtain information concerning the tax credit, including the following:

1. A list of appropriate organizations that may be able to provide any of the following:

i. General advice about qualifying for the tax credit.

ii. Review of quotes from contractors to ensure that the quotes are reasonable.

iii. A list of experienced contractors who have successfully worked on projects that have qualified for the tax credit or any similar tax credits.

2. Any other information that may assist the individual in determining whether he or she may qualify for the tax credit. 2012, c. 13, s. 2.

Amount of tax credit

(5) The amount of an individual’s tax credit under this section for a taxation year is equal to the amount calculated using the formula,

A × B

in which,

  “A” is 15 per cent, and

  “B” is the lesser of $10,000 and the amount by which “C” exceeds “D”, where,

“C” is,

(a) for a taxation year ending before January 1, 2013, the total of all amounts each of which is a qualifying expenditure of the individual that was paid by or on behalf of the individual after September 30, 2011 and before January 1, 2013 and that has not been used by another individual in the calculation of a credit claimed by that individual under this section, and

(b) for a taxation year ending after December 31, 2012, the total of all amounts each of which is a qualifying expenditure of the individual that was paid by or on behalf of the individual during the taxation year and that has not been used by another individual in the calculation of a credit claimed by that individual under this section, and

“D” is the total of all amounts each of which is received or receivable by any person, or that can reasonably be expected to be received by any person, in respect of a qualifying expenditure of the individual referred to in “C” and that is,

(a) provided under any program that is designed to provide assistance with the cost of the construction, alteration or renovation of a residence or land on which the residence is situated and that is financed by a municipal, provincial or federal government,

(b) provided as a forgivable loan from a municipal, provincial or federal government and that is designed to provide permanent or temporary assistance with, or financing for, the cost of the construction, alteration or renovation of a residence or land on which the residence is situated, but only to the extent that the loan, or a portion of it, has not been repaid under a legal obligation to do so, or

(c) provided under any program that is prescribed by the Minister of Finance for the purposes of this subsection. 2012, c. 13, s. 2.

Eligible individuals

(6) An individual is eligible to claim a tax credit under this section for a taxation year if the individual is described in any of the following paragraphs:

1. The individual is a senior at the end of the taxation year in which a qualifying expenditure is paid in respect of a listed improvement to the individual’s qualifying principal residence.

2. The individual is a qualifying relation of a senior at the end of the taxation year in which a qualifying expenditure is paid in respect of a listed improvement to the individual’s qualifying principal residence. 2012, c. 13, s. 2.

Qualifying principal residence

(7) A qualifying principal residence of an individual for the purposes of this section for a taxation year is a residence located in Ontario,

(a) that is, if the individual is a senior at the end of the taxation year, the principal residence of the individual at any time during the taxation year or a residence that is reasonably expected to become the principal residence of the individual within 24 months after the end of the taxation year; or

(b) that is, if the individual is not a senior at the end of the taxation year, the principal residence of the individual at any time during the taxation year and that is, at the same time, also the principal residence of a qualifying relation of the individual who is a senior at the end of the taxation year, or a residence that is reasonably expected to become such a shared principal residence within 24 months after the end of the taxation year. 2012, c. 13, s. 2.

Listed improvements

(8) The following are listed improvements for the purposes of this section:

1. An improvement,

i. that is part of a renovation or alteration of a residence or of the land on which the residence is situated, or that is part of the construction of the residence, that can reasonably be considered to be undertaken,

A. to enable a senior (for whom that residence is the principal residence, or who reasonably expects that residence to become his or her principal residence) to gain access to, or to be mobile or functional within, the residence or the land, or

B. to reduce the risk of harm to a senior (for whom that residence is the principal residence, or who reasonably expects that residence to become his or her principal residence) within the residence or the land, or in gaining access to the residence or the land,

ii. that,

A. is of an enduring nature and that is integral to the residence or the land, or

B. relates to the purchase and installation of a modular or removable version of an item of a type that can otherwise be installed as a permanent fixture to the residence or land on which it is situated (such as modular ramps and non-fixed bath lifts),

iii. whose primary purpose is not to increase the value of the residence or the land, and

iv. that would ordinarily be undertaken by, or on behalf of, a person who has an impairment to enable him or her to gain access to, or to be mobile or functional within, his or her residence or land.

2. An improvement that is prescribed by the Minister of Finance for the purposes of this section. 2012, c. 13, s. 2.

Same, prescribed exclusions

(9) An improvement is not a listed improvement if it is prescribed by the Minister of Finance as ineligible for the purposes of this section. 2012, c. 13, s. 2.

