VIII, s. 68, c. 8, s. 15, c. 21, s. 611995, c. 3, s. 371996, c. 21, s. 301997, c. 25, s. 351998, c. 19, ss. 33, 146, 3061999, c. 22, s. 482000, c. 9, s. 5602001, c. 17, ss. 118, 2132003, c. 15, s. 81, c. 19, s. 73, c. 28, s. 142004 c. 24, s. 242005, c. 19, s. 282006, c. 4, s. 75, c. 9, s. 642007, c. 2, s. 34, c. 35, s. 432008, c. 28, s. 192009, c. 2, ss. 40, 822010, c. 12, s. 142011, c. 24, s. 402012, c. 19, s. 5, c. 31, s. 272013, c. 33, s. 14, c. 34, s. 269, c. 40, s. 572014, c. 20, s. 18, c. 39, s. 422015, c. 36, s. 122016, c. 7, s. 352017, c. 20, s. 23, c. 33, s. 502018, c. 12, s. 212019, c. 29, s. 242022, c. 19, s. 22
127.1(1)Where a taxpayer (other than a person exempt from tax under section 149) files(a)with the taxpayer’s return of income (other than a return of income filed under subsection 70(2) or 104(23), paragraph 128(2)(f) or subsection 150(4)) for a taxation year, or(b)with a prescribed form amending a return referred to in paragraph 127.1(1)(a)a prescribed form containing prescribed information, the taxpayer is deemed to have paid on the taxpayer’s balance-due day for the year an amount on account of the taxpayer’s tax payable under this Part for the year equal to the lesser of(c)the taxpayer’s refundable investment tax credit for the year, and(d)the amount designated by the taxpayer in the prescribed form.Marginal note:Definitions(2)In this section,excluded corporationexcluded corporationfor a taxation year means a corporation that is, at any time in the year,(a)controlled directly or indirectly, in any manner whatever, by(i)one or more persons exempt from tax under this Part by virtue of section 149,(ii)Her Majesty in right of a province, a Canadian municipality or any other public authority, or(iii)any combination of persons each of whom is a person referred to in subparagraph (i) or (ii), or(b)related to any person referred to in paragraph (a); (société exclue)qualifying corporationqualifying corporation, for a particular taxation year that ends in a calendar year, means a particular corporation that is a Canadian-controlled private corporation in the particular taxation year the taxable income of which for its immediately preceding taxation year  —  together with, if the particular corporation is associated in the particular taxation year with one or more other corporations (in this subsection referred to as “associated corporations”), the taxable income of each associated corporation for its last taxation year that ended in the preceding calendar year (determined before taking into consideration the specified future tax consequences for that last year)  —  does not exceed the qualifying income limit, if any, of the particular corporation for the particular taxation year; (société admissible)qualifying income limitqualifying income limitof a corporation for a particular taxation year is the amount determined by the formula$500,000 × [($40 million – A)/$40 million]whereAis(a)nil, if $10 million is greater than or equal to the amount (in paragraph (b) referred to as the “taxable capital amount”) that is the total of the corporation’s taxable capital employed in Canada (within the meaning assigned by section 181.2 or 181.3) for its immediately preceding taxation year and the taxable capital employed in Canada (within the meaning assigned by section 181.2 or 181.3) of each associated corporation for the associated corporation’s last taxation year that ended in the last calendar year that ended before the end of the particular taxation year, or(b)in any other case, the lesser of $40 million and the amount by which the taxable capital amount exceeds $10 million; (plafond de revenu admissible)refundable investment tax creditrefundable investment tax creditof a taxpayer for a taxation year means, in the case of a taxpayer who is(a)a qualifying corporation for the year,(b)an individual other than a trust, or(c)a trust each beneficiary of which is a person referred to in paragraph (a) or (b),an amount equal to 40% of the amount, if any, by which(d)the total of all amounts included in computing the taxpayer’s investment tax credit at the end of the year(i)in respect of property (other than qualified small-business property) acquired, or a qualified expenditure (other than an expenditure in respect of which an amount is included under paragraph (f) in computing the taxpayer’s refundable investment tax credit for the year) incurred, by the taxpayer in the year, or(ii)because of paragraph (b) of the definitioninvestment tax creditin subsection 127(9) in respect of a property (other than qualified small-business property) acquired or a qualified expenditure (other than an expenditure in respect of which an amount is included under paragraph (f) in computing the taxpayer’s refundable investment tax credit for the year) incurredexceeds(e)the total of(i)the portion of the total of all amounts deducted under subsection 127(5) for the year or a preceding taxation year (other than an amount deemed by subsection 127.1(3) to be so deducted for the year) that can reasonably be considered to be in respect of the total determined under paragraph (d), and(ii)the portion of the total of all amounts required by subsection 127(6) or 127(7) to be deducted in computing the taxpayer’s investment tax credit at the end of the year that can reasonably be considered to be in respect of the total determined under paragraph (d),plus where the taxpayer is a qualifying corporation (other than an excluded corporation) for the year, the amount, if any, by which(f)the total of(i)the portion of the amount required by subsection 127(10.1) to be added in computing the taxpayer’s investment tax credit at the end of the year that is in respect of qualified expenditures incurred by the taxpayer in the year, and(ii)all amounts determined under paragraph (a.1) of the definitioninvestment tax creditin subsection 127(9) in respect of expenditures for which an amount is included in subparagraph (i)exceeds(g)the total of(i)the portion of the total of all amounts deducted by the taxpayer under subsection 127(5) for the year or a preceding taxation year (other than an amount deemed by subsection 127.1(3) to be so deducted for the year) that can reasonably be considered to be in respect of the total determined under paragraph (f), and(ii)the portion of the total of all amounts required by subsection 127(6) to be deducted in computing the taxpayer’s investment tax credit at the end of the