I-3 - Taxation Act

Section 771.2.1.4.2 Disposition versions

2019-06-19

771.2.1.4.2. For the purposes of this Title, a Canadian-controlled private corporation (in this section referred to as the “first corporation”) may assign all or any portion of its business limit, determined under the first paragraph of section 771.2.1.3 or any of sections 771.2.1.4 to 771.2.1.6, for a taxation year of the first corporation to another Canadian-controlled private corporation (in this section referred to as the “second corporation”) for a taxation year of the second corporation if

(a)  the second corporation has an amount of income, for its taxation year, referred to in paragraph a of the definition of “specified corporate income” in the first paragraph of section 771.1 from the provision of services or property directly to the first corporation;

(b)  the first corporation’s taxation year ends in the second corporation’s taxation year;

(c)  the amount assigned does not exceed the amount determined by the formula

A – B; and

(d)  the first corporation and the second corporation each file a prescribed form with the Minister in their respective fiscal returns for their respective taxation years.

In the formula in the first paragraph,

(a)  A is the amount of income to which subparagraph a of the first paragraph refers; and

(b)  B is the portion of the amount of income to which subparagraph a of the first paragraph refers that is deductible by the first corporation in respect of the amount of income referred to in paragraph a or b of section 771.2.1.2.0.1 for the taxation year.

2019, c. 14, s. 245.