Chapter 8 - Page 8 of the T2 return

On this page...

• Summary of tax and credits
• Federal tax
  • Line 700 - Part I tax payable
  • Line 708 - Part II surtax payable
  • Line 710 - Part III.1 tax
  • Line 712 - Part IV tax payable
  • Line 716 - Part IV.1 tax payable
  • Line 720 - Part VI tax payable
  • Line 724 - Part VI.1 tax payable
  • Line 727 - Part XIII.1 tax payable
  • Line 728 - Part XIV tax payable
• Provincial and territorial tax
  • Permanent establishment
  • Line 750 - Provincial or territorial jurisdiction
  • Line 760 - Net provincial and territorial tax payable
  • Schedule 5, Tax Calculation Supplementary - Corporations
  • Dual rates of provincial and territorial income tax
  • Provincial or territorial foreign tax credits
  • Newfoundland and Labrador
  • Prince Edward Island
  • Nova Scotia
  • New Brunswick
  • Ontario
  • Manitoba
  • Saskatchewan
  • British Columbia
  • Yukon
  • Northwest Territories
  • Nunavut
  • Line 765 - Provincial tax on large corporations
• Other credits
  • Line 780 - Investment tax credit refund
  • Line 784 - Dividend refund
  • Line 788 - Federal capital gains refund
  • Line 792 - Federal qualifying environmental trust tax credit refund
  • Line 796 - Canadian film or video production tax credit refund
  • Line 797 - Film or video production services tax credit refund
  • Lines 800 and 801 - Tax withheld at source
  • Line 808 - Provincial and territorial capital gains refund
  • Line 812 - Provincial and territorial refundable tax credits
  • Line 840 - Tax instalments paid
• Refund or payment
  • Line 894 - Refund code
  • Line 896
  • Line 898 - Enclosed payment
• Electronic payment of balance owing
• Payment of balance owing at your financial institution
• Direct deposit request
  • Lines 910 to 918
• Certification
  • Lines 950 to 959
• Language of correspondence
  • Line 990

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Summary of tax and credits

In the "Summary of tax and credits" area of your return, summarize the amounts of federal and provincial or territorial tax payable, as well as the credits and refunds claimed to reduce total tax payable.

Federal tax

Line 700 - Part I tax payable

On line 700, enter the amount of Part I tax payable that you determined on line G of page 7.

Line 708 - Part II surtax payable

Under Part II, tobacco manufacturers have to pay surtax equal to 50% of Part I tax on tobacco manufacturing profits for the year.

File Schedule 46, Part II - Tobacco Manufacturers' Surtax, and attach it to your return. See the schedule for more details.

On line 708, enter the amount of Part II surtax payable.

Reference
Section 182

Line 710 - Part III.1 tax

A corporation that designates dividends as eligible dividends that exceed its capacity to pay such dividends is subject to Part III.1 tax. The tax is equal to 20% of the excessive eligible dividend designation.

Use Schedule 55, Part III.1 Tax On Excessive Eligible Dividend Designations, to calculate any Part III.1 tax payable and file it with your T2 return.

Note
Every corporation resident in Canada that pays a taxable dividend in the year, other than a capital gains dividend, must file this schedule.

In the case where an excessive eligible dividend designation is determined to be part of a tax avoidance scheme, the 20% tax plus an additional 10% tax will apply to the whole dividend designation.

Eligible dividend

An eligible dividend is any taxable dividend paid after 2005 to a resident of Canada by a Canadian corporation that is designated by that corporation to be an eligible dividend. A corporation's capacity to pay eligible dividends depends mostly on its status.

General rate income pool (GRIP)

A CCPC or a deposit insurance corporation may pay eligible dividends to the extent of its GRIP - a balance generally reflecting taxable income that has not benefited from the small business deduction or any other special tax rate - without incurring Part III.1 tax. The GRIP is calculated at the end of the tax year. However, a corporation can pay eligible dividends over the course of the year as long as, at the end of the year, the eligible dividends paid do not exceed its GRIP.

Use Schedule 53, General Rate Income Pool (GRIP) Calculation, to determine the GRIP and file it with your T2 return. You should file this schedule if you paid an eligible dividend in the tax year, or if your GRIP balance changed, to ensure that the GRIP balance on our records is correct.

Low rate income pool (LRIP)

A corporation resident in Canada that is neither a CCPC nor a deposit insurance corporation will be able to pay eligible dividends in any amount unless it has an LRIP. The LRIP is generally made up of taxable income that has benefited from certain preferential tax rates. The corporation will have to reduce its LRIP to zero by paying out ordinary dividends before it can pay an eligible dividend, or it will be subject to Part III.1 tax. The LRIP must be calculated at any time of the year (whenever a dividend is paid or received or any other event that occurs that affects the LRIP balance in the year).

Use Schedule 54, Low Rate Income Pool (LRIP) Calculation, to determine the LRIP, throughout the year. File the completed schedule with your T2 return. All other calculations including the worksheets should be kept with your records in case we ask for them at a later date.

Election not to be a Canadian-controlled private corporation

A CCPC can elect not to be a CCPC for purposes of this new dividend treatment. If it so elects, it is deemed not to be a CCPC for the tax year in which it makes the election and all later tax years, until it revokes the election. The CCPC will lose its entitlement to the small business deduction. However, no other benefits of CCPC status will be affected.

A corporation that revokes an election will become a CCPC again for the tax year that follows the tax year in which the revocation is made.

Use Form T2002, Election, or Revocation of an Election, Not To Be a Canadian-Controlled Private Corporation, to make or to revoke an election previously made, and file it by the due date of the T2 return. We will not accept an election or revocation of an election after the filing due date.

Note
A corporation that has previously revoked an election must get written consent from us to make or revoke another election.

Election to treat excessive eligible dividend designations as ordinary dividends

Corporations that make excessive eligible dividend designations may be allowed to elect to treat the excessive amounts paid as ordinary dividends. In order to do so, the corporation must have the concurrence of its shareholders who received, or were entitled to receive, the dividend and whose addresses are known to the corporation. For more information, see Election to treat excessive eligible dividend designations as ordinary dividends.

Corporations cannot elect to treat excessive eligible dividend designations that are subject to the 30% Part III.1 tax as ordinary dividends.

References
Sections 185.1 and 185.2
Subsections 89(11)-(14)

Line 712 - Part IV tax payable

Use Parts 1 and 2 of Schedule 3, Dividends Received, Taxable Dividends Paid, and Part IV Tax Calculation, to calculate Part IV tax payable on taxable dividends you received.

Dividends subject to Part IV tax

The following types of dividends are subject to Part IV tax:

• taxable dividends from corporations that are deductible under section 112 when you calculate taxable income; and
• taxable dividends from foreign affiliates that are deductible under paragraphs 113(1)(a), (b), or (d), or subsection 113(2) when you calculate taxable income.

Taxable dividends received are only subject to Part IV tax if the corporation receives them while it is a private or subject corporation. Taxable dividends received from a non-connected corporation are subject to Part IV tax.

Taxable dividends received from a connected corporation are subject to Part IV tax only when paying the dividends generates a dividend refund for the payer corporation. The Part IV tax rate is 33 1/3%.

Definitions

Private corporation

A private corporation is a corporation that is:

• resident in Canada;
• not a public corporation;
• not controlled by one or more public corporations (other than a prescribed venture capital corporation);
• not controlled by one or more prescribed federal Crown corporations; and
• not controlled by any combination of prescribed federal Crown corporations and public corporations.

Reference
Subsection 89(1)

Subject corporation

A subject corporation is a corporation, other than a private corporation, that is resident in Canada and is controlled by or for the benefit of either an individual other than a trust, or a related group of individuals other than trusts.

Reference
Subsection 186(3)

Connected corporation

A payer corporation is connected to the corporation that receives the dividends (the recipient) if the recipient controls the payer corporation. The payer and recipient corporations are also connected when:

• the recipient owns more than 10% of the issued share capital (with full voting rights) of the payer corporation; and
• the recipient owns shares of the capital stock of the payer corporation with a fair market value of more than 10% of the fair market value of all the issued share capital of the payer corporation.

You determine control of the corporation by considering the actual ownership of shares, without taking into account any rights referred to in paragraph 251(5)(b).

For purposes of Part IV tax, a payer corporation is controlled by a recipient corporation if more than 50% of the payer's issued share capital (having full voting rights) belongs to the recipient, to persons with whom the recipient does not deal at arm's length, or to any combination of these persons.

References
Subsections 186(2) and (4)

Exempt corporations

The following types of corporations are exempt from Part IV tax:

A. a corporation that was bankrupt at any time during the year; or

B. a corporation that, throughout the year, was:

• a prescribed labour-sponsored venture capital corporation;
• a prescribed investment contract corporation;
• an insurance corporation;
• a corporation licensed as a trustee;
• a bank; or
• a registered securities dealer that was, throughout the year, a member of a designated stock exchange in Canada.

Reference
Section 186.1

Exempt dividends

A corporation that is a prescribed venture capital corporation throughout the year does not have to pay Part IV tax on dividends it received from a prescribed qualifying corporation.

References
Section 186.2
Regulation 6704

Dividends not taxable

Any dividends that a corporation received from a capital dividend account are not taxable, as long as the payer corporation made an election under section 83. Therefore, if these non-taxable dividends are included as income, they should be deducted as an adjustment on Schedule 1.

Completing Parts 1 and 2 of Schedule 3

In the following section we provide details on how to complete Parts 1 and 2 of Schedule 3. Parts 3 and 4 are explained under "Parts 3 and 4 of Schedule 3".

Part 1 - Dividends received during the tax year

Do not include dividends received from foreign non-affiliates.

column 200 - list all payer corporations from which the corporation received dividends.

If the payer corporation is a connected corporation, complete columns 205, 210, and 220.

column 205 - enter "1" in the box if the payer corporation is a connected corporation;

column 210 - enter the connected corporation's Business Number;

column 220 - enter the tax year-end of the payer corporation in which the dividend in column 240 was paid;

column 230 - enter the amount of non-taxable capital dividend if under section 83 election (enter the total of this column on line 402 of Schedule 1); and

column 240 - enter the amount of taxable dividends deductible from taxable income under section 112, subsections 113(2) and 138(6), and paragraph 113(1)(a), (b), or (d) (enter the total of this column on line 320 of your return). For more information on these dividends, see Line 320.

If the payer corporation is a connected corporation, complete columns 250 and 260.

column 250 - enter the amount of total taxable dividends paid by the connected payer corporation for the tax year indicated in column 220;

column 260 - enter the amount of dividend refund of the connected payer corporation for the tax year indicated in column 220; and

column 270 - enter the amount of Part IV tax, based on the following calculations:

• when the taxable dividend subject to Part IV tax is received from a non-connected corporation:

  column 270 = column 240 × 1/3

• when the dividend subject to Part IV tax is received from a connected corporation:
  
  

  column 270 =

  column 240 × column 260 ÷ column 250

If the connected payer corporation's tax year ends more than three months after the corporation's tax year, you have to estimate the payer's dividend refund when you calculate the corporation's Part IV tax payable.

Add all Part IV tax, and enter the amount in Part 2 of Schedule 3.

If taxable dividends are received, enter the amount in column 240, but if the corporation is not subject to Part IV tax, such as a public corporation, enter "0" in column 270.

Note
If more than one corporation paid dividends, you have to do a separate calculation for each payer corporation. If dividends were paid in different payer corporations' tax years, you have to do separate calculations for each of the tax years.

Part 2 - Calculation of Part IV tax payable

Part IV tax otherwise payable on a dividend is reduced by any amount of Part IV.1 tax payable on the same dividend. See below for details.

On line 320 of Schedule 3, enter the amount of Part IV.1 tax you have to pay on taxable dividends received.

You can reduce the amount of dividends subject to Part IV tax by using non-capital losses and farm losses incurred in the tax year or carried forward from prior years.

On lines 330 to 345 of Schedule 3, enter the amount of available non-capital and farm losses you are using to reduce dividends subject to Part IV tax.

On line 712 of the return, enter the amount of Part IV tax payable on taxable dividends received (line 360 of Schedule 3).

Reference
IT-269, Part IV Tax on Taxable Dividends Received by a Private Corporation or a Subject Corporation

Line 716 - Part IV.1 tax payable

Complete Schedule 43, Calculation of Parts IV.1 and VI.1 Taxes, to calculate Part IV.1 tax payable.

Part 4 of Schedule 43 - Calculation of Part IV.1 tax

Part 4 gives details on how to calculate Part IV.1 tax.

Public corporations and certain other corporations may be subject to the 10% Part IV.1 tax on dividends they receive on taxable preferred shares. A restricted financial institution is also subject to tax on dividends received on taxable restricted financial institution shares (see subsection 248(1) for definitions of these terms).

The issuer of taxable preferred shares can elect to pay a 40% tax under Part VI.1 on dividends on taxable preferred shares. This election exempts the holder of these shares from the 10% tax under Part IV.1. For details, see line 724.

Excepted dividends, which are defined in section 187.1, are not subject to Part IV.1 tax. For example, an excepted dividend is one the corporation receives on a share of another corporation in which the corporation had a substantial interest at the time it received the dividend.

On line 716, enter the amount of Part IV.1 tax payable that you calculated on line 340 of Schedule 43.

References
Sections 187.1 to 187.6
Subsection 191.2(1)

Line 720 - Part VI tax payable

You have to complete Schedule 38, Part VI Tax on Capital of Financial Institutions, to calculate Part VI tax.

Part VI levies a tax on a financial institution's taxable capital employed in Canada. Part VI tax is 1.25% of the taxable capital employed in Canada that is more than the $1 billion capital deduction for the year.

If the corporation is a member of a related group, you have to allocate the capital deduction among the members.

Use Schedule 39, Agreement Among Related Financial Institutions - Part VI Tax, to allocate the capital deduction. File this agreement with your return.

Note
Schedule 39 need only be filed by one of the associated/related corporations for a calendar year. However, if Schedule 39 is not already on file with us when we assess any of the returns for a tax year ending in the calendar year of the agreement, we will ask for one.

Under subsection 190.1(3), you can deduct Part I tax from Part VI tax payable. This is called the Part I tax credit. You can deduct any unused Part I tax credits from Part VI tax in any of the three previous and seven following tax years.

To calculate the balance of unused Part I tax credits and to carry back this credit, you can use Schedule 42, Calculation of Unused Part I Tax Credit.

You can also deduct Canadian surtax payable for the year from Part VI tax payable. This is called the surtax credit. You can deduct any unused surtax credit from Part VI tax payable in any of the three previous and seven following tax years.

To calculate the balance of your unused surtax credit, you can use Schedule 37, Calculation of Unused Surtax Credit.

Financial institutions include banks, trust companies, life insurance corporations, certain holding corporations, and corporations that accept deposits and carry on the business of lending money on the security of real estate or investing in mortgages or hypothecs on real estate.

File Schedule 38 with your return if you have Part VI tax payable, or would have, if not for the deduction of a Part I tax credit or surtax credit.

On line 720, enter the amount of Part VI tax payable that you calculated on line 890 of Schedule 38.

References
Sections 190, 190.1, and 190.11 to 190.15

Line 724 - Part VI.1 tax payable

Complete the following schedules if required:

• Schedule 43, Calculation of Parts IV.1 and VI.1 Taxes; and
• Schedule 45, Agreement Respecting Liability for Part VI.1 Tax.

See the following headings for more details.

Part 1 of Schedule 43 - Calculation of dividend allowance

Calculate the dividend allowance on Part 1 of Schedule 43.

Generally, the first $500,000 of dividends paid in the year on taxable preferred shares is exempt from Part VI.1 tax liability. This basic annual exemption is called the dividend allowance.

However, the $500,000 dividend allowance is reduced if you paid more than $1 million of dividends on taxable preferred shares in the previous year.

Part 2 of Schedule 43 - Agreement among associated corporations to allocate the dividend allowance

If you are a member of an associated group, you have to allocate the dividend allowance between the members. Part 2 provides an area for this allocation.

Part 3 of Schedule 43 - Calculation of Part VI.1 tax

Complete Part 3 of Schedule 43 to calculate Part VI.1 tax. Part VI.1 tax is levied on dividends (other than certain excluded dividends) you paid on short-term preferred shares and taxable preferred shares.

You are subject to a tax of 50% on dividends you paid on short-term preferred shares that are more than the annual dividend allowance.

You are subject to a tax of 25% and/or 40% on dividends you paid on taxable preferred shares (other than short-term preferred shares) that are more than any remaining dividend allowance.

See subsection 248(1) for definitions of the terms short-term preferred shares and taxable preferred shares.

Schedule 45, Agreement Respecting Liability for Part VI.1 Tax

Complete Schedule 45 to certify the transfer of Part VI.1 tax liability and send it to us with Schedule 43.

A corporation (the transferor) can transfer all or part of its Part VI.1 tax liability to another corporation (the transferee), if the corporations were related throughout the following tax years:

• the transferor's tax year for which it owes Part VI.1 tax; and
• the transferee's tax year that ends on or before the end of the above-mentioned transferor's tax year.

You can deduct Part VI.1 tax payable from income. See line 325 for more information. Any Part VI.1 tax that is left over after the taxable income is reduced to zero is part of the non-capital loss for the year. See "Current-year losses" for details.

On line 724, enter the amount of Part VI.1 tax payable you calculated on line 270 of Schedule 43.

References
Sections 191, and 191.1 to 191.4

Line 727 - Part XIII.1 tax payable

Every authorized foreign bank is subject to Part XIII.1 tax equal to 25% of its taxable interest expense for the year.

You have to show your calculations on a separate schedule. Identify these calculations as Schedule 92, Part XIII.1 Tax -Additional Tax on Authorized Foreign Banks, since we do not print this schedule. For more information, see Part XIII.1 tax.

On line 727 of the return, enter the amount of Part XIII.1 tax payable.

Line 728 - Part XIV tax payable

Every corporation that is non-resident in a tax year is subject to Part XIV tax.

Part XIV tax is 25%, but a tax treaty can reduce this percentage. In addition, a tax treaty may restrict the Part XIV tax to corporations that carry on business in Canada through a permanent establishment in Canada.

You have to complete Schedule 20, Part XIV - Additional Tax on Non-Resident Corporations, to calculate Part XIV tax. On line 728 of the return, enter the amount of Part XIV tax payable you calculated on Schedule 20.

Note
Corporations that are subject to Part XIV tax should file their return with the International Tax Services Office. See "Corporation Internet Filing " and "Where do you file your paper return?"

References
Section 219
IT-137, Additional Tax on Certain Corporations Carrying on Business in Canada

Provincial and territorial tax

Quebec and Alberta administer their own corporation income tax systems. Corporations that earn income in these provinces have to file separate provincial corporation income tax returns.

Note
For tax years ending in 2009 and later, corporations that have a permanent establishment in Ontario have to file a harmonized T2 Corporation Income Tax Return with the Canada Revenue Agency, along with an Ontario Corporations Information Act Annual Return.