Qualifying expenditures

(10) A qualifying expenditure is an outlay or expense made or incurred by, or on behalf of, an individual that is directly attributable to a listed improvement by the individual and includes such an outlay or expense for permits required for, or for the rental of equipment used in the course of, the listed improvement, but does not include such an outlay,

(a) to acquire goods that have been used, or acquired for use or lease, by the individual or by a qualifying relation of the individual, for any purpose whatever before they were acquired by the individual or the qualifying relation of the individual;

(b) made or incurred under the terms of an agreement entered into before October 1, 2011;

(c) to acquire a property that can be used independently of the listed improvement;

(d) that is the cost of annual, recurring or routine repair, maintenance or service;

(e) to acquire a household appliance;

(f) to acquire an electronic home-entertainment device;

(g) for financing costs in respect of the listed improvement;

(h) made or incurred for the purpose of gaining or producing income from a business or property; or

(i) in respect of goods or services provided by a person not dealing at arm’s length with the individual, unless the person is registered for the purposes of Part IX of the Excise Tax Act (Canada). 2012, c. 13, s. 2.

Rules re qualifying expenditures

(11) The following rules apply with respect to qualifying expenditures for the purposes of this section:

1. Subject to paragraph 2, a qualifying expenditure is deemed to have been paid on the earlier of the date on which the expenditure was paid and the date it became payable.

2. If a qualifying expenditure in respect of a single listed improvement is paid by an individual in two or more instalments, the total of all instalments shall be deemed to have been paid on the earlier of the date on which the last instalment was paid and the date it became payable.

3. A qualifying expenditure that is paid or deemed to have been paid after September 30, 2011 and before January 1, 2012 shall be considered to have been paid on January 1, 2012.

4. A qualifying expenditure made by an individual includes an outlay or expense made or incurred by a co-operative housing corporation, a condominium corporation or a similar entity (in this paragraph referred to as the “corporation”), in respect of a property that is owned, administered or managed by that corporation, and that includes the principal residence of the individual, to the extent of the individual’s share of that outlay or expense,

i. if the outlay or expense would be a qualifying expenditure of the corporation if the corporation were a natural person and the property were the principal residence of that natural person, and

ii. if the corporation has notified the individual, in writing, of the individual’s share of the outlay or expense.

5. A qualifying expenditure of an individual includes an outlay or expense made or incurred by a trust in respect of a property owned by the trust that includes the principal residence of the individual, to the extent of the share of that outlay or expense that is reasonably attributable to the individual, having regard to the amount of the outlays or expenses made or incurred in respect of the principal residence of the individual (including, for this purpose, common areas relevant to more than one principal residence),

i. if the outlay or expense would be a qualifying expenditure of the trust if the trust were a natural person and the property were the principal residence of that natural person, and

ii. if the trust has notified the individual, in writing, of the individual’s share of the outlay or expense.

6. The following rules apply if more than one individual is entitled to claim a tax credit under this section for a taxation year in respect of a single residence that is the qualifying principal residence of all of the individuals at the same time during the taxation year or is reasonably expected to become such a shared principal residence within 24 months after the end of the taxation year:

i. The total amount of qualifying expenditures that may be claimed by all of the individuals in respect of the residence cannot exceed $10,000.

ii. If the total amount of qualifying expenditures claimed by all of the individuals in respect of the residence is greater than $10,000, the individuals must agree amongst themselves as to the allocation of the $10,000 limit referred to in subparagraph i.  If the individuals cannot agree, the Ontario Minister may allocate the $10,000 limit among the individuals for the purposes of determining the amount of each individual’s tax credit under this section.

7. The following rules apply if an individual and any individual who is the individual’s qualifying spouse or qualifying common-law partner on December 31 of a taxation year are both entitled to claim a tax credit under this section:

i. The total amount of qualifying expenditures that may be claimed by the two individuals for the taxation year cannot exceed $10,000.

ii. If the total amount of qualifying expenditures claimed by the two individuals for the taxation year is greater than $10,000, the individuals must agree amongst themselves as to the allocation of the $10,000 limit referred to in subparagraph i.  If the individuals cannot agree, the Ontario Minister may allocate the $10,000 limit among the individuals for the purposes of determining the amount of each individual’s tax credit under this section.

8. An outlay or expense is not a qualifying expenditure unless the work to implement the listed improvement (to which that outlay or expense is directly attributable) begins within a reasonable time after the outlay or expense is made or incurred. 2012, c. 13, s. 2.

