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C is the total of all amounts each of which
is an amount determined under paragraph
(13)(d) for the year in respect of the
taxpayer;
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``taxable
supplier''
« fournisseur
imposable »
|
``taxable supplier'' in respect of an amount
means
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|
(a) a person resident in Canada or a
Canadian partnership, or
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|
(b) a non-resident person, or a
partnership that is not a Canadian
partnership,
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|
(i) by which the amount was payable,
or
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|
(ii) by or for the benefit of which the
amount was receivable in the course of
carrying on a business through a
permanent establishment (as defined
by regulation) in Canada.
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(19) Subsection 127(10.1) of the Act is
replaced by the following:
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Additions to
investment tax
credit
|
(10.1) For the purpose of paragraph (e) of
the definition ``investment tax credit'' in
subsection (9), where a corporation was
throughout a taxation year a
Canadian-controlled private corporation,
there shall be added in computing the
corporation's investment tax credit at the end
of the year the amount that is 15% of the least
of
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(a) such amount as the corporation claims;
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(b) the SR&ED qualified expenditure pool
of the corporation at the end of the year; and
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(c) the corporation's expenditure limit for
the year.
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|
(20) Subsections 127(10.7) and (10.8) of
the Act are replaced by the following:
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Further
additions to
investment tax
credit
|
(10.7) Where a taxpayer has in a particular
taxation year repaid an amount of government
assistance, non-government assistance or a
contract payment that was applied to reduce
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(a) the amount of a qualified expenditure
incurred by the taxpayer under paragraph
(11.1)(c) for a preceding taxation year that
began before 1996,
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(b) the prescribed proxy amount of the
taxpayer under paragraph (11.1)(f) for a
preceding taxation year that began before
1996, or
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(c) a qualified expenditure incurred by the
taxpayer under any of subsections (18) to
(20) for a preceding taxation year,
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there shall be added to the amount otherwise
determined under subsection (10.1) in respect
of the taxpayer for the particular year the
amount, if any, by which
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(d) the amount that would have been
determined under subsection (10.1) in
respect of the taxpayer for that preceding
year if subsections (11.1) and (18) to (20)
had not applied in respect of the
government assistance, non-government
assistance or contract payment, as the case
may be, to the extent of the amount so
repaid,
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exceeds
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(e) the amount determined under subsection
(10.1) in respect of the taxpayer for that
preceding year.
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|
Further
additions to
investment tax
credit
|
(10.8) For the purposes of paragraph (e.1) of
the definition ``investment tax credit'' in
subsection (9), subsection (10.7) and
paragraph 37(1)(c), an amount of government
assistance, non-government assistance or a
contract payment that
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(a) was applied to reduce
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(i) the capital cost to a taxpayer of a
property under paragraph (11.1)(b),
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|
(ii) the amount of a qualified expenditure
incurred by a taxpayer under paragraph
(11.1)(c) for taxation years that began
before 1996,
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(iii) the prescribed proxy amount of a
taxpayer under paragraph (11.1)(f) for
taxation years that began before 1996, or
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(iv) a qualified expenditure incurred by a
taxpayer under any of subsections (18) to
(20),
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(b) was not received by the taxpayer, and
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(c) ceased in a taxation year to be an amount
that the taxpayer can reasonably be
expected to receive,
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is deemed to be the amount of a repayment by
the taxpayer in the year of the government
assistance, non-government assistance or
contract payment, as the case may be.
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|
(21) Paragraph 127(11.1)(c) of the Act is
repealed.
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|
(22) Subsection 127(11.1) of the Act is
amended by adding the word ``and'' at the
end of paragraph (c.1) and by repealing
paragraphs (e) and (f).
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(23) Subsection 127(11.2) of the Act is
replaced by the following:
|
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Time of
expenditure
and
acquisition
|
(11.2) In applying subsections (5), (7) and
(8), paragraphs (a) and (a.1) of the definition
``investment tax credit'' in subsection (9) and
section 127.1,
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(a) certified property, qualified property
and first term shared-use-equipment are
deemed not to have been acquired, and
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(b) expenditures incurred to acquire
property described in subparagraph
37(1)(b)(i) are deemed not to have been
incurred
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by a taxpayer before the property is
considered to have become available for use
by the taxpayer, determined without reference
to paragraphs 13(27)(c) and (28)(d).
