Petroleum and Gas Revenue Tax Act — P-12 7
Income or loss from a source 7 (1) Income or loss from a source described in section 5 does not include (a) income or loss from transporting or transmitting petroleum or refining crude oil or its equivalent; (b) income or loss from transporting, transmitting or processing gas, other than treating gas to remove water and other impurities; (c) any amount on which tax under Part II is required to be deducted or withheld that is a resource royalty or that is a production royalty received after December 31, 1983; (d) any amount required by section 13 of the Income Tax Act to be included in computing the taxpayer’s income for the year; (e) with respect to (i) Her Majesty in right of Canada or a province, (ii) an agent of Her Majesty in right of Canada or a province, or (iii) a corporation, commission or association, (other than a prescribed person), that is controlled directly or indirectly in any manner whatever by Her Majesty in right of Canada or a province or by an agent of Her Majesty in either right, a royalty, tax, lease rental or bonus received or receivable by a person described in subparagraph (i), (ii) or (iii) by virtue of an obligation imposed by statute or a contractual obligation substituted for an obligation imposed by statute; (f) income or loss from the production of petroleum or gas from a prescribed oil or gas well; (g) income or loss from the new deep production of petroleum or gas from a deepened well, other than a well located in a prescribed project or an approved recovery project; (h) the portion of the income or loss that may reasonably be attributed to the production in a period after March 31, 1985 of petroleum or gas from an approved recovery project that is the exempt percentage of that income or loss for that period in respect of that project; (i) the portion of the amount received or receivable as a production royalty or resource royalty, computed by reference to the amount or value of production in a period after 1985 of petroleum or gas from an approved recovery project, that is the exempt percentage of that amount for that period in respect of that project; (j) an amount received or receivable as a production royalty or resource royalty computed by reference to the amount or value of production of petroleum or gas after 1985 from a prescribed oil or gas well; or (k) the portion of the amount received or receivable as a production royalty or resource royalty, computed by reference to the amount or value of production after 1985 of petroleum or gas from a deepened well, other than a well located in a prescribed project or an approved recovery project, that is attributable to the new deep production from the well. Separate projects included in prescribed project (2) For the purposes of (a) the approval referred to in the definition “exempt percentage” in subsection 2(1), and (b) paragraphs (1)(h) and (i) and 26(10)(a), where a particular prescribed project that is an approved recovery project referred to in paragraph (b) of the definition “approved recovery project” in subsection 2(1) includes any other project that, but for the existence of the particular project, would be a separate prescribed project, each such project shall be deemed to be a separate approved recovery project and income or loss from each such separate approved recovery project shall not include income or loss from the production of petroleum or gas not attributable to that separate project. R.S., 1985, c. P-12, s. 7; R.S., 1985, c. 2 (2nd Supp.), s. 4