All other provinces and territories legislate their corporation income tax provisions, but the CRA administers them. These provinces and territories do not charge income tax on the taxable income of corporations that are exempt from tax under section 149.

If the corporation has a permanent establishment in any province or territory other than Quebec or Alberta, you have to calculate provincial and/or territorial income taxes and credits, as well as federal income taxes and credits, on the return.

Permanent establishment

A permanent establishment in a province or territory is usually a fixed place of business of the corporation, which includes an office, branch, oil well, farm, timberland, factory, workshop, warehouse, or mine. If the corporation does not have a fixed place of business, the corporation's permanent establishment is the principal place in which the corporation's business is conducted.

If the corporation carries on business through an employee or an agent established in a particular place, it is considered to have a permanent establishment in that place if the employee or agent:

• has general authority to contract for the corporation; or
• has a stock of merchandise owned by the corporation from which the employee or agent regularly fills orders received.

See Regulation 400(2) for a complete definition of permanent establishment.

References
Regulation 400(2)
IT-177, Permanent Establishment of a Corporation in a Province

Line 750 - Provincial or territorial jurisdiction

On line 750, give the name of the province or territory where you earned your income. Usually, this is where the corporation has its permanent establishment.

If you earned income in more than one province or territory, write "multiple" on line 750 and file Schedule 5, Tax Calculation Supplementary - Corporations, with your return. See below for instructions on how to complete Schedule 5.

Note
The Newfoundland and Labrador offshore area and the Nova Scotia offshore area are considered provinces.

By completing line 750, you ensure that the income taxes go to the correct province or territory. Complete this line even if no tax is payable, or if the provincial jurisdiction is Quebec or Alberta.

Reference
Subsection 124(4)

Line 760 - Net provincial and territorial tax payable

If your provincial or territorial jurisdiction is not Quebec or Alberta, and you do not need to complete Schedule 5, enter your provincial or territorial tax payable on line 760.

If you do need to complete Schedule 5, the net amount of provincial or territorial tax will be calculated on line 255 of the schedule. If this amount is positive enter it on line 760 of the return. If this amount is negative, enter it on line 812 of the return.

The following section explains when and how to complete Schedule 5.

Schedule 5, Tax Calculation Supplementary - Corporations

You have to complete Schedule 5 if:

• there is a permanent establishment in more than one province or territory (complete Part 1), whether or not you are taxable (if taxable, also complete Part 2);
• the corporation is claiming provincial or territorial tax credits, or rebates (complete Part 2); or
• the corporation has to pay taxes other than income tax (see "Part 2 of Schedule 5").

Note
The Newfoundland and Labrador offshore area and the Nova Scotia offshore area are considered provinces.

For information on the calculation of tax for each province and territory, see the sections that follow in this chapter.

Part 1 of Schedule 5 - Allocation of taxable income

You must complete Part 1 of Schedule 5 if you had a permanent establishment in more than one province or territory. Complete columns A to F for each province or territory in which you had a permanent establishment in the tax year. If there is no taxable income, you only have to complete columns A, B and D.

Note
This also applies to corporations with permanent establishments in Quebec or Alberta.

We assess provincial or territorial income taxes on the amount of taxable income allocated to each province or territory. See Regulation 402 for details on how to allocate taxable income.

Generally, to allocate taxable income to each province or territory, you have to use a formula based on gross revenue, and salaries and wages. See Part 1 of Schedule 5 for details.

You will find the general rules on how to allocate gross revenue in Regulation 402.

Do not include any of the following amounts in gross revenue:

• interest on bonds, debentures, or mortgages;
• dividends on shares of capital stock; or
• rents or royalties from property that are not part of the principal business operations.

Allocate gross salaries and wages paid in the year to the permanent establishment in which those salaries and wages were paid. Do not include in gross salaries and wages any commissions paid to a person who is not an employee. The allocation of salaries paid through a central paymaster is subject to the deeming rules under Regulation 402.1 .

See Regulations 403 to 413 for details on special methods for allocating taxable income for the following types of businesses:

• insurance corporations (Regulation 403);
• banks (Regulation 404);
• trust and loan corporations (Regulation 405);
• railway corporations (Regulation 406);
• airline corporations (Regulation 407);
• grain elevator operators (Regulation 408);
• bus and truck operators (Regulation 409);
• ship operators (Regulation 410);
• pipeline operators (Regulation 411);
• divided businesses (Regulation 412);
• non-resident corporations (Regulation 413); and
• international banking centres (Regulation 413.1).

In field 100, enter the regulation number that applies to attribute the taxable income.

References
Regulations 400 to 413.1

Part 2 of Schedule 5 - Provincial and territorial tax credits and rebates

Complete Part 2 of Schedule 5 if:

• there is provincial or territorial tax (and a permanent establishment in more than one province or territory);
• there is a claim for provincial or territorial tax credits or rebates; or
• there is a claim for provincial or territorial refundable tax credits.

Note
Corporations with a permanent establishment in Quebec or Alberta must complete the appropriate provincial corporation returns and schedules to report provincial tax and claim provincial credits and rebates.

For tax years ending in 2009 or later, corporations with a permanent establishment in Ontario must also complete Part 2 of Schedule 5 if one of the three previous or six following conditions applies: The corporation:

• is claiming the Ontario small business deduction;
• is claiming the Ontario credit union reduction;
• has an addition to Ontario basic income tax (such as a transitional tax debit);
• has Ontario corporate minimum tax payable;
• has Ontario special additional tax on life insurance corporations payable; or
• has Ontario capital tax payable.

On line 255 of Schedule 5, enter the net amount of provincial and territorial tax payable or the net amount of refundable credits. When the result is positive, enter the net provincial or territorial tax payable on line 760 of the return. When the result is negative, enter the refundable provincial or territorial tax credit on line 812 of the return. Attach to your return any forms you completed to claim provincial or territorial credits or rebates.

In the following sections, you will find information about provincial and territorial tax rates, foreign tax credits, and details on the provincial and territorial credits and rebates.

Dual rates of provincial and territorial income tax

Generally, provinces and territories have two rates of income tax: the lower rate and the higher rate.

The lower rate applies to eligible income based on either:

• the income eligible for the federal small business deduction; or
• income limits established by the particular province or territory.

The higher rate applies to all other income. For detailed information on the income eligible for each rate and the rates that apply to each province and territory, see the sections that follow in this chapter.

When you allocate taxable income to more than one province or territory, you also have to allocate proportionally any income eligible for the small business deduction.

On the appropriate lines of Part 2 of Schedule 5, enter the gross amount of each provincial or territorial tax payable.

Provincial or territorial foreign tax credits

Every province and territory allows a corporation to claim a foreign tax credit for taxes it paid to another country on foreign non-business income. This credit reduces the provincial tax otherwise payable.

However, you cannot claim foreign tax credits for the provinces of Quebec and Alberta on the federal return, because these provinces collect their own income taxes.

Note
For tax years ending in 2009 and later, the provincial foreign tax credit for Ontario is claimed on the harmonized T2 return filed with the CRA.

The provincial or territorial foreign tax credit is available to a corporation that:

• is resident in Canada throughout the tax year;
• has a permanent establishment in the province or territory at any time in the tax year; and
• has foreign investment income for the tax year.

For Ontario, an authorized foreign bank is eligible for the foreign tax credit if it performed Canadian banking business.

The tax credit can only be claimed if the foreign non-business income tax paid exceeds the federal foreign non-business income tax credit deductible for the year.

For each province or territory for which you are claiming a credit, you have to do a separate calculation. Also, if you paid tax to more than one foreign country you have to do a separate calculation for each country.

If dual rates of corporate tax apply, use the higher rate when you calculate the foreign tax credit. For Ontario, use the basic rate of tax.

To claim the foreign tax credit, complete Schedule 21, Federal and Provincial or Territorial Foreign Income Tax Credits and Federal Logging Tax Credit.

Note
If the tax rate has changed during the tax year, you have to prorate the calculation in Part 9 of Schedule 21 using the number of days in each period. For British Columbia, prorate the tax rate in each period, round off the prorated rates to the nearest one-thousandth of 1 percent (= 0.001%), and add the rounded percentages for the periods before multiplying by the foreign non-business income.

On the appropriate lines of Part 2 of Schedule 5, enter the applicable provincial and territorial foreign tax credits.

Newfoundland and Labrador

The lower rate of Newfoundland and Labrador income tax is 5%. This lower rate applies to taxable income earned in Newfoundland and Labrador that qualifies for the federal small business deduction.

The higher rate of income tax is 14%. This higher rate applies to taxable income earned in Newfoundland and Labrador that does not qualify for the federal small business deduction.

These rates also apply to taxable income earned in the Newfoundland and Labrador offshore area.

On line 200 and/or 205 of Schedule 5, enter the amount of tax calculated.

Newfoundland and Labrador capital tax on financial institutions

For tax years that start after October 31, 2008, Newfoundland and Labrador harmonized its provincial financial corporations capital tax with the Part VI federal tax on the capital of financial institutions.

A provincial tax is levied on the taxable capital of financial institutions that have a permanent establishment in Newfoundland and Labrador. This tax applies to banks and trust and loans corporations.

A capital deduction of $5 million is available to a corporation that is not a member of a related group and has a capital of $10 million or less. If the corporation is a member of a related group, a capital deduction of $5 million to be allocated among members of the related group is available as long as the combined capital of all members of the related group is $10 million or less.

Use Schedule 306, Newfoundland and Labrador Capital Tax on Financial Institutions – Agreement Among Related Corporations, to allocate the capital deduction. File this agreement with your return.

The tax is equal to 4% of the amount by which the corporation's taxable capital employed in the province for the year, including the offshore area, exceeds its capital deduction for the year.

Corporations that are liable to pay this tax have to file Schedule 305, Newfoundland and Labrador Capital Tax on Financial Institutions.

On line 518 of Schedule 5, enter the provincial tax on financial institutions payable.

A penalty applies to financial institutions that have to pay this tax and do not file the required return on time. For details, see "Penalties".

Instalment payment requirements are the same as for Part I tax. For details, see "Instalment due dates".

The provincial capital tax cannot be reduced by any tax credits. However, you can deduct the capital tax payable when calculating federal income for tax purposes.

Newfoundland and Labrador political contribution tax credit

You can claim a tax credit on contributions made to registered political parties, registered district associations, or registered non-affiliated candidates, as defined under the Elections Act, 1991, of Newfoundland and Labrador, as follows:

• 75% of the first $100 contributed;

plus

• 50% of the next $450 contributed;

plus

• 33 1/3% of the amount contributed that is more than $550, to a maximum credit of $500.

You do not have to file official receipts with your return. However, keep them in case we ask for them later. We can only accept photocopies if the issuer certifies them as true copies.

On line 891 of Schedule 5, enter the total amount of qualifying contributions, and on line 500, enter the amount of the credit you are claiming.

Newfoundland and Labrador manufacturing and processing profits tax credit

Corporations that have earned taxable income in Newfoundland and Labrador and have manufacturing and processing profits are eligible for this credit.

This credit cannot be claimed unless the corporation has engaged in manufacturing or processing in the tax year from a permanent establishment in Newfoundland and Labrador.

Schedule 300, Newfoundland and Labrador Manufacturing and Processing Profits Tax Credit, is a worksheet to calculate the credit and does not have to be filed with your return. See the schedule for more details.

On line 503 of Schedule 5, enter the amount of the credit you are claiming.

Newfoundland and Labrador direct equity tax credit

You can claim this credit for an investment in eligible shares of a business with which you deal at arm's length.

There are two tax credit rates. For qualifying activities undertaken in the province outside the Northeast Avalon, a 35% rate applies. For qualifying activities undertaken within the Northeast Avalon, a 20% rate applies. In cases where qualifying activities are undertaken in both areas, a reasonable proration applies.

The maximum credit you can claim is $50,000 per year, including any amounts carried back or carried forward.

This credit must be claimed against tax otherwise payable before the Newfoundland and Labrador small business tax holiday. You can carry forward unused credits for seven years or back three years.

The province of Newfoundland and Labrador will issue Form NLDETC-1, Newfoundland and Labrador Direct Equity Tax Credit, for eligible investments. File this form with your T2 return.

To claim the credit, file a completed Schedule 303, Newfoundland and Labrador Direct Equity Tax Credit. See the schedule for more details.

On line 505 of Schedule 5, enter the amount of the credit.

Newfoundland and Labrador resort property investment tax credit

You can claim this credit if you make an investment in a qualifying resort development property in Newfoundland and Labrador after June 13, 2007, but not more than five years after the qualifying resort development property was first made available for sale. The investment must be made at arm's length. The credit is equal to 45% of the amount invested to a lifetime maximum credit of $150,000.

The maximum credit you can claim in the tax year is $50,000, including any amounts carried back or carried forward.

This credit must be claimed against tax otherwise payable before the Newfoundland and Labrador small business tax holiday. You can carry forward unused credits to the seven following tax years or back to the three previous tax years.

The Province of Newfoundland and Labrador will issue Form NLRPITC-1, Newfoundland and Labrador Resort Property Investment Tax Credit, for qualifying investments. File this form with your T2 return.

To claim the credit, file a completed Schedule 304, Newfoundland and Labrador Resort Property Investment Tax Credit.

On line 507 of Schedule 5, enter the amount of the credit you are claiming.

Newfoundland and Labrador small business tax holiday

The province of Newfoundland and Labrador will issue a Small Business Tax Holiday Certificate (NLSBTH) to eligible new businesses incorporated between April 1, 2003, and March 31, 2006, that operate in designated growth sectors of the economy and are not associated with another business.

For businesses located on the Northeast Avalon Peninsula, the tax holiday will be provided for the new company's first three fiscal years. For those located outside the Northeast Avalon, the tax holiday will apply for the first five fiscal years.

You do not have to file the certificate with your return. However, keep it in case we ask for it later.

On lines 832 and 511 of Schedule 5, enter the certificate number and the amount you are claiming.

Newfoundland and Labrador research and development tax credit

You can claim this credit if you have a permanent establishment in Newfoundland and Labrador and if you made eligible expenditures for research and development carried out in Newfoundland and Labrador. The credit is equal to 15% of eligible expenditures.

The credit is fully refundable, but must first be applied against total taxes payable. There are no carry-back or carry-forward provisions.

To claim the credit, file a completed Schedule 301, Newfoundland and Labrador Research and Development Tax Credit, with your return. See the schedule for more details.

On line 520 of Schedule 5, enter the amount of credit earned in the year.

Newfoundland and Labrador film and video industry tax credit

The Minister of Finance for the province of Newfoundland and Labrador will issue a tax credit certificate to a corporation that produces an eligible film or video in the province.

The amount of the credit is equal to the lesser of 40% of eligible salaries paid in the tax year to residents of the province or 25% of the total production costs for each eligible film or video.

The tax credit:

• applies to eligible salaries incurred before January 1, 2014; and
• is a maximum of $3 million for each eligible corporation, together with all corporations associated with that corporation, for all eligible films or videos begun in a 12-month period.

This credit is fully refundable, but must first be applied against total taxes payable. There are no carry-back or carry-forward provisions.

You do not have to file the certificate with your return. However, keep it in case we ask for it later.

If there is only one certificate, enter the certificate number on line 821 of Schedule 5. If there is more than one certificate, complete Schedule 302, Additional Certificate Numbers for the Newfoundland and Labrador Film and Video Industry Tax Credit, and file it with your return.

On line 521 of Schedule 5, enter the amount of the credit earned in the current year.

Prince Edward Island

The lower rate of Prince Edward Island income tax is:

• 4.3% effective April 1, 2007;
• 3.2% effective April 1, 2008;
• 2.1% effective April 1, 2009; and
• 1% effective April 1, 2010.

The tax is prorated based on the number of days in the year when the tax year straddles these dates.

This rate applies to:

• taxable income earned in Prince Edward Island that qualifies for the federal small business deduction; and
• a credit union's income that qualifies for the additional deduction under subsection 137(3).

The higher rate of income tax is 16%. This rate applies to taxable income that does not qualify for the federal small business deduction.

On line 210 of Schedule 5, enter the amount of tax calculated.

Prince Edward Island political contribution tax credit

You can claim a tax credit on contributions made to recognized Prince Edward Island political parties, and to candidates who were officially nominated under the Elections Act of Prince Edward Island, as follows:

• 75% of the first $100 contributed;

plus

• 50% of the next $450 contributed;

plus

• 33 1/3% of the amount contributed that is more than $550, to a maximum credit of $500.

You do not have to file official receipts with your return. However, keep them in case we ask for them later. We can only accept photocopies if the issuer certifies them as true copies.

On line 892 of Schedule 5, enter the total amount of qualifying contributions, and on line 525, enter the amount of credit you are claiming.

Prince Edward Island corporate investment tax credit

Corporations that have acquired qualified property are eligible for this credit. Apply the credit to reduce the Prince Edward Island tax payable.

You can carry back an unused credit to the three previous tax years from the tax year that you acquired the property. You can also carry forward the unclaimed credit to the seven tax years that follow the tax year in which you acquired the property.

The credit can be renounced but must include all current year credits. Partial renouncements are not permitted. The renouncement must be filed on or before the filing due date of the income tax return.

To claim the credit, file a completed Schedule 321, Prince Edward Island Corporate Investment Tax Credit, with your return. See the schedule for more details.

On line 530 of Schedule 5, enter the amount of the credit you are claiming.

Nova Scotia

The lower rate of Nova Scotia income tax is 5%.

The Nova Scotia business limit is $400,000.

The higher rate of income tax is 16%. This rate applies to taxable income earned in Nova Scotia that does not qualify for the lower rate.

These rates also apply to taxable income earned in the Nova Scotia offshore area.

You can use Schedule 346, Nova Scotia Corporation Tax Calculation, to help you calculate the Nova Scotia tax before the application of credits. You do not have to file it with your return. See the schedule for more details.

On line 215 and/or 220 of Schedule 5, enter the amount of tax calculated.

Nova Scotia tax on large corporations

A provincial tax is levied on the taxable capital of large corporations that have a permanent establishment in Nova Scotia, except for:

• corporations mentioned in subsection 181.1(3) of the federal Income Tax Act; and
• banks, credit unions, trust and loan companies.

The Nova Scotia tax on large corporations will be completely eliminated by 2012.

A capital deduction of $5 million is available to a corporation that is not a member of a related group and has taxable capital employed in Canada of less than $10 million. If the corporation is a member of a related group, a capital deduction of $5 million to be allocated among members of the related group is available as long as the combined taxable capital of all members of the related group is less than $10 million.

Use Schedule 343, Nova Scotia Tax on Large Corporations - Agreement Among Related Corporations, to allocate the capital deduction. File this agreement with your return.

Note
Schedule 343 need only be filed by one of the associated/related corporations for a calendar year. However, if Schedule 343 is not already on file with us when we assess any of the returns for a tax year ending in the calendar year of the agreement, we will ask for one.

