11 (1) Except as hereinafter provided, the income or loss of a corporation for a taxation year from a business or property shall for the purposes of this Act be determined in accordance with subdivisions a and b of Division B of Part I of the Income Tax Act (Canada) and the said subdivisions a and b are applicable to this Act in so far as the said subdivisions apply to corporations.  R.S.O. 1990, c. C.40, s. 11 (1); 2004, c. 16, s. 2 (2). Inventory (2) In the application of section 10 of the Income Tax Act (Canada) for the purposes of this Act, the amount determined by a corporation for the purposes of that Act as the value of property described in an inventory shall apply for the purposes of this Act, except that if the Minister is of the opinion that the value has been incorrectly determined by the corporation, the Minister may determine the value under section 10 of that Act for the purposes of this Act.  R.S.O. 1990, c. C.40, s. 11 (2); 2004, c. 16, s. 2 (2). Application of Income Tax Act (Canada), s. 10 (2.1) (2.1) In the application of subsection 10 (2.1) of the Income Tax Act (Canada) for the purposes of this Act, the references to “the Minister” shall be read as references to the Minister of National Revenue.  1994, c. 14, s. 4 (1); 2004, c. 16, s. 2 (2). Disposition of depreciable property: (3) In the application of section 13 of the Income Tax Act (Canada) for the purposes of this Act, the following rules apply, Undepreciated capital cost (a) subsection 13 (10) and element H in the formula in the definition of “undepreciated capital cost” in subsection 13 (21) are not applicable in determining the capital cost or the undepreciated capital cost of depreciable property of a prescribed class for the purposes of this Act and the regulations; Application of Income Tax Act (Canada), s. 13 (7.1) (b) the reference in subsection (7.1) of the said section 13 to “section 65” shall be deemed to be a reference to the said section 65 and to section 17 of this Act.  R.S.O. 1990, c. C.40, s. 11 (3); 1996, c. 29, s. 37 (1); 2004, c. 16, s. 2 (2). Loan to non-resident person (4) In the application of section 17 of the Income Tax Act (Canada) for the purposes of this Act, subsection (7) thereof does not apply in determining whether an amount shall be included in the income of a corporation in accordance with subsection (1) thereof.  R.S.O. 1990, c. C.40, s. 11 (4); 1999, c. 9, s. 75 (1); 2004, c. 16, s. 2 (2). Add-back of certain amounts paid to non-residents (5) Every corporation shall include in its income from a business or property for a taxation year the amount calculated using the formula, A × B in which, “A” is the designated fraction of the corporation for the taxation year, as determined under subsection (8.1), and “B” is the total of the amounts described in subsection (5.1) deducted by the corporation in computing its income for the taxation year, each of which is paid or payable to, (a) a non-resident person who, at any time in the corporation’s taxation year, did not deal at arm’s length with the corporation, or (b) a non-resident owned investment corporation which, at any time in the corporation’s taxation year, did not deal at arm’s length with the corporation. 2000, c. 10, s. 1 (1); 2004, c. 16, s. 2 (2). Payments (5.1) The following amounts are described in this subsection for the purposes of subsection (5): 1. All management or administration fees and charges, including fees and charges calculated by reference to the sale of goods or services, production or profits, but not including, i. any amount that is not included in the amount determined under subsection 212 (4) of the Income Tax Act (Canada), or ii. if the management or administration fee or charge is calculated on the basis of cost plus a mark-up, the portion of that fee or charge equal to the total of specific expenses incurred by the non-resident person in the performance of the service for the benefit of the corporation. 2. All rents, royalties and similar payments other than amounts, i. that would not be included in the amount determined under paragraph 212 (1) (d) of the Income Tax Act (Canada), or ii. that are for the use, or for the right to use in Canada, of computer software or a patent or information concerning industrial, commercial or scientific experience, or a design or model, plan, secret formula or process. 