Income Tax Act — I-3.3 127
 of the scientific research and experimental development to the extent that it was performed by the person or partnership at a time when the person or partnership was not dealing at arm’s length with the recipient, the particular amount shall be applied to reduce each qualified expenditure otherwise determined that is referred to in paragraph 127(19)(c). Agreement to allocate (20) Where (a) on or before the filing-due date for a taxation year of a person or partnership (referred to in this subsection and subsection 127(22) as the “taxpayer”) the taxpayer has received, is entitled to receive or can reasonably be expected to receive a particular amount that is government assistance, non-government assistance or a contract payment that can reasonably be considered to be in respect of scientific research and experimental development, (b) subsection 127(19) does not apply to the particular amount in respect of the year, and (c) the taxpayer and a person or partnership (referred to in this subsection and subsection 127(22) as the “transferee”) with which the taxpayer does not deal at arm’s length file an agreement or amended agreement with the Minister, the lesser of (d) the amount specified in the agreement, and (e) the total of all amounts each of which would, but for the agreement, be a qualified expenditure (i) that was incurred by the transferee in a particular taxation year of the transferee that ended in the taxpayer’s taxation year, and (ii) that can reasonably be considered to be in respect of the scientific research and experimental development to the extent that it was performed by the transferee at a time when the transferee was not dealing at arm’s length with the taxpayer shall be applied to reduce the qualified expenditures otherwise determined that are described in paragraph 127(20)(e). Failure to allocate (21) Where on or before the filing-due date for a taxation year of a person or partnership (referred to in this subsection as the “recipient”) the recipient has received, is entitled to receive or can reasonably be expected to receive a particular amount that is government assistance, non-government assistance or a contract payment that can reasonably be considered to be in respect of scientific research and experimental development and subsection 127(19) does not apply to the particular amount in respect of the year, the lesser of (a) the total of all amounts each of which is a qualified expenditure (i) that was incurred by a particular person or partnership in a taxation year of the particular person or partnership that ended in the recipient’s taxation year, and (ii) that can reasonably be considered to be in respect of the scientific research and experimental development to the extent that it was performed by the particular person or partnership at a time when the particular person or partnership was not dealing at arm’s length with the recipient, and (b) the amount, if any, by which the particular amount exceeds the total of amounts applied for the year and preceding taxation years under subsection 127(18), 127(19) or 127(20) in respect of the particular amount is deemed for the purposes of this section to be an amount of government assistance received at the end of the particular year by the particular person or partnership in respect of the scientific research and experimental development. Invalid agreements (22) An agreement or amended agreement referred to in subsection 127(20) between a taxpayer and a transferee is deemed not to have been filed with the Minister where (a) it is not in prescribed form; (b) it is not filed (i) on or before the taxpayer’s filing-due date for the particular taxation year to which the agreement relates, (ii) in the period within which the taxpayer may serve a notice of objection to an assessment of tax payable under this Part for the particular year, or (iii) in the period within which the transferee may serve a notice of objection to an assessment of tax payable under this Pa