The tax rates of a corporation when the taxable capital employed in Canada of all related corporations is less than $10 million are as follows:

• 0.45% effective July 1, 2007;
• 0.4% effective July 1, 2008;
• 0.3% effective July 1, 2009;
• 0.2% effective July 1, 2010;
• 0.1% effective July 1, 2011; and
• 0% effective July 1, 2012.

The tax rates of a corporation when the taxable capital employed in Canada of all related corporations is $10 million or more are as follows:

• 0.225% effective July 1, 2007;
• 0.2% effective July 1, 2008;
• 0.15% effective July 1, 2009;
• 0.1% effective July 1, 2010;
• 0.05% effective July 1, 2011; and
• 0% effective July 1, 2012.

These rates apply to the taxable capital allocated to the province of Nova Scotia including the Nova Scotia offshore area.

The tax is prorated based on the number of days in the year when the tax year straddles these dates.

Corporations that are liable to pay the Nova Scotia tax on large corporations have to file Schedule 342, Nova Scotia Tax on Large Corporations. Use this schedule to also calculate and claim the Nova Scotia energy tax credit (see below).

On line 765 of the T2 return, enter the provincial tax on large corporations payable.

A penalty applies to large corporations that have to pay this tax and do not file the required return on time. For details, see "Penalties".

Instalment payment requirements are the same as for Part I tax. For details, see "Instalment due dates".

The provincial capital tax cannot be reduced by any tax credits, except the new energy tax credit; however, you can deduct the capital tax payable when calculating federal income for tax purposes.

Nova Scotia energy tax credit

This is a non-refundable tax credit equal to 25% of eligible capital investments in Nova Scotia on renewable energy sources or energy efficiency investments made by a corporation in a given year, after June 30, 2006. The credit can be used to reduce up to a maximum of 50% of the provincial capital tax payable in a tax year. Any unused credit can be carried forward seven tax years.

A corporation can renounce the energy tax credit. The renouncement must be filed on or before the filing due date of the income tax return.

Complete Schedule 342, Nova Scotia Tax on Large Corporations, to calculate and claim this credit.

Nova Scotia political contribution tax credit

You can claim a tax credit on contributions made to candidates and recognized parties, as defined under the Nova Scotia Elections Act. The amount that you can claim is the lesser of:

• 75% of the total contributions;

and

• $750

You do not have to file official receipts with your return. However, keep them in case we ask for them later. We can only accept photocopies if the issuer certifies them as true copies.

On line 893 of Schedule 5, enter the total amount of qualifying contributions, and on line 550 enter the amount of the credit you are claiming.

Nova Scotia manufacturing and processing investment tax credit

This credit was earned on qualified property acquired before January 1, 2003. The qualified property had to be used or leased in Nova Scotia mainly for manufacturing or processing goods. The credit was equal to 15% of the total capital cost of the qualified property.

A corporation could add expenditures made after January 1, 2003, and before May 10, 2006, to the total capital cost of qualified property if more than 50% of the expected total capital cost of the qualified property had been incurred before January 1, 2003.

You can carry forward the unclaimed credit to the seven tax years that follow the tax year in which you acquired the property. However, 2009 is the last tax year to which you can carry the credit forward.

To claim a credit carried forward from previous tax years, file a completed Schedule 344, Nova Scotia Manufacturing and Processing Investment Tax Credit. The capital cost of qualified property must have been identified on this schedule and filed no later than 12 months after the income tax return was due for the tax year in which the costs had been incurred. For more details, see the schedule.

On line 561 of Schedule 5, enter the amount of credit you are claiming.

Nova Scotia corporate tax reduction for new small businesses

This tax reduction applies to the first three tax years of qualifying CCPCs incorporated in Nova Scotia. This tax reduction also applies to a corporation incorporated outside the province, but inside of Canada, if it pays at least 25% of its wages to employees who are resident in the province and its head office is located in the province.

If the qualifying corporation is eligible for a federal small business deduction for the year, it can claim this tax reduction to reduce Nova Scotia income tax otherwise payable.

Schedule 341, Nova Scotia Corporate Tax Reduction for New Small Businesses, is a worksheet to calculate the credit and does not have to be filed with your return. You do not have to file the certificate of eligibility that the province issues. However, keep it in case we ask for it later.

On lines 834 and 556 of Schedule 5, enter the certificate number and the amount of the reduction you are claiming.

Nova Scotia film industry tax credit

The Minister of Finance for the Province of Nova Scotia will issue a tax credit certificate to a corporation producing an eligible film in the province.

The credit currently ranges from 50% to 65% of eligible salaries paid to residents of the province, and is limited by the production costs.

For film production activities between October 1, 2007, and December 31, 2015, the credit is equal to:

When 50% or more of the days of principal photography of the production are in an eligible geographic area:

• whichever is less:
  • 60% of all eligible salaries paid to residents of the province; or
  • 30% of total production costs of the eligible film.

When less than 50% of the days of principal photography of the production are in an eligible geographic area:

• whichever is less:
  • 60% of eligible salaries paid to residents of the province prorated for the number of days of principal photography that are inside the eligible geographic area over the total number of days of principal photography; or
  • 30% of total production costs of the eligible film prorated for the number of days of principal photography that are inside the eligible geographic area over the total number of days of principal photography;

plus

• whichever is less:
  • 50% of eligible salaries paid to residents of the province prorated for the number of days of principal photography that are outside the eligible geographic area over the total number of days of principal photography; or
  • 25% of total production costs of the eligible film prorated for the number of days of principal photography that are outside the eligible geographic area over the total number of days of principal photography.

Production companies that shoot more than two films in the province over a two year period are eligible for an additional 5% of eligible salaries frequent film bonus on the third and subsequent films.

This credit is refundable, but must first be applied against total taxes payable. There are no carry back or carry forward provisions.

You do not have to file the certificate with your return. However, keep it in case we ask for it later.

If there is only one certificate, enter the certificate number on line 836 of Schedule 5. If there is more than one certificate, complete Schedule 345, Additional Certificate Numbers for the Nova Scotia Film Industry Tax Credit, and file it with your return.

On line 565 of Schedule 5, enter the amount of the credit earned in the current year.

Nova Scotia research and development tax credit

You can claim this credit if you have a permanent establishment in Nova Scotia and if you made eligible expenditures for research and development carried out in Nova Scotia. The credit is equal to 15% of eligible expenditures.

The credit is fully refundable, but must first be applied against total taxes payable. There are no carry-back or carry-forward provisions.

You can renounce the research and development tax credit for an eligible expenditure incurred during the year under subsection 41(7) of the Income Tax Act (Nova Scotia).

To calculate and claim the credit, file a completed Schedule 340, Nova Scotia Research and Development Tax Credit, with your return. See the schedule for more details.

On line 566 of Schedule 5, enter the amount of credit earned in the year.

Recapture of Nova Scotia research and development tax credit

A corporation that disposed of a property used in research and development, or converted the property to commercial use, may have to report a recapture of any Nova Scotia research and development tax credit previously calculated on that property. Any recapture will create or increase Nova Scotia tax otherwise payable.

To calculate the recapture, complete Schedule 340, Nova Scotia Research and Development Tax Credit. See the schedule for more details.

On line 221 of Schedule 5, enter the amount of recapture calculated.

Nova Scotia digital media tax credit

The Minister of Finance for the Province of Nova Scotia will issue a tax credit certificate to a corporation producing an eligible product in the province.

The credit is based on the qualifying expenditures incurred after June 30, 2007, and before January 1, 2013, and is limited by total expenditures. The amount of the credit is the lesser of:

• 60% of the qualifying expenditures incurred after December 31, 2007 (40% before January 1, 2008), to develop an eligible product in a prescribed geographic area; plus
• 50% of the qualifying expenditures incurred after December 31, 2007 (35% before January 1, 2008), to develop an eligible product outside a prescribed geographic area;

or

• 30% of the total expenditures incurred after December 31, 2007 (20% before January 1, 2008), to develop an eligible product in a prescribed geographic area; plus
• 25% of the total expenditures incurred after December 31, 2007 (17.5% before January 1, 2008), to develop an eligible product outside a prescribed geographic area.

This credit is refundable, but must first be applied against total taxes payable. There are no carry back or carry forward provisions.

You do not have to file the certificate with your return. However, keep it in case we ask for it later.

If there is only one certificate, enter the certificate number on line 838 of Schedule 5. If there is more than one certificate, complete Schedule 347, Additional Certificate Numbers for the Nova Scotia Digital Media Tax Credit, and file it with your return.

On line 567 of Schedule 5, enter the amount of the credit earned in the current year.

New Brunswick

The lower rate of New Brunswick income tax is 5% effective January 1, 2007.

The income eligible for the lower rates is determined using the New Brunswick business limit of $400,000, effective January 1, 2007.

The higher rate of New Brunswick income tax is 13%.

Starting July 1, 2009, the higher rate will decrease as follows:

• 12% effective July 1, 2009;
• 11% effective July 1, 2010;
• 10% effective July 1, 2011; and
• 8% effective July 1, 2012.

This rate applies to all income not eligible for the lower rates.

The tax is prorated based on the number of days in the year when the tax year straddles these dates.

You can use Schedule 366, New Brunswick Corporation Tax Calculation, to help you calculate the New Brunswick tax before the application of credits. You do not have to file it with your return. See the schedule for more details.

On line 225 of Schedule 5, enter the amount of tax calculated.

New Brunswick tax on large corporations

A provincial tax is levied on the taxable capital of large corporations that have a permanent establishment in New Brunswick, except for:

• corporations mentioned in subsection 181.1(3) of the federal Income Tax Act; and
• financial institutions.

The New Brunswick tax on large corporations is completely eliminated effective January 1, 2009.

A $5 million capital deduction on taxable capital is available to corporations. If the corporation is a member of a related group, the capital deduction has to be allocated between the members.

Use Schedule 362, New Brunswick Tax on Large Corporations - Agreement Among Related Corporations, to allocate the capital deduction. File this agreement with your return.

Note
Schedule 362 need only be filed by one of the associated/related corporations for a calendar year. However, if Schedule 362 is not already on file with us when we assess any of the returns for a tax year ending in the calendar year of the agreement, we will ask for one.

New Brunswick tax on large corporations is the taxable capital allocated to the province of New Brunswick multiplied by:

• 0.20% effective January 1, 2007;
• 0.10% effective January 1, 2008; and
• 0% effective January 1, 2009.

The tax is prorated based on the number of days in the year when the tax year straddles these dates.

Corporations that are liable to pay the New Brunswick capital tax on large corporations have to file Schedule 361, New Brunswick Tax on Large Corporations.

On line 765 of the T2 return, enter the provincial tax on large corporations payable.

A penalty applies to large corporations that have to pay this tax and do not file the required return on time. For details, see "Penalties".

Instalment payment requirements are the same as for Part I tax. For details, see "Instalment due dates".

The provincial capital tax cannot be reduced by any tax credits; however, you can deduct the capital tax payable when calculating federal income for tax purposes.

New Brunswick political contribution tax credit

You can claim a tax credit on contributions made to a registered political party, a registered district association, or a registered independent candidate, as defined under the New Brunswick Elections Act, as follows:

• 75% of the first $200 contributed;

plus

• 50% of the next $350 contributed;

plus

• 33 1/3% of the next $525 contributed, to a maximum credit of $500.

You do not have to file official receipts with your return. However, keep them in case we ask for them later. We can accept photocopies only if the issuer certifies them as true copies.

On line 894 of Schedule 5, enter the total amount of qualifying contributions, and on line 575 enter the amount of the credit you are claiming.

New Brunswick non-refundable research and development tax credit

Corporations can no longer file a claim for this credit, since it was available only on eligible expenditures for research and development carried out in New Brunswick before January 1, 2003. Any unused credits can be carried forward for up to seven tax years that follow the tax year in which you made the expenditure.

To claim a carryforward, file a completed Schedule 360, New Brunswick Research and Development Tax Credit, with your return. For more details, see the schedule.

On line 577 of Schedule 5, enter the amount of the credit you are claiming.

New Brunswick refundable research and development tax credit

You can claim this credit if you have a permanent establishment in New Brunswick and you made eligible expenditures for research and development to be carried out in New Brunswick. The amount of the credit is equal to 15% of eligible expenditures.

The credit is fully refundable and there are no carry-forward or carry-back provisions.

To claim the credit, file a completed Schedule 360, New Brunswick Research and Development Tax Credit, with your return. For more details, see the schedule.

On line 597 of Schedule 5, enter the amount of the credit you are claiming.

Recapture of New Brunswick research and development tax credit

A corporation that disposed of a property used in research and development, or converted it to commercial use, may have to report a recapture of any New Brunswick research and development tax credit previously calculated on that property. Any recapture will create or increase New Brunswick tax otherwise payable.

To calculate the recapture, complete Schedule 360, New Brunswick Research and Development Tax Credit.

On line 573 of Schedule 5, enter the amount of recapture calculated.

New Brunswick film tax credit

The Minister of Finance for the province of New Brunswick will issue a tax credit certificate to a corporation producing an eligible film in the province.

The amount of the credit cannot be more than 40% of the amount of eligible salaries paid in the tax year.

The credit is subject to the following conditions:

• the tax credit applies to eligible salaries incurred before January 1, 2010;
• an eligible corporation must, for each eligible project, pay at least 25% of its total salaries and wages to eligible employees; and
• the tax credit applies only to that portion of eligible salaries that is not more than 50% of the total production costs of the eligible project less the amount of production costs funded by the province.

This credit is fully refundable, but must first be applied against total taxes payable. There are no carry-back or carry-forward provisions.

You do not have to file the certificate with your return. However, keep it in case we ask for it later.

If there is only one certificate, enter the certificate number on line 850 of Schedule 5. If there is more than one certificate, complete Schedule 365, Additional Certificate Numbers for the New Brunswick Film Tax Credit, and file it with your return.

On line 595 of Schedule 5, enter the amount of the credit earned in the current year.

Ontario

For tax years ending in 2009 and later, corporations that have a permanent establishment in Ontario have to file a harmonized T2 Corporation Income Tax Return with the CRA. The harmonized return includes the following Ontario corporation taxes: corporate income tax, including refundable tax credits, corporate minimum tax, capital tax, and special additional tax on life insurance corporations.

The basic rate of income tax is 14%.

The tax is prorated based on the number of days in the year when the tax year straddles these dates.

You can use Schedule 500, Ontario Corporation Tax Calculation, to calculate your Ontario basic income tax. Schedule 500 is a worksheet and does not have to be filed with your return.

On line 270 of Schedule 5, enter the amount of basic income tax calculated.

Ontario small business deduction

Before 2009 the Ontario small business deduction was known as the incentive deduction for small business corporations.

The deduction reduces the Ontario basic income tax of a corporation that was a CCPC throughout the tax year. It is calculated by multiplying the corporation's Ontario small business income for the tax year by the small business deduction rate (8.5%) for the year, resulting in a lower tax rate of 5.5%.

The tax is prorated based on the number of days in the year when the tax year straddles July 1, 2010.

Calculate a corporation's Ontario small business income for the tax year by multiplying its Ontario domestic factor by the least of the following amounts:

• the income from an active business carried on in Canada (amount on line 400 of the T2 return);
• the federal taxable income, less adjustment for foreign tax credit (amount on line 405 of the T2 return); or
• the unreduced federal business limit adjusted for Ontario's higher business limit of $500,000 for days in the tax year that are in 2008 (line 3 on page 1 of Schedule 500).

The corporation's Ontario domestic factor is the ratio of the corporation's Ontario taxable income to the corporation's taxable income earned in all provinces and territories.

You can use Part 2 of Schedule 500, Ontario Corporation Tax Calculation, to calculate the deduction. Schedule 500 is a worksheet and does not have to be filed with your return.

On line 402 of Schedule 5, enter the small business deduction amount.

Surtax re Ontario small business deduction

The Ontario surtax re Ontario small business deduction claws back the small business deduction from more profitable CCPCs.

The surtax of 4.25% applies to CCPCs whose adjusted taxable income and the adjusted taxable income of all associated corporations, if any, exceed the Ontario business limit of $500,000. The surtax fully claws back the deduction when the adjusted taxable income of the corporation or the associated group is equal to or more than $1,500,000.

A corporation's adjusted taxable income is equal to:

• its taxable income or taxable income earned in Canada for the year;

plus

• its adjusted Crown royalties for the year, as calculated on Schedule 504;

minus

• its notional resource allowance for the year, as calculated on Schedule 504.

The surtax re Ontario small business deduction is eliminated effective July 1, 2010.

You can use Part 3 of Schedule 500, Ontario Corporation Tax Calculation, to calculate the surtax. Schedule 500 is a worksheet and does not have to be filed with your return.

If the corporation is a member of an associated group, also complete Schedule 501, Ontario Adjusted Taxable Income of Associated Corporations to Determine Surtax re Ontario Small Business Deduction.

On line 272 of Schedule 5, enter the amount of the surtax.

Ontario additional tax re Crown royalties

File a completed Schedule 504, Ontario Resource Tax Credit and Ontario Additional Tax re Crown Royalties, with the return. For more information, see "Ontario resource tax credit".

On line 274 of Schedule 5, enter the amount of the additional tax re Crown royalties.

Ontario transitional tax debits and credits

The Ontario transitional tax debits and credits provide a transition from the Corporations Tax Act (Ontario) for corporations with different income tax attributes for federal and Ontario purposes.

For tax years ending before 2009, a corporation's income and taxable income for Ontario purposes are determined based on its Ontario tax pools (for example, the undepreciated capital cost of depreciable property) under the Corporations Tax Act (Ontario).

For tax years ending after 2008, the corporation's income and taxable income for Ontario purposes are determined based on its federal tax pools under the Taxation Act, 2007 (Ontario).

Where the corporation's federal tax pools exceed its Ontario tax pools, the corporation has a transitional tax debit. A specified corporation subject to the Ontario transitional tax debit is generally required to pay additional Ontario corporate income tax over a five-year period beginning with its first tax year ending after 2008.

Conversely, where the corporation's Ontario tax pools exceed its federal tax pools, the corporation has a transitional tax credit. A specified corporation is generally entitled to a transitional tax credit over a five-year period beginning with its first tax year ending after 2008.

A specified corporation is defined under subsection 46(5) of the Taxation Act, 2007 (Ontario).

Complete Schedule 506, Ontario Transitional Tax Debits and Credits, to calculate the corporation's transitional tax debits and tax credits. Use Schedule 507, Ontario Transitional Tax Debits and Credits Calculation, to determine the amounts to enter in Part 3 of Schedule 506.

File Schedule 506 with the return. Schedule 507 does not have to be filed with the return.

On line 276 of Schedule 5, enter the total transitional tax debits.

On line 414 of Schedule 5, enter the transitional tax credits.

