Income Tax Act — I-3.3 93.4
 other than the FABI amount (in this subsection referred to as the “excess amount”); and (b) in determining each of the amounts referred to in paragraph (a), (i) the amount deductible under subsection 91(4) in respect of the FABI amount is to be determined as though (A) the references in subsection 91(4) to the “income amount” were references to the “FABI amount”, and (B) paragraph (a) of the definition relevant tax factor in subsection 95(1) were read without the references to “(other than a Canadian-controlled private corporation or a corporation that is a substantive CCPC at any time in the year)”, and (ii) the amount deductible under subsection 91(4) in respect of the excess amount is to be determined as though the references in subsection 91(4) to the “income amount” were references to the “excess amount”. Dividends from foreign affiliates (3) If, at any particular time in a taxation year, a corporation that is a Canadian-controlled private corporation or a substantive CCPC at any time in the year (referred to in this subsection as the “recipient corporation”) receives a dividend on a share owned by it of the capital stock of a foreign affiliate of the recipient corporation, any portion of the dividend is prescribed to be paid out of taxable surplus of the affiliate (referred to in this subsection as the “taxable surplus dividend”) and an election is made by the recipient corporation in prescribed form and manner by its filing-due date for the taxation year, paragraphs 113(1)(b) and (c) and any regulations made for the purposes of those provisions are to be applied to the taxable surplus dividend as follows: (a) the portion of the taxable surplus dividend that is considered to be paid out of the affiliate’s FABI surplus (referred to in this subsection as the “FABI surplus dividend”) is equal to the lesser of (i) the taxable surplus dividend, and (ii) the proportion of the foreign affiliate’s FABI surplus at the time of the dividend payment that the dividend is of the whole dividend referred to in subparagraph 5900(1)(b)(ii) of the Income Tax Regulations ; (b) the amounts deductible by the recipient corporation under paragraphs 113(1)(b) and (c) in respect of the FABI surplus dividend are determined as though (i) each reference to “such portion of the dividend as is prescribed to have been paid out of taxable surplus” in subparagraph 113(1)(b)(i), clause 113(1)(c)(i)(A) and subparagraph 113(1)(c)(ii) and the reference to “that portion of the dividend” in subparagraph 113(1)(b)(ii) were a reference to “the FABI surplus dividend”, (ii) the reference to the “foreign tax prescribed to be applicable” in paragraph 113(1)(b) were a reference to the amount that would be the underlying foreign tax applicable (as defined in subsection 5907(1) of the Income Tax Regulations ) in respect of the recipient corporation to the whole dividend if that amount consisted solely of the affiliate’s underlying FABI surplus tax at the particular time in respect of the recipient corporation, and (iii) the definition relevant tax factor in subsection 95(1) were read without reference to the words “(other than a Canadian-controlled private corporation or a corporation that is a substantive CCPC at any time in the year)”; and (c) the amounts deductible under paragraphs 113(1)(b) and (c) in respect of the portion of the taxable surplus dividend other than the FABI surplus dividend are determined as though (i) each reference to “such portion of the dividend as is prescribed to have been paid out of taxable surplus” in subparagraph 113(1)(b)(i), clause 113(1)(c)(i)(A) and subparagraph 113(1)(c)(ii) and the reference to “that portion of the dividend” in subparagraph 113(1)(b)(ii) refer to the portion of the taxable surplus dividend other than the FABI surplus dividend, and (ii) the reference to “the foreign tax prescribed to be applicable to such portion of the dividend” in subparagraph 113(1)(b)(i) refers to the foreign affiliate’s underlying foreign tax