43.7 (1) A corporation that is an Ontario book publishing company for a taxation year and complies with the requirements of this section may deduct from its tax otherwise payable under this Part for a taxation year, after making all the deductions for the taxation year claimed under sections 39, 40, 41, 43 and 43.3 to 43.6, an amount not exceeding the amount of its Ontario book publishing tax credit for the taxation year.  1997, c. 43, Sched. A, s. 21; 2004, c. 16, s. 2 (2). Same (2) A corporation referred to in subsection (1) that complies with the requirements of this section may deduct from its tax otherwise payable for the year under Parts III and IV an amount not exceeding the amount by which its Ontario book publishing tax credit for the taxation year exceeds the maximum amount, if any, deductible by the corporation for the year under subsection (1).  1997, c. 43, Sched. A, s. 21; 2004, c. 16, s. 2 (2). Amount of tax credit (3) The amount of a corporation’s Ontario book publishing tax credit for a taxation year is the sum of all amounts each of which is the amount of the available credit for the taxation year in respect of the publication of an eligible literary work, as determined using the formula, A + B in which, “A” is the amount that is the lesser of, (a) 30 per cent of the qualifying expenditures made by the corporation after May 6, 1997 and before May 3, 2000 in respect of the publication of the literary work, to the extent that the expenditures were not included in determining the available credit relating to the publication of the literary work that was included in an Ontario book publishing tax credit claimed by the corporation for a prior taxation year, and (b) $10,000 less the total of all amounts, if any, each of which is the available credit relating to the publication of the same literary work that was included in an Ontario book publishing tax credit claimed by the corporation for a prior taxation year; and “B” is the amount that is the lesser of, (a) 30 per cent of the qualifying expenditures made by the corporation after May 2, 2000 and before the end of the taxation year in respect of the publication of the literary work, to the extent that the expenditures were not included in determining the available credit relating to the publication of the literary work that was included in an Ontario book publishing tax credit claimed by the corporation for a prior taxation year, and (b) $30,000 less the sum of the amount of “A” for the taxation year in respect of the eligible literary work and the total of all amounts, if any, each of which is the available credit relating to the publication of that literary work that was included in an Ontario book publishing tax credit claimed by the corporation for a prior taxation year. 2000, c. 42, s. 17 (1); 2004, c. 16, s. 2 (2). Same, book containing more than one literary work (4) A book that contains more than one literary work shall be deemed to be one literary work for the purposes of subsection (3), and the amount of a corporation’s Ontario book publishing tax credit for a taxation year in respect of the book shall not exceed the amount determined under subsection (3).  2000, c. 42, s. 17 (2); 2004, c. 16, s. 2 (2). Corporate partner (5) If a corporation is a member of a partnership and the partnership would qualify in a particular taxation year of the corporation for an Ontario book publishing tax credit if the partnership were a corporation whose fiscal period was its taxation year, the portion of the Ontario book publishing tax credit to which the partnership would be entitled if it were a corporation that may reasonably be considered to be the corporation’s share may be included in determining the amount of the corporation’s Ontario book publishing tax credit for the corporation’s taxation year.  1997, c. 43, Sched. A, s. 21; 2004, c. 16, s. 2 (2). Limited partner (6) Despite subsection (5), a limited partner’s share of an Ontario book publishing tax credit to which a partnership would be entitled if it were a corporation shall be deemed to be nil.  1997, c. 43, Sched. A, s. 21; 2004, c. 16, s. 2 (2). Ontario book publishing company (7) A corporation is an Ontario book publishing company for a taxation year if it is a Canadian-controlled corporation throughout the taxation year and is a book publishing company that carries out its business primarily through a permanent establishment of the corporation in Ontario.  1997, c. 43, Sched. A, s. 21; 2004, c. 16, s. 2 (2). Application for certificate (8) In order to be eligible to deduct or claim an amount in respect of an Ontario book publishing tax credit under this section with respect to a particular literary work, an Ontario book publishing company shall apply to the Ontario Media Development Corporation or a person designated by the Minister of Culture for certification that the work is an eligible literary work for the purposes of this section.  