Ontario corporate minimum tax

The Ontario corporate minimum tax payable is equal to the amount by which the corporate minimum tax exceeds the Ontario corporate income tax.

A corporation is subject to corporate minimum tax if its total assets exceed $5,000,000 or total revenue exceeds $10,000,000, except if it was, throughout the tax year:

• a corporation exempt from income tax under section 149;
• a mortgage investment corporation under subsection 130.1(6);
• a deposit insurance corporation under subsection 137.1(5);
• a congregation or business agency to which section 143 applies;
• an investment corporation referred to in subsection 130(3); or
• a mutual fund corporation under subsection 131(8).

In determining if the total assets or total revenue exceeds the limits, a corporation must include its share of the total assets and total revenue of a partnership in which it has an interest, any associated foreign or Canadian corporation, and any associated corporation's share of a partnership. If a corporation is associated it must complete and file Schedule 511, Ontario Corporate Minimum Tax - Total Assets and Revenue for Associated Corporations, to report the total assets and total revenue of all the associated corporations.

File Schedule 510, Ontario Corporate Minimum Tax, with your T2 Corporation Income Tax Return if:

• the corporation is subject to corporate minimum tax for the tax year (Part 1 of the schedule);
• the corporation is not subject to corporate minimum tax in the year, but is deducting a corporate minimum tax credit or has a corporate minimum tax credit carryforward (see "Ontario corporate minimum tax"), loss carryforward, or current year corporate minimum tax loss (Parts 4 to 8 of the schedule); or
• the corporation has special additional tax on life insurance corporations payable in the year even if it is not subject to corporate minimum tax for the tax year (Part 4 of Schedule 510, and Schedule 512, Ontario Special Additional Tax on Life Insurance Corporations [SAT]).

Corporate minimum tax is based on the adjusted net income of a corporation. The adjusted net income is a corporation's net income calculated in accordance with Canadian generally accepted accounting principles or the International Financial Reporting Standards, with various adjustments. The adjustments are reported on Part 2 of Schedule 510.

Accounting gains reported in the year from corporation reorganizations that are deferred for income tax purposes are deductible when calculating adjusted net income.

Accounting gains reported in the year on the transfer of property under section 85, section 85.1, section 97, subsection 13(4), subsection 14(6) and/or section 44 are deductible when calculating adjusted net income. An election is required in order to claim this deduction. We will consider a corporation to have filed an election (and to not need to file another document) if it reports the deduction and has filed the election(s) required for corporate income tax purposes.

In addition, certain unrealized mark-to-market gains/losses and foreign currency that are not required to be included in computing income for income tax purposes are not included in adjusted net income. For additional information see Ontario Regulation 37/09.

File a completed Schedule 510 with your return and, if applicable, Schedule 511.

On line 278 of Schedule 5, enter the amount of the corporate minimum tax.

References
Division C, Sections 54 - 62 Taxation Act, 2007 (Ontario)

Corporate minimum tax loss carryforward

A corporate minimum tax loss earned in a tax year ending before March 24, 2007, may be carried forward 10 years. A loss earned in a tax year ending after March 23, 2007, may be carried forward 20 years.

A corporate minimum tax loss may be transferred to a successor corporation on an amalgamation under section 87 that occurred before March 22, 2007. The loss may not be transferred from a subsidiary to the successor on an amalgamation of a parent and subsidiary corporations occurring after March 21, 2007.

A corporate minimum tax loss may be transferred to a parent corporation on a winding-up of its subsidiary under subsection 88(1) completed before March 22, 2007. The loss may not be transferred to a parent corporation on any winding-up completed after March 21, 2007.

Ontario special additional tax on life insurance corporations

A life insurance corporation carrying on business in Ontario at any time in the tax year is subject to the Ontario special additional tax on life insurance corporations.

The special additional tax payable for a tax year is equal to the amount by which:

• 1.25% of the corporation's taxable paid-up capital multiplied by the number of days in the tax year divided by 365

exceeds

• the total of the corporation's Ontario corporate income tax and corporate minimum tax payable for the year.

Use Schedule 512, Ontario Special Additional Tax on Life Insurance Corporations (SAT), to calculate the tax payable.

For tax years ending in 2009 and later, the special additional tax paid for a tax year is added to the corporation's corporate minimum tax credit carryforward. This credit may be deducted to reduce Ontario corporate income tax payable in future years . . Refer to "Ontario Corporate Minimum Tax Credit" for more information. Enter the special additional tax payable for the tax year in Part 4 of Schedule 510, Ontario Corporate Minimum Tax.

Life insurance corporations that are subject to the special additional tax and related, at the end of the tax year, to another life insurance corporation carrying on business in Canada must use Schedule 513, Agreement Among Related Life Insurance Corporations (Ontario), to allocate the capital allowance among the members of the related group.

File Schedule 512 and, if applicable, Schedule 513, with your return.

On line 280 of Schedule 5, enter the amount of special additional tax payable.

Ontario capital tax

For tax years starting before July 1, 2010, corporations that have a permanent establishment in Ontario any time in the tax year are liable for Ontario capital tax under section 64 of the Taxation Act, 2007 (Ontario). These include both financial institutions and corporations other than financial institutions, except:

• a corporation that is liable for the special additional tax under section 74 of the Corporations Tax Act (Ontario);
• a deposit insurance corporation, as defined in section 137.1 of the federal Income Tax Act;
• a credit union;
• a corporation exempt from income tax under section 149 of the federal Act;
• a family farm corporation for the year, as defined in subsection 64(3) of the Taxation Act, 2007 (Ontario), other than a corporation for which a determination has been made under subsection 31(2) of the federal Act; and
• a family fishing corporation for the year, as defined in subsection 64(3) of the Taxation Act, 2007 (Ontario).

Note
The Ontario capital tax will be eliminated by July 1, 2010. The tax is eliminated effective January 1, 2007, for businesses mainly engaged in qualifying manufacturing and resource activities in Ontario.

Capital deduction

The taxable capital is reduced by a $15 million capital deduction.

Financial institutions

The rates of capital tax payable by financial institutions are:

Applicable period	First $400 million of taxable capital	Taxable capital over $400 million
		Non-deposit taking	Deposit taking
Before Jan. 1, 2010	0.45%	0.54%	0.675%
After Dec. 31, 2009 and before July 1, 2010	0.3%	0.36%	0.45%
July 1, 2010	Eliminated	Eliminated	Eliminated

The investment allowance of an authorized foreign bank is generally calculated in the same way as for other financial institutions under the Taxation Act, 2007 (Ontario). However, an investment made by an authorized foreign bank is not eligible if the investee corporation is exempt from capital tax.

Note
An authorized foreign bank is defined by section 2 of the Bank Act and in general terms is a foreign bank authorized to operate in Canada through a branch. The paid-up capital of an authorized foreign bank is the same amount as its capital for federal large corporations tax purposes.

To calculate your capital tax payable, complete the following:

• Schedule 34, Part I.3 Tax on Financial Institutions (in 2010, the title will change to Taxable Capital Employed in Canada - Financial Institutions);
• Schedule 517, Calculation of Ontario Capital Tax Investment Allowance for Financial Institutions; and
• Schedule 514, Ontario Capital Tax on Financial Institutions.

File completed Schedules 34 and 514 with your T2 return within six months of the end of the tax year.

On line 282 of Schedule 5, enter the Ontario capital tax payable.

Other than financial institutions

The rates of capital tax payable by a corporation that is other than a financial institution are:

• 0.225% before January 1, 2010;
• 0.15% after December 31, 2009 and before July 1, 2010; and
• 0% effective July 1, 2010.

To calculate the capital tax payable by a corporation other than a financial institution, complete the following:

• Schedule 33, Part I.3 Tax on Large Corporations (in 2010, the title will change to Taxable Capital Employed in Canada - Large Corporations); ; and
• Schedule 515, Ontario Capital Tax on Other Than Financial Institutions.

Eligible corporations that are associated with other eligible corporations in a tax year may elect under subsection 83(2) of the Taxation Act, 2007 (Ontario), to allocate the associated group's net capital deduction. File a completed Schedule 516, Capital Deduction Election of Associated Group for the Allocation of Net Deduction, with your return.

A manufacturing corporation whose Ontario manufacturing labour cost is more than 20% of its total Ontario labour cost for the year can claim a capital tax credit for manufacturers. If the corporation's manufacturing labour cost is at least 50% of its total Ontario labour cost for the year, this credit will equal the amount of capital tax otherwise payable. Calculate the tax credit in Part 4 of Schedule 515.

File completed Schedules 33, 515, and, if applicable, 516 with your T2 return within six months of the end of the tax year.

On line 282 of Schedule 5, enter the Ontario capital tax payable.

Ontario resource tax credit

The Ontario resource tax credit and the Ontario additional tax re Crown royalties are based on the corporation's:

• notional resource allowance for the year, as determined in subsection 7(3) of Ontario Regulation 37/09 to the Taxation Act, 2007
• adjusted Crown royalties for the year, as defined in subsection 36(2) of the Taxation Act, 2007 (Ontario); and
• Ontario allocation factor, as defined in subsection 1(1) of the Taxation Act, 2007 (Ontario).

The Ontario resource tax credit is used to offset Ontario corporate income tax otherwise payable. Unused amounts (the resource tax credit balance at the end of the year) can be carried forward to the following year.

Complete Schedule 504, Ontario Resource Tax Credit and Ontario Additional Tax re Crown Royalties, if the corporation:

• has a permanent establishment in Ontario at any time in the tax year;
• is not exempt from corporate income tax;

and

• owns a Canadian resource property as defined in subsection 66(15) of the federal Income Tax Act; or
• produces in Canada petroleum, natural gas, related hydrocarbons, coal, sulphur, base or precious metals, certain minerals, or iron to the pellet stage from an oil or gas well, a mine, or tar sands in Canada;

and

• earned adjusted resource profits for the year and has a notional resource allowance for the year as determined in subsection 7(3) of Ontario Regulation 37/09 to the Taxation Act, 2007; or
• paid or incurred an adjusted Crown royalty for the year as defined in subsection 36(2) of the Taxation Act, 2007 (Ontario).

File a completed Schedule 504 with the return.

On line 404 of Schedule 5, enter the amount of the credit you are claiming.

Ontario tax credit for manufacturing and processing

You can claim the Ontario tax credit for manufacturing and processing if the corporation had:

• Ontario taxable income during the tax year; and
• eligible Canadian profits from manufacturing and processing, farming, fishing, logging, mining, the generation of electrical energy for sale, or the production of steam for sale.

You cannot claim this credit on the corporation's income that is subject to the Ontario small business deduction rate.

To claim the credit, file a completed Schedule 502, Ontario Tax Credit for Manufacturing and Processing, with the return.

On line 406 of Schedule 5, enter the amount of the credit you are claiming.

Ontario credit union tax reduction

The Ontario credit union tax reduction allows credit unions a special deduction from income tax otherwise payable. It is designed to reduce their overall income tax rate to the same net rate paid by small business corporations that claim the Ontario small business deduction.

To be eligible to claim the Ontario credit union tax reduction, the credit union must:

• have been a credit union throughout the tax year;
• have had a permanent establishment in Ontario at any time in the tax year; and
• have Ontario taxable income in the year.

You can use Part 5 of Schedule 500, Ontario Corporation Tax Calculation, to calculate the Ontario credit union tax reduction. Schedule 500 is a worksheet and does not have to be filed with your return.

On line 410 of Schedule 5, enter the amount of the credit you are claiming.

Ontario research and development tax credit

You can claim this credit if you have a permanent establishment in Ontario and you had eligible expenditures for scientific research and experimental development carried out in Ontario.

An eligible expenditure is:

• an expenditure attributable to a permanent establishment in Ontario of a corporation;
• a qualified expenditure for the purposes of section 127 of the federal Income Tax Act for scientific research and experimental development carried on in Ontario; and
• reduced by government assistance, non-government assistance or contract payments received, entitled to be received or reasonably expected to be received.

The amount of the non-refundable credit is equal to 4.5% of eligible expenditures incurred by a corporation in a tax year that ends after December 31, 2008.

The credit may be applied to reduce Ontario corporate income tax that you would otherwise have to pay. An unused credit can be carried back 3 years to tax years ending after December 31, 2008, and can be carried forward 20 years.

Only corporations that are not exempt from Ontario corporate income tax and that have no exempt income can claim the credit.

To claim the credit, file a completed Schedule 508, Ontario Research and Development Tax Credit, with your return.

If the corporation is a member of a partnership and is allocated a portion of the credit as provided for in section 40 of the Taxation Act, 2007 (Ontario), attach a schedule showing the partnership's calculation.

On line 416 of Schedule 5, enter the amount of the credit you are claiming.

References
Sections 38 to 44, Taxation Act, 2007 (Ontario)

Recapture of Ontario research and development tax credit

A corporation that disposed of a property used in scientific research and experimental development, or converted it to commercial use, may have to report a recapture of any Ontario research and development tax credit previously calculated on that property. Any recapture will create or increase Ontario tax otherwise payable.

To calculate the recapture, complete Schedule 508, Ontario Research and Development Tax Credit.

On line 277 of Schedule 5, enter the amount of recapture calculated.

Reference
Section 45, Taxation Act, 2007 (Ontario)

Ontario corporate minimum tax credit

The Ontario corporate minimum tax credit that may be deducted from Ontario corporate income tax payable for the tax year is equal to the least of:

• the corporate minimum tax credit available for the tax year;
• the Ontario corporate income tax payable (before the corporate minimum tax credit) minus the greater of the corporate minimum tax after foreign tax credit deduction and gross special additional tax on life insurance corporations for the tax year; and
• the Ontario corporate income tax payable (before the corporate minimum tax credit) minus the total refundable tax credits for the tax year.

The minimum tax credit carryforward at the beginning of the tax year is equal to the minimum tax and special additional tax paid in previous tax years less any minimum tax credit previously deducted or expired. Only special additional tax paid in a tax year ending after 2008 is included.

The minimum tax credits attributable to tax years ending after March 22, 2007, can be carried forward for 20 years.

For tax years ending after 2008, the carryforward of minimum tax credits attributable to tax years ending before March 23, 2007, is extended from 10 to 20 years if the credit did not otherwise expire before the beginning of the corporation's first tax year ending after 2008.

Complete Parts 4, 5, and 6 of Schedule 510, Ontario Corporate Minimum Tax, to calculate the corporate minimum tax credit carryforward and the credit deducted in the current tax year.

On line 418 of Schedule 5, enter the amount of the credit deducted in the current tax year.

References
Subsection 53(1), Taxation Act, 2007 (Ontario)
Subsections 53(2), (3), (4) and (5), Taxation Act, 2007 (Ontario)

Ontario qualifying environmental trust tax credit

A corporation that is the beneficiary of a qualifying environmental trust located in Ontario can claim a qualifying environmental trust tax credit on income that is subject to tax under Part XII.4 of the federal Income Tax Act.

The amount of the tax credit is the corporation's share of the qualifying environmental trust tax paid by the trust.

The qualifying environmental trust will issue a letter to the corporation that is a beneficiary.

The credit is fully refundable but must first be applied against taxes payable. There are no carry-back or carry-forward provisions.

You do not have to file the letter with your return. However, keep it in case we ask for it later.

On line 450 of Schedule 5, enter the amount of the credit you are claiming.

Reference
Section 87, Taxation Act, 2007 (Ontario)

Ontario co-operative education tax credit

You can claim this credit if you are a corporation that provided a qualifying work placement at a permanent establishment in Ontario for a student enrolled in a qualifying post-secondary co-operative education program.

To be a qualifying work placement, the work placement must meet all of the following conditions:

• the student must perform employment duties for a corporation under a qualifying co-operative education program;
• the placement must be developed or approved by an eligible educational institution as a suitable learning situation;
• the terms of the placement must require the student to engage in productive work;
• the placement must be for a period of at least 10 consecutive weeks except, in the case of an internship program, the placement cannot be less than 8 consecutive months and not more than 16 consecutive months;
• the corporation must supervise and evaluate the job performance of the student;
• the institution must monitor the student's performance in the placement;
• the institution must certify the placement as a qualifying work placement; and
• the student must be paid for the work performed.

The credit is equal to an eligible percentage (10% to 15%) of the eligible expenditures incurred by the corporation for a qualifying work placement.

The maximum credit for each qualifying work placement ending before March 27, 2009, is $1,000.

Eligible expenditures are:

• salaries and wages (including taxable benefits) paid or payable to a student in a qualifying work placement; or
• fees paid or payable to an employment agency for the provision of services performed by the student in a qualifying work placement.

Keep a copy of the letter of certification from the eligible educational institution in Ontario to support your claim. The letter of certification must contain the name of the student, the employer, the institution, the term of the work placement, and the name/discipline of the qualifying co-operative education program.

To claim the credit, file a completed Schedule 550, Ontario Co-operative Education Tax Credit, with your return. For more details, see the schedule.

On line 452 of Schedule 5, enter the amount of the refundable credit you are claiming.

Reference
Section 88, Taxation Act, 2007 (Ontario)

Ontario apprenticeship training tax credit

You can claim this credit if you are a corporation that provided a qualifying apprenticeship at a permanent establishment in Ontario for a student enrolled in a qualifying skilled trade.

To be a qualifying apprenticeship, the apprenticeship must meet the following conditions:

• the apprenticeship must be in a qualifying skilled trade approved by the Ministry of Training, Colleges and Universities (Ontario); and
• the corporation and the apprentice must be participating in an apprenticeship program in which the training agreement has been registered under the Ontario College of Trades and Apprenticeship Act, 2009 or the Apprenticeship and Certification Act, 1998 or in which the contract of apprenticeship has been registered under the Trades Qualification and Apprenticeship Act.

The credit is equal to a specified percentage (25% to 30%) of the eligible expenditures incurred by the corporation for a qualifying apprenticeship. The maximum credit for each apprentice is $5,000 per year to a maximum of $15,000 over the first 36-month period of the qualifying apprenticeship.

Eligible expenditures are:

• salaries and wages (including taxable benefits) paid to an apprentice in a qualifying apprenticeship; or
• fees paid to an employment agency for the provision of services performed by an apprentice in a qualifying apprenticeship.

Keep a copy of the training agreement or contract of apprenticeship to support your claim.

To claim the credit, file a completed Schedule 552, Ontario Apprenticeship Training Tax Credit, with your return. For more details, see the schedule.

On line 454 of Schedule 5, enter the amount of the refundable credit you are claiming.

Reference
Section 89, Taxation Act, 2007 (Ontario)

Ontario computer animation and special effects tax credit

The Ontario computer animation and special effects tax credit is a refundable tax credit equal to 20% of the qualifying labour expenditures for eligible computer animation and special effects activities, incurred by a qualifying corporation in a tax year for an eligible production.