3. Amounts in consideration for a right in or for the use of, i. a motion picture film, ii. a film or video tape for use in connection with television, other than solely in connection with and as part of a news program produced in Canada, or iii. any other means of reproduction for use in connection with television, other than solely in connection with and as part of a news program produced in Canada.  1998, c. 34, s. 28 (1); 1999, c. 9, s. 75 (3); 2004, c. 16, s. 2 (2). Exclusions from amount (5.2) Despite subsection (5.1), the following amounts shall not be included in the amounts described in that subsection: 1. An amount that would otherwise be included in an amount described in subsection (5.1) that is paid or payable to a person for the benefit of a third person who is a non-resident person entitled to the payment if, i. the third person deals at arm’s length with the corporation, and ii. the amount is subsequently paid or payable to the third person. 2. An amount paid or payable to a non-resident person who is subject to tax under this Part or under Part I of the Income Tax Act (Canada), if the amount is included in computing the non-resident person’s taxable income earned in Canada.  1998, c. 34, s. 28 (1); 2004, c. 16, s. 2 (2). Interpretation (5.3) For the purposes of subsection (5.1), a specific expense of a person is an explicit and identifiable expense that is paid or payable and is incurred directly by the person to provide for either the use of property by the corporation making the payment or to obtain goods or services for the benefit of the corporation making the payment.  1998, c. 34, s. 28 (1); 2004, c. 16, s. 2 (2). Adjustment for unpaid amounts (5.4) In computing its income for a taxation year, a corporation may deduct the amount calculated using the formula, A × B in which, “A” is the designated fraction of the corporation for the taxation year, as determined under subsection (8.1), and “B” is any amount required to be included in the corporation’s income for the taxation year under section 78 of the Income Tax Act (Canada), if the amount is included in the calculation of an amount included in the corporation’s taxable income under subsection (5) or (6) for the taxation year or a prior taxation year. 2000, c. 10, s. 1 (2); 2004, c. 16, s. 2 (2). Certain payments to non-resident persons (6) Subsection (6.1) applies, (a) if an amount to which subsection (5) would have applied in a taxation year if it had been paid or payable to a non-resident person is paid or payable by a corporation (the “payer”) to a related person (the “payee”) resident in Canada but not in Ontario; and (b) if the payee is related to another person not resident in Canada that controls the payer.  2000, c. 10, s. 1 (3); 2004, c. 16, s. 2 (2). Same (6.1) In the circumstances described in subsection (6), the corporation that is the payer shall include in computing its income from a business or property for the taxation year the amount calculated using the formula, A × B in which, “A” is the designated fraction of the corporation that is the payer, as determined under subsection (8.1), and “B” is the amount referred to in subsection (6) for the taxation year. 2000, c. 10, s. 1 (3); 2004, c. 16, s. 2 (2). Partnerships (7) For the purposes of subsections (5), (5.1), (5.2), (5.4) and (6), if an amount is payable to a partnership, or by a partnership to a non-resident person, a non-resident owned investment corporation or another partnership, the following rules apply: 1. If the amount is paid or payable to a partnership, the amount shall be deemed to be paid or payable to each member of the partnership to the extent of that member’s profit entitlement in the partnership. 2. If the amount is paid or payable by a partnership, the amount shall be deemed to be paid or payable by each member of the partnership to the extent of the member’s profit entitlement in the partnership. 3. A person who is a member of a partnership that is a member of a second partnership is deemed to be a member of the second partnership entitled to a pro rata share of the income or loss of the second partnership that is reasonable in the circumstances. 4. The profit entitlement of a person as a member of a partnership is the person’s proportionate share of the income or loss of the partnership to which the person is entitled under the partnership agreement, under paragraph 3 or at law.  1998, c. 34, s. 28 (2); 2004, c. 16, s. 2 (2). Application of subs. (5) (8) Where it is reasonable for the Minister to believe that one of the principal purposes of the provisions of a contract or arrangement between two or more persons is to avoid the application of subsection (5) to an amount paid or payable to which it would otherwise apply, subsection (5) shall, except where subsection (6) applies, apply to that portion of the amount which the Minister considers reasonable in the circumstances.  