year that can reasonably be considered to be in respect of the total determined under paragraph (f). (crédit d’impôt à l’investissement remboursable)Marginal note:Addition to refundable investment tax credit(2.01)In the case of a taxpayer that is a Canadian-controlled private corporation other than a qualifying corporation or an excluded corporation, the refundable investment tax credit of the taxpayer for a taxation year is the amount, if any, by which(a)the total of(i)the portion of the amount required by subsection 127(10.1) to be added in computing the taxpayer’s investment tax credit at the end of the year that is in respect of qualified expenditures incurred by the taxpayer in the year, and(ii)all amounts determined under paragraph (a.1) of the definitioninvestment tax creditin subsection 127(9) in respect of expenditures for which an amount is included in subparagraph (i)exceeds(b)the total of(i)the portion of the total of all amounts deducted by the taxpayer under subsection 127(5) for the year or a preceding taxation year (other than an amount deemed by subsection (3) to have been so deducted for the year) that can reasonably be considered to be in respect of the total determined under paragraph (a), and(ii)the portion of the total of all amounts required by subsection 127(6) to be deducted in computing the taxpayer’s investment tax credit at the end of the year that can reasonably be considered to be in respect of the total determined under paragraph (a).Marginal note:Application of s. 127(9)(2.1)The definitions in subsection 127(9) apply to this section.Marginal note:Refundable investment tax credit — associated CCPCs(2.2)If a particular Canadian-controlled private corporation is associated with another corporation in circumstances where those corporations would not be associated if the Act were read without reference to paragraph 256(1.2)(a), the particular corporation has issued shares to one or more persons who have been issued shares by the other corporation and there is at least one shareholder of the particular corporation who is not a shareholder of the other corporation or one shareholder of the other corporation who is not a shareholder of the particular corporation, the particular corporation is not associated with the other corporation for the purpose of calculating that portion of the particular corporation’s refundable investment tax credit that is in respect of qualified expenditures.Marginal note:Application of subsection (2.2)(2.3)Subsection (2.2) applies to the particular corporation and the other corporation referred to in that subsection only if the Minister is satisfied that(a)the particular corporation and the other corporation are not otherwise associated under this Act; and(b)the existence of one or more shareholders of the particular corporation who is not a shareholder of the other corporation, or the existence of one or more shareholders of the other corporation who is not a shareholder of the particular corporation, is not for the purpose of satisfying the requirements of subsection (2.2) or 127(10.22).Marginal note:Deemed deduction(3)For the purposes of this Act, the amount deemed under subsection 127.1(1) to have been paid by a taxpayer for a taxation year shall be deemed to have been deducted by the taxpayer under subsection 127(5) for the year.Marginal note:Qualifying income limit determined in certain cases(4)For the purpose of the definition ofqualifying corporationin subsection (2), where a Canadian-controlled private corporation has a taxation year that is less than 51 weeks, the taxable income of the corporation for the year shall be determined by multiplying that amount by the ratio that 365 is of the number of days in that year.
(a)with the taxpayer’s return of income (other than a return of income filed under subsection 70(2) or 104(23), paragraph 128(2)(f) or subsection 150(4)) for a taxation year, or(b)with a prescribed form amending a return referred to in paragraph 127.1(1)(a)
(c)the taxpayer’s refundable investment tax credit for the year, and(d)the amount designated by the taxpayer in the prescribed form.
(a)controlled directly or indirectly, in any manner whatever, by(i)one or more persons exempt from tax under this Part by virtue of section 149,(ii)Her Majesty in right of a province, a Canadian municipality or any other public authority, or(iii)any combination of persons each of whom is a person referred to in subparagraph (i) or (ii), or(b)related to any person referred to in paragraph (a); (société exclue)
(i)one or more persons exempt from tax under this Part by virtue of section 149,(ii)Her Majesty in right of a province, a Canadian municipality or any other public authority, or(iii)any combination of persons each of whom is a person referred to in subparagraph (i) or (ii), or
(a)nil, if $10 million is greater than or equal to the amount (in paragraph (b) referred to as the “taxable capital amount”) that is the total of the corporation’s taxable capital employed in Canada (within the meaning assigned by section 181.2 or 181.3) for its immediately preceding taxation year and the taxable capital employed in Canada (within the meaning assigned by section 181.2 or 181.3) of each associated corporation for the associated corporation’s last taxation year that ended in the last calendar year that ended before the end of the particular taxation year, or(b)in any other case, the lesser of $40 million and the amount by which the taxable capital amount exceeds $10 million; (plafond de revenu admissible)
(a)a qualifying corporation for the year,(b)an individual other than a trust, or(c)a trust each beneficiary of which is a person referred to in paragraph (a) or (b),
(d)the total of all amounts included in computing the taxpayer’s investment tax credit at the end of the year(i)in respect of property (other than qualified small-business property) acquired, or a qualified expenditure (other than an expenditure in respect of which an amount is included under paragraph (f) in computing the taxpayer’s refundable investment tax credit for the year) incurred, by the taxpayer in the year, or(ii)because of paragraph (b) of the definitioninvestment tax creditin subsection 127(9) in respect of a property (other than qualified small-business property) acquired or a qualified expenditure (other than an expenditure in respect of which an amount is included under paragraph (f) in computing the taxpayer’s refundable investment tax credit for the year) incurred
