62 (1) For the purpose of computing the taxable paid-up capital of a corporation for a taxation year, there may be deducted from its paid-up capital such of the following amounts as are applicable, Deficit (a) the amount of any deficit deducted by the corporation in computing its shareholders’ equity; Discount on shares (b) the amount of the discount on the issue or sale of the shares of the corporation; Investments (c) subject to subsection (1.2), the amount that equals that proportion of the paid-up capital remaining after the deduction of the amounts deductible under clauses (a), (b) and (d) to (i) which the total cost of investments made by the corporation in other corporations bears to the total assets of the corporation remaining after the deduction of the amounts deductible under clauses (a), (b) and (d) to (i); Deferred Canadian and Ontario mining exploration and development expenses (d) the amount of Canadian exploration and development expenses, Canadian exploration expenses, Canadian development expenses and Ontario exploration and development expenses incurred by the corporation in searching for minerals in Canada that are deductible under section 18, 19 or 21 of this Act or section 29, 30 or 34 of The Corporations Tax Application Rules, 1972, to the extent that such expenses have not been deducted by the corporation for the taxation year or any prior taxation year; Renounced Canadian mining exploration and development expenses (e) the amount of Canadian exploration expenses and Canadian development expenses incurred by the corporation in searching for minerals in Canada that have been renounced by the corporation under section 66 of the Income Tax Act (Canada) to individuals, either directly or through a partnership; Scientific research and experimental development and Ontario New Technology Tax Incentive (f) all amounts, except to the extent that they have been deducted by the corporation in computing its income under Part II for the taxation year or any prior taxation year, that are deductible by the corporation, (i) under subsection 37 (1) of the Income Tax Act (Canada), as made applicable for the purposes of this Act by subsection 11 (1), in respect of scientific research and experimental development, or (ii) under clause 11 (10) (a) on account of the Ontario New Technology Tax Incentive, as determined under the regulations; Future tax assets (g) the amount of the corporation’s deferred tax debit balance or future tax assets; Unrealized foreign exchange losses (h) the amount of the corporation’s unrealized foreign exchange losses; Electricity assets (i) all amounts, except to the extent that they have been deducted by the corporation in computing its income under Part II for the taxation year or any prior taxation year, that are deductible by the corporation under clause 11 (10) (a) on account of property that is qualifying Ontario electrical generation and conservation property described in section 204 of Regulation 183 of the Revised Regulations of Ontario, 1990 (General) made under this Act.  R.S.O. 1990, c. C.40, s. 62 (1); 1994, c. 14, s. 26 (1-5); 1997, c. 19, s. 4 (2); 1997, c. 43, Sched. A, s. 32 (1-8); 1998, c. 5, s. 19; 1998, c. 34, s. 48 (1); 2001, c. 23, s. 41 (1); 2002, c. 23, s. 2 (2); 2004, c. 16, s. 2 (2); 2004, c. 31, Sched. 9, s. 29 (1-3). Interpretation (1.1) For the purposes of clause (1) (c) and subsection (1.2), the following are investments in another corporation: 1. An investment by the corporation in shares issued by the other corporation. 2. An investment by the corporation in bonds, lien notes and similar obligations issued by the other corporation. 3. A loan or advance to the other corporation.  1998, c. 34, s. 48 (2); 2004, c. 16, s. 2 (2). Rules for determining investment allowance (1.2) In determining the amount, if any, of a corporation’s deduction for a taxation year under clause (1) (c), the following rules apply: 1. The corporation’s deduction for the taxation year under clause (1) (c) shall not exceed the total cost of the investments in respect of which the deduction is claimed. 2. An amount of cash on deposit with any corporation authorized to accept deposits from the public shall not be included in determining the amount of a deduction under clause (1) (c). 3. A loan or advance to a corporation with its head office outside Canada that is owed to a related corporation that is subject to tax under this Part shall not be included in determining the amount of the related corporation’s deduction under clause (1) (c) unless the amount was outstanding for at least 120 days before the end of the taxation year of the related corporation. 