Part-year residents

(12) Subject to the following rules, an individual who is resident in Canada for only part of a taxation year is entitled to claim for the year only the amount the individual would be entitled to claim for the year under this section that can reasonably be considered wholly applicable to any period in the year throughout which the individual was resident in Canada, computed as though that period were the whole taxation year:

1. The sum of all amounts that may be claimed under this section for all taxation years of the individual ending after September 30, 2011 and before January 1, 2013 shall not exceed the total amount that the individual would have been entitled to claim under this section in respect of that period if the individual had been resident in Canada throughout that period.

2. For taxation years of the individual ending after December 31, 2012, the amount that may be claimed under this section shall not exceed the amount that the individual would have been entitled to claim under this section if the individual had been resident in Canada throughout the year. 2012, c. 13, s. 2.

Bankruptcy

(13) Subject to the following rules, an individual who becomes bankrupt in a calendar year is entitled to claim, for each taxation year that ends in the calendar year, only such amounts as the individual is entitled to claim for the taxation year under this section as can reasonably be considered wholly applicable to the taxation year:

1. The sum of all amounts that may be claimed under this section for all taxation years of the individual ending after September 30, 2011 and before January 1, 2013 shall not exceed the total amount that the individual would have been entitled to claim under this section in respect of that period if the individual had not become bankrupt.

2. The sum of all amounts that may be claimed under this section for all taxation years of the individual ending in a calendar year after December 31, 2012 shall not exceed the total amount that the individual would have been entitled to claim under this section in respect of the calendar year if the individual had not become bankrupt. 2012, c. 13, s. 2.

Bankruptcy, senior

(14) If an individual becomes bankrupt in a calendar year and, when the bankruptcy occurs, he or she is not a senior but becomes a senior by the end of the calendar year, the bankrupt individual is eligible to claim a tax credit under this section for the taxation year that ends at the time of the bankruptcy. 2012, c. 13, s. 2.

Same, qualifying relation

(15) If an individual becomes bankrupt in a calendar year and, when the bankruptcy occurs, he or she is a qualifying relation of another individual who is not a senior at that time but becomes a senior by the end of the calendar year, the bankrupt individual is eligible to claim a tax credit under this section for the taxation year that ends at the time of the bankruptcy. 2012, c. 13, s. 2.

Death in year

(16) If, when an individual dies, he or she is not a senior but would have become a senior by the end of the calendar year in which he or she dies, the individual is eligible to claim a tax credit under this section for the taxation year that ends on the date of death. 2012, c. 13, s. 2.

Same

(17) If, when an individual dies, he or she is a qualifying relation of another individual who is not a senior at that time but becomes a senior by the end of the calendar year in which the death occurs, the deceased individual is eligible to claim a tax credit under this section for the taxation year that ends on the date of death. 2012, c. 13, s. 2.

Same

(18) If an individual is a qualifying relation of another individual who, immediately before death, is not a senior but who would have become a senior by the end of the calendar year in which he or she dies, the individual who is the qualifying relation is eligible to claim a tax credit under this section for a taxation year that ends in the calendar year as if the other individual had not died. 2012, c. 13, s. 2.

(19) Repealed: 2014, c. 7, Sched. 29, s. 9.

Financial disclosure

(20) The Minister of Finance shall ensure that the appropriate annual financial reports compare the anticipated cost of the credit for a year against the actual cost of the credit for the year. 2012, c. 13, s. 2.

Relation to other credits

(21) Despite paragraph 248 (28) (b) of the Federal Act as it applies for the purposes of this Act, an individual may include the same qualifying expenditure for the purpose of determining his or her tax credit under this section and for the purpose of determining his or her entitlement to the tax credit under subsection 9 (20) of this Act. 2012, c. 13, s. 2.

Definitions

(22) In this section,

“qualifying relation” of an individual means a person who is connected or related to the individual in any manner described in subsection 251 (6) or 252 (2) of the Federal Act; (“proche admissible”)

“senior” means, despite subsection 98 (1), an individual who is at least 65 years of age. (“personne âgée”) 2012, c. 13, s. 2.

