Income Tax Act — I-3.3 133
Computation of income 133 (1) In computing the income of a non-resident-owned investment corporation for a taxation year, (a) no deduction may be made in respect of interest on its bonds, debentures, securities or other indebtedness, and (b) no deduction may be made under subsection 65(1), and its income and taxable income shall be computed as if (c) the only taxable capital gains and allowable capital losses referred to in paragraph 3(b) were from dispositions of taxable Canadian property, (d) any taxable capital gain or allowable capital loss of the corporation were an amount equal to twice the amount thereof otherwise determined, and (e) subsection 83(2) were read without reference to paragraph 83(2)(b). Non-resident-owned investment corporations (2) In computing the taxable income of a non-resident-owned investment corporation for a taxation year, no deduction may be made from its income for the year, except (a) interest received in the year from other non-resident-owned investment corporations; (b) taxes paid to the government of a country other than Canada in respect of any part of the income of the corporation for the year derived from sources therein; and (c) net capital losses as provided for by section 111. Special tax rate (3) The tax payable under this Part by a corporation for a taxation year when it was a non-resident-owned investment corporation is an amount equal to 25% of its taxable income for the year. No deduction for foreign taxes (4) No deduction from the tax payable under this Part by a non-resident-owned investment corporation may be made under section 124 or in respect of taxes paid to the government of a country other than Canada. Allowable refund to non-resident-owned investment corporations (6) If the return of a non-resident-owned investment corporation’s income for a taxation year has been made within 3 years from the end of the year, the Minister (a) may, on sending the notice of assessment for the year, refund without application its allowable refund for the year; and (b) shall, with all due dispatch, make that allowable refund after sending the notice of assessment if an application for it has been made in writing by the corporation within the period within which the Minister would be allowed under subsection 152(4) to assess tax payable by the corporation for the year if that subsection were read without reference to paragraph 152(4)(a). Application to other liability (7) Instead of making a refund that might otherwise be made under subsection 133(6), the Minister may, where the taxpayer is liable or about to become liable to make any payment under this Act, apply the amount that would otherwise be refunded to that other liability and notify the taxpayer of that action. Interest on allowable refund (7.01) Where an allowable refund for a taxation year is paid to, or applied to a liability of, a non-resident-owned investment corporation, the Minister shall pay or apply interest on the refund at the prescribed rate for the period beginning on the day that is the later of (a) the day that is 120 days after the end of the year, and (b) the day that is 30 days after the day on which the corporation’s return of income under this Part for the year was filed under section 150, unless the return was filed on or before the day on or before which it was required to be filed, and ending on the day the refund is paid or applied. Excess interest on allowable refund (7.02) Where at any particular time interest has been paid to, or applied to a liability of, a corporation under subsection 133(7.01) in respect of an allowable refund and it is determined at a subsequent time that the allowable refund was less than that in respect of which interest was so paid or applied, (a) the amount by which the interest that was so paid or applied exceeds the interest, if any, computed in respect of the amount that is determined at the subsequent time to be the allowable refund shall be deemed to be an amount (in this subsec