Income Tax Act — I-3.3 18.2
ubparagraph in respect of that amount of absorbed capacity to the taxpayer’s excess capacity for the relevant years preceding the particular relevant year. ( capacité excédentaire cumulative inutilisée ) eligible group entity , in respect of a taxpayer resident in Canada, at any time, means a corporation, or a trust, resident in Canada (a) that is, at that time, related (other than because of a right referred to in paragraph 251(5)(b)) to the taxpayer; (b) that would, at that time, be affiliated with the taxpayer if section 251.1 were read without reference to the definition controlled in subsection 251.1(3); (c) that is a trust in respect of which the taxpayer’s interest in the trust is not a fixed interest (as defined in subsection 94(1)); or (d) that is a beneficiary of the taxpayer, if the taxpayer is a trust, whose interest in the taxpayer is not a fixed interest (as defined in subsection 94(1)) (other than a beneficiary that is a registered charity, or a non-profit organization, with whom the taxpayer deals at arm’s length). ( entité admissible du groupe ) excess capacity of a taxpayer for a taxation year means (a) if subsection 18.21(2) applies in respect of the taxpayer for the year, nil; and (b) in any other case, the amount determined by the formula A − B − C where A is the amount determined by the formula D × E + F where D is the ratio of permissible expenses of the taxpayer for the year, E is the adjusted taxable income of the taxpayer for the year, and F is the amount determined by the formula G − H × I where G is the interest and financing revenues of the taxpayer for the year, H is the ratio of permissible expenses of the taxpayer for the year, and I is the lesser of (i) the amount by which the interest and financing revenues of the taxpayer for the year exceed the interest and financing expenses of the taxpayer for the year, and (ii) either (A) if the adjusted taxable income of the taxpayer for the year would, in the absence of section 257, be a negative amount, the absolute value of the negative amount, or (B) in any other case, nil, B is the interest and financing expenses of the taxpayer for the year, and C is the amount deductible by the taxpayer under paragraph 111(1)(a.1) in the year. ( capacité excédentaire ) excluded entity for a particular taxation year means (a) a corporation that is throughout the particular year a Canadian-controlled private corporation in respect of which the amount determined for C in paragraph 125(5.1)(a) for the year is less than $50,000,000; (b) a particular taxpayer resident in Canada, if $1,000,000 is not less than the amount determined by the formula A − B where A is the total of all amounts, each of which is the interest and financing expenses or the exempt interest and financing expenses of (i) the particular taxpayer for the particular taxation year, or (ii) another taxpayer resident in Canada for a taxation year (referred to in this subparagraph as the “relevant taxation year”) ending in the particular taxation year, if the other taxpayer is an eligible group entity in respect of the particular taxpayer at the end of the relevant taxation year, and B is the amount that would be determined for A if (i) the reference in the description of A to “the interest and financing expenses or the exempt interest and financing expenses” were read as a reference to “the interest and financing revenues”, and (ii) the interest and financing revenues of a financial institution group entity were excluded; or (c) a taxpayer resident in Canada if (i) all or substantially all of the businesses, if any, and all or substantially all of the undertakings and activities of (A) the taxpayer are, throughout the particular year, carried on in Canada, and (B) each eligible group entity in respect of the taxpayer are, throughout the eligible group entity’s taxation year that ends in the particular year, carried on in Canada, (ii) throughout the year, it is the case that A ≥ B where A is $5,000,000, an