Section 127.43 — Income Tax Act: Definitions

The following definitions apply in this section. assistance means an amount, other than a prescribed amount or an amount deemed under subsection (2) to have been paid, that would be included under paragraph 12(1)(x) in computing an eligible entity’s income for any taxation year if that paragraph were read without reference to subparagraphs 12(1)(x)(v) to (vii). ( montant d’aide ) eligible entity , for a taxation year, means a qualifying corporation for the taxation year; an individual other than a trust; or a partnership. ( entité déterminée ) qualifying corporation , for a particular taxation year, means a particular corporation that meets the following conditions: it is a Canadian-controlled private corporation or would be a Canadian-controlled private corporation absent the application of subsection 136(1);

and it is the case that $15,000,000 > A + B where A is the particular corporation’s taxable capital employed in Canada (in this formula, within the meaning assigned by section 181.2 or 181.3) for its immediately preceding taxation year, and B is the total of all amounts, each of which is the taxable capital employed in Canada of a corporation that is associated in the particular taxation year with the particular corporation for the associated corporation’s last taxation year that ended before the beginning of the particular taxation year. ( société admissible ) qualifying expenditure means an outlay or expense prescribed by regulation that is made or incurred by an eligible entity during the qualifying period in the course of the eligible entity’s ordinary commercial activities. ( dépense admissible ) qualifying location , of an eligible entity, means real or immovable property (other than property that is a self-contained domestic establishment, or part of such a self-contained domestic establishment, the land subjacent to the self-contained domestic establishment and such portion of any immediately contiguous land as can reasonably be regarded as contributing to the use and enjoyment of the self-contained domestic establishment as a residence) in Canada used by the eligible entity primarily in the course of its ordinary commercial activities. ( emplacement admissible ) qualifying period means the period that begins on September 1, 2021 and ends on December 31, 2022. ( période d’admissibilité ) total per location expense , for a qualifying location of an eligible entity for a taxation year, means the lesser of the amount determined by the formula A − B where A is the total of all amounts, each of which is a qualifying expenditure of the eligible entity made or incurred in the taxation year in respect of the qualifying location (or, for the first taxation year that ends after 2021, the qualifying expenditures made or incurred in respect of the qualifying location from the start of the qualifying period to the end of that first taxation year), and B is the total of all amounts, each of which is an amount of assistance that the eligible entity has received, is entitled to receive or can reasonably be expected to receive, in respect of amounts described in A, and has not been repaid before the end of the taxation year pursuant to a legal obligation to do so; and the amount determined by the formula $10,000 − C where C is the total of all amounts, each of which is a qualifying expenditure in respect of the qualifying location and is a qualifying expenditure of the eligible entity, in respect of which an amount under subsection (2) or (3) is deemed to have been paid in a prior taxation year, or is a qualifying expenditure of another eligible entity that is affiliated during the qualifying period with the eligible entity, in respect of which an amount under subsection (2) or (3) is deemed to have been paid in any taxation year. ( dépense totale par emplacement ) total ventilation expense , of an eligible entity for a taxation year, means the lesser of the total of all amounts, each of which is a total per location expense for a qualifying location of the eligible entity for the taxation year; and the amount determined by the formula $50,000 × X − Y where X is 100%, unless the eligible entity is affiliated at any time in the qualifying period with one or more other eligible entities that are deemed to have paid an amount under subsection (2) in respect of the qualifying period, or, in the case of a partnership, has a member that is deemed to have paid an amount under subsection (3) in respect of the partnership, a percentage assigned to the eligible entity under an agreement, if the agreement is entered into by the eligible entity and each eligible entity that is affiliated with the eligible entity in the qualifying period, and is deemed to have paid an amount under subsection (2) in respect of the qualifying period, or, in the case of a partnership, has a member that is deemed to have paid an amount under subsection (3) in respect of the partnership, the agreement is filed in prescribed form and manner with the Minister by the eligible entity and each eligible entity referred to in clause (A), the agreement assigns, for the purposes of this definition, a percentage in respect of each eligible entity referred to in clause (A), and the total of all the percentages assigned under the agreement does not exceed 100%, and in any other case, nil, and Y is the total of all amounts, each of which is the total ventilation expense of the eligible entity for a prior taxation year in respect of which an amount is deemed to have been paid under subsection (2) or (3). ( dépense totale de ventilation ) An eligible entity (other than a partnership) that files a prescribed form containing prescribed information with its return of income for a taxation year that ends after 2021 is deemed to have, on its balance-due day for the year, paid on account of its tax payable under this Part for the year an amount equal to 25% of its total ventilation expense for the taxation year. If an eligible entity (other than a partnership) is a member of a partnership at the end of a fiscal period of the partnership that ends after 2021 and that ends in a taxation year of the eligible entity — and the partnership files an information return in prescribed form containing prescribed information for that fiscal period and the eligible entity files a prescribed form containing prescribed information with its return of income for the taxation year — then the eligible entity is deemed to have paid, on the eligible entity’s balance-due day for the taxation year on account of the eligible entity’s tax payable under this Part for the taxation year, an amount determined by the formula 0.25 × A × B where A is the total ventilation expense of the partnership for the fiscal period; and B is the specified proportion of the eligible entity for the fiscal period of the partnership. For the purposes of this section, the fiscal period of a partnership is deemed to be its taxation year;

and if an eligible entity is a member of a particular partnership that is a member of another partnership, the eligible entity is deemed to be a member of the other partnership, and to have a specified proportion in the other partnership for a fiscal period of the other partnership equal to its specified proportion of the particular partnership — for the last fiscal period of the particular partnership that ends in the fiscal period of the other partnership — multiplied by the particular partnership’s specified proportion of the other partnership for the fiscal period of the other partnership. For the purposes of this Act other than this section, and for greater certainty, an amount that an eligible entity is deemed under subsection (2) or (3) to have paid is assistance received by it from a government immediately before the end of the taxation year to which it relates. For the purposes of this section, if two eligible entities are affiliated with the same eligible entity, they are deemed to be affiliated with each other.