(i)in respect of property (other than qualified small-business property) acquired, or a qualified expenditure (other than an expenditure in respect of which an amount is included under paragraph (f) in computing the taxpayer’s refundable investment tax credit for the year) incurred, by the taxpayer in the year, or(ii)because of paragraph (b) of the definitioninvestment tax creditin subsection 127(9) in respect of a property (other than qualified small-business property) acquired or a qualified expenditure (other than an expenditure in respect of which an amount is included under paragraph (f) in computing the taxpayer’s refundable investment tax credit for the year) incurred
(e)the total of(i)the portion of the total of all amounts deducted under subsection 127(5) for the year or a preceding taxation year (other than an amount deemed by subsection 127.1(3) to be so deducted for the year) that can reasonably be considered to be in respect of the total determined under paragraph (d), and(ii)the portion of the total of all amounts required by subsection 127(6) or 127(7) to be deducted in computing the taxpayer’s investment tax credit at the end of the year that can reasonably be considered to be in respect of the total determined under paragraph (d),
(i)the portion of the total of all amounts deducted under subsection 127(5) for the year or a preceding taxation year (other than an amount deemed by subsection 127.1(3) to be so deducted for the year) that can reasonably be considered to be in respect of the total determined under paragraph (d), and(ii)the portion of the total of all amounts required by subsection 127(6) or 127(7) to be deducted in computing the taxpayer’s investment tax credit at the end of the year that can reasonably be considered to be in respect of the total determined under paragraph (d),
(f)the total of(i)the portion of the amount required by subsection 127(10.1) to be added in computing the taxpayer’s investment tax credit at the end of the year that is in respect of qualified expenditures incurred by the taxpayer in the year, and(ii)all amounts determined under paragraph (a.1) of the definitioninvestment tax creditin subsection 127(9) in respect of expenditures for which an amount is included in subparagraph (i)
(i)the portion of the amount required by subsection 127(10.1) to be added in computing the taxpayer’s investment tax credit at the end of the year that is in respect of qualified expenditures incurred by the taxpayer in the year, and(ii)all amounts determined under paragraph (a.1) of the definitioninvestment tax creditin subsection 127(9) in respect of expenditures for which an amount is included in subparagraph (i)
(g)the total of(i)the portion of the total of all amounts deducted by the taxpayer under subsection 127(5) for the year or a preceding taxation year (other than an amount deemed by subsection 127.1(3) to be so deducted for the year) that can reasonably be considered to be in respect of the total determined under paragraph (f), and(ii)the portion of the total of all amounts required by subsection 127(6) to be deducted in computing the taxpayer’s investment tax credit at the end of the year that can reasonably be considered to be in respect of the total determined under paragraph (f). (crédit d’impôt à l’investissement remboursable)
(i)the portion of the total of all amounts deducted by the taxpayer under subsection 127(5) for the year or a preceding taxation year (other than an amount deemed by subsection 127.1(3) to be so deducted for the year) that can reasonably be considered to be in respect of the total determined under paragraph (f), and(ii)the portion of the total of all amounts required by subsection 127(6) to be deducted in computing the taxpayer’s investment tax credit at the end of the year that can reasonably be considered to be in respect of the total determined under paragraph (f). (crédit d’impôt à l’investissement remboursable)
(a)the total of(i)the portion of the amount required by subsection 127(10.1) to be added in computing the taxpayer’s investment tax credit at the end of the year that is in respect of qualified expenditures incurred by the taxpayer in the year, and(ii)all amounts determined under paragraph (a.1) of the definitioninvestment tax creditin subsection 127(9) in respect of expenditures for which an amount is included in subparagraph (i)
(i)the portion of the amount required by subsection 127(10.1) to be added in computing the taxpayer’s investment tax credit at the end of the year that is in respect of qualified expenditures incurred by the taxpayer in the year, and(ii)all amounts determined under paragraph (a.1) of the definitioninvestment tax creditin subsection 127(9) in respect of expenditures for which an amount is included in subparagraph (i)
(b)the total of(i)the portion of the total of all amounts deducted by the taxpayer under subsection 127(5) for the year or a preceding taxation year (other than an amount deemed by subsection (3) to have been so deducted for the year) that can reasonably be considered to be in respect of the total determined under paragraph (a), and(ii)the portion of the total of all amounts required by subsection 127(6) to be deducted in computing the taxpayer’s investment tax credit at the end of the year that can reasonably be considered to be in respect of the total determined under paragraph (a).
(i)the portion of the total of all amounts deducted by the taxpayer under subsection 127(5) for the year or a preceding taxation year (other than an amount deemed by subsection (3) to have been so deducted for the year) that can reasonably be considered to be in respect of the total determined under paragraph (a), and(ii)the portion of the total of all amounts required by subsection 127(6) to be deducted in computing the taxpayer’s investment tax credit at the end of the year that can reasonably be considered to be in respect of the total determined under paragraph (a).
(a)the particular corporation and the other corporation are not otherwise associated under this Act; and(b)the existence of one or more shareholders of the particular corporation who is not a shareholder of the other corporation, or the existence of one or more shareholders of the other corporation who is not a shareholder of the particular corporation, is not for the purpose of satisfying the requirements of subsection (2.2) or 127(10.22).