1997, c. 43, Sched. A, s. 21; 2004, c. 16, s. 2 (2); 2005, c. 31, Sched. 5, s. 7 (1). Same (9) An Ontario book publishing company that applies for certification shall provide to the designated person the information he or she specifies for the purposes of this section.  1997, c. 43, Sched. A, s. 21; 2004, c. 16, s. 2 (2). Certificate (10) If the particular literary work is an eligible literary work for the purposes of this section, the designated person shall issue to the Ontario book publishing company a certificate certifying that the work is an eligible literary work for the purposes of this section.  1997, c. 43, Sched. A, s. 21; 2004, c. 16, s. 2 (2). Same (11) In order to deduct or claim an amount under this section for a taxation year in respect of a particular literary work, an Ontario book publishing company must deliver to the Minister with its return for the taxation year the certificate issued in respect of the work, or a certified copy of the certificate.  1997, c. 43, Sched. A, s. 21; 2004, c. 16, s. 2 (2). Revocation of certificate (11.1) A certificate issued under subsection (10) may be revoked if an omission or incorrect statement was made for the purpose of obtaining the certificate, if the corporation is not an Ontario book publishing company, or if the literary work is not an eligible literary work for the purposes of this section.  1998, c. 5, s. 15 (2); 2004, c. 16, s. 2 (2). Same (11.2) A certificate that is revoked shall be deemed never to have been issued.  1998, c. 5, s. 15 (2); 2004, c. 16, s. 2 (2). Eligible literary work (12) A literary work is an eligible literary work if it satisfies the following conditions: 1. The literary work is written by an eligible Canadian author or, if it is written by more than one author, all or substantially all of the work is the work of eligible Canadian authors. 2. The literary work belongs to an eligible category of writing. 3. At least 90 per cent of the literary work is new material that has not been previously published. 4. If the literary work contains pictures and is not a children’s book, the ratio of the amount of text to pictures in the literary work is at least 65 per cent. 5. The literary work is suitable for publication as a bound book having not less than 48 printed pages, unless the literary work is a children’s book. 6. The literary work is not an ineligible publication.  1997, c. 43, Sched. A, s. 21; 2000, c. 42, s. 17 (3, 4); 2004, c. 16, s. 2 (2). Exception (13) No tax credit may be claimed by a corporation under this section with respect to the publishing of a literary work if, (a) the publication date is before May 7, 1997; (b) the corporation publishes the literary work on consignment or at the expense of another person; (c) the author of the literary work, a person related to the author or a person who is, or is related to, the subject of the literary work directly or indirectly funds, or guarantees the payment of, any part of the cost of publishing or marketing the literary work; (d) the corporation is controlled by the author of the literary work, or by a person not dealing at arm’s length with the author; (e) the corporation publishes the literary work other than as a bound hardback, a paperback or a trade paperback book; (f) the corporation publishes the literary work in an edition of less than 500 copies; (g) the published literary work is not assigned an International Standard Book Number; (h) the corporation does not offer the literary work for sale through an established distributor; (i) the corporation published fewer than two books during the 12-month period immediately before the taxation year for which the credit under this section is claimed; (j) the literary work is published in a book that also contains one or more other literary works and less than all or substantially all of the literary works contained in the book are by eligible Canadian authors.  1997, c. 43, Sched. A, s. 21; 2000, c. 42, s. 17 (5); 2004, c. 16, s. 2 (2); 2004, c. 31, Sched. 9, s. 20 (1). Qualifying expenditures (14) The following amounts in respect of the publishing of an eligible literary work by an Ontario book publishing company are qualifying expenditures of the company for a taxation year: 1. Expenditures incurred by the company in the taxation year in respect of pre-press costs, including, i. non-refundable monetary advances to the eligible Canadian author of the literary work, and ii. amounts in respect of activities that reasonably relate to the publishing of the literary work, if the activities are carried out primarily in Ontario, including, A. salaries and wages paid to employees involved in editing, design and project management, B. amounts in respect of fees for freelance editing, design and research, and C. amounts in respect of the cost of art work, developing prototypes, set-up and typesetting. 