R.S.O. 1990, c. C.40, s. 11 (8); 2004, c. 16, s. 2 (2). Designated fraction of a corporation (8.1) The designated fraction of a corporation for a taxation year is the total of, (a) 5/15.5 multiplied by the ratio of the number of days in the taxation year before May 2, 2000 to the total number of days in the taxation year; (b) 5/14.5 multiplied by the ratio of the number of days in the taxation year after May 1, 2000 and before January 1, 2001 to the total number of days in the taxation year; (c) 5/14 multiplied by the ratio of the number of days in the taxation year that are after December 31, 2000 and before October 1, 2001 to the total number of days in the taxation year; (d) 5/12.5 multiplied by the ratio of the number of days in the taxation year that are after September 30, 2001 and before January 1, 2004 to the total number of days in the taxation year; (e) 5/14 multiplied by the ratio of the number of days in the taxation year that are after December 31, 2003 to the total number of days in the taxation year. (f)  Repealed:  2003, c. 7, s. 1. (g)  Repealed:  2003, c. 7, s. 1. 2000, c. 10, s. 1 (4); 2001, c. 8, s. 19 (1); 2001, c. 23, s. 22 (1-3); 2002, c. 22, s. 38; 2003, c. 7, s. 1; 2004, c. 16, s. 2 (2). Loans or lending assets (9) In the application of paragraph 18 (1) (s) of the Income Tax Act (Canada) for the purposes of this Act, the reference therein to “this Part” shall be read as a reference to Part II of this Act.  R.S.O. 1990, c. C.40, s. 11 (9); 2004, c. 16, s. 2 (2). Deductions allowed (10) Paragraphs 20 (1) (a) and (v.1) of the Income Tax Act (Canada) are not applicable in computing the income of a corporation for a taxation year from a business or property for the purposes of this Act, and in lieu thereof there may be deducted such of the following amounts as are applicable: Capital cost of property (a) such part of the capital cost to the corporation of property, or such amount in respect of the capital cost to the corporation of property, as is allowed by regulation; Resource allowance (b) such amount as is allowed to the corporation by the regulations in respect of oil or gas resources in Canada or mineral resources in Canada.  R.S.O. 1990, c. C.40, s. 11 (10); 2004, c. 16, s. 2 (2). Deduction not allowed (10.1) If a corporation is entitled to claim a deduction under section 13.1 for a taxation year, no deduction may be claimed under paragraph 20 (1) (b) of the Income Tax Act
(Canada), as it applies for the purposes of this Act, in respect of the same property or expenditure.  1997, c. 43, Sched. A, s. 5 (3); 2004, c. 16, s. 2 (2). Deductions not allowed (11) In the application of paragraph 20 (1) (n) of the Income Tax Act (Canada) for the purposes of this Act, No deduction in respect of property in certain circumstances (a) despite subsection 20 (8) of the Income Tax Act (Canada), the said paragraph (n) does not apply to allow a deduction in computing the income of a corporation for a taxation year from a business in respect of a property sold in the course of the business if, (i) the corporation at the end of the taxation year or at any time in the immediately following taxation year, (A) was exempt from tax under any provision of this Part, or (B) ceased to have a permanent establishment in Canada, or (ii) the sale occurred more than thirty-six months before the end of the taxation year; and No deduction in respect of sale of property if security disposed of (b) the said paragraph (n) does not apply to allow a deduction in computing the income of a corporation for a taxation year from a business where the corporation has, in the taxation year, sold, pledged, assigned or in any way disposed of any security received by it as payment in whole or in part for the sale of property in respect of which the corporation has, in that or a previous taxation year, been allowed a deduction under that paragraph for the purposes of this Act.  