[NOTE: Application provisions are not included in the consolidated textsee relevant amending Acts and regulations.]R.S., 1985, c. 1 (5th Supp.), s. 127.11994, c. 8, s. 161995, c. 3, s. 381996, c. 21, s. 311997, c. 25, s. 361998, c. 19, s. 1472005, c. 19, s. 292009, c. 2, s. 412012, c. 31, s. 282013, c. 40, s. 58
127.2(1)There may be deducted from the tax otherwise payable under this Part by a taxpayer for a taxation year an amount not exceeding the total of(a)the taxpayer’s share-purchase tax credit for the year, and(b)the taxpayer’s unused share-purchase tax credit for the taxation year immediately following the year.Marginal note:Persons exempt from tax(2)Where a taxpayer who was throughout a taxation year a person described in any of paragraphs 149(1)(e) to (y) files with the taxpayer’s return of income under this Part for the year a prescribed form containing prescribed information, the taxpayer shall be deemed to have paid, on the day on which the return is filed, an amount, on account of the taxpayer’s tax under this Part for the year, equal to the taxpayer’s share-purchase tax credit for the year.Marginal note:Trust(3)Where, in a particular taxation year of a taxpayer who is a beneficiary under a trust, an amount is included in computing the share-purchase tax credit of the trust for its taxation year ending in that particular taxation year, the trust may, in its return of income for its taxation year ending in that particular taxation year, designate as attributable to the taxpayer such portion of that amount(a)as may, having regard to all the circumstances (including the terms and conditions of the trust arrangement), reasonably be considered to be attributable to the taxpayer, and(b)as was not designated by the trust in respect of any other beneficiary of that trust,and, where the trust so designates such a portion, an amount equal to that portion shall be(c)added in computing the share-purchase tax credit of the taxpayer for the particular taxation year, and(d)deducted in computing the share-purchase tax credit of the trust for its taxation year ending in the particular taxation year.Marginal note:Exclusion of certain trusts(3.1)For the purposes of subsection 127.2(3), a trust does not include a trust that is(a)governed by an employee benefit plan or a revoked deferred profit sharing plan; or(b)exempt from tax under section 149.Marginal note:Partnership(4)Where, in a taxation year of a taxpayer who is a member of a partnership, an amount is included in computing the share-purchase tax credit of the partnership for its fiscal period ending in that year, such portion of that amount as may reasonably be considered to be the taxpayer’s share thereof shall be(a)added in computing the share-purchase tax credit of the taxpayer for that year; and(b)deducted in computing the share-purchase tax credit of the partnership for that fiscal period.Marginal note:Cooperative corporation(5)Where at any particular time in a taxation year a taxpayer that is a cooperative corporation (within the meaning assigned by subsection 136(2)) has, as required by subsection 135(3), deducted or withheld an amount from a payment made by it to any person pursuant to an allocation in proportion to patronage, the taxpayer may deduct from the amount otherwise required by subsection 135(3) to be remitted to the Receiver General, an amount not exceeding the amount, if any, by which(a)the amount that would, but for this subsection, be its share-purchase tax credit for the taxation year in which it made the payment if that year had ended immediately before the particular timeexceeds(b)the total of all amounts each of which is the amount deducted by virtue of this subsection from any amount otherwise required to be remitted by subsection 135(3) in respect of payments made by it before the particular time and in the taxation year,and the amount, if any, so deducted from the amount otherwise required to be remitted by subsection 135(3) shall be(c)deducted in computing the share-purchase tax credit of the taxpayer for the taxation year, and(d)deemed to have been remitted by the taxpayer to the Receiver General on account of tax under this Part of the person to whom that payment was made.Marginal note:Definitions(6)In this section,share-purchase tax creditshare-purchase tax creditof a taxpayer for a taxation year means the amount determined by the formula(A + B) - CwhereAis the total of all amounts each of which is an amount designated by a corporation under subsection 192(4) in respect of a share acquired by the taxpayer in the year where the taxpayer is the first person, other than a broker or dealer in securities, to be a registered holder,Bis the total of all amounts each of which is an amount required by subsection 127.2(3) or (4) to be added in computing the taxpayer’s share-purchase tax credit for the year, andCis the total of all amounts each of which is an amount required by subsection 127.2(3), (4) or (5) to be deducted in computing the taxpayer’s share-purchase tax credit for the year; (crédit d’impôt à l’achat d’actions)unused share-purchase tax creditunused share-purchase tax creditof a taxpayer for a taxation year means the amount determined by the formulaA - (B + C)whereAis the taxpayer’s share-purchase tax credit for the year,Bis the taxpayer’s tax otherwise payable under this Part for the year, the amount deemed by subsection 127.2(2) to have been paid on account of the taxpayer’s tax payable under this Part for the year or, where Division E.1 is applicable to the taxpayer for the year, the amount, if any, by which the taxpayer’s tax otherwise payable under this Part for the year exceeds the taxpayer’s minimum amount for the year determined under section 127.51, as the case may be, andCis the taxpayer’s refundable Part VII tax on hand at the end of the year. (partie inutilisée du crédit d’impôt à l’achat d’actions)Marginal note:Definition oftax otherwise payable(7)In this section,tax otherwise payableunder this Part by a taxpayer means the amount that would, but for this section and section 120.1, be the tax payable under this Part by the taxpayer.Marginal note:Deemed cost of acquisition(8)For the purposes of this Act, where, at any time in a taxation year, a taxpayer has acquired a share and is the first registered holder of the share, other than a broker or dealer in securities, and an amount is, at any time, designated by a corporation under subsection 192(4) in respect of the share, the following rules apply:(a)the taxpayer shall be deemed to have acquired the share at a cost to the taxpayer equal to the amount by which(i)its cost to the taxpayer as otherwise determinedexceeds(ii)the amount so designated in respect of the share; and(b)where the amount determined under subparagraph 127.2(8)(a)(ii) exceeds the amount determined under subparagraph 127.2(8)(a)(i), the excess shall(i)where the share is a capital property to the taxpayer, be deemed to be a capital gain of the taxpayer for the year from the disposition of that property, and(ii)in any other case, be included in computing the income of the taxpayer for the year,and the cost to the taxpayer of the share shall be deemed to be nil.Marginal note:Partnership(9)For the purposes of this section and subsection 193(5), a partnership shall be deemed to be a person and its taxation year shall be deemed to be its fiscal period.Marginal note:Election re first holder(10)Where a share of a public corporation has been lawfully distributed to the public in accordance with a prospectus, registration statement or similar document filed with a public authority in Canada pursuant to and in accordance with the law of Canada or of any province, and, where required by law, accepted for filing by such a public authority, the corporation, if it has designated an amount under subsection 192(4) in respect of the share, may, in the prescribed form required to be filed under that subsection, elect that, for the purposes of this section, the first person, other than a broker or dealer in securities, to have acquired the share (and no other person) shall be considered to be the first person to be a registered holder of the share.Marginal note:Calculation of consideration(11)For greater certainty,(a)for the purposes of this section and Part VII, the amount of consideration for which a share is acquired and issued includes the amount of any consideration for the designation under subsection 192(4) in respect of the share; and(b)the amount received by a corporation as consideration for a designation under subsection 192(4) in respect of a share issued by it shall not be included in computing its income.
(a)the taxpayer’s share-purchase tax credit for the year, and(b)the taxpayer’s unused share-purchase tax credit for the taxation year immediately following the year.
(a)as may, having regard to all the circumstances (including the terms and conditions of the trust arrangement), reasonably be considered to be attributable to the taxpayer, and(b)as was not designated by the trust in respect of any other beneficiary of that trust,
(c)added in computing the share-purchase tax credit of the taxpayer for the particular taxation year, and(d)deducted in computing the share-purchase tax credit of the trust for its taxation year ending in the particular taxation year.
