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| Definitions
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123.4 (1) The definitions in this subsection
apply in this section.
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``CCPC rate
reduction
percentage''
« pourcentage
de réduction
du taux des
SPCC »
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``CCPC rate reduction percentage'' of a
Canadian-controlled private corporation
for a taxation year is that proportion of 7%
that the number of days in the year that are
after 2000 is of the number of days in the
year.
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``full rate
taxable
income''
« revenu
imposable au
taux
complet »
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``full rate taxable income'' of a corporation for
a taxation year is
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(a) if the corporation is not a corporation
described in paragraph (b) or (c) for the
year, the amount by which the
corporation's taxable income for the year
exceeds the total of,
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(i) if an amount is deducted under
subsection 125.1(1) from the
corporation's tax otherwise payable
under this Part for the year, 100/7 of the
amount deducted,
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(ii) if an amount is deducted under
subsection 125.1(2) from the
corporation's tax otherwise payable
under this Part for the year, the amount
determined, in respect of the
deduction, by the formula in that
subsection,
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(iii) three times the total of all amounts
each of which is deducted under
paragraph 20(1)(v.1) in computing the
corporation's income from a business
or property for the year, and
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(iv) if the corporation is a credit union
throughout the year, 100/16 of the
amount, if any, deducted under
subsection 137(3) from the
corporation's tax otherwise payable
under this Part for the year;
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(b) if the corporation is a
Canadian-controlled private corporation
throughout the year, the amount by which
the corporation's taxable income for the
year exceeds the total of
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(i) the amounts that would, if
paragraph (a) applied to the
corporation, be determined under
subparagraphs (a)(i) to (iv) in respect
of the corporation for the year,
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(ii) 100/16 of the amount, if any,
deducted under subsection 125(1)
from the corporation's tax otherwise
payable under this Part for the year,
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(iii) the corporation's aggregate
investment income for the year, within
the meaning assigned by subsection
129(4), and
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(iv) 100/7 of the amount, if any,
deducted under subsection (3) from the
corporation's tax otherwise payable
under this Part for the year; and
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(c) if the corporation is throughout the
year an investment corporation, a
mortgage investment corporation, a
mutual fund corporation, or a
non-resident-owned investment
corporation, nil.
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``general rate
reduction
percentage''
« pourcentage
de réduction
du taux
général »
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``general rate reduction percentage'' of a
corporation for a taxation year is the total of
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(a) that proportion of 1% that the number
of days in the year that are in 2001 is of
the number of days in the year;
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(b) that proportion of 3% that the number
of days in the year that are in 2002 is of
the number of days in the year;
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(c) that proportion of 5% that the number
of days in the year that are in 2003 is of
the number of days in the year; and
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(d) that proportion of 7% that the number
of days in the year that are after 2003 is
of the number of days in the year.
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| General
deduction
from tax
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(2) There may be deducted from a
corporation's tax otherwise payable under this
Part for a taxation year the product obtained
by multiplying the corporation's general rate
reduction percentage for the year by the
corporation's full-rate taxable income for the
year.
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| CCPC
deduction
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(3) There may be deducted from the tax
otherwise payable under this Part for a
taxation year by a Canadian-controlled
private corporation the product obtained by
multiplying the corporation's CCPC rate
reduction percentage for the year by the
amount by which the least of
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(a) 3/2 of the corporation's business limit
for the year, as determined under section
125 for the purpose of paragraph 125(1)(c),
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(b) the amount that would be determined
under paragraph 125(1)(a) in respect of the
corporation for the year if the references in
the description of M in the definition
``specified partnership income'' in
subsection 125(7) to ``$200,000'' and
``$548'' were read as references to
``$300,000'' and ``$822'', respectively, and
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(i) the amount that would, if subsection
126(1) did not apply in respect of any
amount included in the corporation's
aggregate investment income for the year
(determined under subsection 129(4)), be
determined under paragraph 125(1)(b) in
respect of the corporation for the year
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(ii) the corporation's aggregate
investment income for the year,
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exceeds the total of
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(d) the amounts that would, if paragraph (a)
of the definition ``full-rate taxable income''
in subsection (1) applied to the corporation
for the year, be determined under
subparagraphs (a)(i) to (iv) of that
definition in respect of the corporation for
the year, and
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(e) 100/16 of the amount, if any, deducted
under subsection 125(1) from the
corporation's tax otherwise payable under
this Part for the year.