R.S.O. 1990, c. C.40, s. 11 (11); 2004, c. 16, s. 2 (2). Foreign non-business income tax (12) For the purposes of this Act, subsection 20 (12) of the Income Tax Act (Canada) does not apply to allow a deduction in computing the income of a corporation for a taxation year except to the extent that the portion of the foreign non-business income tax paid by the corporation to which the subsection applies was not deducted pursuant to subsection 126 (1) of the Income Tax Act (Canada).  R.S.O. 1990, c. C.40, s. 11 (12); 2004, c. 16, s. 2 (2). Foreign non-business income tax (12.1) For the purposes of this Act, subsection 20 (12.1) of the Income Tax Act (Canada) does not apply to allow a deduction in computing the income of a corporation for a taxation year ending after December 31, 1997 except to the extent that the portion of the foreign non-business income tax paid by the corporation to which that subsection applies was not included in computing the corporation’s non-business income tax for any taxation year under subsection 126 (4.1) of that Act.  2004, c. 31, Sched. 9, s. 2. Banks (13) In the application of section 26 of the Income Tax Act (Canada) for the purposes of this Act, (a) despite paragraph 4 of subsection 1 (3.1), the amounts referred to in subparagraphs 26 (1) (c) (i) and 26 (2) (c) (i) of the Income Tax Act (Canada) shall be the amounts that were deductible under subsection 26 (2) of that Act in computing the income of the bank for the taxation years referred to in those subparagraphs for the purposes of that Act, and not the amounts that were deductible under subsection 26 (2) of that Act as that subsection applied for the purposes of this Act in computing the bank’s income for those years for the purposes of this Act; (b) no amount shall be deducted under paragraph 26 (2) (a), (b), (c) or (e) of that Act, for the purpose of computing the income of a bank for a taxation year for the purposes of this Act, in excess of the amount deducted by the bank under that paragraph for the purposes of computing its income for the taxation year for the purposes of that Act, unless all amounts deductible by the bank under that paragraph have been deducted in computing its income for a previous taxation year or years for the purposes of that Act; and (c) the reference to subsections 26 (1) and (2) of that Act in subsection 26 (4) of that Act shall be deemed not to be a reference to those subsections as they applied for the purposes of this Act under the predecessor of this subsection.  R.S.O. 1990, c. C.40, s. 11 (13); 2004, c. 16, s. 2 (2); 2005, c. 28, Sched. D, s. 3 (1). (14) Repealed:  1996, c. 29, s. 37 (2). Crown corporations (15) Section 27 of the Income Tax Act (Canada) is not applicable for the purposes of this Act and in lieu thereof the following provisions shall apply: Prescription 1. Where a corporation referred to in paragraphs 149 (1) (d) to (d.6) of the Income Tax Act
(Canada) is otherwise exempt under section 57 of this Act and subsection 71 (1) of this Act, such exemptions do not apply if the corporation is prescribed by regulation. Transfers of land for disposition 2. Where land has been transferred to a corporation prescribed in the regulations for the purpose of disposition, the acquisition of the property by the corporation and any disposition thereof shall be deemed not to have been in the course of the business carried on by the corporation. Application of par. 1 to controlled corporation 3. Where a corporation is prescribed pursuant to paragraph 1, paragraph 1 shall apply to any corporation controlled by such corporation.  R.S.O. 1990, c. C.40, s. 11 (15); 1999, c. 9, s. 75 (5); 2004, c. 16, s. 2 (2). Income Tax Act (Canada), s. 33.1 not applicable (16) Section 33.1 of the Income Tax Act (Canada) is not applicable in computing the income of a corporation for a taxation year for the purposes of this Act.  R.S.O. 1990, c. C.40, s. 11 (16); 2004, c. 16, s. 2 (2). Scientific research expenditures (17) In the application of paragraph 37 (1) (g) of the Income Tax Act (Canada) for the purposes of this Act, (a) subsection 1 (3.1) of this Act does not apply; and (b) the aggregate of the amounts determined under paragraph 37 (1) (g) of the Income Tax Act