Qualifying labour expenditures equal the corporation's Ontario labour expenditures for the tax year less any assistance reasonably related to these expenditures. The Ontario labour expenditures are the sum of the salaries and wages and 50% of the remuneration incurred in a tax year that are directly attributable to computer animation and special effects activities performed in Ontario and paid to certain persons or entities, within 60 days of the end of the tax year.

The criteria a corporation must meet to be eligible for the credit include the following:

• be a Canadian corporation;
• perform eligible computer animation and special effects activities for the eligible production at a permanent establishment in Ontario for the tax year;
• not be exempt from tax under Part III of the Taxation Act, 2007 (Ontario) for the tax year;
• not be controlled directly or indirectly, at any time in the tax year, in any way, by one or more corporations, all or part of whose taxable income is exempt from tax under section 57 of the Corporations Tax Act (Ontario) or Part III of the Taxation Act, 2007 (Ontario); and
• not be a prescribed labour-sponsored venture capital corporation at any time in the tax year.

Before claiming the credit, send a completed Ontario Media Development Corporation (OMDC) application form to the OMDC. If the production is eligible, the OMDC will issue a certificate indicating the estimated amount of the tax credit. Only one certificate of eligibility is issued for all of the eligible productions for the tax year.

To claim the credit, attach the following to your return for the year:

• the original or certified copy of the certificate of eligibility issued by the OMDC; and
• a completed Schedule 554, Ontario Computer Animation and Special Effects Tax Credit, for each eligible production.

On line 456 of Schedule 5, enter the total amount of the credit you are claiming.

Reference
Section 90, Taxation Act, 2007 (Ontario)

Ontario film and television tax credit

The Ontario film and television tax credit is a refundable tax credit based on the qualifying labour expenditures incurred by a qualifying production company for eligible Ontario productions.

If the eligible Ontario production is a first-time production, you can claim a credit equal to:

• 40% of the labour expenditures incurred after December 31, 2004, and before January 1, 2008, for the first $240,000 for the production and 30% on the balance;
• 40% of the labour expenditures incurred after December 31, 2007, for the first $240,000 for the production and 35% on the balance; and
• an additional 10% of the labour expenditures if the production is a regional Ontario production.

If the eligible Ontario production is a small first-time production, you can claim a credit equal to the lesser of:

• the labour expenditures; and
• $20,000 if the production is a regional Ontario production or $15,000 if it is not a regional Ontario production.

The total labour expenditure for a small first-time production cannot be more than $50,000 at the time the production is completed.

If the eligible Ontario production is other than a first-time production, you can claim a credit equal to:

• 30% of labour expenditures incurred after December 31, 2004, and before January 1, 2008;
• 35% of labour expenditures incurred after December 31, 2007; and
• an additional 10% of labour expenditures if the production is a regional Ontario production.

The qualifying labour expenditures equal the corporation's Ontario labour expenditures less assistance reasonably related to these expenditures (some exceptions apply—see Schedule 556). The qualifying labour expenditures are determined without reference to any equity investment held by a person prescribed under section 1106(10) of the federal regulations. The Ontario labour expenditures are the sum of the salaries and wages and remuneration incurred in a tax year that are directly attributable to the eligible Ontario production, performed in Ontario and paid to certain persons or entities, within 60 days of the end of the tax year.

The criteria a corporation must meet to be eligible for the credit include the following:

• be a Canadian-controlled corporation throughout the tax year as determined under sections 26 to 28 of the Investment Canada Act;
• have a permanent establishment in Ontario throughout the tax year;
• be primarily engaged in the carrying on of a Canadian film or video production business through a permanent establishment in Canada in the tax year;
• not be exempt from tax under Part III of the Taxation Act, 2007 (Ontario) or Part I of the federal Income Tax Act for the tax year;
• not be controlled, at any time in the tax year, directly or indirectly, in any way, by one or more persons, all or part of whose taxable income was exempt from tax under Part I of the federal Income Tax Act, Part II of the Corporations Tax Act (Ontario), or Part III of the Taxation Act, 2007 (Ontario); and
• not be a prescribed labour-sponsored venture capital corporation at any time in the tax year.

You cannot claim the Ontario film and television tax credit if you claim the Ontario production services tax credit for that same production for any tax year.

Before claiming the credit, send a completed Ontario Media Development Corporation (OMDC) application form to the OMDC. If the production is eligible, the OMDC will issue a certificate indicating the estimated amount of the tax credit.

To claim the credit, attach the following to your return for the year for each eligible production:

• the original or certified copy of the certificate of eligibility issued by the OMDC; and
• a completed Schedule 556, Ontario Film and Television Tax Credit.

On line 458 of Schedule 5, enter the total amount of the credit you are claiming.

Reference
Section 91, Taxation Act, 2007 (Ontario)

Ontario production services tax credit

The Ontario production services tax credit is a refundable tax credit based on qualifying Ontario labour expenditures incurred for eligible productions by a qualifying corporation in a tax year.

The credit is equal to:

• 18% of the labour expenditures incurred after December 31, 2004, and before January 1, 2008; and
• 25% of the labour expenditures incurred after December 31, 2007.

The qualifying Ontario labour expenditures equal the corporation's Ontario labour expenditures less assistance reasonably related to these expenditures (some exceptions apply—see Schedule 558). The Ontario labour expenditures are the sum of the salaries and wages and remuneration incurred in a tax year that are directly attributable to the eligible production, performed in Ontario and paid to certain persons or entities, within 60 days of the end of the tax year.

The criteria a corporation must meet to be eligible for the credit include the following:

• be primarily engaged, in the tax year, in the carrying on of a film or video production business, or a film or video production services business, through a permanent establishment in Ontario;
• not be exempt from tax, for the tax year, under Part III of the Taxation Act, 2007 (Ontario) or Part I of the Income Tax Act;
• not, at any time in the tax year, be controlled directly or indirectly, in any way, by one or more persons, all or part of whose taxable income was exempt from tax under Part I of the Income Tax Act; and
• not be a prescribed labour-sponsored venture capital corporation at any time in the tax year.

You cannot claim the Ontario production services tax credit if you claim the Ontario film and television tax credit for that same production for any tax year.

Before claiming the credit, send a completed Ontario Media Development Corporation (OMDC) application form to the OMDC. If the production is eligible, the OMDC will issue a certificate indicating the estimated amount of the tax credit.

To claim the credit, attach the following to your return for the year for each eligible production:

• the original or certified copy of the certificate of eligibility issued by the OMDC; and;
• a completed Schedule 558, Ontario Production Services Tax Credit.

On line 460 of Schedule 5, enter the total amount of the credit you are claiming.

Reference
Section 92, Taxation Act, 2007 (Ontario)

Ontario interactive digital media tax credit

The Ontario interactive digital media tax credit is a refundable tax credit based on qualifying expenditures incurred for eligible products by a qualifying corporation during a tax year.

The credit for qualifying expenditures incurred before March 27, 2009, is equal to:

• 30% for small corporations that develop eligible products other than specified products;
• 25% of expenditures incurred after March 25, 2008 (20% before March 26, 2008), by all corporations that develop specified products; and
• 25% of expenditures incurred after March 25, 2008 (20% before March 26, 2008), by corporations other than small corporations that develop eligible products other than specified products.

For all eligible products, qualifying expenditures include Ontario salaries and wages incurred in a tax year that are directly attributable to the eligible product and paid within 60 days of the end of the tax year.

For eligible products that are not specified products, the qualifying expenditures also include 50% of Ontario remuneration, and marketing and distribution expenditures (maximum $100,000 per eligible product for all tax years) incurred in a tax year that are directly attributable to the product and paid to certain persons and entities within 60 days of the end of the tax year.

Qualifying expenditures are reduced by any government assistance reasonably related to these expenditures.

You cannot claim the Ontario interactive digital media tax credit if you claim the Ontario computer animation and special effects tax credit, the Ontario film and television tax credit or the Ontario production services tax credit for the same expenditure for any tax year.

The criteria a corporation must meet to be eligible for the credit include the following:

• be a Canadian corporation;
• have completed development on or developed an eligible interactive digital media product at a permanent establishment in Ontario, as described in subsection 93(16) of the Taxation Act, 2007 (Ontario);
• not be exempt from tax under Part III of the Taxation Act, 2007 (Ontario) for the tax year;
• not be controlled directly or indirectly, in any way, at any time in the tax year, by one or more corporations, all or part of whose taxable income was exempt from tax under section 57 of the Corporations Tax Act (Ontario)or Part III of the Taxation Act, 2007 (Ontario); and
• not be a prescribed labour-sponsored venture capital corporation at any time in the tax year.

Before claiming the credit, send a completed Ontario Media Development Corporation (OMDC) application form to the OMDC. If the product is eligible, the OMDC will issue a certificate indicating the estimated amount of the tax credit. Only one certificate of eligibility is issued for all of the eligible products for the tax year.

To claim the credit, attach the following to your return for the year:

• the original or certified copy of the certificate of eligibility issued by the OMDC; and
• a completed Schedule 560, Ontario Interactive Digital Media Tax Credit, for each eligible product.

On line 462 of Schedule 5, enter the total amount of the credit you are claiming.

Reference
Section 93, Taxation Act, 2007 (Ontario)

Ontario sound recording tax credit

The Ontario sound recording tax credit is a refundable tax credit equal to 20% of the qualifying expenditures incurred during a tax year by an eligible sound recording company. The expenditures must be incurred by the corporation within 24 months from the date that the first eligible expenditure was incurred for the eligible Canadian sound recording.

Qualifying expenditures include expenditures incurred mainly in Ontario in the production of the recording, the production of the qualifying music video, and the marketing of the recording and 50% of the last two types of expenditures if incurred outside Ontario. These qualifying expenditures are reduced by any assistance reasonably related to these expenditures.

Touring costs incurred in connection with a concert or live performance are not a qualifying expenditure.

The criteria a corporation must meet to be eligible for the credit include the following:

• be a Canadian-controlled corporation throughout the tax year under sections 26 to 28 of the Investment Canada Act;
• be primarily engaged in the carrying on of a sound recording business mainly through a permanent establishment in Ontario;
• have earned less than 50% of its taxable income in the previous tax year outside Ontario; and
• not be exempt from tax under Part III of the Taxation Act, 2007 (Ontario).

Before claiming the credit, send a completed Ontario Media Development Corporation (OMDC) application form to the OMDC. If the sound recording is eligible, the OMDC will issue a certificate.

To claim the credit, attach the following to your return for the year for each eligible Canadian sound recording:

• the original or certified copy of the certificate of eligibility issued by the OMDC; and
• a completed Schedule 562, Ontario Sound Recording Tax Credit. For more details, see the schedule.

On line 464 of Schedule 5, enter the total amount of the credit you are claiming.

Reference
Section 94, Taxation Act, 2007 (Ontario)

Ontario book publishing tax credit

The Ontario book publishing tax credit is a refundable tax credit of 30% on the qualifying expenditures incurred during a tax year for an eligible literary work, by an Ontario book publishing company, up to a maximum credit of $30,000 per work.

Qualifying expenditures include pre-press costs and marketing expenditures and 50% of the production costs paid by the corporation for the publishing of an eligible literary work. These qualifying expenditures are reduced by any assistance reasonably related to these expenditures.

The criteria a corporation must meet to be eligible for the credit include the following:

• be a Canadian-controlled corporation throughout the tax year, as determined under sections 26 to 28 of the Investment Canada Act;
• carry on a book publishing business mainly through a permanent establishment in Ontario for the tax year;
• not be exempt from tax under Part III of the Taxation Act, 2007 (Ontario) for the tax year; and
• not be controlled by the author of the literary work, or by a person not dealing at arm's length with the author.

Before claiming the credit, send a completed Ontario Media Development Corporation (OMDC) application form to the OMDC. If the literary work is eligible, the OMDC will issue a certificate.

To claim the credit, attach the following to your return for the year for each literary work:

• the original or certified copy of the certificate of eligibility issued by the OMDC; and
• a completed Schedule 564, Ontario Book Publishing Tax Credit.

On line 466 of Schedule 5, enter the total amount of the credit you are claiming.

Reference
Section 95, Taxation Act, 2007 (Ontario)

Ontario innovation tax credit

You are eligible to claim an Ontario innovation tax credit if you:

• had a permanent establishment in Ontario during the year;
• have carried on scientific research and experimental development (SR&ED) in Ontario during the year;
• are not exempt from tax under Part III of the Taxation Act, 2007 (Ontario);
• are eligible to claim a federal investment tax credit under section 127 of the federal Income Tax Act in respect of the corporation's qualified expenditures; and
• have filed Form T661, Scientific Research and Experimental Development (SR&ED) Expenditures Claim , in the tax year.

The credit is a 10% refundable tax credit based on the sum of the corporation's qualified expenditures incurred in Ontario and any eligible repayments.

The credit is available to a maximum annual expenditure limit of $3 million. Associated corporations must share in the $3 million expenditure limit.

The expenditure limit was $2 million before February 26, 2008. It has to be pro-rated for tax years that straddle February 26, 2008.

Qualifying corporations are eligible to claim the full credit with a qualified expenditure limit of $2 million where their specified capital amount or their federal taxable income in the previous year is not more than $25 million and $400,000 respectively. If one of these amounts is more than the respective threshold, the $2 million limit is progressively reduced.

Qualified expenditures include 100% of current expenditures and 40% of capital expenditures.

Expenditure limit, qualified expenditure, and eligible repayments are defined in subsections 96(3), 96(8) and 96(12) of the Taxation Act, 2007 (Ontario).

File a completed Schedule 566, Ontario Innovation Tax Credit, with your return. See the schedule for more details.

On line 468 of Schedule 5, enter the amount of the credit you are claiming.

Reference
Section 96, Taxation Act, 2007 (Ontario)

Ontario business-research institute tax credit

You are eligible to claim an Ontario business-research institute tax credit if you:

• carried on business in the tax year through a permanent establishment in Ontario;
• incurred qualified expenditures under an eligible contract with an eligible research institute; and
• were not exempt from tax under Part III of the Taxation Act, 2007 (Ontario).

This credit is a 20% refundable tax credit based on qualified expenditures for the tax year incurred in Ontario under an eligible contract with an eligible research institute.

The annual qualified expenditure limit is $20 million. If a corporation is associated with other corporations at any time in a calendar year, the $20 million limit must be allocated between the associated group. The maximum tax credit that a qualifying corporation or an associated group of corporations can claim in a tax year is $4 million (20% of $20 million).

Complete Schedule 568, Ontario Business-Research Institute Tax Credit, to claim the credit and complete a Schedule 569, Ontario Business-Research Institute Tax Credit Contract Information, for each eligible contract.

Note
When completing Schedule 569, to find the applicable eligible research institute code, go to our Ontario business-research institute tax credit page.

Keep a copy of each eligible contract to support your claim.

On line 470 of Schedule 5, enter the amount of the credit you are claiming.

Reference
Section 97, Taxation Act, 2007 (Ontario)

Ontario Ministry of Government Services annual return

For tax years ending after December 31, 2008, Ontario corporations and foreign business corporations licensed to carry on business in Ontario must file an Ontario Corporations Information Act Annual Return with the CRA within six months of the end of the tax year as follows:

• Every corporation that is incorporated, continued, or amalgamated in Ontario and subject to the Business Corporations Act or the Corporations Act, except for registered charities under the federal Income Tax Act, must file Schedule 546, Corporations Information Act Annual Return for Ontario Corporations.
• Every business corporation that is incorporated, continued, or amalgamated in a jurisdiction outside Canada with a licence under the Extra-Provincial Corporations Act to carry on business in Ontario must file Schedule 548, Corporations Information Act Annual Return for Foreign Business Corporations.

File the completed Schedule 546 or 548 with the T2 return. If you have to file more than one tax return in a calendar year, file the annual return only with the first tax return.

The CRA will transmit the information on Schedules 546 and 548 to the Ontario Ministry of Government Services (MGS). The MGS is responsible for maintaining a public database of corporate information. It is the corporation's responsibility to ensure that the information on the public record is accurate and up to date.

To report changes to the name of a director/officer, or changes to both the address and date elected/appointed of a director/officer, enter the director/officer information exactly as shown incorrectly on the public record, with a cease date, and then photocopy and complete only Part 7 of Schedule 546 with the correct director/officer information.

Corporations that have to file Schedule 546 have the option of filing electronically with one of the service providers under contract with the Ontario Ministry of Government Services, instead of filing it together with the T2 return.

Ontario specialty types

Any corporation carrying on business in Ontario through a permanent establishment must file Schedule 524, Ontario Specialty Types, to identify its specialty type if:

• its tax year includes January 1, 2009;
• the tax year is the first year after incorporation or an amalgamation; or
• there is a change to the specialty type.

Manitoba

The rates of Manitoba income tax are:

• 14% effective January 1, 2007;
• 13% effective July 1, 2008; and
• 12% effective July 1, 2009.

Corporations may be eligible for a small business deduction to reduce part of the tax otherwise payable.

The small business income tax rates are:

• 3% effective January 1, 2007;
• 2% effective January 1, 2008; and
• 1% effective January 1, 2009.

The small business deduction rate will be adjusted accordingly.

You have to prorate the tax using the number of days in each period when the rate changes during the tax year.

The income eligible for the small business deduction rate is determined using the Manitoba business limit of $400,000.

You can use Schedule 383, Manitoba Corporation Tax Calculation,to help you calculate your Manitoba tax before the application of credits. You do not have to file it with your return. See the schedule for more details.

On line 230 of Schedule 5, enter the amount of tax calculated.

Manitoba manufacturing investment tax credit

You can earn this 10% credit on qualified property you acquired before January 1, 2012, to reduce Manitoba tax payable.

You have to use the qualified property in Manitoba mainly for manufacturing or processing goods for sale or lease.

The definition of qualified property is extended to include new equipment, under Class 43.1 of Part XI of the federal Income Tax Regulations, purchased between April 22, 2003, and December 31, 2011.

Note
Qualified property under Class 43.1 that was moved under Class 43.2 as a result of the 2005 federal budget continues to qualify for this credit.

After March 8, 2005, qualifying property includes used buildings, machinery, and equipment made available for use in manufacturing or processing goods for sale or lease.

You can carry back an unused credit to the three previous tax years from the tax year in which you acquired the property.

You can carry forward to the following 10 tax years an unused credit earned in a tax year ending after 2003, and to the following 7 tax years for an unused credit earned in a tax year ending before 2004.

To claim the credit, file a completed Schedule 381, Manitoba Manufacturing Investment Tax Credit no later than 12 months after your income tax return is due for the tax year in which the expenditures were incurred. For more details, see the schedule.

On line 605 of Schedule 5, enter the amount of the credit you are claiming.

Manitoba refundable manufacturing investment tax credit

The investment tax credit will first be applied to reduce the Manitoba corporation income tax payable. Then you can claim a part of the investment tax credit you are entitled to claim in a tax year as a refundable credit. The maximum refundable part is:

• 35% of your investment tax credit (3.5% of qualified property) for tax years ending after March 6, 2006, and before January 1, 2008; and
• 70% of your investment tax credit (7% of qualified property) for tax year ending in 2008 and after. This applies to qualified property acquired on or after January 1, 2008.