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|
(24) Subsection 127(11.4) of the Act is
replaced by the following:
|
|
Reclassified
expenditures
|
(11.4) Paragraph (e) of the definition
``qualified expenditure'' in subsection (9)
does not apply to an expenditure incurred in a
taxation year by a taxpayer where the
expenditure is reclassified by the Minister on
an assessment of the taxpayer's tax payable
under this Part for the year, or on a
determination that no tax under this Part is
payable for the year by the taxpayer, as an
expenditure in respect of scientific research
and experimental development.
|
|
Adjustments
to qualified
expenditures
|
(11.5) For the purpose of the definition
``qualified expenditure'' in subsection (9),
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(a) the amount of an expenditure (other than
a prescribed proxy amount or an amount
described in paragraph (b)) incurred by a
taxpayer in a taxation year is deemed to be
the amount of the expenditure, determined
without reference to subsections 13(7.1)
and (7.4) and after the application of
subsection (11.6); and
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(b) the amount of an expenditure incurred
by a taxpayer in the taxation year that ends
coincidentally with the end of the first
period (within the meaning assigned in the
definition ``first term
shared-use-equipment'' in subsection (9))
or the second period (within the meaning
assigned in the definition ``second term
shared-use-equipment'' in subsection (9))
in respect of first term
shared-use-equipment or second term
shared-use-equipment, respectively, of the
taxpayer is deemed to be 1/4 of the capital
cost of the equipment determined after the
application of subsection (11.6) in
accordance with the following rules:
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(i) the capital cost to the taxpayer shall be
computed as if no amount were added
thereto because of section 21, and
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(ii) the capital cost to the taxpayer is
determined without reference to
subsections 13(7.1) and (7.4).
|
|
Non-arm's
length costs
|
(11.6) For the purpose of subsection (11.5),
where
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(a) a taxpayer would, if this Act were read
without reference to subsection (26), incur
at any time an expenditure as consideration
for a person or partnership (referred to in
this subsection as the ``supplier'') rendering
a service (other than a service rendered by
a person as an employee of the taxpayer) or
providing a property to the taxpayer, and
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(b) at that time the taxpayer does not deal at
arm's length with the supplier,
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|
the amount of the expenditure incurred by the
taxpayer for the service or property and the
capital cost to the taxpayer of the property are
deemed to be
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|
(c) in the case of a service rendered to the
taxpayer, the lesser of
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|
(i) the amount of the expenditure
otherwise incurred by the taxpayer for
the service, and
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|
(ii) the adjusted service cost to the
supplier of rendering the service, and
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|
(d) in the case of a property sold to the
taxpayer, the lesser of
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|
(i) the capital cost to the taxpayer of the
property otherwise determined, and
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|
(ii) the adjusted selling cost to the
supplier of the property.
|
|
Definitions
|
(11.7) The definitions in this subsection
apply in this subsection and subsection (11.6).
|
|
``adjusted
service cost''
« coût de
service
rajusté »
|
``adjusted service cost'' to a person or
partnership (referred to in this definition as
the ``supplier'') of rendering a particular
service is the amount determined by the
formula
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A - B - C - D - E
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|
A is the cost to the supplier of rendering the
particular service,
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B is the total of all amounts each of which
is the amount, if any, by which
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(a) the cost to the supplier for a service
(other than a service rendered by a
person as an employee of the supplier)
rendered by a person or partnership
that does not deal at arm's length with
the supplier to the extent that the cost
is incurred for the purpose of rendering
the particular service
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|
(b) the adjusted service cost to the
person or partnership referred to in
paragraph (a) of rendering the service
referred to in that paragraph to the
supplier,
|
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|
C is the total of all amounts each of which
is the amount, if any, by which
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|
(a) the cost to the supplier of a property
acquired by the supplier from a person
or partnership that does not deal at
arm's length with the supplier
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|
(b) the adjusted selling cost to the
person or partnership referred to in
paragraph (a) of the property,
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to the extent that the excess relates to the
cost of rendering the particular service,
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D is the total of all amounts each of which
is remuneration based on profits or a
bonus paid or payable to an employee of
the supplier to the extent that it is
included in the cost to the supplier of
rendering the particular service, and
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E is the total of all amounts each of which
is government assistance or
non-government assistance that can
reasonably be considered to be in respect
of rendering the particular service and
that the supplier has received, is entitled
to receive or can reasonably be expected
to receive.