4. No amount shall be included in determining the amount of a deduction under clause (1) (c) in respect of an investment in a corporation that is a financial institution or that would be a financial institution if it carried on business in Canada and had been incorporated in Canada unless, i. the investment is in long-term debt of the corporation, as defined in subsection 181 (1) of the Income Tax Act (Canada), ii. the investment is in shares of the corporation, or iii. the investment is in a banker’s acceptance that was issued for a term of at least 120 days and was held by the corporation for at least 120 days before the end of its taxation year. 5. A loan or advance that was issued for a term of less than 120 days or was held by the corporation for less than 120 days before the end of its taxation year shall not be included in determining the amount of a deduction under clause (1) (c), i. if the loan or advance is owed by a corporation that does not deal at arm’s length with a corporation described in paragraph 4, and ii. if the corporation described in paragraph 4 guarantees the amount of the loan or advance or provides security, directly or indirectly, for the repayment of the loan or advance. 6. No amount shall be included in determining the amount of a deduction under clause (1) (c) in respect of an investment in a corporation that is not subject to tax under this Part by reason of subsection 71 (1). 7. Commercial paper issued by a corporation shall not be included in determining the amount of a deduction under clause (1) (c) unless the commercial paper was issued for a term of at least 120 days and was held by the corporation claiming the deduction for at least 120 days before the end of its taxation year or, if the commercial paper was issued without a specified term, it was held by the corporation claiming the deduction for at least 120 days before the end of its taxation year. 8. An account receivable by the corporation shall not be included in determining the amount of a deduction under clause (1) (c) for a taxation year unless it is owed by a corporation and, i. if the account receivable is owed by a related corporation, it has been outstanding for at least 120 days before the end of the taxation year, or ii. if the account receivable is owed by a corporation other than a related corporation, it has been outstanding for at least 365 days before the end of the taxation year. 9. An amount paid by a corporation for goods to be delivered, for services to be rendered or for the right to use property after the end of a taxation year of a corporation that ends after October 30, 1998 shall not be included in determining the amount of a deduction under clause (1) (c) for the taxation year unless the amount is included in the determination of the amount of its investment allowance under paragraph 181.2 (4) (b) of the Income Tax Act (Canada), or would be included if the corporation were subject to tax under Part I.3 of that Act. 10. An investment in a related corporation shall not be included in determining the amount of a deduction under clause (1) (c) for the taxation year if, i. the investment was made less than 120 days before the end of the corporation’s taxation year, ii. the investment was made after the end of the last taxation year of the related corporation that ended before the end of the corporation’s taxation year, and iii. the investment is part of a series of investments and repayments or redemptions.  1998, c. 34, s. 48 (2); 1999, c. 9, s. 85 (1); 2001, c. 23, s. 41 (2); 2004, c. 16, s. 2 (2). Interpretation (1.3) For the purposes of paragraph 10 of subsection (1.2), an investment shall be considered to be part of a series of investments and repayments or redemptions if, (a) the investment is repaid or redeemed by the related corporation before the end of its first taxation year ending after the end of the corporation’s taxation year; and (b) the Minister is of the opinion that the amount of the investment has not been replaced by new debt or equity capital or by an increase in the related corporation’s surplus.  1998, c. 34, s. 48 (2); 2004, c. 16, s. 2 (2). Definition, “minerals” (2) For the purposes of clauses (1) (d) and (e), “minerals” does not include petroleum, natural gas or related hydrocarbons, bituminous sands, oil sands or oil shale.  R.S.O. 1990, c. C.40, s. 62 (2); 1994, c. 14, s. 26 (6); 2004, c. 16, s. 2 (2). Definition, “total assets” (3) For the purpose of clause (1) (c), “total assets”, of a corporation, includes the same proportion of the total assets of a partnership of which the corporation is a partner as the share of the income or loss of the partnership to which the corporation is entitled under the partnership agreement, but does not include the amount invested by the corporation in the partnership.  R.S.O. 1990, c. C.40, s. 62 (3); 2001, c. 23, s. 41 (3); 2004, c. 16, s. 2 (2). Definition, “any other surplus” (4) For the purpose of this Part, “any other surplus” includes, in respect of a corporation for a taxation year, in addition to any amount included under subsection (7), any amount required to be included in the corporation’s income for the purposes of Part II for the taxation year or a previous taxation year to the extent that the amount is not included in the corporation’s income as shown on its financial statements, but does not include, (a) an amount referred to in subsection 11 (5) or (6) or 11.0.1 (3), or (b) an amount referred to in paragraph 12 (1) (o) or subsection 15 (1) or (2), 17 (1) or 37.1 (3) of the Income Tax Act (Canada), as made applicable by subsection 11 (1).  