Income Tax Regulations — 1106
ns for which the labour expenditure of the corporation in respect of the production for the taxation years ending in 2020 or 2021 was greater than nil. Prescribed Taxable Canadian Corporation (2) For the purposes of section 125.4 of the Act and this Division, prescribed taxable Canadian corporation means a taxable Canadian corporation that is a Canadian, other than a corporation that is (a) controlled directly or indirectly in any manner whatever by one or more persons all or part of whose taxable income is exempt from tax under Part I of the Act; or (b) a prescribed labour-sponsored venture capital corporation, as defined in section 6701. Treaty Co-production (3) For the purpose of this Division, treaty co-production means a film or video production whose production is contemplated under any of the following instruments, and to which the instrument applies: (a) a co-production treaty entered into between Canada and another State; (b) the Memorandum of Understanding between the Government of Canada and the Government of the Hong Kong Special Administrative Region of the People’s Republic of China on Film and Television Co-Production; (c) the Common Statement of Policy on Film, Television and Video Co-Productions between Japan and Canada; (d) the Memorandum of Understanding between the Government of Canada and the Government of the Republic of Korea on Television Co-Production; (e) the Memorandum of Understanding between the Government of Canada and the Government of the Republic of Malta on Audio-Visual Relations; and (f) the Memorandum of Understanding between the Government of Canada and the Respective Governments of the Flemish, French and German-Speaking Communities of the Kingdom of Belgium concerning Audiovisual Coproduction. Canadian Film or Video Production (4) Subject to subsections (6) to (9), for the purposes of section 125.4 of the Act, this Part and Schedule II, Canadian film or video production means a film or video production, other than an excluded production, of a prescribed taxable Canadian corporation in respect of which the Minister of Canadian Heritage has issued a certificate (other than a certificate that has been revoked under subsection 125.4(6) of the Act) and that is (a) a treaty co-production; or (b) a film or video production (i) whose producer is a Canadian at all times during its production, (ii) in respect of which the Minister of Canadian Heritage has allotted not less than six points in accordance with subsection (5), (iii) in respect of which not less than 75% of the total of all costs for services provided in respect of producing the production (other than excluded costs) was payable in respect of services provided to or by individuals who are Canadians, and for the purpose of this subparagraph, excluded costs are (A) costs determined by reference to the amount of income from the production, (B) remuneration payable to, or in respect of, the producer or individuals described in any of subparagraphs (5)(a)(i) to (viii) and (b)(i) to (vi) and paragraph (5)(c) (including any individuals that would be described in paragraph (5)(c) if they were Canadians), (C) amounts payable in respect of insurance, financing, brokerage, legal and accounting fees, and similar amounts, and (D) costs described in subparagraph (iv), and (iv) in respect of which not less than 75% of the total of all costs incurred for the post-production of the production, including laboratory work, sound re-recording, sound editing and picture editing, (other than costs that are determined by reference to the amount of income from the production and remuneration that is payable to, or in respect of, the producer or individuals described in any of subparagraphs (5)(a)(i) to (viii) and (b)(i) to (vi) and paragraph (5)(c), including any individuals that would be described in paragraph (5)(c) if they were Canadians) was incurred in respect of services provided in Canada. (5) For the purposes of this Division, the Minister of Canadian H