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(2) Subsection (1) applies to the 2001 and
subsequent taxation years except that, in its
application to a taxation year that begins
before 2001, the amount determined under
subparagraph (b)(iv) of the definition ``full
rate taxable income'' in subsection 123.4(1)
of the Act, as enacted by subsection (1), is
deemed to be the amount otherwise so
determined multiplied by the number
obtained by dividing the number of days in
the year by the number of days in the year
that are after 2000.
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113. (1) The portion of paragraph
125(1)(b) of the Act before subparagraph
(iii) is replaced by the following:
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(b) the amount, if any, by which the
corporation's taxable income for the year
exceeds the total of
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(i) 10/3 of the total of the amounts that
would be deductible under subsection
126(1) from the tax for the year otherwise
payable under this Part by it if those
amounts were determined without
reference to sections 123.3 and 123.4 ,
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(ii) 10/4 of the total of the amounts that
would be deductible under subsection
126(2) from the tax for the year otherwise
payable under this Part by it if those
amounts were determined without
reference to section 123.4 , and
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(2) The definition ``Canadian-controlled
private corporation'' in subsection 125(7)
of the Act is replaced by the following:
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``Canadian-co
ntrolled
private
corporation''
« société
privée sous
contrôle
canadien »
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``Canadian-controlled private corporation''
means a private corporation that is a
Canadian corporation other than
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(a) a corporation controlled, directly or
indirectly in any manner whatever, by
one or more non-resident persons, by one
or more public corporations (other than a
prescribed venture capital corporation),
by one or more corporations described in
paragraph (c) , or by any combination of
them ,
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(b) a corporation that would, if each
share of the capital stock of a corporation
that is owned by a non-resident person,
by a public corporation (other than a
prescribed venture capital corporation),
or by a corporation described in
paragraph (c) were owned by a particular
person, be controlled by the particular
person, or
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(c) a corporation a class of the shares of
the capital stock of which is listed on a
prescribed stock exchange;
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(3) Subsection (1) applies to the 2001 and
subsequent taxation years.
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(4) Subsection (2) applies to taxation
years that begin after 1999.
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114. (1) Subparagraph 125.1(1)(b)(ii) of
the Act is replaced by the following:
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(ii) 10/4 of the total of the amounts that
would be deductible under subsection
126(2) from the tax for the year otherwise
payable under this Part by the
corporation if those amounts were
determined without reference to section
123.4 , and
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(2) The portion of subsection 125.1(2) of
the Act before the formula is replaced by
the following:
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| Electrical
energy and
steam
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(2) A corporation that generates electrical
energy for sale, or produces steam for sale , in
a taxation year may deduct from its tax
otherwise payable under this Part for the year
7% of the amount determined by the formula
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(3) Paragraphs 125.1(5)(a) and (b) of the
Act are replaced by the following:
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(a) electrical energy and steam are deemed
to be goods ; and
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(b) the generation of electrical energy for
sale, and the production of steam for sale,
are deemed to be, subject to paragraph (l) of
the definition ``manufacturing or
processing'' in subsection (3),
manufacturing or processing.
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(4) Subsection (1) applies to the 2001 and
subsequent taxation years.
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(5) Subsections (2) and (3) apply to
taxation years that end after 1999 except
that, in its application to such a taxation
year that begins before 2002, the reference
to ``7%'' in subsection 125.1(2) of the Act,
as enacted by subsection (2), shall be read as
a reference to the total of
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(a) 0% multiplied by the number of days
in the year that are before 1999,
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(b) in the case of a corporation that in
1999 generated electrical energy for sale,
or produced steam for use in the
generation of electrical energy for sale,
that proportion of 1% that the number of
days in the taxation year that are in the
1999 calendar year is of the number of
days in the taxation year,
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(c) in the case of a corporation to which
paragraph (b) does not apply, 0%
multiplied by the number of days in the
taxation year that are in the 1999
calendar year,
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(d) that proportion of 3% that the
number of days in the taxation year that
are in the 2000 calendar year is of the
number of days in the taxation year,
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(e) that proportion of 5% that the
number of days in the taxation year that
are in the 2001 calendar year is of the
number of days in the taxation year,
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(f) that proportion of 7% that the number
of days in the taxation year that are in the
2002 calendar year is of the number of
days in the taxation year, and
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(g) that proportion of 7% that the
number of days in the taxation year that
are in the 2003 calendar year is of the
number of days in the taxation year.