Section Amendments with date in force (d/m/y)

2012, c. 13, s. 2 - 04/10/2012

2014, c. 7, Sched. 29, s. 9 - 24/07/2014

2016, c. 5, Sched. 28, s. 19 - 19/04/2016

Part IV.0.1
Non-Refundable Tax Credits

Community food program donation tax credit for farmers

103.1.2 (1) In this section,

“agricultural product” has the meaning prescribed by the regulations; (“produit agricole”)

“eligible community food program” means a person or entity that,

(a) is engaged in the distribution of food to the public without charge in Ontario, including as a food bank,

(b) is registered as a charity under the Federal Act, and

(c) satisfies the other conditions that are prescribed by the regulations; (“programme alimentaire communautaire admissible”)

“eligible person” means,

(a) an individual who carries on the business of farming in Ontario or his or her spouse or common-law partner, or

(b) a corporation that carries on the business of farming in Ontario. (“personne admissible”) 2013, c. 7, s. 8 (2).

Qualifying donation

(2) A donation is a qualifying donation for a taxation year if both of the following criteria are met:

1. The donation is a donation of one or more agricultural products produced in Ontario by an eligible person and is donated by an eligible person to an eligible community food program in Ontario.

2. The donation is made on or after January 1, 2014. 2013, c. 7, s. 8 (2).

Amount of the tax credit, individuals

(3) An eligible person who is an individual and who was resident in Ontario on the last day of a taxation year ending after the date prescribed by the Minister of Finance may deduct from the amount of tax otherwise payable for the year under Division B of Part II a community food program donation tax credit not exceeding the amount calculated using the formula,

A × B

in which,

  “A” is the sum of the fair market value of each qualifying donation, the fair market value of which was used in calculating the amount deducted by the individual under subsection 9 (21) in computing the amount of his or her tax payable for the year under Division B of Part II, and

  “B” is 25 per cent.

2013, c. 7, s. 8 (2).

Amount of the tax credit, corporations

(4) An eligible person that is a corporation may deduct from the amount of tax otherwise payable for the year under Division B of Part III, for a taxation year ending after the date prescribed by the Minister of Finance, a community food program donation tax credit not exceeding the amount calculated using the formula,

C × D

in which,

  “C” is that part of the person’s qualifying donations for the year that was deducted by the person under subsection 110.1 (1) of the Federal Act in computing the person’s taxable income for the year, and

  “D” is 25 per cent.

2013, c. 7, s. 8 (2).

Trusts

(5) A trust is not entitled to a tax credit under this section. 2013, c. 7, s. 8 (2).

Regulations

(6) The Lieutenant Governor in Council may make regulations prescribing any rules the Lieutenant Governor in Council considers necessary or advisable for the purposes of the proper administration of the credit under this section. 2013, c. 7, s. 8 (2).

Section Amendments with date in force (d/m/y)

2013, c. 7, s. 8 (2) - 15/08/2014

part iv.1
ontario trillium benefit

Ontario Trillium Benefit

Ontario Trillium Benefit

103.2 (1) For July 2012 and subsequent months, an individual is eligible to be paid an Ontario Trillium Benefit for a month if he or she is resident in Ontario at the beginning of the month.  2011, c. 9, Sched. 40, s. 6.

Amount of Benefit

(2) The amount of an individual’s Ontario Trillium Benefit for a month is the sum of the following:

1. The amount, if any, of his or her Ontario sales tax credit for the month, as determined under section 103.8.

2. The amount, if any, of his or her Ontario energy and property tax credit for the month, as determined under sections 103.9 to 103.11.

3. The amount, if any, of his or her Northern Ontario energy credit for the month, as determined under section 103.12.  2011, c. 9, Sched. 40, s. 6.

Same, 12-month period

(2.1) The amount of an individual’s Ontario Trillium Benefit for the 12 months that relate to a particular base taxation year is the sum of all amounts each of which is the individual’s Benefit for a month in that 12-month period. 2013, c. 2, Sched. 14, s. 1.

Status of Benefit

(3) The amount of an individual’s Ontario Trillium Benefit for a month is deemed to be an overpayment on account of the individual’s liability for tax under this Act, and the overpayment is deemed to have arisen during that month.  2011, c. 9, Sched. 40, s. 6.

Section Amendments with date in force (d/m/y)

2011, c. 9, Sched. 40, s. 6 - 12/05/2011

2013, c. 2, Sched. 14, s. 1 - 21/06/2013

Payment of Benefit

103.3 (1) The Ontario Minister may pay an Ontario Trillium Benefit in accordance with this section to an individual who is eligible for the Benefit. 2013, c. 2, Sched. 14, s. 2 (1).