(a)governed by an employee benefit plan or a revoked deferred profit sharing plan; or(b)exempt from tax under section 149.
(a)added in computing the share-purchase tax credit of the taxpayer for that year; and(b)deducted in computing the share-purchase tax credit of the partnership for that fiscal period.
(a)the amount that would, but for this subsection, be its share-purchase tax credit for the taxation year in which it made the payment if that year had ended immediately before the particular time
(b)the total of all amounts each of which is the amount deducted by virtue of this subsection from any amount otherwise required to be remitted by subsection 135(3) in respect of payments made by it before the particular time and in the taxation year,
(c)deducted in computing the share-purchase tax credit of the taxpayer for the taxation year, and(d)deemed to have been remitted by the taxpayer to the Receiver General on account of tax under this Part of the person to whom that payment was made.
(a)the taxpayer shall be deemed to have acquired the share at a cost to the taxpayer equal to the amount by which(i)its cost to the taxpayer as otherwise determinedexceeds(ii)the amount so designated in respect of the share; and(b)where the amount determined under subparagraph 127.2(8)(a)(ii) exceeds the amount determined under subparagraph 127.2(8)(a)(i), the excess shall(i)where the share is a capital property to the taxpayer, be deemed to be a capital gain of the taxpayer for the year from the disposition of that property, and(ii)in any other case, be included in computing the income of the taxpayer for the year,and the cost to the taxpayer of the share shall be deemed to be nil.
(i)its cost to the taxpayer as otherwise determined
(ii)the amount so designated in respect of the share; and
(i)where the share is a capital property to the taxpayer, be deemed to be a capital gain of the taxpayer for the year from the disposition of that property, and(ii)in any other case, be included in computing the income of the taxpayer for the year,
(a)for the purposes of this section and Part VII, the amount of consideration for which a share is acquired and issued includes the amount of any consideration for the designation under subsection 192(4) in respect of the share; and(b)the amount received by a corporation as consideration for a designation under subsection 192(4) in respect of a share issued by it shall not be included in computing its income.
[NOTE: Application provisions are not included in the consolidated textsee relevant amending Acts and regulations.]1984, c. 1, s. 73, c. 45, s. 451988, c. 55, s. 108
127.3(1)There may be deducted from the tax otherwise payable under this Part by a taxpayer for a taxation year an amount not exceeding the total of the taxpayer’s(a)scientific research and experimental development tax credit for the year, and(b)unused scientific research and experimental development tax credit for the taxation year immediately following the year.Marginal note:Definitions(2)In this section,scientific research and experimental development tax creditscientific research and experimental development tax creditof a taxpayer for a taxation year means the amount determined by the formulaA - BwhereAis the total of all amounts each of which is an amount equal to(a)where the taxpayer is a corporation, 50%, or(b)where the taxpayer is an individual other than a trust, 34%of an amount designated by a corporation under subsection 194(4) in respect of(c)a share acquired by the taxpayer in the year where the taxpayer is the first person, other than a broker or dealer in securities, to be a registered holder thereof,(d)a bond, debenture, bill, note, mortgage, hypothecary claim or similar obligation (in this section referred to as a “debt obligation”) acquired by the taxpayer in the year where the taxpayer is the first person, other than a broker or dealer in securities, to be a registered holder of that debt obligation, or(e)a right acquired by the taxpayer in the year where the taxpayer is the first person, other than a broker or dealer in securities, to have acquired that right, andBis the total of all amounts required by subsection 127.3(5) to be deducted in computing the taxpayer’s scientific research and experimental development tax credit for the year; (crédit d’impôt pour des activités de recherche scientifique et de développement expérimental)unused scientific research and experimental development tax creditunused scientific research and experimental development tax creditof a taxpayer for a taxation year means the amount determined by the formulaA - (B + C)whereAis the taxpayer’s scientific research and experimental development tax credit for the year,Bis the taxpayer’s tax otherwise payable under this Part for the year or, where Division E.1 is applicable to the taxpayer for the year, the amount, if any, by which the taxpayer’s tax otherwise payable under this Part for the year exceeds the taxpayer’s minimum amount for the year determined under section 127.51, as the case may be, andCis the taxpayer’s refundable Part VIII tax on hand at the end of the year. (partie inutilisée du crédit d’impôt pour des activités de recherche scientifique et de développement expérimental)Marginal note:Trust(3)For the purposes of this section and section 53, where a taxpayer, other than a broker or dealer in securities, is a beneficiary under a trust and an amount is designated by a corporation under subsection 194(4) in respect of a share, debt obligation or right acquired by the trust in a taxation year of the trust where the trust is the first person, other than a broker or dealer in securities, to be a registered holder of the share or debt obligation or to have acquired the right, as the case may be,(a)the trust may, in its return of income for that year, specify such portion of that amount as may, having regard to all the circumstances (including the terms and conditions of the trust arrangement), reasonably be considered to be attributable to the taxpayer and as was not specified by the trust in respect of any other beneficiary under that trust; and(b)the portion specified pursuant to paragraph 127.3(3)(a) shall be deemed to be an amount designated on the last day of that year by the corporation under subsection 194(4) in respect of a share, debt obligation or right, as the case may be, acquired by the taxpayer on that day where the taxpayer is the first person, other than a broker or dealer in securities, to be a registered holder of the share or debt obligation or to have acquired the right, as the case may be.Marginal note:Exclusion of certain trusts(3.1)For the purposes of subsection (3), a trust does not include a trust that is(a)governed by an employee benefit plan or a revoked deferred profit sharing plan; or(b)exempt from tax under section 149.Marginal note:Partnership(4)For the purposes of this section and section 53, where a taxpayer, other than a broker or dealer in securities, is a member of a partnership and an amount is designated by a corporation under subsection 194(4) in respect of a share, debt obligation or right acquired by the partnership in a taxation year of the partnership where the partnership is the first person, other than a broker or dealer in securities, to be a registered holder of the share or debt obligation or to have acquired the right, as the case may be, such portion of that amount as may reasonably be considered to be the taxpayer’s share thereof shall be deemed to be an amount designated on the last day of that year by the