II, s. 11, Sch, VIII, s. 5, c. 21, s. 91995, c. 21, s. 41997, c. 10, s. 2691998, c. 19, s. 752000, c. 12, s. 1422007, c. 2, s. 432012, c. 31, s. 52013, c. 34, s. 1772014, c. 39, s. 42016, c. 12, s. 52018, c. 27, s. 2
15.1(1)Any amount received by a taxpayer as or on account of interest on a small business development bond shall, except for the purposes of Part IV, be deemed to have been received as a taxable dividend.Marginal note:Rules for small business development bonds(2)Where a corporation (in this section referred to as the “issuer”) has issued an obligation that is at any time a small business development bond, notwithstanding any other provision of this Act,(a)in computing the issuer’s income for a taxation year, no deduction shall be made in respect of any amount paid or payable (depending on the method regularly followed in computing the issuer’s income) as or on account of interest on the obligation in respect of a period that includes that time;(b)except for the purpose of subsection 129(1), to the extent that any amount paid by the issuer as or on account of interest on the obligation is not allowed as a deduction because of paragraph 15.1(2)(a), it shall, when paid, be deemed to have been paid as a taxable dividend; and(c)except for the purposes of paragraph 125(1)(b), the issuer’s taxable income for any taxation year that includes a period throughout which the obligation was a small business development bond but(i)the issuer was not an eligible small business corporation, or(ii)all or substantially all of the proceeds from the issue of the obligation cannot reasonably be regarded as having been used by the issuer or a corporation with which it was not dealing at arm’s length in the financing of an active business carried on in Canada immediately before the obligation was issuedshall be deemed to be an amount equal to the total of(iii)the amount paid or payable (depending on the method regularly followed in computing the issuer’s income) as or on account of interest on the obligation in respect of that period, and(iv)the issuer’s taxable income otherwise determined for the year.Marginal note:Definitions(3)In this section,eligible small business corporationeligible small business corporationat any time means a taxable Canadian corporation that at that time is(a)a small business corporation, or(b)a cooperative corporation (within the meaning assigned by subsection 136(2)) all or substantially all of the assets of which are used in an active business carried on by it in Canada; (société admissible exploitant une petite entreprise)joint electionjoint electionmeans an election that is made in prescribed form, containing prescribed information, jointly by the issuer of an obligation and the person who is the holder of the obligation at the time of the election, that is filed with the Minister by the holder, and in which the holder and the issuer elect that this section apply to the obligation; (choix conjoint)majority interest partnermajority interest partner[Repealed, 1998, c. 19, s. 76(1)]property used for specified purposesproperty used for specified purposes[Repealed, 1994, c. 7, Sch