(Canada) applies for the purposes of the application of that paragraph under this Act.  R.S.O. 1990, c. C.40, s. 11 (17); 2004, c. 16, s. 2 (2); 2005, c. 28, Sched. D, s. 3 (2). Interest repayments (18) Paragraph 20 (1) (ll) of the Income Tax Act (Canada) is not applicable for the purposes of this Act and in lieu thereof there may be deducted the amount of interest paid by a corporation to the Receiver General of Canada or to the Treasurer or other government authority of a Province, to the extent that, (a) the interest was previously received by, or applied to a liability of the corporation, in respect of an overpayment made on account of tax payable, pursuant to the provisions of an Act of the Parliament of Canada or the Legislature of a Province imposing a tax on the income or profits of the corporation; (b) the interest was included in computing the income of the corporation from a business or property for the purposes of this Act; and (c) the corporation was required to repay the interest as a result of a subsequent determination that the amount upon which the interest was calculated was not an overpayment of tax.  R.S.O. 1990, c. C.40, s. 11 (18); 2004, c. 16, s. 2 (2). Idem (19) Subsections 127.2 (8) and 127.3 (6) of the Income Tax Act (Canada) are applicable for the purposes of this Act in the determination of the cost of property other than capital property, including shares, debt obligations and rights, and in the determination of any amount to be included in the income of the corporation as a result of any adjustments to the cost of the property under this subsection.  R.S.O. 1990, c. C.40, s. 11 (19); 2004, c. 16, s. 2 (2). (20) Repealed:  1996, c. 29, s. 37 (3). (21) Repealed:  1994, c. 14, s. 4 (2). Interest and property tax transition rule (22) In the application of subsection 18 (2) of the Income Tax Act (Canada) for the purposes of this Act, subsection 10 (23) of the Statutes of Canada, 1988, chapter 55, as amended by subsection 132 (1) of the Statutes of Canada, 1994, chapter 21, as it applies for the purposes of the application of subsection 10 (6) of that Act (which repealed and re-enacted subsection 18 (2) of the Income Tax Act (Canada)), applies for the purposes of this Act.  R.S.O. 1990, c. C.40, s. 11 (22); 1996, c. 29, s. 37 (4); 2004, c. 16, s. 2 (2). Idem (23) In the application of subsections 18 (2.3) and (2.4) of the Income Tax Act
(Canada) for the purposes of this Act, any reference therein to “the Minister” shall be read as a reference to the Minister of National Revenue.  R.S.O. 1990, c. C.40, s. 11 (23); 2004, c. 16, s. 2 (2). Income Tax Act (Canada), par. 18 (1) (t) not applicable (24) Paragraph 18 (1) (t) of the Income Tax Act (Canada) is not applicable for the purposes of this Act.  1992, c. 3, s. 2; 2004, c. 16, s. 2 (2). Interpretation (25) In the application of subsection 12 (2.2) of the Income Tax Act (Canada) for the purposes of this Act, a reference in that subsection to an assessment or reassessment of tax, interest or penalties under section 152 of that Act shall be read as a reference to an assessment or reassessment under Part V of this Act.  1996, c. 29, s. 37 (5); 2004, c. 16, s. 2 (2). Fuel tax rebates (26) The amount required to be included in the income of a corporation for a taxation year under paragraph 12 (1) (x.1) of the Income Tax Act (Canada) for the purposes of this Act shall be deemed to be the total of all amounts each of which is a fuel tax rebate received in the taxation year by the corporation under section 68.4 of the Excise Tax Act (Canada).  1997, c. 43, Sched. A, s. 5 (4); 2004, c. 16, s. 2 (2). Life insurance companies, “SAT” not deductible (27) No deduction may be claimed by a corporation in computing its income for a taxation year in respect of any tax payable by the corporation under section 74.1.  1998, c. 34, s. 28 (4); 2004, c. 16, s. 2 (2). (28) Repealed:  2001, c. 23, s. 22 (4). (29) Repealed:  2001, c. 23, s. 22 (5). Section Amendments with date in force (d/m/y) 1992, c. 3, s. 2 - 25/06/1992; 1994, c. 14, s. 4 (1) - 17/12/1991; 1994, c. 14, s. 4 (2) - 01/01/1989; 1996, c. 29, s. 37 (1) - 01/03/1994; 1996, c. 29, s. 37 (2) - 23/02/1994; 1996, c. 29, s. 37 (3) - 25/02/1986; 1996, c. 29, s. 37 (4) - 13/09/1988; 1996, c. 29, s. 37 (5) - 01/02/1990; 1997, c. 43, Sched. A, s. 5 (1, 2) - 01/01/1998; 1997, c. 43, Sched. A, s. 5 (3) - 07/05/1997; 1997, c. 43, Sched. A, s. 5 (4, 5) - 01/01/1997; 1998, c. 34, s. 28 (1-5) - 18/12/1998; 1999, c. 9, s. 75 (1, 2) - 24/02/1998; 1999, c. 9, s. 75 (3, 4) - 05/05/1999; 1999, c. 9, s. 75 (5, 6) - 01/01/1999 2000, c. 10, s. 1 (1-4)
- 02/05/2000 2001, c. 8, s. 19 (1, 2)
- 01/01/2002; 2001, c. 23, s. 22 (1, 4-5) - 01/10/2001; 2001, c. 23, s. 22 (2)
- 01/01/2002 2002, c. 22, s. 38
- 09/12/2002 2003, c. 7, s. 1
- 01/01/2004 2004, c. 16, s. 2 (2)
- 01/01/2004; 2004, c. 31, Sched. 9, s. 2 - 16/12/2004 2005, c. 28, Sched. D, s. 3 (1, 2) - 01/01/2003