I-3 - Taxation Act

Section 413 Disposition versions

2021-06-04

413. A development corporation carrying on an oil business may deduct, in computing its income for a taxation year, an amount not exceeding the aggregate of its cumulative Canadian development expenses incurred in Québec at the end of the year and the amount by which the aggregate determined under subparagraph i of paragraph b of section 418.31.1 in respect of the corporation for the year in relation to its cumulative Canadian development expenses incurred in Québec exceeds the amount that would be determined in respect of the corporation for the year under paragraph e of section 330 in relation to such expenses if the aggregate last referred to in that paragraph e were not taken into account, and an amount not exceeding the aggregate of

(a)  the lesser of

i.  the aggregate of its other cumulative Canadian development expenses at the end of the year and the amount by which the aggregate determined under subparagraph i of paragraph b of section 418.31.1 in respect of the corporation for the year in relation to its other cumulative Canadian development expenses exceeds the amount that would be determined in respect of the corporation for the year under paragraph e of section 330 in relation to such expenses if the aggregate last referred to in that paragraph e were not taken into account, and

ii.  the amount by which the amount determined under subparagraph ii of subparagraph a of the first paragraph of section 418.7 exceeds the amount determined under subparagraph i of that subparagraph a;

(b)  the lesser of

i.  the amount by which the amount determined under subparagraph i of subparagraph a exceeds the amount determined under subparagraph ii of that subparagraph a, and

ii.  the amount by which the aggregate of all amounts each of which is an amount included in computing its income for the year by reason of the disposition, in the year, of a property included in its inventory under section 419, and acquired by the corporation under circumstances described in paragraph e of section 395 or 408, or an amount included, in computing its income, under paragraph e of section 87 to the extent that such amount relates to that property, exceeds the aggregate of all amounts deducted as a reserve in computing its income for the year under section 153 to the extent that the reserve relates to such property;

(c)  30% of the amount by which the amount determined under subparagraph i of subparagraph b exceeds the amount determined under subparagraph ii of that subparagraph b; and

(d)  the amount determined by the formula

A × (B − C).

Any other taxpayer may deduct, in computing income for a taxation year in respect of an oil business, an amount not exceeding the aggregate of the amounts that would be determined in respect of the taxpayer under subparagraphs a to d of the first paragraph, if no reference were made to “other” in subparagraph i of that subparagraph a and to “, other than Canadian development expenses incurred in Québec,” in subparagraph b of the third paragraph and subparagraphs a to c of the fourth paragraph.

In the formula in subparagraph d of the first paragraph,

(a)  A is

i.  where the taxation year ends before 1 January 2024, 15%,

ii.  where the taxation year begins before 1 January 2024 and ends after 31 December 2023, the amount determined by the formula

15% (D/E) + 7.5% (F/E), and

iii.  where the taxation year begins after 31 December 2023, 7.5%;

(b)  B is the aggregate of all accelerated Canadian development expenses, other than Canadian development expenses incurred in Québec, incurred by the corporation in the taxation year; and

(c)  C is the amount determined by the formula

(G − H) − (I − J − K).

In the formulas in subparagraph ii of subparagraph a of the third paragraph and in subparagraph c of that paragraph,

(a)  D is the aggregate of all accelerated Canadian development expenses, other than Canadian development expenses incurred in Québec, incurred by the corporation before 1 January 2024 and in the taxation year;

(b)  E is the aggregate of all accelerated Canadian development expenses, other than Canadian development expenses incurred in Québec, incurred by the corporation in the taxation year;

(c)  F is the aggregate of all accelerated Canadian development expenses, other than Canadian development expenses incurred in Québec, incurred by the corporation after 31 December 2023 and in the taxation year;

(d)  G is the aggregate of the amounts referred to in paragraphs a to j of section 412 at the end of the taxation year;

(e)  H is the aggregate of the amounts referred to in paragraphs a to j of section 412 at the beginning of the taxation year;

(f)  I is the aggregate of the amounts referred to in paragraphs a to d of section 411 at the end of the taxation year;

(g)  J is the aggregate of the amounts referred to in paragraphs a to d of section 411 at the end of the preceding taxation year; and

(h)  K is the amount described in subparagraph b of the third paragraph.

1975, c. 22, s. 90; 1977, c. 26, s. 45; 1982, c. 5, s. 100; 1993, c. 16, s. 160; 1997, c. 3, s. 71; 1997, c. 14, s. 67; 2001, c. 53, s. 65; 2021, c. 18, s. 39.

2006-03-01

413. A development corporation carrying on an oil business may deduct, in computing its income for a taxation year, an amount not exceeding the aggregate of its cumulative Canadian development expenses incurred in Québec at the end of the year and the amount by which the aggregate determined under subparagraph i of paragraph b of section 418.31.1 in respect of the corporation for the year in respect of its cumulative Canadian development expenses incurred in Québec exceeds the amount that would be determined in respect of the corporation for the year under paragraph e of section 330 in respect of such expenses if the aggregate last referred to in the said paragraph e were not taken into account, and an amount not exceeding the aggregate of

(a)  the lesser of:

i.  the aggregate of its other cumulative Canadian development expenses at the end of the year and the amount by which the aggregate determined under subparagraph i of paragraph b of section 418.31.1 in respect of the corporation for the year in respect of its other cumulative Canadian development expenses exceeds the amount that would be determined in respect of the corporation for the year under paragraph e of section 330 in respect of such expenses if the aggregate last referred to in the said paragraph e were not taken into account; and

ii.  the amount by which the amount determined under subparagraph ii of paragraph a of section 418.7 exceeds the amount determined under subparagraph i of the said paragraph; and

(b)  the lesser of

i.  the amount by which the amount determined under subparagraph i of subparagraph a exceeds the amount determined under subparagraph ii of the said subparagraph; or

ii.  the amount by which the aggregate of all amounts included in computing its income for the year by reason of the disposition, in the year, of a property included in its inventory under section 419, and acquired by the corporation under circumstances referred to in paragraph e of section 395 or 408, or any amount included, in computing its income, under paragraph e of section 87 to the extent that such amount relates to that property, exceeds the aggregate of any amount deducted as a reserve in computing its income for the year under section 153 to the extent that the reserve relates to such property; and

(c)  30% of the amount by which the amount determined under subparagraph i of subparagraph b exceeds that determined under subparagraph ii of the said subparagraph.

Any other taxpayer may deduct in computing his income for any taxation year in respect of an oil business an amount not exceeding the aggregate of amounts that would be determined in his respect under subparagraphs a to c of the first paragraph, if account were not taken of the word “other” in subparagraph i of the said subparagraph a.

1975, c. 22, s. 90; 1977, c. 26, s. 45; 1982, c. 5, s. 100; 1993, c. 16, s. 160; 1997, c. 3, s. 71; 1997, c. 14, s. 67; 2001, c. 53, s. 65.