I-3 - Taxation Act

Section 1029.8.36.27 Disposition versions

2006-06-13

1029.8.36.27. (Repealed).

1995, c. 1, s. 157; 1995, c. 63, s. 192; 1997, c. 3, s. 71; 1997, c. 31, s. 116; 2006, c. 13, s. 148.

2006-03-01

1029.8.36.27. Where, in respect of an outside consulting contract, a person or a partnership has obtained, is entitled to obtain or can reasonably expect to obtain a benefit or advantage, other than a benefit or advantage that may reasonably be attributed to the carrying out of the design activity, whether in the form of a reimbursement, compensation, guarantee or the proceeds of disposition of property which exceed the fair market value of that property, or in any other form or manner, the following rules apply:

(a)  for the purpose of computing the amount that is deemed to have been paid to the Minister for a taxation year by a qualified corporation under section 1029.8.36.5, the expenditure referred to therein shall be reduced by the amount of the benefit or advantage the person or partnership has obtained, is entitled to obtain or can reasonably expect to obtain on or before the qualified corporation’s filing-due date for that taxation year; and

(b)  for the purpose of computing the amount that is deemed to have been paid to the Minister for a taxation year by a qualified corporation that is a member of the qualified partnership under section 1029.8.36.6, the qualified corporation’s share of the expenditure referred to therein shall be reduced

i.  by its share of the amount of the benefit or advantage that a partnership or a person other than a person referred to in subparagraph ii has obtained, is entitled to obtain or can reasonably expect to obtain on or before the day that is six months after the end of the fiscal period of the qualified partnership in which the expenditure was incurred, and

ii.  by the amount of the benefit or advantage that the qualified corporation or a person with which the qualified corporation does not deal at arm’s length has obtained, is entitled to obtain or can reasonably expect to obtain on or before the day that is six months after the end of the fiscal period of the qualified partnership in which the expenditure was incurred.

For the purposes of subparagraph i of subparagraph b of the first paragraph, the qualified corporation’s share of the amount of the benefit or advantage that a partnership or a person other than a person referred to in subparagraph ii of that subparagraph b has obtained, is entitled to obtain or can reasonably expect to obtain, is equal to such proportion of that amount as the share of the qualified corporation of the income or loss of the qualified partnership for the fiscal period of the qualified partnership ending in its taxation year is of the income or loss of the qualified partnership for that fiscal period, on the assumption that, if the income and loss of the qualified partnership for that fiscal period are nil, the qualified partnership’s income for that fiscal period is equal to $1,000,000.

1995, c. 1, s. 157; 1995, c. 63, s. 192; 1997, c. 3, s. 71; 1997, c. 31, s. 116.