Income Tax Act — I-3.3 91
 in the circumstances. Reserve for preceding year to be included (3) In computing the income of a taxpayer for a taxation year, there shall be included each amount in respect of a share that was deducted by virtue of subsection 91(2) in computing the taxpayer’s income for the immediately preceding year. Amounts deductible in respect of foreign taxes (4) Where, by virtue of subsection 91(1), an amount in respect of a share has been included in computing the income of a taxpayer for a taxation year or for any of the 5 immediately preceding taxation years (in this subsection referred to as the “income amount”), there may be deducted in computing the taxpayer’s income for the year the lesser of (a) the product obtained when (i) the portion of the foreign accrual tax applicable to the income amount that was not deductible under this subsection in any previous year is multiplied by (ii) the taxpayer’s relevant tax factor for the year, and (b) the amount, if any, by which the income amount exceeds the total of the amounts in respect of that share deductible under this subsection in any of the 5 immediately preceding taxation years in respect of the income amount. Denial of foreign accrual tax (4.1) For the purposes of the definition foreign accrual tax in subsection 95(1), foreign accrual tax applicable to a particular amount included in computing a taxpayer’s income under subsection (1) for a taxation year of the taxpayer in respect of a particular foreign affiliate of the taxpayer is not to include the amount that would, in the absence of this subsection, be foreign accrual tax applicable to the particular amount if, at any time in the taxation year (referred to in this subsection as the “affiliate year”) of the particular affiliate that ends in the taxation year of the taxpayer, (a) a specified owner in respect of the taxpayer is considered, (i) under the income tax laws (referred to in subsections (4.5) and (4.6) as the “relevant foreign tax law”) of any country other than Canada under the laws of which any income of a particular corporation — that is, at any time in the affiliate year, a pertinent person or partnership in respect of the particular affiliate — is subject to income taxation, to own less than all of the shares of the capital stock of the particular corporation that are considered to be owned by the specified owner for the purposes of this Act, or (ii) under the income tax laws (referred to in subsections (4.5) and (4.6) as the “relevant foreign tax law”) of any country other than Canada under the laws of which any income of a particular partnership — that is, at any time in the affiliate year, a pertinent person or partnership in respect of the particular affiliate — is subject to income taxation, to have a lesser direct or indirect share of the income of the particular partnership than the specified owner is considered to have for the purposes of this Act; or (b) where the taxpayer is a partnership, the direct or indirect share of the income of the partnership of any member of the partnership that is, at any time in the affiliate year, a person resident in Canada or a foreign affiliate of such a person is, under the income tax laws (referred to in subsection (4.6) as the “relevant foreign tax law”) of any country other than Canada under the laws of which any income of the partnership is subject to income taxation, less than the member’s direct or indirect share of that income for the purposes of this Act. Specified owner (4.2) For the purposes of subsections (4.1) and (4.5), a specified owner , at any time, in respect of a taxpayer means the taxpayer or a person or partnership that is, at that time, (a) a partnership of which the taxpayer is a member; (b) a foreign affiliate of the taxpayer; (c) a partnership a member of which is a foreign affiliate of the taxpayer; or (d) a person or partnership referred to in any of subparagraphs (4.4)(a)(i) to (iii). Pertinent person or partnership (4.3) For the purposes of thi