Small amounts

(2) If the total amount of an individual’s Ontario Trillium Benefit is not more than $2 for the 12 months that relate to a particular base taxation year, that amount for that 12-month period is deemed to be nil.  2011, c. 9, Sched. 40, s. 6; 2013, c. 2, Sched. 14, s. 2 (2).

Payment arrangements

(3) For a 12-month period that relates to a base taxation year, the Ontario Trillium Benefit is payable to an individual in the following ways:

1. Monthly payment:  The Benefit is payable as a monthly payment during the 12-month period except in the circumstances described in paragraphs 2 and 3.

2. Single payment:  The Benefit is payable as a single payment during or after the last month of the 12-month period,

i. if the particular base taxation year commences after December 31, 2012,

ii. if the total amount of the individual’s Benefit for the 12-month period is greater than $360, or such lesser amount as may be prescribed by the Minister of Finance,

iii. if the individual has made a request to receive the Benefit for the 12-month period as a single payment in accordance with subsection (3.1), and

iv. if the individual has not revoked his or her request to receive the Benefit for that period as a single payment.

3. Other:  The Benefit is payable in the amounts, in the manner and at the times prescribed by the Minister of Finance if the total amount of the individual’s Benefit is greater than $2 but not more than $360, or such lesser amount as may be prescribed by the Minister of Finance, for the 12-month period. 2013, c. 2, Sched. 14, s. 2 (3); 2014, c. 7, Sched. 29, s. 10 (1).

Request for single payment

(3.1) An individual may make a request to receive the Benefit as a single payment for a 12-month period that relates to a base taxation year in accordance with the following rules:

1. The individual must make the request in his or her return of income under this Act for the base taxation year on or before December 31 of the year immediately following the base taxation year, or on or before such other date as may be prescribed by the Minister of Finance.

2. The individual may not make the request in an amended return. 2013, c. 2, Sched. 14, s. 2 (3); 2014, c. 7, Sched. 29, s. 10 (2).

Revocation of request

(3.2) An individual may revoke a request to receive the Benefit as a single payment for a 12-month period that relates to a base taxation year,

(a) without the Ontario Minister’s consent, if the revocation is made before June 1 of the year immediately following the base taxation year, or before such other date as may be prescribed by the Minister of Finance; or

(b) with the Ontario Minister’s consent, if the revocation is made after May 31 of the year immediately following the base taxation year, or after such other date as may be prescribed by the Minister of Finance. 2013, c. 2, Sched. 14, s. 2 (3).

Deemed revocation

(3.3) An individual is deemed to have revoked his or her request to receive the Benefit as a single payment for a 12-month period on the day that any of the following events occur during that period:

1. The individual becomes bankrupt.

2. The individual ceases to be a resident of Ontario.

3. The individual dies.

4. The individual becomes confined to a prison or similar institution for a period of at least 90 days. 2013, c. 2, Sched. 14, s. 2 (3); 2014, c. 7, Sched. 29, s. 10 (3).

(4) Repealed: 2014, c. 7, Sched. 29, s. 10 (4).

Regulations

(5) The Minister of Finance may make regulations prescribing any rules that the Minister considers necessary or advisable to facilitate the payment of the Benefit to an individual as a single payment under this section. 2013, c. 2, Sched. 14, s. 2 (4).

Section Amendments with date in force (d/m/y)

2011, c. 9, Sched. 40, s. 6 - 12/05/2011

2013, c. 2, Sched. 14, s. 2 (1, 3, 4) - 21/06/2013; 2013, c. 2, Sched. 14, s. 2 (2) - 01/07/2012

2014, c. 7, Sched. 29, s. 10 (1-3) - 21/06/2013; 2014, c. 7, Sched. 29, s. 10 (4) - 24/07/2014

Interpretation

Interpretation

103.4 (1) In this Part,

“adjusted income” means, in respect of an individual for a taxation year, his or her adjusted income for the year as determined for the purposes of section 122.5 of the Federal Act; (“revenu rajusté”)

“base taxation year” means, in relation to a month,

(a) for any month from July to December, the taxation year that ended on December 31 of the preceding taxation year, or

(b) for any month from January to June, the taxation year that ended on December 31 of the second preceding taxation year; (“année de base”)

“designated long-term care home” means, in respect of an individual for a base taxation year, a designated principal residence of the individual that is a long-term care home in Ontario,

(a) that was exempt in whole or in part from municipal tax for the year, and

(b) for which no grant in lieu of municipal tax is payable by the owner under any statutory authority or, if payable, has not been paid; (“foyer de soins de longue durée désigné”)

