Income Tax Regulations — 5907
tion; ( déficit imposable ) taxable earnings of a foreign affiliate of a corporation for a taxation year of the affiliate is (a) where the year is the 1975 or any preceding taxation year of the affiliate, nil, and (b) in any other case, the total of all amounts each of which is (i) the affiliate’s net earnings for the year from an active business carried on by it in a country, (ii) the affiliate’s net earnings for the year in respect of its foreign accrual property income, (iii) the affiliate’s earnings for the year as determined under paragraph (b) of the definition earnings minus the portion of any income or profits tax paid to the government of a country for a year by the affiliate that can reasonably be regarded as tax in respect of those earnings, (iv) to the extent not included under subparagraph (ii), the affiliate’s net earnings for the year determined under paragraphs (c) to (f) of the definition net earnings , or (iv.1) the amount, if any, by which (A) the total of all amounts each of which is an amount required by paragraph (2.02)(a) to be included under this definition for the year exceeds (B) the total of all amounts each of which is an amount required by paragraph (2.02)(b) to be deducted under this definition for the year, (v) [Repealed, 2013, c. 34, s. 46] but does not include any amount included in the affiliate’s exempt earnings for the year; ( gains imposables ) taxable loss of a foreign affiliate of a corporation for a taxation year of the affiliate is (a) where the year is the 1975 or any preceding taxation year of the affiliate, nil, and (b) in any other case, the total of all amounts each of which is (i) the affiliate’s net loss for the year from an active business carried on by it in a country, (ii) the affiliate’s net loss for the year in respect of foreign accrual property income, (iii) the affiliate’s loss for the year as determined under paragraph (b) of the definition loss minus the portion of any income or profits tax refunded by the government of a country for a year to the affiliate that can reasonably be regarded as tax refunded in respect of that loss, or (iv) to the extent not included under subparagraph (ii), the affiliate’s net loss for the year determined under paragraphs (c) to (f) of the definition net loss , but does not include any amount included in the affiliate’s exempt loss for the year; ( perte imposable ) taxable surplus , of a foreign affiliate (in this definition referred to as the “subject affiliate”) of a corporation in respect of the corporation, at any particular time, means the amount determined by the following formula in respect of the period that begins with the latest of the following times and that ends with the particular time: (a) the first day of the taxation year of the subject affiliate in which it last became a foreign affiliate of the corporation, (b) the last time for which the opening taxable surplus of the subject affiliate in respect of the corporation was required to be determined under section 5905, and (c) the last time for which the opening taxable deficit of the subject affiliate in respect of the corporation was required to be determined under section 5905 A – B where A is the total of all amounts, in respect of the period, each of which is (i) the opening taxable surplus, if any, of the subject affiliate in respect of the corporation as determined under section 5905, at the time established in paragraph (b), (ii) the taxable earnings of the subject affiliate for any of its taxation years ending in the period, (iii) the portion of any dividend received in the period and before the particular time by the subject affiliate from another foreign affiliate of the corporation (including, for greater certainty, any dividend deemed under subsection 5905(7) to have been received by the subject affiliate) that was prescribed under paragraph 5900(1)(b) to have been paid out of the payer affiliate’s taxable surplus in respect of the corporation to the extent that