2. One-half of the expenditures incurred by the company in the taxation year for the printing, assembling and binding of the literary work, if those activities are carried out primarily in Ontario. 3. Expenditures incurred by the company in the taxation year that reasonably relate to the marketing of copies of the published literary work and are incurred by the company within 12 months after the date of publication of the literary work, including, i. expenditures in respect of promotional tours by the eligible Canadian author of the literary work, except that only 50 per cent of expenditures for meals and entertainment are qualifying expenditures, ii. salaries and wages paid to employees of the company engaged in marketing the published literary work, and iii. amounts expended in respect of promoting and marketing copies of the published literary work.  1997, c. 43, Sched. A, s. 21; 2000, c. 42, s. 17 (6, 7); 2004, c. 16, s. 2 (2). Exception, second and subsequent literary works (14.1) An expenditure incurred before May 3, 2000 is not a qualifying expenditure of an Ontario book publishing company unless the expenditure relates to the first literary work published by an eligible Canadian author in an eligible category of writing.  2000, c. 42, s. 17 (8); 2004, c. 16, s. 2 (2). Same (15) The total of all qualifying expenditures made by a corporation in respect of the publishing of an eligible literary work shall be the amount otherwise determined less the amount of all government assistance, if any, in respect of the qualifying expenditures that, at the time the corporation’s return is required to be delivered under subsection 75 (1) for the taxation year for which the tax credit is claimed, the corporation has received, is entitled to receive or may reasonably be expected to be entitled to receive.  1997, c. 43, Sched. A, s. 21; 2004, c. 16, s. 2 (2). Corporate reorganizations (15.1) Subsection (15.2) applies if, after December 31, 2001, one of the following events occurs: 1. An Ontario book publishing company (the “transferor”) transfers all or part of its business to another corporation (the “transferee”) in accordance with subsection 85 (1) of the Income Tax Act (Canada). 2. A corporation (the “transferee”) is formed as the result of an amalgamation of an Ontario book publishing company (the “transferor”) with one or more other corporations in accordance with section 87 of the Income Tax Act (Canada). 3. An Ontario book publishing company (the “transferor”) is wound up in accordance with subsection 88 (1) of the Income Tax Act (Canada) and its assets and liabilities, if any, are transferred to its parent corporation (the “transferee”).  2004, c. 31, Sched. 9, s. 20 (2). Continuation of corporation (15.2) If one of the conditions described in subsection (15.1) is satisfied, the following rules apply: 1. For the purposes of subsections (3), (8) and (14), the transferee shall be deemed to be the same corporation as, and a continuation of, the transferor with respect to an eligible literary work or the right to publish an eligible literary work that is transferred to the transferee under paragraph 1, 2 or 3 of subsection (15.1) and any credit previously claimed under this section by the transferor in a taxation year in respect of the eligible literary work shall be deemed to have been claimed by the transferee in that previous taxation year. 2. For the purposes of subsections (3), (8) and (14), the transferor ceases, immediately after the eligible literary work is transferred under paragraph 1, 2 or 3 of subsection (15.1) to be an Ontario book publishing company in respect of the eligible literary work or the right to publish the eligible literary work. 3. For the purpose of clause (13) (i), any books published by the transferor in the 12-month period immediately preceding the taxation year in which the event described in paragraph 1, 2 or 3 of subsection (15.1) occurs shall be deemed to have been published by the transferor and the transferee.  2004, c. 31, Sched. 