“designated principal residence” means, in respect of an individual for a month, a principal residence in Ontario of the individual, the individual’s qualified relation or both of them that is designated by the individual as his or her principal residence in his or her return of income under this Act for the base taxation year that relates to the particular month; (“résidence principale désignée”)

“principal residence” means, in respect of an individual for a month, premises, including a mobile home, that are occupied by the individual, the individual’s qualified relation, or both of them, as their primary place of residence in the base taxation year that relates to the particular month; (“résidence principale”)

“reserve” has the same meaning as in the Indian Act (Canada); (“réserve”)

“return of income” has the meaning assigned by section 122.6 of the Federal Act; (“déclaration de revenu”)

“senior” means an individual who is at least 64 years of age; (“personne âgée”)

“seniors’ income threshold” means, in respect of an individual for a base taxation year, the sum of,

(a) the maximum amount for the base taxation year of a pension payable under the Old Age Security Act (Canada) to a person and his or her spouse or common-law partner, within the meaning of that Act, where each of them is a pensioner,

(b) the maximum amount for the base taxation year of a guaranteed income supplement payable under Part II of the Old Age Security Act (Canada) to a person and his or her spouse or common-law partner, within the meaning of that Act, where each of them is a pensioner, and

(c) the maximum amount for the base taxation year of a guaranteed annual income increment payable under the Ontario Guaranteed Annual Income Act to a person and his or her spouse or common-law partner, within the meaning of that Act, where each of them is a beneficiary; (“seuil de revenu des personnes âgées”)

“shared-custody parent”, in respect of a qualified dependant at a particular time, means a shared-custody parent as defined in section 122.6 of the Federal Act. (“parent ayant la garde partagée”)  2011, c. 9, Sched. 40, s. 6; 2015, c. 38, Sched. 20, s. 6.

Seniors’ income threshold, rounding

(2) If the amount that would otherwise be the seniors’ income threshold for a base taxation year is not a whole dollar amount, it shall be rounded up to the next whole dollar.  2011, c. 9, Sched. 40, s. 6.

Occupancy cost

(3) For the purposes of this Part, “occupancy cost” has the same meaning and is determined in the same manner as in Division D of Part IV and, in the application of section 98 for the purposes of this Part, references to a qualifying spouse or qualifying common-law partner are read as references to a qualified relation.  2011, c. 9, Sched. 40, s. 6.

Section Amendments with date in force (d/m/y)

2011, c. 9, Sched. 40, s. 6 - 12/05/2011

2015, c. 38, Sched. 20, s. 6 - 10/12/2015

Qualified dependant

For Ontario sales tax credit

103.5 (1) For the purposes of section 103.8, an individual is a qualified dependant of another individual for a month,

(a) if he or she is a qualified dependant of the individual as defined in subsection 122.5 (1) of the Federal Act; and

(b) if he or she is not a person described in subsection 122.5 (2) of the Federal Act.  2011, c. 9, Sched. 40, s. 6.

For other credits

(2) For the purposes of sections 103.9, 103.10 and 103.12, an individual is a qualified dependant of another individual for a month,

(a) if he or she would be a qualified dependant of the individual as defined in subsection 122.5 (1) of the Federal Act if the reference to “19 years” in clause (c) of that definition were read as “18 years”; and

(b) if he or she is not a person described in subsection 122.5 (2) of the Federal Act.  2011, c. 9, Sched. 40, s. 6.

Change in status

(3) For the purposes of sections 103.9, 103.10 and 103.12, if a qualified dependant of an individual attains the age of 18 or becomes a parent who resides with their child after December 31 of a base taxation year that relates to a particular month, the amount of the individual’s credit under each of those sections for the month is determined as though the qualified dependant had not attained the age of 18 or had not become a parent who resides with their child.  2011, c. 9, Sched. 40, s. 6.

Section Amendments with date in force (d/m/y)

2011, c. 9, Sched. 40, s. 6 - 12/05/2011

Qualified relation

103.6 (1) For the purposes of this Part, an individual is a qualified relation of another individual for a month if he or she is a qualified relation of the individual as defined in subsection 122.5 (1) of the Federal Act and is not a person described in subsection 122.5 (2) of the Federal Act.  2011, c. 9, Sched. 40, s. 6.

Deeming provision, certain credits

(2) For the purposes of sections 103.9, 103.10 and 103.12, if an individual has a qualified relation at the end of a base taxation year, the individual is deemed to have a qualified relation for every month that relates to that base taxation year.  2011, c. 9, Sched. 40, s. 6.