Note
The acquired date for purposes of this credit is the date that the property became available for use.

To claim the credit, file a completed Schedule 381, Manitoba Manufacturing Investment Tax Credit, no later than 12 months after your income tax return is due for the tax year in which the expenditures were incurred. For more details, see the schedule.

On line 621 of Schedule 5, enter the amount of the refundable credit you are claiming.

Manitoba research and development tax credit

You can claim this credit if you have a permanent establishment in Manitoba and you made eligible expenditures for research and development carried out in Manitoba.

The amount of the credit is equal to 20% of eligible expenditures.

Apply the credit to reduce Manitoba tax that you would otherwise have to pay.

You can carry back an unused credit to the three previous tax years from the tax year that you made the expenditure. You can carry forward to the following 10 tax years an unused credit earned in a tax year ending after 2003, and to the following 7 tax years an unused credit earned in a tax year before 2004.

You can renounce the research and development tax credit for an eligible expenditure incurred during the year, in whole or in part, under subsection 7.3(7) of the Income Tax Act(Manitoba).

To claim the credit, file a completed Schedule 380, Manitoba Research and Development Tax Credit, with your return. You must identify the qualified expenditures no later than 12 months after your income tax return is due for the tax year in which the expenditures were incurred. For more details, see the schedule.

On line 606 of Schedule 5, enter the amount of the non refundable credit you are claiming. On line 613 of Schedule 5, enter the amount of the refundable credit.

Manitoba co-op education and apprenticeship tax credit

The Manitoba co-op education and apprenticeship tax credit includes the following:

• co-op work placements;
• co-op graduate hiring incentive; and
• advanced-level apprentices hiring incentive; and
• journeypersons hiring incentive.

The Province of Manitoba will issue a "Proof of Credit" certificate to the corporation or partnership for each qualifying work placement or qualifying employment.

To claim the credit, file a completed Schedule 384, Manitoba Co-op Education and Apprenticeship Tax Credit, with your return. For more details, see the schedule.

On line 603 of Schedule 5, enter the amount of the non-refundable credit you are claiming.

On line 622 of Schedule 5 enter the amount of the refundable credit you are claiming.

A corporation that is exempt under section 149 of the federal Income Tax Act is also eligible to claim this credit. Along with Schedule 384, the exempt corporation will also have to complete Schedule 5 and file a T2 Corporation Income Tax Return.

Co-op work placements

You can claim a credit if you are an employer who provides a work placement for a student enrolled in a qualifying post-secondary co-operative education program.

The work placement must end on or before the end of a tax year and before 2012.

The credit for each qualifying work placement is whichever is less:

• $1,000; and
• 10% of the wages and salaries paid to the employee for work performed mainly in Manitoba, less government assistance.

The credit will be nil if the student under the work placement has had five previous qualifying work placements.

The credit for work placements that end before March 7, 2006, is non-refundable. You can claim any unused credit earned before this date to reduce total taxes payable. Any remaining credit that has not expired can be carried forward ten tax years that follow the tax year in which you earned the credit. Unused credits may be carried forward on amalgamation or wind-up.

The credit earned for work placements that end after March 6, 2006, is fully refundable, but must first be applied against total taxes payable. The carry-back and carry-forward provisions do not apply to a credit earned after March 6, 2006.

Co-op graduates hiring incentive

You can claim a credit if you are an employer that has hired co-op graduates in full-time employment in Manitoba, and retained them for at least one year. The students must have graduated after March 6, 2006, and before 2012, from a recognized post-secondary co-operative education program in a field related to the employment.

The credit is equal to 5% of the net wages and salaries paid to the graduate in each of the first two full years of employment, to a maximum of $2,500 for each year, where the employment starts within 18 months of graduation.

This credit is fully refundable but must first be applied against total taxes payable. There are no carry-back or carry-forward provisions.

Journeypersons hiring incentive

You can claim a credit if you are an employer that has hired recent graduates of apprenticeship programs in full time employment in Manitoba, and retained them for at least one year. The journeyperson must have received their certificate of qualification in Canada after April 9, 2008, in a field related to the employment.

The credit is equal to 5% of the wages and salaries paid to the journeyperson in each of the first two full years of employment, to a maximum of $2,500 for each year, where the employment starts within 18 months of certification.

Employment periods must be continuous and consecutive, but an employment period of twelve-month's duration may be interrupted by a seasonal layoff of not more than three months.

This credit is fully refundable but must first be applied against total taxes payable. There are no carry-back or carry-forward provisions.

Manitoba odour-control tax credit

You can earn this credit on eligible expenditures made before January 1, 2010, to reduce Manitoba income tax payable.

Eligible expenditures consist of the capital costs of depreciable capital properties that become available for use in the year and were acquired for the purpose of preventing, reducing, or eliminating nuisance odours that arise or may arise from the use or production of organic waste.

You can earn this credit if odour control is a significant, but not necessarily your primary, purpose for acquiring the eligible capital property. The properties must be unused and must not have been acquired for any use by anyone before. Eligible expenditures are either prescribed by regulation or approved by the Minister.

The credit is equal to 10% of the eligible expenditures and is non-refundable. However, for eligible expenditures made after December 31, 2005, by an agricultural corporation part of the credit is refundable (see below).

You can carry back an unused credit to the three previous tax years from the tax year in which you earned the credit. You can also carry forward the unclaimed credit to the 10 tax years that follow the tax year in which you earned the credit. Unused credits may be carried forward on amalgamation or wind-up.

The corporation may be the beneficiary of a trust or a member of a partnership at the end of the trust's or partnership's tax year. If so, it may include its proportionate allocation or share of the trust/partnership's eligible expenditures in computing its odour-control tax credit.

You cannot claim this credit on eligible expenditures used in calculating any other credit.

Effective March 7, 2006, agricultural corporations are eligible for a refundable part of the odour-control tax credit. The maximum refund that an agricultural corporation can claim is the lesser of:

• the tax credit that is more than the non-refundable tax credit claimed in the current year; and
• the property tax paid net of government assistance received or receivable on Manitoba farmland used by the corporation in the business of farming, for the calendar year that ended in a tax year after March 6, 2006.

To claim the credit, file a completed Schedule 385, Manitoba Odour - Control Tax Credit, with your return. You can claim this credit no later than 12 months after your income tax return is due for the tax year in which the expenditures were incurred. For more details, see the schedule.

On line 607 of Schedule 5, enter the non refundable amount of the credit you are claiming.

If you are an agricultural corporation, enter the refundable part of the credit you are claiming on line 623 of Schedule 5.

Manitoba community enterprise investment tax credit

For tax years after 2007, you can claim a non-refundable tax credit if:

• you are a taxable Canadian corporation with a permanent establishment in Manitoba that is not a prescribed venture capital corporation or labour-sponsored venture capital corporation under Part LXVII of the federal regulations;
• 25% or more of the total salary and wages that you paid in the tax year in which you made the investment were paid to employees resident in Manitoba; and
• you directly invested a minimum of $20,000 in a qualifying community enterprise, as defined in the regulations.

The credit is equal to 30% of the amount invested to a lifetime maximum investment of $450,000.

The annual investment limit is also $450,000 and the maximum amount of the tax credit that you can earn in a given year is $135,000. However, the maximum amount of the tax credit that you can apply against provincial tax in the year is $45,000, including any amounts carried back or carried forward.

This credit must be claimed against Manitoba tax otherwise payable. You can carry forward unused credits to the 10 following tax years or back to the 3 previous tax years.

The Province of Manitoba will issue a tax credit receipt for qualifying investments. File it with your T2 return.

To claim the credit, file a completed Schedule 387, Manitoba Community Enterprise Investment Tax Credit. See the schedule for more details.

On line 608 of Schedule 5, enter the amount of the credit you are claiming.

Manitoba interactive digital media tax credit

Manitoba Science, Technology, Energy and Mines will issue a tax credit certificate to a corporation that develops and produces an eligible interactive digital media project in Manitoba, upon completion of the project. However, the corporation must first receive a certificate of eligibility before the start of the project.

To claim the credit, a qualifying corporation must be a taxable Canadian corporation with a permanent establishment in Manitoba. It must pay at least 25% of the salary and wages to employees who are Manitoba residents for the project period.

The amount of the credit is equal to 40% of eligible labour expenditures paid in the tax year to residents of the province. The maximum tax credit on an eligible project is $500,000.

Projects that begin prototyping and product development after April 9, 2008, and before 2011 will qualify for the credit.

This credit is fully refundable. There are no carry-back of carry-forward provisions.

To claim the credit, file the certificate with your return.

On line 614 of Schedule 5, enter the amount of the credit you are claiming.

Manitoba book publishing tax credit

You can claim this credit if you:

• are engaged mainly in the business of publishing books or you operate a book publishing business as a university press;
• have a permanent establishment in Manitoba;
• pay at least 25% of the wages and salaries to employees who are Manitoba residents; and
• have published at least two eligible books within the two-year period ending at the end of the tax year.

An eligible book is a first edition, non-periodical Canadian-authored publication. It is classified as fiction, non-fiction, poetry, drama, biography or children's.

The credit is equal to 40% of eligible Manitoba labour costs, to a maximum of $100,000 per year. Eligible labour costs must be incurred and paid in Manitoba by the publisher after April 9, 2008, and before 2012.

The credit is fully refundable. There are no carry-forward or carry-back provisions.

An additional bonus of 10% on Manitoba printing costs can be claimed if the book is printed on paper with a minimum of 30% recycled content. Eligible printing costs must be incurred and paid within one year of publication of the eligible book.

To claim the credit, file a completed Schedule 389, Manitoba Book Publishing Tax Credit, with your return.

On line 615 of Schedule 5, enter the amount of the credit you are claiming.

Manitoba green energy equipment tax credit
Manufacturer's tax credit

You can claim this credit if you manufacture and sell in Manitoba after April 4, 2007, and before 2019 qualifying property used to generate energy from a renewable resource.

The credit is equal to a maximum of 10% of the selling price of the qualifying property that is manufactured in Manitoba and sold in the year for residential or commercial use in Manitoba. The rate varies with different classes of property and is prescribed by regulation.

Manufacturers can claim a 5% tax credit on the sale price of ground source heat pump systems that meet the standards set by the Canadian Standards Association.

This credit is refundable, but must first be applied against total taxes payable. There are no carryback or carryforward provisions.

On line 619 of Schedule 5, enter the amount of the credit earned in the year.

Purchaser's tax credit

You can also claim this credit if you buy qualifying property that is used to produce energy in Manitoba from a renewable resource. The credit you can claim cannot exceed 10% of the purchase price, less any credit that an eligible manufacturer has claimed or may claim for the qualifying property. The rate varies with different classes of property and is prescribed by regulation.

Purchasers can claim a credit on ground source heat pump systems that meet the standards set by the Canadian Standards Association. The tax credit (T) is calculated as follows:

• 10% on eligible capital installation costs excluding the cost of the heat pump; plus
• 5% on the cost of the heat pump if it is manufactured in Manitoba .

Purchasers who install new specified solar heating equipment in Manitoba qualify for a refundable 10% credit on the eligible capital costs (including taxes and costs related to acquiring and making the system operational). The equipment does not include equipment used to heat water for use in a swimming pool or equipment that distributes heated air or water in a building.

This credit is refundable, but must first be applied against total taxes payable. There are no carry back or carry forward provisions.

On line 619 of Schedule 5, enter the amount of the credit earned in the year.

Manitoba film and video production tax credit

The Manitoba Film and Sound Recording Development Corporation reviews all tax credit applications and will issue a tax credit certificate to a corporation that produces an eligible film.

The credit is equal to 45% of eligible salaries paid before March 1, 2011, for work performed on an eligible film where principal photography begins after March 8, 2005.

For productions starting principal photography after 2007, the percentage of eligible salaries paid to non-residents for work performed in Manitoba is increased from 20% to 30% of eligible salaries paid to Manitobans.

There is a frequent filming incentive of 5% on the third eligible film, for corporations that produce three eligible films in two years. This incentive was 5% for productions starting principal photography before 2008. This also applies to serial productions.

There is a 5% incentive on eligible salaries paid for work performed in Manitoba on productions where at least 50% of filming days take place at least 35 kilometers outside of Winnipeg.

For productions starting principal photography after 2007, you can claim a 5% bonus on eligible salaries where a Manitoba resident receives credit as a producer on an eligible film.

This credit is fully refundable, but must first be applied against total taxes payable. There are no carry-back or carry-forward provisions.

You must file all the certificates with your return.

If the title of your certificate is Advance Certificate of Eligibility or Certificate of Completion, as issued by the Manitoba Film and Sound Recording Development Corporation::

• attach a completed copy of Schedule 388, Manitoba Film and Video Production Tax Credit, for each certificate and all the additional documents listed on the last page of Schedule 388 on top of your T2 return for the tax year.

If the title of your certificate is Manitoba Film and Video Production Tax Credit Certificate, as issued by the Manitoba Department of Finance::

• and there is one certificate, enter the certificate number on line 856 of Schedule 5;
• and there are multiple certificates, enter the certificate numbers and amounts shown on the certificate in Schedule 382, Additional Certificate Numbers for the Manitoba Film and Video Production Tax Credit.

On line 620 of Schedule 5, enter the amount of the credit earned in the current year.

Saskatchewan

The lower rate of Saskatchewan income tax is 4.5% effective January 1, 2007.

Income eligible for this lower rate is determined using the Saskatchewan business limit of $500,000 effective July 1, 2008. Before this date, the business limit was $450,000 effective July 1, 2007.

The higher rate of income tax is 12% effective July 1, 2008. Before this date, it was 13% effective July 1, 2007.

This higher rate applies to all income not eligible for the lower rate.

If the tax year includes a date with a rate change, you have to prorate the tax calculation using the number of days before and after this date.

You can use Schedule 411, Saskatchewan Corporation Tax Calculation, to help you calculate your Saskatchewan tax before the application of credits. You do not have to file it with your return. See the schedule for more details.

On line 235 of Schedule 5, enter the amount of tax calculated.

Saskatchewan political contribution tax credit

You can claim a tax credit on contributions made to qualifying political parties or election candidates as follows:

• 75% of the first $400 contributed;

plus

• 50% of the next $350 contributed;

plus

• 33 1/3% of the next $525 contributed, to a maximum credit of $650.

You do not have to file official receipts with your return. However, keep them in case we ask for them later. We can only accept photocopies if the issuer certifies them as true copies.

On line 890 of Schedule 5, enter the total amount of qualifying contributions, and on line 624, enter the amount of the credit you are claiming.

Saskatchewan manufacturing and processing profits tax reduction

You can claim this reduction if at any time in the tax year you had a permanent establishment in Saskatchewan, earned taxable income and had Canadian manufacturing and processing profits, in Saskatchewan.

The profits from producing or processing electrical energy or steam for sale can be included with Canadian manufacturing and processing profits for this tax reduction.

You must claim this reduction within three years of the filing due date of the return for the applicable tax year.

You can reduce the Saskatchewan income tax rate on Canadian manufacturing and processing profits by 2% effective July 1, 2008, and by 3% effective July 1, 2007.

If the tax year includes a date with a rate change, you have to prorate the tax calculation using the number of days before and after this date.

You can calculate the reduction on Schedule 404, Saskatchewan Manufacturing and Processing Profits Tax Reduction. Schedule 404 is a worksheet to calculate the reduction and does not have to be filed with your return. For more details, see the schedule.

On line 626 of Schedule 5, enter the amount of reduction you are claiming.

Saskatchewan manufacturing and processing investment tax credit

You can earn this credit on qualified property that is used in Saskatchewan mainly for manufacturing or processing goods for lease or sale.

The credit you can earn is 5% on qualified property acquired after October 27, 2006.

The credit earned on qualified property acquired after April 6, 2006, is fully refundable, but must first be applied against total taxes payable. There are no carry-back or carry-forward provisions.

The credit earned on qualified property acquired before April 7, 2006, is non-refundable. Any unused credit that has not expired can be carried forward for up to 10 years that follow the tax year in which you earned the credit.

Corporations that are exempt under section 149 of the federal Income Tax Act are not eligible for the refundable credit.

To claim the credit, file a completed Schedule 402, Saskatchewan Manufacturing and Processing Investment Tax Credit, with your return. For more details, see the schedule.

On line 630 of Schedule 5, enter the amount of the non refundable credit you are claiming.

On line 644 of Schedule 5, enter the amount of the refundable credit you are claiming.

Saskatchewan research and development tax credit

You can claim this credit if you have a permanent establishment in Saskatchewan, and you made eligible expenditures for scientific research and experimental development carried out in Saskatchewan.

The credit is 15% of eligible expenditures. The credit may be applied to reduce Saskatchewan tax that you would otherwise have to pay.

You can carry back an unused credit to the three previous tax years from the tax year that you made the expenditures. You can also carry forward the unused credit to the ten tax years that follow the tax year in which you made the expenditures.

You can renounce the research and development tax credit for an eligible expenditure incurred during the year, in whole or in part, under subsection 63(10) of the Income Tax Act (Saskatchewan).

To claim the credit, file a completed Schedule 403, Saskatchewan Research and Development Tax Credit. See the schedule for more details.

On line 631 of Schedule 5, enter the amount of the non refundable credit you are claiming.

On line 645 of Schedule 5, enter the amount of the refundable credit.

Saskatchewan royalty tax rebate

This rebate is available to corporations that, in the tax year, had both taxable income earned in Saskatchewan and attributed Canadian royalties and taxes, as defined in paragraph 2(1)(a) of the Saskatchewan Royalty Tax Rebate Regulations.

The Saskatchewan royalty tax rebate will be phased out. Effective January 1, 2007, the carry-forward period for any outstanding royalty tax rebate balances will be limited to seven years.

To claim the rebate, file a completed Schedule 400, Saskatchewan Royalty Tax Rebate Calculation (Corporations), with your return. For more details, see the schedule.

On line 632 of Schedule 5, enter the royalty tax rebate you are claiming.

Saskatchewan qualifying environmental trust tax credit

A corporation that is a beneficiary of a qualifying environmental trust located in Saskatchewan can claim a tax credit on income that is subject to tax under Part XII.4 of the federal Income Tax Act.

The amount of the tax credit is: 12% effective July 1, 2008. Before this date, it was 13% effective July 1, 2007.

The qualifying environmental trust will issue a letter to the corporation that is a beneficiary.

This credit is fully refundable, but must first be applied against taxes payable. There are no carry-back or carry-forward provisions.

You do not have to file the letter with your return. However, keep it in case we ask for it later.

On line 641 of Schedule 5, enter the amount of the credit earned.

Saskatchewan film employment tax credit

The Minister of Tourism, Parks, Culture and Sport of Saskatchewan will issue a certificate to a corporation that produces an eligible film in the province.