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115. (1) Subsection 125.4(2) of the Act is
amended by striking out the word ``and'' at
the end of paragraph (a), by adding the
word ``and'' at the end of paragraph (b) and
by adding the following after paragraph
(b):
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(c) that definition does not apply to an
amount to which section 37 applies.
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(2) Subsection (1) applies after November
1999.
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116. (1) The portion of the definition
``eligible production corporation'' in
subsection 125.5(1) of the Act after
paragraph (b) and before paragraph (c) is
replaced by the following:
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except a corporation that is, at any time in
the year ,
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(2) Subsection (1) applies after November
1999.
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117. (1) Clause 126(1)(b)(ii)(A) of the Act
is replaced by the following:
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(A) the amount, if any, by which,
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(I) if the taxpayer was resident in
Canada throughout the year, the
taxpayer's income for the year
computed without reference to
paragraph 20(1)(ww), and
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(II) if the taxpayer was non-resident
at any time in the year, the amount
determined under paragraph 114(a)
in respect of the taxpayer for the
year
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(III) the total of all amounts each of
which is an amount deducted under
section 110.6 or paragraph
111(1)(b), or deductible under any
of paragraphs 110(1)(d) to (d.3), (f)
and (j) and sections 112 and 113, in
computing the taxpayer's taxable
income for the year , and
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(2) Section 126 of the Act is amended by
adding the following after subsection (1):
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| Authorized
foreign bank
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(1.1) In applying subsections 20(12) and
(12.1) and this section in respect of an
authorized foreign bank,
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(a) the bank is deemed, for the purposes of
subsections (1), (4) to (5), (6) and (7), to be
resident in Canada in respect of its
Canadian banking business;
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(b) the references in subsection 20(12) and
paragraph (1)(a) to ``country other than
Canada'' shall be read as a reference to
``country that is neither Canada nor a
country in which the taxpayer is resident at
any time in the taxation year'';
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(c) the reference in subparagraph (1)(b)(i)
to ``from sources in that country'' shall be
read as a reference to ``in respect of its
Canadian banking business from sources in
that country'';
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(d) subparagraph (1)(b)(ii) shall be read as
follows:
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(A) the taxpayer's taxable income
earned in Canada for the year, and
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(B) the total of the taxpayer's income
for the year from its Canadian banking
business and the amount determined in
respect of the taxpayer under
subparagraph 115(1)(a)(vii) for the
year.'';
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(e) in computing the non-business income
tax paid by the bank for a taxation year to
the government of a country other than
Canada, there shall be included only taxes
that relate to amounts that are included in
computing the bank's taxable income
earned in Canada from its Canadian
banking business; and
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(f) the definition ``tax-exempt income'' in
subsection (7) shall be read as follows:
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`` ``tax-exempt income'' means income of a
taxpayer from a source in a particular
country in respect of which
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(a) the taxpayer is, because of a
comprehensive agreement or convention
for the elimination of double taxation on
income, which has the force of law in the
particular country and to which a country
in which the taxpayer is resident is a
party, entitled to an exemption from all
income or profits taxes, imposed in the
particular country, to which the
agreement or convention applies, and
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(b) no income or profits tax to which the
agreement or convention does not apply
is imposed in the particular country;''.
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(3) Clause 126(2.1)(a)(ii)(A) of the Act is
replaced by the following:
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(A) the amount, if any, by which
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(I) if the taxpayer is resident in
Canada throughout the year, the
taxpayer's income for the year
computed without reference to
paragraph 20(1)(ww), and
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(II) if the taxpayer is non-resident at
any time in the year, the amount
determined under paragraph 114(a)
in respect of the taxpayer for the
year
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