Income Tax Act — I-3.3 18.2
for the year that is not, because of an Act of Parliament, subject to tax under this Part, or (j) the amount that would be the taxpayer’s income for the year, or that would be the taxpayer’s share of the income of a partnership of which the taxpayer is a member, if the taxpayer or partnership had no income or loss other than income that can reasonably be considered to be earned by the taxpayer or the partnership in respect of activities funded by a borrowing (within the meaning of the definition exempt interest and financing expenses ) that results in exempt interest and financing expenses of the taxpayer or the partnership. ( revenu imposable rajusté ) affiliate taxation year of a controlled foreign affiliate means the period for which the accounts of the affiliate have been ordinarily made up, but no such period may exceed 53 weeks. ( année d’imposition de la société affiliée ) cumulative unused excess capacity of a taxpayer for a particular taxation year means the total of all amounts each of which is (a) the excess capacity of the taxpayer for the particular year, or (b) the excess capacity of the taxpayer for any of the three immediately preceding taxation years, if the taxpayer’s excess capacity for each of those years is determined according to the following rules: (i) if the taxpayer has an amount of transferred capacity for any taxation year (referred to in this definition as the “transfer year”) preceding the particular year, (A) there are to be reductions to the taxpayer’s excess capacity for the transfer year and the three taxation years immediately preceding the transfer year (each referred to in this subparagraph as a “relevant year”) in a total amount equal to the total of all amounts each of which is an amount of transferred capacity of the taxpayer for the transfer year (referred to in this definition as the “total transferred capacity amount”), and (B) the amount by which the taxpayer’s excess capacity for a particular relevant year is to be reduced is equal to the lesser of (I) the taxpayer’s excess capacity for the particular relevant year, determined taking into consideration any reductions to that excess capacity under 1 this subparagraph, in respect of amounts of transferred capacity for years preceding the transfer year, and 2 subparagraph (ii), in respect of amounts of absorbed capacity for the transfer year and any years preceding the transfer year, and (II) the amount, if any, by which the total transferred capacity amount for the transfer year exceeds the reductions, under this subparagraph in respect of that total transferred capacity amount, to the taxpayer’s excess capacity for any relevant years preceding the particular relevant year, and (ii) if the taxpayer has an amount of absorbed capacity for a taxation year (referred to in this definition as the “absorbed capacity year”), (A) there are to be reductions to the taxpayer’s excess capacity for the three taxation years immediately preceding the absorbed capacity year (each referred to in this subparagraph as a “relevant year”) in a total amount equal to the amount of absorbed capacity for the absorbed capacity year, and (B) the amount by which the taxpayer’s excess capacity for a particular relevant year is to be reduced is equal to the lesser of (I) the taxpayer’s excess capacity for the particular relevant year, determined taking into account any reductions to that excess capacity under 1 subparagraph (i), in respect of amounts of transferred capacity for years preceding the absorbed capacity year, and 2 this subparagraph, in respect of amounts of absorbed capacity for years preceding the absorbed capacity year, and (II) the amount, if any, by which the amount of absorbed capacity for the absorbed capacity year exceeds the reductions under this subparagraph 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 inutilisé