The amount of the credit is equal to 45% of eligible salaries. Eligible salaries are limited to 50% of the total production cost of the eligible film.

An additional 5% credit for salaries of Saskatchewan residents, when hired in 6 out of 10 key positions in films with budgets of 3 million dollars or more, is also available.

An eligible corporation located more than 40 kilometres from Saskatoon or Regina can apply for an additional credit equal to 5% of the total production cost for the eligible film.

This credit is fully refundable, but must first be applied against total taxes payable. There are no carry-back or carry-forward provisions.

You do not have to file the certificate with your return. However, keep it in case we ask for it later.

If there is only one certificate, enter the certificate number on line 860 of Schedule 5. If there is more than one certificate, complete Schedule 410, Additional Certificate Numbers for the Saskatchewan Film Employment Tax Credit, and file it with your return.

On line 643 of Schedule 5, enter the amount of the credit earned in the current year.

British Columbia

The lower rate of British Columbia income tax is:

• 4.5% before July 1, 2008;
• 3.5% effective July 1, 2008; and
• 2.5% effective December 1, 2008.

Income eligible for the lower rate is determined using the British Columbia business limit of $400,000.

The higher rate of British Columbia income tax is 11% effective July 1, 2008. Before this date, it was 12%.

This rate applies to all income not eligible for the lower rate.

The tax is prorated based on the number of days in the year when the tax year straddles these dates.

You can use Schedule 427, British Columbia Corporation Tax Calculation, to help you calculate your British Columbia tax before the application of credits. You do not have to file it with your return. See the schedule for more details.

On line 240 of Schedule 5, enter the amount of tax calculated.

References
Sections 14, 14.1, and 16, British Columbia Income Tax Act

British Columbia logging tax credit

Corporations that have paid a logging tax to British Columbia on income they earned from logging operations for the year can claim a British Columbia logging tax credit. This non-refundable credit is equal to one-third of the logging tax payable and paid as indicated on provincial Form FIN 542, Logging Tax Return of Income.

On line 651 of Schedule 5, enter the amount of the credit you are claiming.

Reference
Section 19.1, British Columbia Income Tax Act

British Columbia political contribution tax credit

You can claim a tax credit on contributions made to registered British Columbia political parties, registered British Columbia constituency associations, or to candidates for an election to the Legislative Assembly of British Columbia, as follows:

• 75% of the first $100 contributed;

plus

• 50% of the next $450 contributed;

plus

• 33 1/3% of the amount contributed that is more than $550, to a maximum credit of $500.

You do not have to file official receipts with your return. However, keep them in case we ask for them later. We can only accept photocopies if the issuer certifies them as true copies.

On line 896 of Schedule 5, enter the total amount of qualifying contributions, and on line 653, enter the amount of the credit you are claiming.

Reference
Section 20, British Columbia Income Tax Act

British Columbia small business venture capital tax credit

Corporations investing in shares of a registered venture capital corporation or eligible business corporation can claim a British Columbia venture capital tax credit. The British Columbia government issues a certificate called Form SBVC 10 to these corporations.

Apply this credit first to reduce the British Columbia provincial tax payable for the year to zero. If unclaimed credits remain, you can carry them forward for four tax years to reduce the British Columbia tax payable.

You do not have to file the certificate with your return. However, keep it in case we ask for it later.

On Schedule 5, line 880, enter the unclaimed tax credit, if any, at the end of the previous tax year. On line 881, enter the tax credit amount available in the current year as reported on Form SBVC 10. On line 882, enter the nine-digit certificate number from Form SBVC 10. On line 656, enter the tax credit amount you are claiming.

Reference
Section 21, British Columbia Income Tax Act

British Columbia manufacturing and processing tax credit

Corporations may no longer file a claim for the British Columbia manufacturing and processing tax credit. This credit was earned on qualifying property purchased before July 31, 2001.

Any unused credits that have not expired may be carried forward for up to ten tax years after the tax year in which they were earned.

To claim a carryforward, file a completed Schedule 426, British Columbia Manufacturing and Processing Tax Credit, with your return. For more details, see the schedule.

On line 660 of Schedule 5, enter the amount of the credit you are claiming.

References
Part 7, British Columbia Income Tax Act
CIT-001, British Columbia Manufacturing and Processing Tax Credit

British Columbia scientific research and experimental development tax credit

A qualifying corporation can claim this credit on expenditures incurred in the tax year for scientific research and experimental development (SR&ED) carried on in British Columbia. The expenditures have to be made before September 1, 2014, and when the corporation has a permanent establishment in the province.

An active member of a partnership can also claim its share of the partnership's non-refundable tax credit for SR&ED carried on in British Columbia. Only partners that are qualifying corporations can claim the credit.

References
Part 6, British Columbia Income Tax Act
CIT-007, British Columbia Scientific Research and Experimental Development Tax Credit

British Columbia SR&ED refundable tax credit

A qualifying corporation that is a CCPC may claim the refundable tax credit.

The amount of the credit is equal to 10% of whichever of the following amounts is less:

• the SR&ED qualified BC expenditure for the tax year; or
• the expenditure limit for the tax year.

To claim the credit, file a completed Form T666, British Columbia Scientific Research and Experimental Development Tax Credit, with your return. You must file this form no later than 18 months after the end of the tax year in which the qualified expenditures are incurred. For more details, see Form T666.

On line 674 of Schedule 5, enter the amount of the refundable credit you are claiming.

Reference
Section 98, British Columbia Income Tax Act

British Columbia SR&ED non-refundable tax credit

Other qualifying corporations, and CCPCs with SR&ED qualified expenditures that are more than their expenditure limit, may claim a non-refundable tax credit.

The non-refundable tax credit for a tax year is 10% of the SR&ED qualified BC expenditure for that year less the total of:

• the amount of refundable credit for that year; and
• any amount renounced for that year.

The credit may be deducted against the income tax payable for that year. You must claim the maximum tax credit available in the year it is earned. You can carry back an unused credit to the three previous tax years from the year the expenditures were incurred. You can also carry forward the unclaimed credit to the ten tax years that follow the tax year in which the expenditures were incurred.

To claim the credit, file a completed Form T666 with your return. You must file this form no later than 18 months after the end of the tax year in which the qualified expenditures are incurred. For more details, see Form T666.

On line 659 of Schedule 5, enter the amount of the non-refundable credit you are claiming.

Reference
Section 99, British Columbia Income Tax Act

Recapture of British Columbia SR&ED tax credit

A corporation that disposed of a property used in SR&ED, or converted it to commercial use, may be required to report a recapture of any British Columbia SR&ED tax credit previously calculated on that property. Any recapture will create or increase British Columbia tax otherwise payable.

To calculate the recapture, complete Form T666, British Columbia Scientific Research and Experimental Development Tax Credit. For more details, see Form T666.

On line 241 of Schedule 5, enter the amount of recapture calculated.

Reference
Sections 102.1 to 102.6, British Columbia Income Tax Act

British Columbia qualifying environmental trust tax credit

A corporation that is a beneficiary of a qualifying environmental trust located in British Columbia can claim a tax credit on income that is subject to tax under Part XII.4 of the federal Income Tax Act.

The credit will reduce the provincial tax otherwise payable for the tax year that includes the trust's tax year.

This credit is fully refundable, but must first be applied against total taxes payable. There are no carry-back or carry-forward provisions.

On line 670 of Schedule 5, enter the amount of the credit earned.

Reference
Section 25, British Columbia Income Tax Act

British Columbia film and television tax credit

The film and television tax credits are for domestic productions with qualifying levels of Canadian content. To claim these credits, an eligible production corporation must be a British Columbia controlled corporation and its activities must mainly be carrying on a film or video production business through a permanent establishment in British Columbia.

The film and television tax credit cannot be claimed if the production services tax credit is claimed for that production.

These credits are fully refundable but must first be applied against total taxes payable. There are no carry-back or carry-forward provisions.

These credits apply to BC labour expenditures. For productions that start principal photography before February 20, 2008, a BC-based individual is defined for the entire length of a production based on the residency status of the individual in the calendar year that precedes the year principal photography begins. For productions that start principal photography after February 19, 2008, a BC-based individual is a person who is resident in the province on December 31 of the year preceding the end of the tax year for which the tax credit is claimed.

An eligible production corporation can claim these different credits:

• the basic tax credit;
• the additional basic tax credit;
• the regional tax credit;
• the distant location regional tax credit (for productions that start principal photography after February 19, 2008);
• the film training tax credit; and
• the digital animation or visual effects tax credit.

Note
If you are not eligible for, and do not claim the basic tax credit, you cannot claim the additional basic, regional, distant location, film training, or the digital animation or visual effects tax credits.

• The basic tax credit is equal to one of the following amounts:
  • 30% of the qualified BC labour expenditure for the tax year for the production; or
  • for a production that is an inter-provincial co-production, 30% of the qualified BC labour expenditure for that tax year for the production multiplied by the percentage of the copyright in the production that is beneficially owned by the corporation.

Note
For simplification, the former additional basic tax credit of 10% was rolled up into the former basic tax credit of 20% for productions with principal photography starting after December 31, 2004.

• The additional basic tax credit is equal to 5% of qualified BC labour expenditure incurred after December 31, 2007.
• The regional tax credit is equal to one of the following amounts:
  • 12.5% of the qualified BC labour expenditure for the production for the tax year, where a minimum of five days and more than 50% of the total principal photography days in British Columbia are outside of the designated Vancouver area; or
  • for a production that is intended for television broadcast as a series and that comprises a cycle of at least three episodes, where principal photography of at least three episodes is done outside of the designated Vancouver area, the credit is 12.5% of the qualified BC labour expenditure for the tax year for the qualified episodes done in British Columbia, where a minimum of five days and more than 50% of the total principal photography days in British Columbia are outside of the designated Vancouver area.

The credit is prorated for the number of days of principal photography done in British Columbia outside the designated Vancouver area over the total number of days of principal photography performed in British Columbia.

• The distant location regional tax credit is available for productions that start principal photography after February 19, 2008, when principal photography is done in British Columbia in a distant location. The distant location is that part of British Columbia that is not included within the area that extends from the designated Vancouver area north, up to and including Whistler, and east to include Hope, and not within the Capital Regional District.

The distant location regional tax credit is equal to one of the following amounts:

• 6% of the qualified BC labour expenditure for the production for the tax year, where a minimum of one day of principal photography is in a distant location; or
• for a production that is intended for television broadcast as a series and that comprises a cycle of at least three episodes, where principal photography of at least three episodes is done in a distant location, the credit is 6% of the qualified BC labour expenditure for the tax year for the qualified episodes determined for the regional tax credit, where a minimum of one day of principal photography is in a distant location.

The qualified BC labour expenditures must be incurred after December 31, 2007.

The credit is prorated for the number of days of principal photography done in a distant location, over the total number of days of principal photography performed in British Columbia.

The distant location regional tax credit can only be claimed if the corporation is eligible for, and claiming the regional tax credit.

• The film training tax credit is equal to whichever is less:
  • 3% of the qualified BC labour expenditure for the production for the tax year; or
  • 30% of the payments (net of assistance) made to the trainees in the tax year while they are participating in the approved training program on the production.
• The digital animation or visual effects tax credit is equal to 15% of BC labour expenditure directly attributable to prescribed digital animation or visual effects activities.

To claim these credits, attach the following on top of your return for the year:

• the eligibility certificate(s) requested from British Columbia Film;
• if it applies, the completion certificate, and a copy of the audited statement of production costs and notes provided to British Columbia Film; and
• a completed copy of Form T1196, British Columbia Film and Television Tax Credit, for each film or video production.

You must claim these credits no later than 36 months after the end of the tax year.

On line 671 of Schedule 5, enter the amount you are claiming.

References
Part 5, British Columbia Income Tax Act
CIT-009, British Columbia Film and Television Tax Credit
CIT-011, British Columbia Digital Animation or Visual Effects Tax Credit

British Columbia production services tax credit

The production services tax credits are available to both domestic and foreign producers and there is no Canadian content requirement. To claim these credits, the corporation must have a permanent establishment in British Columbia during the tax year, and throughout the tax year, must have mainly carried on a film or video production business or a film or video production services business.

The production services tax credit cannot be claimed if the film and television tax credit is claimed for that production.

These credits are fully refundable, but must first be applied against total taxes payable. There are no carry-back or carry-forward provisions.

These credits apply to BC labour expenditures. For productions that start principal photography before February 20, 2008, a BC-based individual is defined for the entire length of a production based on the residency status of the individual in the calendar year that precedes the year principal photography begins. For productions that start principal photography after February 19, 2008, a BC-based individual is a person who is resident in the province on December 31 of the year preceding the end of the year for which the tax credit is claimed.

An accredited production corporation can claim these different credits:

• the production services tax credit;
• the additional production services tax credit;
• the regional production services tax credit;
• the distant location production services tax credit (for productions that start principal photography after February 19, 2008); and
• the digital animation or visual effects production services tax credit.

Note
If you are not eligible for, and do not claim the production services tax credit, you cannot claim the additional, regional, distant location, or digital animation or visual effects production services tax credits.

• The production services tax credit is equal to 18% of the corporation's accredited qualified BC labour expenditure for the tax year.

Note
For simplification, the former additional production services tax credit of 7% was rolled up into the former production services tax credit of 11% for productions with principal photography starting after December 31, 2004.

• The additional production services tax credit is equal to 7% of accredited qualified BC labour expenditures incurred after December 31, 2007.
• The regional production services tax credit is equal to 6% of the accredited qualified BC labour expenditure for the production for the tax year, where a minimum of five days and more than 50% of the total principal photography days in British Columbia are done outside of the designated Vancouver area.

The credit is prorated for the number of days of principal photography done in British Columbia outside the designated Vancouver area over the total number of days of principal photography performed in British Columbia.

• The distant location production services tax credit is available for productions that start principal photography after February 19, 2008, when principal photography is done in British Columbia in a distant location. The distant location is that part of British Columbia that is not included within the area that extends from the designated Vancouver area north, up to and including Whistler and east to include Hope and not within the Capital Regional District.
  
  The distant location production services tax credit is equal to 6% of the accredited qualified BC labour expenditure for the production for the tax year, where a minimum of one day of principal photography is in a distant location.
  
  The accredited qualified BC labour expenditure must be incurred after December 31, 2007.
  
  The credit is prorated for the number of days of principal photography done in a distant location, over the total number of days of principal photography performed in British Columbia.
  
  The distant location production services tax credit can only be claimed if the corporation is eligible for, and is claiming the regional production services tax credit.

• The digital animation or visual effects production services tax credit is equal to 15% of accredited qualified BC labour expenditure directly attributable to prescribed digital animation or visual effects activities.

To claim these credits, attach the following on top of your return for the year:

• the accreditation certificate requested from British Columbia Film; and
• a completed Form T1197, British Columbia Production Services Tax Credit, for each film or video production.

You must claim these credits no later than 36 months after the end of the tax year.

On line 672 of Schedule 5, enter the amount of credit you are claiming.

References
Part 5, British Columbia Income Tax Act
CIT-010, British Columbia Production Services Tax Credit
CIT-011, British Columbia Digital Animation or Visual Effects Tax Credit

British Columbia mining exploration tax credit

A corporation that has incurred qualified mining exploration expenses in British Columbia may qualify for the British Columbia mining exploration tax credit. The corporation must have maintained a permanent establishment in the province at any time in the tax year.

The expenditures have to be incurred before January 1, 2017, for determining the existence, location, extent, or quality of a mineral resource in British Columbia.

Any flow-through mining expenditure renounced under subsection 66(12.6) of the federal Income Tax Act does not qualify for the credit.

This credit also applies to partnerships. Taxpayers who are active members of a partnership, other than specified members (such as limited partners), can each claim their proportionate share of the partnership's tax credit. To claim your proportionate share of the partnership's tax credit, file a completed Form T1249, British Columbia Mining Exploration Tax Credit Partnership Schedule, with your return. For more details, see the schedule.

The credit is equal to 20% of the amount by which:

• the total qualified mining exploration expenses incurred in the tax year;

is more than

• the total assistance for amounts included in the total qualified mining exploration expenses for the tax year.

A corporation can claim an additional 10% of the total qualified mining exploration expenses incurred after February 20, 2007, in prescribed mountain pine beetle affected areas. These expenses must be reduced by the total assistance attributable to them. The prescribed mountain pine beetle affected areas were expanded by regulation on December 1, 2008.

The credit is fully refundable, but must first be applied against total taxes payable. There are no carry-back or carry-forward provisions.

To claim the credit, file a completed Schedule 421, British Columbia Mining Exploration Tax Credit, with your return. You must claim this credit no later than 36 months after the end of the tax year. For more details, see the schedule. Members of a partnership must also file a completed Schedule T1249.

On line 673 of Schedule 5, enter the amount of credit you are claiming.

References
Section 25.1, British Columbia Income Tax Act
CIT-006, Mining Exploration Tax Credit

British Columbia book publishing tax credit

You can claim this credit if you are a recipient of a Book Publishing Industry Development Program (BPIDP) contribution before April 1, 2012.

The recipient must be a Canadian-controlled corporation carrying on business mainly through a permanent establishment in British Columbia with book publishing as its principal business.

You are eligible for a credit of 90% of the BPIDP contributions received in the tax year. The credit is fully refundable, but must first be applied against total taxes payable. There are no carry-back or carry-forward provisions.

On line 886 and line 665 of Schedule 5, enter the amount of the BPIDP contribution received in the tax year and the amount of the credit you are claiming. You must claim this credit no later than 18 months after the end of the tax year.

References
Part 8, British Columbia Income Tax Act
CIT-008, Book Publishing Tax Credit

British Columbia training tax credit

You can claim a refundable tax credit if you are a taxable corporation with a permanent establishment in the province and you paid salary and wages to an employee who was registered in a prescribed program administered through the BC Industry Training Authority.