9, s. 20 (2). Definitions (16) In this section, “author” includes, in respect of a literary work that is a children’s book, the illustrator of the literary work; (“auteur”) “book publishing company” means a corporation whose principal business is selecting, editing and publishing books and that, (a) enters into contractual agreements with authors and copyright holders for the production of literary works in print form, (b) offers for sale into the retail market the literary works that it publishes, (c) owns its own inventory or is related to a Canadian-controlled corporation that owns the inventory, or has a contractual arrangement for inventory repurchase or acceptance of book returns, and (d) bears the financial risks associated with carrying on the business of publishing, or is related to a Canadian-controlled corporation that bears the financial risks associated with carrying on the business; (“maison d’édition”) “Canadian-controlled corporation” means a corporation that is determined to be Canadian-controlled under sections 26 to 28 of the Investment Canada Act (Canada) for the purposes of that Act and, in the application of those sections for the purposes of this definition, a reference to the Minister shall be read as a reference to the Minister of Finance; (“société sous contrôle canadien”) “eligible Canadian author” means, with respect to a literary work, an individual, (a) who, when the contract is entered into to publish the literary work, is ordinarily resident in Canada and is a Canadian citizen or a permanent resident within the meaning of the Immigration Act (Canada), and (b) who has not written more than two literary works of the same eligible category of writing that have been previously published, other than a literary work published in an anthology containing two or more literary works by different authors; (“auteur canadien admissible”) “established distributor” means a person or partnership that has engaged in the business of selling or distributing books to retail stores and educational institutions for more than one year and does not sell directly by retail to an ultimate consumer; (“distributeur établi”) “government assistance” means assistance from a government, municipality or other public authority in any form, including a grant, subsidy, forgivable loan, deduction from tax and investment allowance, but does not include, (a) an Ontario book publishing tax credit under this section, or (b) a grant that is not specific to a particular eligible literary work; (“aide gouvernementale”) “ineligible publication” means a literary work that is an ineligible publication under the rules prescribed by the regulations. (“publication non admissible”)  1997, c. 43, Sched. A, s. 21; 2000, c. 42, s. 17 (9, 10); 2004, c. 16, s. 2 (2); 2004, c. 31, Sched. 9, s. 20 (3); 2005, c. 31, Sched. 5, s. 7 (2, 3). Eligible category of writing (16.1) For the purposes of this section, the eligible categories of writing are as follows: 1. If the literary work is published on or before May 11, 2005, each of the following is an eligible category of writing: i. Fiction. ii. Nonfiction. iii. Poetry. iv. Biography. v. Children’s books. 2. If the literary work is published after May 11, 2005, each of the following is an eligible category of writing: i. Fiction. ii. Nonfiction. iii. Poetry. iv. Biography. v. Children’s fiction. vi. Children’s nonfiction. vii. Children’s poetry. viii. Children’s biography.  2005, c. 31, Sched. 5, s. 7 (4). Transitional, eligible Canadian author (16.2) In determining if an individual is an eligible Canadian author of a literary work published after May 11, 2005 that is children’s fiction, children’s non-fiction, children’s poetry or children’s biography and whether the individual has more than two literary works of the same eligible category of writing that have been previously published, any children’s books of which the individual is the author that were published before May 12, 2005 shall be classified according to the eligible categories of writing that would apply if the books had been published after May 11, 2005.  2005, c. 31, Sched. 5, s. 7 (4). Deemed tax payment (17) A corporation shall be deemed to pay on account of its tax payable under this Act for a taxation year an amount claimed by the corporation, not exceeding the amount, if any, by which, (a) the corporation’s Ontario book publishing tax credit for the taxation year, exceeds, (b) the maximum amount, if any, deductible by the corporation under subsections (1) and (2) in determining its tax payable under this Act for the taxation year.  1997, c. 43, Sched. A, s. 21; 2004, c. 16, s. 2 (2). Time of deemed payment (18) A corporation shall be deemed to make the payment referred to in subsection (17) and the Minister shall be deemed to apply the deemed payment on the day on or before which the corporation would be required under clause 78 (2) (b) to pay any balance of tax payable for the taxation year.  1997, c. 43, Sched. A, s. 21; 2004, c. 16, s. 2 (2). Section Amendments with date in force (d/m/y) 1997, c. 43, Sched. A, s. 21 - 07/05/1997; 1998, c. 5, s. 15 (1) - 07/05/1997; 1998, c. 5, s. 15 (2) - 26/06/1998 2000, c. 42, s. 17 (1-3, 5-10) - 03/05/2000; 2000, c. 42, s. 17 (4)
- 21/12/2000 2004, c. 16, s. 2 (2)
- 01/01/2004; 2004, c. 31, Sched. 9, s. 20 (1) - 16/12/2004; 2004, c. 31, Sched. 9, s. 20 (2) - 01/01/2002; 2004, c. 31, Sched. 9, s. 20 (3) - 07/05/1997 2005, c. 31, Sched. 5, s. 7 (1) - 15/12/2005; 2005, c. 31, Sched. 5, s. 7 (2) - 03/05/2000; 2005, c. 31, Sched. 5, s. 7 (3, 4) - 11/05/2005