Income Tax Act — I-3.3 127
y the supplier from a person or partnership with which the supplier does not deal at arm’s length, that part of the cost is deemed to be the lesser of (i) the amount of that part of the cost otherwise determined, and (ii) the adjusted selling cost to the person or the partnership of the other property, (d) where part of the cost to a supplier of a property is attributable to a service (other than a service rendered by a person as an employee of the supplier) rendered to the supplier by a person or partnership with which the supplier does not deal at arm’s length, that part of the cost is deemed to be the lesser of (i) the amount of that part of the cost otherwise determined, and (ii) the adjusted service cost to the person or partnership of rendering the service, and (e) no part of the cost to a supplier of a property that is attributable to remuneration based on profits or a bonus paid or payable to an employee of the supplier shall be included, and B is the total of all amounts each of which is the amount of government assistance or non-government assistance that can reasonably be considered to be in respect of the property and that the supplier has received, is entitled to receive or can reasonably be expected to receive. ( coût de vente rajusté ) Interpretation for non-arm’s length costs (11.8) For the purposes of this subsection and subsections 127(11.6) and 127(11.7), (a) the cost to a person or partnership (referred to in this paragraph as the “supplier”) of rendering a service or providing a property to another person or partnership (referred to in this paragraph as the “recipient”) with which the supplier does not deal at arm’s length does not include, (i) where the cost to the recipient of the service rendered or property provided by the supplier would, but for this paragraph, be a cost to the recipient incurred in rendering a particular service or providing a particular property to a person or partnership with which the recipient does not deal at arm’s length, any expenditure of the supplier to the extent that it would, if it were incurred by the recipient in rendering the particular service or providing the particular property, be excluded from a cost to the recipient because of this paragraph, and (ii) in any other case, any expenditure of the supplier to the extent that it would, if it were incurred by the recipient, not be a qualified expenditure of the recipient; (b) paragraph 69(1)(c) does not apply in determining the cost of a property; and (c) the leasing of a property is deemed to be the rendering of a service. Interpretation (12) For the purposes of subsection 13(7.1), where, ursuant to a designation or an allocation from a trust or partnership, an amount is required by subsection 127(7) or 127(8) to be added in computing the investment tax credit of a taxpayer at the end of the taxpayer’s taxation year, the portion thereof that can reasonably be considered to relate to depreciable property shall be deemed to have been received by the partnership or trust, as the case may be, at the end of its fiscal period in respect of which the designation or allocation was made as assistance from a government for the acquisition of depreciable property. Idem (12.1) For the purposes of section 37, where, pursuant to a designation or an allocation from a trust or partnership, an amount is required by subsection 127(7) or 127(8) to be added in computing the investment tax credit of a taxpayer at the end of the taxpayer’s taxation year, the portion thereof that may reasonably be regarded as relating to expenditures of a current nature in respect of scientific research and experimental development that are qualified expenditures shall, at the end of the fiscal period of the trust or partnership, as the case may be, in respect of which the designation or allocation was made, reduce the total of such expenditures of a current nature as may be claimed by the trust or partnership in respect of scientific research and experiment