|
|
``adjusted
selling cost''
« coût de
vente rajusté »
|
``adjusted selling cost'' to a person or
partnership (referred to in this definition as
the ``supplier'') of a property is the amount
determined by the formula
|
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|
A - B
|
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|
(a) where the property is purchased
from another person or partnership
with which the supplier does not deal
at arm's length, the lesser of
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(i) the cost to the supplier of the
property, and
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|
(ii) the adjusted selling cost to the
other person or partnership of the
property, and
|
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|
(b) in any other case, the cost to the
supplier of the property,
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|
and for the purpose of paragraph (b),
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|
(c) where part of the cost to a supplier
of a particular property is attributable
to another property acquired by the
supplier from a person or partnership
with which the supplier does not deal
at arm's length, that part of the cost is
deemed to be the lesser of
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|
(i) the amount of that part of the cost
otherwise determined, and
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|
(ii) the adjusted selling cost to the
person or the partnership of the
other property,
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|
(d) where part of the cost to a supplier
of a property is attributable to a service
(other than a service rendered by a
person as an employee of the supplier)
rendered to the supplier by a person or
partnership with which the supplier
does not deal at arm's length, that part
of the cost is deemed to be the lesser of
|
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|
(i) the amount of that part of the cost
otherwise determined, and
|
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|
(ii) the adjusted service cost to the
person or partnership of rendering
the service, and
|
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|
(e) no part of the cost to a supplier of
a property that is attributable to
remuneration based on profits or a
bonus paid or payable to an employee
of the supplier shall be included, and
|
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B is the total of all amounts each of which
is the amount of government assistance
or non-government assistance that can
reasonably be considered to be in respect
of the property and that the supplier has
received, is entitled to receive or can
reasonably be expected to receive.
|
|
Interpreta-
tion for
non-arm's
length costs
|
(11.8) For the purposes of this subsection
and subsections (11.6) and (11.7),
|
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|
(a) the cost to a person or partnership
(referred to in this paragraph as the
``supplier'') of rendering a service or
providing a property to another person or
partnership (referred to in this paragraph as
the ``recipient'') with which the supplier
does not deal at arm's length does not
include,
|
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|
(i) where the cost to the recipient of the
service rendered or property provided by
the supplier would, but for this
paragraph, be a cost to the recipient
incurred in rendering a particular service
or providing a particular property to a
person or partnership with which the
recipient does not deal at arm's length,
any expenditure of the supplier to the
extent that it would, if it were incurred by
the recipient in rendering the particular
service or providing the particular
property, be excluded from a cost to the
recipient because of this paragraph, and
|
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|
(ii) in any other case, any expenditure of
the supplier to the extent that it would, if
it were incurred by the recipient, not be
a qualified expenditure of the recipient;
|
|
|
(b) paragraph 69(1)(c) does not apply in
determining the cost of a property; and
|
|
|
(c) the leasing of a property is deemed to be
the rendering of a service.
|
|
|
(25) Section 127 of the Act is amended by
adding the following after subsection
(12.3):
|
|
Agreement to
transfer
qualified
expenditures
|
(13) Where a taxpayer (referred to in this
subsection and subsections (15) and (16) as
the ``transferor'') and another taxpayer
(referred to in this subsection and subsection
(15) as the ``transferee'') file with the Minister
an agreement or an amended agreement in
respect of a particular taxation year of the
transferor, the least of
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|
(a) the amount specified in the agreement
for the purpose of this subsection,
|
|