You can claim one or more of the following three credits in the year for each qualified employee:

• The basic tax credit is 10% of the salary and wages less any assistance you received or were entitled to receive that was paid to an employee who was in the first 24 months of a non-Red Seal apprenticeship program in the tax year. The maximum basic tax credit you can claim is $2,000, per employee. This credit is not available to Red Seal trades and cannot be claimed if you are claiming the federal apprenticeship job creation tax credit in respect of the same employee (see Apprenticeship job creation tax credit);

• The completion tax credit is 15% of the salary and wages less any assistance you received or were entitled to receive that was paid to an employee within the 12 month period ending on any day in the month that the employee completed level three or higher. The maximum completion tax credit you can claim is $2,500, per employee who has completed level three and $3,000, per employee who has completed level four or higher. This credit applies to both Red Seal and non-Red Seal trades; and
• The enhanced tax credit applies to employees who are registered as Indians under the Indian Act or qualify for the disability amount on their income tax return. Do not claim the basic tax credit or the completion tax credit if you are claiming the enhanced tax credit. These credits are included in the calculation of the enhanced tax credits. An employer claiming the enhanced tax credit for a qualifying employee should only complete Part 3 of Schedule 428. The enhanced tax credits are as follows:
  • for the first 24 months of a Red Seal program, 15% of the salary and wages less any assistance you received or were entitled to receive that was paid to an employee who was in the first 24 months of a Red Seal apprenticeship program in the tax year. The maximum tax credit you can claim is $1,000 per employee. You can claim this credit in addition to the federal apprenticeship job creation tax credit in respect of the same employee;
  • for the first 24 months of a non-Red Seal program, 15% of the salary and wages less any assistance you received or were entitled to receive that was paid to an employee who was in the first 24 months of a non-Red Seal apprenticeship program in the tax year. The maximum tax credit you can claim is $3,000 per employee. This credit is not available to Red Seal trades and cannot be claimed if you are claiming the federal apprenticeship job creation tax credit in respect of the same employee;
  
  

  Effective July 1, 2009, this enhanced tax credit is increased from 15% to 30%, up to a maximum of $6,000 per employee

  
  
  • for level 3 or higher of a Red Seal or non-Red Seal program, 22.5% of the salary and wages less any assistance you received or were entitled to receive that was paid to an employee within the 12 month period ending on any day in the month that the employee completed level three or higher. The maximum tax credit you can claim is $3,750, per employee who has completed level three and $4,500, per employee who has completed level four or higher.

For the completion and enhanced tax credits, the salary and wages can be dually applied to overlapping periods when more than one level is completed.

You can also claim these credits for former employees for the time they were employed by you during the eligible period and enrolled in an eligible program.

These credits extend to partnerships. Corporations who are members of a partnership, other than specified members (such as limited partners), can each claim their share of the partnership's tax credit.

Special rules apply for employers not dealing at arm's length who wish to claim the training tax credit for the same employee. For more details, see section 125 of the British Columbia Income Tax Act.

To claim these credits, file a completed Schedule 428, British Columbia Training Tax Credit, with your return. You must claim these credits no later than 36 months after the end of the tax year in which you paid the eligible salaries and wages.

On line 679 of Schedule 5, enter the total amount of the credits you are claiming.

References
Part 9, British Columbia Income Tax Act
CIT-013, Training Tax Credits for Employers

Yukon

The lower rate of Yukon income tax is 4%. Income eligible for this lower rate is determined using the Yukon business limit of $400,000.

The higher rate of tax is 15%. This higher rate applies to taxable income earned in the Yukon that does not qualify for the small business deduction.

You can use Schedule 443, Yukon Corporation Tax Calculation, to help you calculate the Yukon tax before the application of credits. You do not have to file it with your return. See the schedule for more details.

On line 245 of Schedule 5, enter the amount of tax calculated.

Yukon political contribution tax credit

You can claim a tax credit on contributions made to a registered political party or to a candidate for an election to the Yukon Legislative Assembly. The maximum credit you can claim is $500 and is calculated as follows:

• 75% of the first $100 contributed;

plus

• 50% of the next $450 contributed;

plus

• 33 1/3% of the amount contributed that is more than $550.

You do not have to file official receipts with your return. However, keep them in case we ask for them later. We can only accept photocopies if the issuer certifies them as true copies.

On line 897 of Schedule 5, enter the total amount of qualifying contributions, and on line 675, enter the amount of the credit you are claiming.

Yukon manufacturing and processing profits tax credit

Corporations that have earned taxable income and manufacturing and processing profits in the Yukon are eligible for this credit.

Schedule 440, Yukon Manufacturing and Processing Profits Tax Credit, is a worksheet to calculate the credit, and it does not have to be filed with your return. For more details, see the schedule.

On line 677 of Schedule 5, enter the amount of the credit you are claiming.

Yukon research and development tax credit

You can claim this credit if you have a permanent establishment in the Yukon at any time in the year and you incurred qualified expenditures in the year for scientific research and experimental development carried on in the Yukon.

The credit is equal to the total of the following amounts:

• 15% of eligible expenditures incurred in the year; and
• 5% of eligible expenditures included above paid or payable to the Yukon College.

The credit is fully refundable, but must first be applied against total taxes payable. There are no carry-back or carry-forward provisions.

To claim the credit, file Schedule 442, Yukon Research and Development Tax Credit, with your return. For more details, see the schedule.

On line 698 of Schedule 5, enter the amount of the credit earned.

Northwest Territories

The lower rate of Northwest Territories income tax is 4%. This lower rate applies to taxable income earned in the Northwest Territories that qualifies for the federal small business deduction.

The higher rate of the Northwest Territories income tax is 11.5%. This rate applies to taxable income earned in the Northwest Territories that does not qualify for the small business deduction.

On line 250 of Schedule 5, enter the amount of tax calculated.

Northwest Territories political contribution tax credit

You can claim a tax credit on contributions made to a candidate for an election to the Northwest Territories Legislative Assembly. The allowable political contribution tax credit is equal to:

• 100% of the first $100 contributed;

plus

• 50% of the next $800 contributed, to a maximum credit of $500.

You do not have to file official receipts with your return. However, keep them in case we ask for them later. We can only accept photocopies if the issuer certifies them as true copies.

Note
Contributions to a political party do not qualify for this credit.

On line 898 of Schedule 5, enter the total amount of qualifying contributions, and on line 700, enter the amount of the credit you are claiming.

Northwest Territories investment tax credit

You can claim this credit if you had a permanent establishment in the Northwest Territories at any time in the year and made an investment eligible for the investment tax credit under the Risk Capital Investment Tax Credits Act.

The maximum credit you can claim in a tax year is $30,000 less any tax credits that may be deducted under the federal Income Tax Act.

This credit expired December 31, 2003, and is continued again for investments made from January 1, 2005, and before March 1, 2008. No credit is available for investments made during the 2004 calendar year.

You can carry back an unused credit to the three previous tax years from the tax year in which you made investments. You can also carry forward the unclaimed credit to the seven tax years that follow the tax year in which you made investments.

The Minister of Finance of the Northwest Territories will issue a certificate to eligible corporations. You do not have to file the certificate with your return. However, keep it in case we ask for it later.

To claim the credit, file a completed Schedule 460, Northwest Territories Investment Tax Credit, with your return. For more details, see the schedule.

On line 705 of Schedule 5, enter the amount of credit you are claiming.

Nunavut

The lower rate of Nunavut income tax is 4%. This lower rate applies to taxable income earned in Nunavut that qualifies for the federal small business deduction.

The higher rate of Nunavut income tax is 12%. This rate applies to taxable income earned in Nunavut that does not qualify for the small business deduction.

On line 260 of Schedule 5, enter the amount of tax calculated.

Nunavut political contribution tax credit

You can claim a tax credit on contributions made to a candidate for an election to the Nunavut Legislative Assembly. The allowable political contribution tax credit is equal to:

• 100% of the first $100 contributed;

plus

• 50% of the next $800 contributed, to a maximum credit of $500.

You do not have to file official receipts with your return. However, keep them in case we ask for them later. We can only accept photocopies if the issuer certifies them as true copies.

Note
Contributions to a political party do not qualify for this credit.

On line 899 of Schedule 5, enter the total amount of qualifying contributions, and on line 725, enter the amount of the credit you are claiming.

Nunavut investment tax credit

You can no longer file a claim for this credit, since it expired December 31, 2003. Only unused credits that have not expired can be carried forward for up to seven tax years that follow the tax year in which you made the investments.

To claim a carryforward, file a completed Schedule 480, Nunavut Investment Tax Credit, with your return. For more details, see the schedule.

On line 735 of Schedule 5, enter the amount of the credit you are claiming.

Line 765 - Provincial tax on large corporations

A provincial tax is levied on taxable capital of certain large corporations that have a permanent establishment in Nova Scotia or New Brunswick.

If the corporation is liable for the provincial tax on large corporations in Nova Scotia, on line 765, enter the tax as calculated on Schedule 342, Nova Scotia Tax on Large Corporations. For more details, see "Nova Scotia tax on large corporations".

If the corporation is liable for the provincial tax on large corporations in New Brunswick, on line 765, enter the tax as calculated on Schedule 361, New Brunswick Tax on Large Corporations. For more details, see "New Brunswick tax on large corporations".

Note
Newfoundland and Labrador and Ontario capital taxes are reported on Schedule 5. For more details, see "Newfoundland and Labrador capital tax on financial institutions" and "Ontario capital tax"

Other credits

Line 780 - Investment tax credit refund

On line 780, enter the amount of the investment tax credit refund. See "Investment tax credit" for details.

Line 784 - Dividend refund

On line 784, enter the amount of the dividend refund, which you calculated in the "Dividend refund" area on page 6 of your return. See "Dividend refund" for details.

Line 788 - Federal capital gains refund

Investment corporations and mutual fund corporations have to file Schedule 18, Federal and Provincial or Territorial Capital Gains Refund, with their returns. Schedule 18 has to contain the following information:

• details about the refundable capital gains tax on hand;
• details of the capital gains redemption for the year; and
• a calculation of the federal capital gains refund for the year.

Use 28% as the percentage to determine the refundable capital gains tax on hand.

The federal capital gains refund for the year is whichever is less:

• 14% of the total of:
  • the capital gains dividends paid in the period starting 60 days after the beginning of the year and ending 60 days after the end of the year; and
  • the capital gains redemption for the year; or
• the refundable capital gains tax on hand at the end of the year.

Complete the appropriate lines on Schedule 18, and enter on line 788 of the return the federal capital gains refund. See the next page for details on the provincial or territorial capital gains refund.

Note
If a corporation is established and maintained mainly to benefit non-residents, it does not qualify as a mutual fund corporation, and it cannot claim the capital gains refund.

References
Sections 130 and 131

Line 792 - Federal qualifying environmental trust tax credit refund

On line 792, enter the amount of federal qualifying environmental trust tax credit refund that was not used in the Part I tax calculation. See line 648 for more information.

Line 796 - Canadian film or video production tax credit refund

A fully refundable tax credit is available to qualified corporations that produce an eligible production certified by the Minister of Canadian Heritage to be a Canadian film or video production.

The credit is equal to 25% of qualified labour expenditures for the year for the production. The qualified labour expenditure cannot be more than 60% of the total cost of a production. The tax credit is therefore limited to 15% of the total cost of a production, less any assistance. Labour expenditures in respect of non-residents of Canada (other than Canadian citizens) will not be eligible for the credit.

For more information, see Guide RC4385, Claiming a Film or Video Production Services Tax Credit, or visit our Film Advisory Services page.

To claim the credit, attach the following items to the top of your return for the year:

• the Canadian Film or Video Production Certificate (Part A) issued by the Canadian Audio-Visual Certification Office (CAVCO), or a copy;
• if it applies, a Certificate of Completion (Part B) issued by CAVCO, or a copy, and a copy of the audited statement of production costs and notes provided to CAVCO; and
• a completed Form T1131, Claiming a Canadian Film or Video Production Tax Credit, for each film or video production.

On line 796, enter the amount of the credit from Form T1131. If you are filing more than one of these forms, enter the cumulative total.

Note
We may refund all or part of a claim for a Canadian film or video production tax credit for a tax year to a qualified corporation, before we issue the notice of assessment for that year, provided certain conditions are met.

References
Section 125.4
Regulation 1106
RC4164, Claiming a Canadian Film or Video Production Tax Credit - Guide to Form T1131

Line 797 - Film or video production services tax credit refund

A fully refundable tax credit is available to eligible production corporations for a film or video production certified by the Minister of Canadian Heritage to be an accredited production.

Eligible production corporations do not include those that, at any time in the year, are tax-exempt, are controlled by one or more tax-exempt entities, or are prescribed labour-sponsored venture capital corporations.

The credit is equal to 16% of qualified Canadian labour expenditures for the year.

Note
Qualified Canadian labour expenditure is net of any assistance.

For more information, see our Film Advisory Services page.

To claim the credit, attach the following items to the top of your return for the year:

• an Accredited Film or Video Production Certificate, or a copy; and
• a completed Form T1177, Claiming a Film or Video Production Services Tax Credit, for each accredited production.

On line 797, enter the amount of the credit from Form T1177. If you are filing more than one of these forms, enter the cumulative total.

If a credit is claimed for the Canadian film or video production tax credit, then a credit cannot be claimed for the film and video production services tax credit.

Note
We may refund all or part of a claim for a film or video production services tax credit for a tax year to an eligible production corporation, before we issue the notice of assessment for that year, provided certain conditions are met.

References
Section 125.5
Regulation 9300

Lines 800 and 801 - Tax withheld at source

This is the amount shown as "income tax deducted" on any NR4, T4A, or T4A-NR information slips you may have received. You do not have to file these information slips with your return, unless you are a non-resident corporation. However, keep them in case we ask for them later.

On line 800, enter the total amount of income tax deducted from all your information slips and, on line 801, enter the total payments on which tax has been withheld.

References
IC 77-16, Non-Resident Income Tax
IC 75-6, Required Withholding From Amounts Paid to Non-Residents Providing Services in Canada

Line 808 - Provincial and territorial capital gains refund

Investment public corporations and mutual fund corporations have to file Schedule 18, Federal and Provincial or Territorial Capital Gains Refund, with their return, complete with information mentioned in "Other credits".

These corporations have to calculate the provincial and territorial capital gains refund according to provincial and territorial income tax acts.

For tax years ending in 2009 or later, mutual fund corporations and investment public corporations that have a permanent establishment in Ontario have to calculate their Ontario capital gains refunds according to section 106 of the Taxation Act, 2007 (Ontario).

Complete page 2 of Schedule 18, and enter the provincial and territorial capital gains refund on line 808.

References
Sections 130 and 131

Line 812 - Provincial and territorial refundable tax credits

On line 812, enter the amount of provincial and territorial refundable tax credits calculated on line 255 of Schedule 5 (negative amount).

Line 840 - Tax instalments paid

On line 840, report all of the instalment payments you made for the tax year. If there is a discrepancy between the amount you report on the return and the amount in the instalment account, we will use the amount in your instalment account for the tax year being assessed when we process the return.

For information on how to make payments and calculate instalments see Guide T7B Corp, Corporation Instalment Guide.

Refund or payment

Your overpayment or balance unpaid is the difference you get after subtracting all the credits on lines 780 to 840 from the total tax payable on line 770.

If your total tax payable (line 770) is less than your total credits (line 890), enter the difference on the overpayment line.

If your total payable (line 770) is more than your total credits (line 890), enter the difference on the balance unpaid line.

Note
After we process your return and apply any interest and/or penalty charges, if the total amount owing at that time is $2 or less, you will not have to pay that amount. If an amount of $2 or less is owed to you, the amount will not be paid; however, we will apply it to any existing liability you may have.

Line 894 - Refund code

If entitled to a refund, enter one of the following codes on line 894:

• enter "1" or leave this line blank if you want us to refund the overpayment;
• enter "2" if you want us to transfer the overpayment to next year's instalment account; or
• enter "3" if you want us to apply the overpayment to another liability (such as an expected debit from a reassessment) or to a different account. Attach a letter to your return giving instructions and we will review your request.

Whichever option you choose, we will apply the overpayment to any outstanding liabilities the corporation owes on the same or related Business Number account. Then, we will refund or transfer the excess overpayment according to the code you enter. We will do this only if all the required returns have been filed on the account and all related accounts.

The payment of refunds and rebates will be withheld until all required returns, of which the Minister of National Revenue has knowledge, have been filed.

Line 896 - If the corporation is a Canadian-controlled private corporation throughout the tax year, does it qualify for the one-month extension of the date the balance of tax is due?

Tick the appropriate box. See "Balance due date".

Line 898 - Enclosed payment

On line 898, enter the amount of any payment you are sending with your return. Do not enter an amount on this line if you made your payment at your financial institution in Canada or sent your payment to us electronically (see following section). Do not include this payment amount in the instalment total you recorded on line 840.

Make the cheque or money order payable to the Receiver General for Canada, and attach it to your return.

The Canadian Payments Association sets a maximum value of $25 million for any cheque or other paper-based payment instrument cleared through the banking system. We encourage you to make arrangements with your financial institution for payments of large amounts.

Electronic payment of balance owing

Make your payment online using the Canada Revenue Agency's My Payment option. For more information, or to use My Payment.

You can pay your corporation's balance owing electronically by using your financial institution's Internet or telephone banking services, or through a third-party service provider. Most financial institutions allow a corporation to schedule a future-dated payment. For more information about this option, visit our Electronic payments page or contact your financial institution.

Payment of balance owing at your financial institution

You can also make your payment, free of charge, at your financial institution in Canada. You will have received a Form RC160, Interim Payments Remittance Voucher after all your instalment payments have been made for the year, which shows the tax year-end. Use the form to remit your balance due date payment, if applicable.

Present the part of your statement that displays your remittance voucher with your payment to the teller. The teller will return the top part to you as a receipt. You must have an original voucher from the CRA for your financial institution to accept the payment. Photocopies are not accepted.

Direct deposit request

Lines 910 to 918

Direct deposit offers a safe, convenient, and dependable way of receiving payments, and it removes the potential loss of credit interest if a cheque is delayed in the mail.

To start direct deposit to the corporation's account at a financial institution, or to change information you already gave us, complete the "Direct deposit request" at the bottom of page 8. You do not have to complete this area if you already have direct deposit service and the information you gave before has not changed.

You can also use Form T2-DD, Direct Deposit Request Form for Corporations.

Note
You can now view your direct deposit banking information online through My Business Account.

Your direct deposit request will stay in effect until you change the information or cancel the service. However, if your financial institution advises us that you have a new account, we may deposit your payments into the new account. If, for any reason, we cannot deposit a payment into a designated account, we will mail a cheque to you at the address we have on file at the time of the original payment.

Note
The CRA must generate all large-value refunds ($25 million or more) through the Large Value Transfer System (LVTS). To avoid potential delays, you have to be registered for direct deposit and be registered on the LVTS. If you are expecting a large-value refund, arrange for direct deposit and contact your tax centre to make the necessary arrangements.

Certification

Lines 950 to 959

Lines 950 to 956 - Complete these lines by giving the required information in the appropriate spaces. Be sure that the person who signs and dates the return is an authorized officer of the corporation.

Line 957 - Tick the appropriate box.

Lines 958 and 959 - If you answer No to line 957, provide the first and last names and telephone number of a contact person. This contact person is responsible for all matters related to the processing of this year's return.

Note
Use My Business Account or complete Form RC59, Business Consent Form, if you wish to authorize representatives (including employees) to discuss your corporation income tax return for any year with the CRA. Please verify if your list of authorized representatives is up-to-date and, if applicable, modify or cancel authorized representatives. My Business Account allows you to authorize a new representative, and to view, update, and cancel authorizations of existing representatives.

Language of correspondence

Line 990

Indicate in which official language you would like to receive your correspondence by entering the appropriate code:

• 1 for English; or
• 2 for French.

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