Income Tax Act — I-3.3 137
Payments pursuant to allocations in proportion to borrowing 137 (2) Notwithstanding anything in this Part, there may be deducted, in computing the income for a taxation year of a credit union, the total of bonus interest payments and payments pursuant to allocations in proportion to borrowing made by the credit union within the year or within 12 months thereafter to members of the credit union, to the extent that those payments were not deductible under this subsection in computing the income of the credit union for the immediately preceding taxation year. Additional deduction (3) There may be deducted from the tax otherwise payable under this Part for a taxation year by a corporation that was, throughout the year, a credit union, an amount equal to the amount determined by the formula A × B × C where A is the rate that would, if subsection 125(1.1) applied to the corporation for the year, be its small business deduction rate for the year within the meaning assigned by that subsection, B is the amount, if any, determined by the formula D – E where D is the lesser of (a) the corporation’s taxable income for the year, and (b) the amount, if any, by which 4/3 of the corporation’s maximum cumulative reserve at the end of the year exceeds the corporation’s preferred-rate amount at the end of the immediately preceding taxation year, and E is the least of the amounts determined under paragraphs 125(1)(a) to (c) in respect of the corporation for the year, and C is the percentage that is the total of (a) the proportion of 100% that the number of days in the year that are before March 21, 2013 is of the number of days in the year, (b) the proportion of 80% that the number of days in the year that are after March 20, 2013 and before 2014 is of the number of days in the year, (c) the proportion of 60% that the number of days in the year that are in 2014 is of the number of days in the year, (d) the proportion of 40% that the number of days in the year in 2015 is of the number of days in the year, (e) the proportion of 20% that the number of days in the year in 2016 is of the number of days in the year, and (f) if one or more days in the year are after 2016, 0%. Amount deemed deductible under s. 125 (4) For the purposes of this Act, any amount deductible or any deduction under subsection 137(3) from the tax otherwise payable by a credit union under this Part for a taxation year shall be deemed to be an amount deductible or a deduction, as the case may be, under section 125 from that tax. Payments in respect of shares (4.1) Notwithstanding any other provision of this Act, an amount paid or payable by a credit union to a person is deemed to be paid or payable, as the case may be, by the credit union as interest and to be received or receivable, as the case may be, by the person as interest, if (a) the amount is in respect of a share held by the person of the capital stock of the credit union, other than an amount paid or payable as or on account of a reduction of the paid-up capital, redemption, acquisition or cancellation of the share by the credit union to the extent of the paid-up capital of the share; (b) the share is not listed on a stock exchange; and (c) the person is (i) a member of the credit union, or (ii) a member of another credit union if the share is issued by the credit union after March 28, 2012 and the other credit union is a member of the credit union. Deemed interest not a dividend (4.2) Notwithstanding any other provision of this Act, an amount that is deemed by subsection 137(4.1) to be interest shall be deemed not to be a dividend. Determination of preferred-rate amount of a corporation (4.3) For the purposes of subsection 137(3), (a) the preferred-rate amount of a corporation at the end of a taxation year is determined by the formula A + B/C where A is its preferred-rate amount at the end of its immediately preceding taxation year, B is the amount deductible under section 125 from the tax for the taxation year otherwis