corporation under subsection 194(4) in respect of a share, debt obligation or right, as the case may be, acquired by the taxpayer on that day where the taxpayer is the first person, other than a broker or dealer in securities, to be a registered holder of the share or debt obligation or to have acquired the right, as the case may be.Marginal note:Cooperative corporation(5)Where at any particular time in a taxation year a taxpayer that is a cooperative corporation (within the meaning assigned by subsection 136(2)) has, as required by subsection 135(3), deducted or withheld an amount from a payment made by it to any person pursuant to an allocation in proportion to patronage, the taxpayer may deduct from the amount otherwise required by subsection 135(3) to be remitted to the Receiver General, an amount not exceeding the amount, if any, by which(a)the amount that would, but for this subsection, be its scientific research and experimental development tax credit for the taxation year in which it made the payment if that year had ended immediately before the particular timeexceeds(b)the total of all amounts each of which is the amount deducted by virtue of this subsection from any amount otherwise required to be remitted by subsection 135(3) in respect of payments made by it before the particular time and in the taxation year,and the amount, if any, so deducted from the amount otherwise required to be remitted by subsection 135(3) shall be(c)deducted in computing the scientific research and experimental development tax credit of the taxpayer for the taxation year, and(d)deemed to have been remitted by the taxpayer to the Receiver General on account of tax under this Part of the person to whom that payment was made.Marginal note:Deduction from cost(6)For the purposes of this Act, where at any time in a taxation year a taxpayer has acquired a share, debt obligation or right and is the first registered holder of the share or debt obligation or the first person to have acquired the right, as the case may be, other than a broker or dealer in securities, and an amount is, at any time, designated by a corporation under subsection 194(4), in respect of the share, debt obligation or right, the following rules apply:(a)the taxpayer shall be deemed to have acquired the share, debt obligation or right at a cost to the taxpayer equal to the amount by which(i)its cost to the taxpayer as otherwise determinedexceeds(ii)50% of the amount so designated in respect thereof; and(b)where the amount determined under subparagraph 127.3(6)(a)(ii) exceeds the amount determined under subparagraph (a)(i), the excess shall(i)where the share, debt obligation or right, as the case may be, is a capital property to the taxpayer, be deemed to be a capital gain of the taxpayer for the year from the disposition of that property, and(ii)in any other case, be included in computing the income of the taxpayer for the year,and the cost to the taxpayer of the share, debt obligation or right, as the case may be, shall be deemed to be nil.Marginal note:Partnership(7)For the purposes of this section and Part VIII, a partnership shall be deemed to be a person and its taxation year shall be deemed to be its fiscal period.Definition oftax otherwise payable(8)In this section,tax otherwise payableunder this Part by a taxpayer means the amount that would, but for this section and section 120.1, be the tax payable under this Part by the taxpayer.Marginal note:Election re first holder(9)Where a share or debt obligation of a public corporation has been lawfully distributed to the public in accordance with a prospectus, registration statement or similar document filed with a public authority in Canada pursuant to and in accordance with the law of Canada or of any province, and, where required by law, accepted for filing by that public authority, the corporation, if it has designated an amount under subsection 194(4) in respect of the share or debt obligation, may, in the prescribed form required to be filed under that subsection, elect that, for the purposes of this section, the first person, other than a broker or dealer in securities, to have acquired the share or debt obligation, as the case may be, (and no other person) shall be considered to be the first person to be a registered holder thereof.Marginal note:Calculation of consideration(10)For greater certainty,(a)for the purposes of this section and Part VIII, the amount of consideration for which a share, debt obligation or right was acquired and issued or granted includes the amount of any consideration for the designation under subsection 194(4) in respect of the share, debt obligation or right; and(b)the amount received by a corporation as consideration for a designation under subsection 194(4) in respect of a share, debt obligation or right issued or granted by it shall not be included in computing its income.
(a)scientific research and experimental development tax credit for the year, and(b)unused scientific research and experimental development tax credit for the taxation year immediately following the year.
(a)where the taxpayer is a corporation, 50%, or(b)where the taxpayer is an individual other than a trust, 34%
(c)a share acquired by the taxpayer in the year where the taxpayer is the first person, other than a broker or dealer in securities, to be a registered holder thereof,(d)a bond, debenture, bill, note, mortgage, hypothecary claim or similar obligation (in this section referred to as a “debt obligation”) acquired by the taxpayer in the year where the taxpayer is the first person, other than a broker or dealer in securities, to be a registered holder of that debt obligation, or(e)a right acquired by the taxpayer in the year where the taxpayer is the first person, other than a broker or dealer in securities, to have acquired that right, and
(a)the trust may, in its return of income for that year, specify such portion of that amount as may, having regard to all the circumstances (including the terms and conditions of the trust arrangement), reasonably be considered to be attributable to the taxpayer and as was not specified by the trust in respect of any other beneficiary under that trust; and(b)the portion specified pursuant to paragraph 127.3(3)(a) shall be deemed to be an amount designated on the last day of that year by the corporation under subsection 194(4) in respect of a share, debt obligation or right, as the case may be, acquired by the taxpayer on that day where the taxpayer is the first person, other than a broker or dealer in securities, to be a registered holder of the share or debt obligation or to have acquired the right, as the case may be.
(a)governed by an employee benefit plan or a revoked deferred profit sharing plan; or(b)exempt from tax under section 149.
(a)the amount that would, but for this subsection, be its scientific research and experimental development tax credit for the taxation year in which it made the payment if that year had ended immediately before the particular time
(b)the total of all amounts each of which is the amount deducted by virtue of this subsection from any amount otherwise required to be remitted by subsection 135(3) in respect of payments made by it before the particular time and in the taxation year,
(c)deducted in computing the scientific research and experimental development tax credit of the taxpayer for the taxation year, and(d)deemed to have been remitted by the taxpayer to the Receiver General on account of tax under this Part of the person to whom that payment was made.
