Income Tax Act — I-3.3 127
f 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 experimental development. Idem (12.2) For the purposes of paragraphs 53(2)(c), 53(2)(h) and 53(2)(k), where in a taxation year a taxpayer has deducted under subsection 127(5) an amount that may reasonably be regarded as attributable to amounts included in computing the investment tax credit of the taxpayer at the end of the year in respect of property acquired, or an expenditure made, in a subsequent taxation year, the taxpayer shall be deemed to have made the deduction under that subsection in that subsequent taxation year. Idem (12.3) For the purposes of the determination of J in the definition cumulative Canadian exploration expense in subsection 66.1(6), where, pursuant to a designation by a trust, an amount is required by subsection 127(7) 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 a qualified Canadian exploration expenditure of the trust for a taxation year shall be deemed to have been received by the trust at the end of its taxation year in respect of which the designation was made as assistance from a government in respect of that expenditure. Agreement to transfer qualified expenditures (13) Where a taxpayer (referred to in this subsection and subsections 127(15) and 127(16) as the “transferor”) and another taxpayer (referred to in this subsection and subsection 127(15) as the “transferee”) file with the Minister an agreement or an amended agreement in respect of a particular taxation year of the transferor, the least of (a) the amount specified in the agreement for the purpose of this subsection, (b) the amount that but for the agreement would be the transferor’s SR&ED qualified expenditure pool at the end of the particular year, and (c) the total of all amounts each of which is an amount that, if the transferor were dealing at arm’s length with the transferee, would be a contract payment (i) for the performance of scientific research and experimental development for, or on behalf of, the transferee, (ii) that is paid by the transferee to the transferor on or before the day that is 180 days after the end of the particular year, and (iii) that would be in respect of (A) a qualified expenditure that (I) would be incurred by the transferor in the particular year (if this Act were read without reference to subsections 127(26) and 78(4)) in respect of that portion of the scientific research and experimental development that was performed at a time when the transferor did not deal at arm’s length with the transferee, and (II) is paid by the transferor on or before the day that is 180 days after the end of the particular year, or (B) an amount added because of this subsection to the transferor’s SR&ED qualified expenditure pool at the end of the particular year where the amount is attributable to an expenditure in respect of the scientific research and experimental development is deemed to be (d) an amount determined in respect of the transferor for the particular year for the purpose of determining the value of C in the definition SR&ED qualified expenditure pool in subsection 127(9), and (e) an amount determined in respect of the transferee for the transferee’s first taxation year that ends at or after the end of the particular year for the purpose of determining the value of B in the definition SR&ED qualified expenditure pool in subsection 127(9), and where the total of all amounts each of which is an amount specified in an agreement filed with the Minister under this subsection in respect of a particular taxation year of a transferor exceeds the amount that would be the transferor’s SR&ED qualified expenditure pool at the end of the particular year if no agreement were filed with the Minister in respec