2007, c. 7, Sched. 6, s. 8 (1). Idem (5) For the purposes of this Part, “any other surplus” includes, in addition to any other amount included therein by virtue of this section, (a) all amounts, other than accounts payable referred to in subsection 61 (2) or current trade accounts payable referred to in subsection 61 (2.1), owing by the corporation in respect of expenses deductible by the corporation in the calculation of its income subject to tax under Part II, if the amounts are owing to a person with whom the corporation was not dealing at arm’s length at the time the liability was incurred, and (b) dividends declared, which were unpaid at the close of the preceding taxation year and remain unpaid and owing to a person with whom the corporation was not dealing at arm’s length at the close of the taxation year.  R.S.O. 1990, c. C.40, s. 62 (5); 1994, c. 14, s. 26 (7, 8); 2004, c. 16, s. 2 (2); 2004, c. 31, Sched. 9, s. 29 (5). (5.1) Repealed:  1998, c. 34, s. 48 (3). (5.2) Repealed:  1998, c. 34, s. 48 (3). (6) Repealed:  1997, c. 43, Sched. A, s. 32 (10). Definitions (7) For the purposes of this Part, “accumulated other comprehensive income”, “any other surplus”, “cost of investments” and “total assets” includes any amount, (a) by which any asset of a corporation is carried in its books of account or on its balance sheet in excess of the cost thereof, (b) by which the value of an asset of a corporation has been written down and deducted from its income or undivided profits where such amount is not deductible, or if deductible has not been deducted in computing its income for the year or a previous year, under Part II, and excludes any amount, (c) by which the value of an asset of a corporation has been written down and deducted from its income or undivided profits where such amount is deductible and has been deducted in computing its income for the year or a previous year under the provisions of Part II except, (i) paragraph 20 (1) (n) of the Income Tax Act (Canada) as that paragraph applies by virtue of subsections 11 (1) and (11) of this Act, and (ii) subparagraphs 40 (1) (a) (iii) and 44 (1) (e) (iii) of the Income Tax Act
(Canada) as those subparagraphs apply by virtue of subsection 14 (1) of this Act, (d) that is an appraisal surplus of a corporation arising where its fixed assets are carried in its books of account at an amount that is in excess of the cost thereof.  R.S.O. 1990, c. C.40, s. 62 (7); 2004, c. 16, s. 2 (2); 2007, c. 7, Sched. 6, s. 8 (2). Idem (8) For the purposes of this Part, “total assets” and “cost of investments” includes any amount included in income for the year or a preceding year under subsection 91 (1) of the Income Tax Act (Canada) as made applicable by subsection 30 (1) of this Act.  R.S.O. 1990, c. C.40, s. 62 (8); 2004, c. 16, s. 2 (2). Exception (9) Subsections (1) and (8) do not apply to any corporation to which subsection 61 (3) or (4) applies.  R.S.O. 1990, c. C.40, s. 62 (9); 2004, c. 16, s. 2 (2). Artificial transaction (10) In computing taxable paid-up capital or taxable paid-up capital employed in Canada, as the case may be, no reduction may be made with respect to any transaction that, if permitted, would unduly or artificially reduce the taxable paid-up capital or taxable paid-up capital employed in Canada, as the case may be.  R.S.O. 1990, c. C.40, s. 62 (10); 2004, c. 16, s. 2 (2). Limitation respecting inclusions and deductions (11) Subsection 181 (4) of the Income Tax Act (Canada) applies with necessary modifications for the purposes of this Division in determining any amount required to determine a corporation’s taxable paid-up capital for a taxation year.  1999, c. 9, s. 85 (3); 2004, c. 16, s. 2 (2). Section Amendments with date in force (d/m/y) 1992, c. 3, s. 12 - 25/06/1992; 1994, c. 14, s. 26 (1, 2, 7, 10, 11) - 20/05/1993; 1994, c. 14, s. 26 (3, 5, 6) - 01/01/1986; 1994, c. 14, s. 26 (4, 9) - 20/05/1981; 1994, c. 14, s. 26 (8) - 23/06/1994; 1997, c. 19, s. 4 (2) - 10/10/1997; 1997, c. 43, Sched. A, s. 32 (1, 5, 9, 12, 14) - 31/10/1997; 1997, c. 43, Sched. A, s. 32 (2, 7, 11) - 01/01/1998; 1997, c. 43, Sched. A, s. 32 (3, 4, 6, 8, 13) - 07/05/1997; 1997, c. 43, Sched. A, s. 32 (10) - 08/05/1998; 1998, c. 5, s. 19 - 26/06/1998; 1998, c. 34, s. 48 (1-4) - 31/10/1998; 1999, c. 9, s. 85 (1-3) - 14/12/1999 2001, c. 23, s. 41 (1, 3) - 05/12/2001; 2001, c. 23, s. 41 (2)
- 31/10/1998 2002, c. 23, s. 2 (2)
- 09/12/2002 2004, c. 16, s. 2 (2)
- 01/01/2004; 2004, c. 31, Sched. 9, s. 29 (1) - 05/12/2001; 2004, c. 31, Sched. 9, s. 29 (2, 3) - 09/12/2002; 2004, c. 31, Sched. 9, s. 29 (4) - 16/12/2004; 2004, c. 31, Sched. 9, s. 29 (5) - 18/05/2004 2007, c. 7, Sched. 6, s. 8 (1, 2) - 17/05/2007 Division B.1 — Adjusted Taxable Paid-Up capital of Financial Institutions Calculation