(a)the taxpayer shall be deemed to have acquired the share, debt obligation or right at a cost to the taxpayer equal to the amount by which(i)its cost to the taxpayer as otherwise determinedexceeds(ii)50% of the amount so designated in respect thereof; and(b)where the amount determined under subparagraph 127.3(6)(a)(ii) exceeds the amount determined under subparagraph (a)(i), the excess shall(i)where the share, debt obligation or right, as the case may be, is a capital property to the taxpayer, be deemed to be a capital gain of the taxpayer for the year from the disposition of that property, and(ii)in any other case, be included in computing the income of the taxpayer for the year,and the cost to the taxpayer of the share, debt obligation or right, as the case may be, shall be deemed to be nil.
(i)its cost to the taxpayer as otherwise determined
(ii)50% of the amount so designated in respect thereof; and
(i)where the share, debt obligation or right, as the case may be, is a capital property to the taxpayer, be deemed to be a capital gain of the taxpayer for the year from the disposition of that property, and(ii)in any other case, be included in computing the income of the taxpayer for the year,
(a)for the purposes of this section and Part VIII, the amount of consideration for which a share, debt obligation or right was acquired and issued or granted includes the amount of any consideration for the designation under subsection 194(4) in respect of the share, debt obligation or right; and(b)the amount received by a corporation as consideration for a designation under subsection 194(4) in respect of a share, debt obligation or right issued or granted by it shall not be included in computing its income.
[NOTE: Application provisions are not included in the consolidated textsee relevant amending Acts and regulations.]R.S., 1985, c. 1 (5th Supp.), s. 127.32013, c. 34, s. 128(E)
127.4(1)In this section,approved shareapproved sharemeans a share of the capital stock of a prescribed labour-sponsored venture capital corporation, but does not include(a)a share issued by a registered labour-sponsored venture capital corporation the venture capital business of which was discontinued before the time of the issue, and(b)a share issued by a prescribed labour-sponsored venture capital corporation that is not a registered labour-sponsored venture capital corporation if, at the time of the issue, no province under the laws (described in section 6701 of theIncome Tax Regulations) of which the corporation is registered or established provides assistance in respect of the acquisition of the share; (action approuvée)labour-sponsored funds tax creditlabour-sponsored funds tax credit[Repealed, 1997, c. 25, s. 37]net costnet costto an individual of an approved share means the amount, if any, by which(a)the amount of consideration paid by the individual to acquire or subscribe for the shareexceeds(b)the amount of any assistance (other than an amount included in computing a tax credit of the individual in respect of that share) provided or to be provided by a government, municipality or any public authority in respect of, or for the acquisition of, the share; (coût net)original acquisitionoriginal acquisitionof a share means the first acquisition of the share, except that(a)where the share is irrevocably subscribed and paid for before its first acquisition, subject to paragraphs (b) and (c), the original acquisition of the share is the first transaction whereby the share is irrevocably subscribed and paid for,(b)a share is deemed never to have been acquired and never to have been irrevocably subscribed and paid for unless the first registered holder of the share is, subject to paragraph (c), the first person to either acquire or irrevocably subscribe and pay for the share, and(c)for the purpose of this definition, a broker or dealer in securities acting in that capacity is deemed never to acquire or subscribe and pay for the share and never to be the registered holder of the share; (acquisition initiale)qualifying trustqualifying trustfor an individual in respect of a share means(a)a trust governed by a registered retirement savings plan, under which the individual is the annuitant, that is not a spousal or common-law partner plan (in this definition having the meaning assigned by subsection 146(1)) in relation to another individual,(b)a trust governed by a registered retirement savings plan, under which the individual or the individual’s spouse or common-law partner is the annuitant, that is a spousal or common-law partner plan in relation to the individual or the individual’s spouse or common-law partner, if the individual and no other person claims a deduction under subsection (2) in respect of the share, or(c)a trust governed by a TFSA of which the individual is the holder; (fiducie admissible)tax otherwise payabletax otherwise payableby an individual means the amount that, but for this section, would be the individual’s tax payable under this Part. (impôt payable par ailleurs)Marginal note:Amalgamations or mergers(1.1)Subsections 204.8(2) and 204.85(3) apply for the purpose of this section.Marginal note:Deduction of labour-sponsored funds tax credit(2)There may be deducted from the tax otherwise payable by an individual (other than a trust) for a taxation year such amount as the individual claims not exceeding the individual’s labour-sponsored funds tax credit limit for the year.(3) and (4)[Repealed, 1999, c. 22, s. 49]Marginal note:Labour-sponsored funds tax credit limit(5)For the purpose of subsection 127.4(2), an individual’s labour-sponsored funds tax credit limit for a taxation year is the lesser of(a)$750, and(b)the amount, if any, by which(i)the total of all amounts each of which is the individual’s labour-sponsored funds tax credit in respect of an original acquisition in the year or in the first 60 days of the following taxation year of an approved shareexceeds(ii)the portion of the total described in subparagraph 127.4(5)(b)(i) that was deducted under subsection 127.4(2) in computing the individual’s tax payable under this Part for the preceding taxation year.Marginal note:Deemed original acquisition(5.1)If the Minister so directs, an original acquisition of an approved share that occurs in an individual’s taxation year (other than in the first 60 days of the year) is deemed for the purpose of this section to have occurred at the beginning of the year and not at the time it actually occurred.Marginal note:Labour-sponsored funds tax credit(6)For the purpose of subsection (5), an individual’s labour-sponsored funds tax credit in respect of an original acquisition of an approved share is equal to the least of(a)15% of the net cost to the individual (or to a qualifying trust for the individual in respect of the share) for the original acquisition of the share by the individual or by the trust, if the share is a share of a prescribed labour-sponsored venture capital corporation (other than a corporation that is a prescribed labour-sponsored venture capital corporation solely because it is a registered labour-sponsored venture capital corporation),(a.1)5% of the net cost to the individual (or to a qualifying trust for the individual in respect of the share) for the original acquisition of the share by the individual or by the trust, if(i)the taxation year for which a claim is made under subsection (2) in respect of the original acquisition is 2016, and(ii)the share is a share of a corporation that is a prescribed labour-sponsored venture capital corporation solely because it is a registered labour-sponsored venture capital corporation,(a.2)nil, if(i)the taxation year for which a claim is made under subsection (2) in respect of the original acquisition is after 2016, and(ii)the share is a share of a corporation that is a prescribed labour-sponsored venture capital corporation solely because it is a registered labour-sponsored venture capital corporation,(b)nil, where the share was issued by a registered labour-sponsored venture capital corporation unless the information return described in paragraph 204.81(6)(c) is filed with the individual’s return of income for the taxation year for which a claim is made under subsection 127.4(2) in respect of the original acquisition of the share (other than a return of income filed under subsection 70(2), paragraph 104(23)(d) or 128(2)(e) or subsection 150(4)),(c)nil, where the individual dies after December 5, 1996 and before the original acquisition of the share,(d)nil, where a payment in respect of the disposition of the share has been made under section 211.9, and(e)nil, if the share is issued in exchange for another share of the corporation.