Same

(3) For the purposes of sections 103.9, 103.10 and 103.12, if an individual does not have a qualified relation at the end of a base taxation year, he or she is deemed not to have a qualified relation for every month that relates to that base taxation year.  2011, c. 9, Sched. 40, s. 6.

Exception and election

(4) The following rules apply if two individuals are qualified relations in respect of each other but, because of medical necessity, they are living separate and apart at the end of a base taxation year:

1. For the purposes of sections 103.9, 103.10, 103.11 and 103.12, subsections 103.13 (1) and (2) and section 103.14, the individuals may elect not to be qualified relations of each other for the months that relate to that base taxation year.

2. They make this election by designating their preference in their returns of income under this Act for that base taxation year.

3. If the individuals do not make such an election in this manner, the individuals are considered to be qualified relations of each other for the months that relate to that base taxation year.  2011, c. 9, Sched. 40, s. 6; 2014, c. 7, Sched. 29, s. 11.

Section Amendments with date in force (d/m/y)

2011, c. 9, Sched. 40, s. 6 - 12/05/2011

2014, c. 7, Sched. 29, s. 11 - 12/05/2011

Application of Federal Act

103.7 Subsections 122.5 (5), (6), (6.1), (6.2) and (7) and 160.1 (1.1) and paragraph 164 (1.5) (a) of the Federal Act apply for the purposes of this Part in respect of the Ontario Trillium Benefit as if a reference in any of those provisions to a provision of subdivision a.1 of Division E of Part I of the Federal Act were a reference to the corresponding provision of this Part.  2011, c. 9, Sched. 40, s. 6.

Section Amendments with date in force (d/m/y)

2011, c. 9, Sched. 40, s. 6 - 12/05/2011

Calculations

Calculation of Ontario sales tax credit

103.8 (1) This section governs the determination of the amount, if any, of an individual’s Ontario sales tax credit for a month.  2011, c. 9, Sched. 40, s. 6.

Eligibility

(2) An individual is eligible for an Ontario sales tax credit for a particular month if all of the following conditions are satisfied:

1. At the beginning of the month, the individual is resident in Ontario.

2. At the beginning of the month, the individual is an eligible individual as defined in subsection 122.5 (1) of the Federal Act and is not excluded from being an eligible individual because of subsection 122.5 (2) of the Federal Act.

3. The individual and, if required by the Ontario Minister, the person who is the individual’s qualified relation for the month have each filed a return of income under this Act for the applicable base taxation year.  2011, c. 9, Sched. 40, s. 6.

Amount

(3) The amount of the eligible individual’s Ontario sales tax credit for the month is the amount calculated using the formula,

(A – [0.04 × (B – C)])/12

in which,

  “A” is the total of,

(a) $260,

(b) $260 where the individual has a qualified relation for the month,

(c) $260 where the individual has no qualified relation for the month and is entitled to deduct an amount for the applicable base taxation year under subsection 118 (1) of the Federal Act because of paragraph (b) of the definition of “B” in that subsection in respect of a qualified dependant of the individual for the month, and

(d) $260 multiplied by the number of qualified dependants of the individual for the month other than a qualified dependant in respect of whom an amount is included under clause (c),

  “B” is,

(a) the greater of $20,000 and the individual’s adjusted income for the base taxation year that relates to the particular month if the individual does not have a qualified relation or a qualified dependant for the month, and

(b) the greater of $25,000 and the individual’s adjusted income for the base taxation year that relates to the particular month if the individual has a qualified relation, a qualified dependant or both for the month, and

  “C” is,

(a) $20,000 if the individual does not have a qualified relation or qualified dependant for the month, and

(b) $25,000 if the individual has a qualified relation, a qualified dependant or both for the month.

2011, c. 9, Sched. 40, s. 6.

Same, shared-custody parent

(4) Despite subsection (3), if an eligible individual is a shared-custody parent in respect of one or more qualified dependants at the beginning of the particular month, the amount of his or her Ontario sales tax credit for the month is the amount calculated using the formula,

(D + E)/2

in which,

  “D” is the amount determined for the month by the formula in subsection (3), calculated without reference to this subsection, and

  “E” is the amount determined for the month by the formula in subsection (3), calculated without reference to this subsection and calculated as if the individual were not an eligible individual in respect of any qualified dependants in respect of whom the individual is a shared-custody parent.

2011, c. 9, Sched. 40, s. 6.