(a)a share issued by a registered labour-sponsored venture capital corporation the venture capital business of which was discontinued before the time of the issue, and(b)a share issued by a prescribed labour-sponsored venture capital corporation that is not a registered labour-sponsored venture capital corporation if, at the time of the issue, no province under the laws (described in section 6701 of theIncome Tax Regulations) of which the corporation is registered or established provides assistance in respect of the acquisition of the share; (action approuvée)
(a)the amount of consideration paid by the individual to acquire or subscribe for the share
(b)the amount of any assistance (other than an amount included in computing a tax credit of the individual in respect of that share) provided or to be provided by a government, municipality or any public authority in respect of, or for the acquisition of, the share; (coût net)
(a)where the share is irrevocably subscribed and paid for before its first acquisition, subject to paragraphs (b) and (c), the original acquisition of the share is the first transaction whereby the share is irrevocably subscribed and paid for,(b)a share is deemed never to have been acquired and never to have been irrevocably subscribed and paid for unless the first registered holder of the share is, subject to paragraph (c), the first person to either acquire or irrevocably subscribe and pay for the share, and(c)for the purpose of this definition, a broker or dealer in securities acting in that capacity is deemed never to acquire or subscribe and pay for the share and never to be the registered holder of the share; (acquisition initiale)
(a)a trust governed by a registered retirement savings plan, under which the individual is the annuitant, that is not a spousal or common-law partner plan (in this definition having the meaning assigned by subsection 146(1)) in relation to another individual,(b)a trust governed by a registered retirement savings plan, under which the individual or the individual’s spouse or common-law partner is the annuitant, that is a spousal or common-law partner plan in relation to the individual or the individual’s spouse or common-law partner, if the individual and no other person claims a deduction under subsection (2) in respect of the share, or(c)a trust governed by a TFSA of which the individual is the holder; (fiducie admissible)
(a)$750, and(b)the amount, if any, by which(i)the total of all amounts each of which is the individual’s labour-sponsored funds tax credit in respect of an original acquisition in the year or in the first 60 days of the following taxation year of an approved shareexceeds(ii)the portion of the total described in subparagraph 127.4(5)(b)(i) that was deducted under subsection 127.4(2) in computing the individual’s tax payable under this Part for the preceding taxation year.
(i)the total of all amounts each of which is the individual’s labour-sponsored funds tax credit in respect of an original acquisition in the year or in the first 60 days of the following taxation year of an approved share
(ii)the portion of the total described in subparagraph 127.4(5)(b)(i) that was deducted under subsection 127.4(2) in computing the individual’s tax payable under this Part for the preceding taxation year.
(a)15% of the net cost to the individual (or to a qualifying trust for the individual in respect of the share) for the original acquisition of the share by the individual or by the trust, if the share is a share of a prescribed labour-sponsored venture capital corporation (other than a corporation that is a prescribed labour-sponsored venture capital corporation solely because it is a registered labour-sponsored venture capital corporation),(a.1)5% of the net cost to the individual (or to a qualifying trust for the individual in respect of the share) for the original acquisition of the share by the individual or by the trust, if(i)the taxation year for which a claim is made under subsection (2) in respect of the original acquisition is 2016, and(ii)the share is a share of a corporation that is a prescribed labour-sponsored venture capital corporation solely because it is a registered labour-sponsored venture capital corporation,(a.2)nil, if(i)the taxation year for which a claim is made under subsection (2) in respect of the original acquisition is after 2016, and(ii)the share is a share of a corporation that is a prescribed labour-sponsored venture capital corporation solely because it is a registered labour-sponsored venture capital corporation,(b)nil, where the share was issued by a registered labour-sponsored venture capital corporation unless the information return described in paragraph 204.81(6)(c) is filed with the individual’s return of income for the taxation year for which a claim is made under subsection 127.4(2) in respect of the original acquisition of the share (other than a return of income filed under subsection 70(2), paragraph 104(23)(d) or 128(2)(e) or subsection 150(4)),(c)nil, where the individual dies after December 5, 1996 and before the original acquisition of the share,(d)nil, where a payment in respect of the disposition of the share has been made under section 211.9, and(e)nil, if the share is issued in exchange for another share of the corporation.
(i)the taxation year for which a claim is made under subsection (2) in respect of the original acquisition is 2016, and(ii)the share is a share of a corporation that is a prescribed labour-sponsored venture capital corporation solely because it is a registered labour-sponsored venture capital corporation,
(i)the taxation year for which a claim is made under subsection (2) in respect of the original acquisition is after 2016, and(ii)the share is a share of a corporation that is a prescribed labour-sponsored venture capital corporation solely because it is a registered labour-sponsored venture capital corporation,
[NOTE: Application provisions are not included in the consolidated textsee relevant amending Acts and regulations.]R.S., 1985, c. 1 (5th Supp.), s. 127.41994, c. 7, Sch