Seniors’ income threshold

(5) Despite subsection (3), if the eligible individual is a senior at the end of the base taxation year and has a qualified relation, qualified dependant or both for the month, and if the amount referred to in clause (b) of the definition of “B” and the amount of clause (b) of the definition of “C” in subsection (3) for the base taxation year (as adjusted under section 23 for a base taxation year after 2010) is less than the seniors’ income threshold for that base taxation year, those clauses shall be read as if they referred to the amount of the senior’s income threshold.  2011, c. 9, Sched. 40, s. 6.

Section Amendments with date in force (d/m/y)

2011, c. 9, Sched. 40, s. 6 - 12/05/2011

Calculation of Ontario energy and property tax credit (other than for seniors)

103.9 (1) This section and sections 103.11 and 103.13 govern the determination of the amount, if any, of an individual’s Ontario energy and property tax credit for a month, if the individual is not a senior at the end of the base taxation year.  2011, c. 9, Sched. 40, s. 6.

Eligibility

(2) An individual is eligible for an Ontario energy and property tax credit for a particular month if all of the following conditions are satisfied:

1. At the beginning of the month, the individual is resident in Ontario.

2. At the beginning of the month, the individual would be an eligible individual as defined in subsection 122.5 (1) of the Federal Act if the reference to “19 years” in clause (a) of that definition were read as “18 years”.

3. At the beginning of the month, the individual is not a person described in subsection 122.5 (2) of the Federal Act.

4. On the last day of the applicable base taxation year, the individual had a designated principal residence in Ontario and was resident in Ontario.

5. The individual and, if required by the Ontario Minister, the person who is the individual’s qualified relation for the month have each filed a return of income under this Act for the applicable base taxation year.  2011, c. 9, Sched. 40, s. 6.

Amount

(3) If the eligible individual is not a senior at the end of the applicable base taxation year, the amount of his or her Ontario energy and property tax credit for the month is the amount calculated using the formula,

[(F + G) – 0.02 × (H – J)]/12

in which,

“F” is the individual’s energy amount equal to the lesser of,

(a) $200, and

(b) the sum of,

(i) the amount, if any, of the individual’s occupancy cost for the base taxation year less any amount included under paragraph 5 of subsection 98 (2) or paragraph 5 of subsection 98 (3),

(ii) the energy costs, if any, paid for the base taxation year by or on behalf of the individual or the individual’s qualified relation in respect of a designated principal residence of the individual on a reserve in Ontario, if the individual is resident on a reserve in Ontario at any time in the year, and

(iii) 20 per cent of the amount, if any, paid by or on behalf of the individual or the individual’s qualified relation for accommodation for the individual at any time in the base taxation year in a designated long-term care home,

  “G” is the individual’s property tax amount equal to the least of,

(a) $700,

(b) the individual’s occupancy cost for the base taxation year, and

(c) the sum of,

(i) the lesser of $50 and the individual’s occupancy cost for the base taxation year, and

(ii) an amount equal to 10 per cent of the individual’s occupancy cost for the base taxation year,

  “H” is,

(a) the greater of $20,000 and the individual’s adjusted income for the base taxation year, if the individual does not have a qualified relation or a qualified dependant for the month, or

(b) the greater of $25,000 and the individual’s adjusted income for the base taxation year, if the individual has a qualified relation, a qualified dependant or both for the month, and

“J” is,

(a) $20,000, if the individual does not have a qualified relation or a qualified dependant for the month, or

(b) $25,000, if the individual has a qualified relation, a qualified dependant or both for the month.

2011, c. 9, Sched. 40, s. 6.

Same, shared-custody parent

(4) Despite subsection (3), if the eligible individual, other than an individual who is a senior at the end of the applicable base taxation year, is a shared-custody parent in respect of a qualified dependant for the particular month and did not have any other qualified dependants or a qualified relation for the month, the amount of his or her Ontario energy and property tax credit for the month is the amount that would be determined under subsection (3) if the definitions of “H” and “J” in that subsection read as follows:

  “H” is the amount determined by the formula,

(K + L)/2

in which,

“K” is the greater of $20,000 and the individual’s adjusted income for the base taxation year, and

“L” is the greater of $25,000 and the individual’s adjusted income for the base taxation year, and

“J” is $22,500.

2011, c. 9, Sched. 40, s. 6.

Section Amendments with date in force (d/m/y)

2011, c. 9, Sched. 40, s. 6 - 12/05/2011

Calculation of Ontario energy and property tax credit, seniors