48 (1) For the purposes of subparagraphs 1 ii and 2 ii of subsection 47 (1), the amount determined under this subsection is calculated using the formula, A/B × (C – D) × E in which, “A” is, (a) nil, if the corporation’s amortization period ends before the taxation year, (a.1) the total number of days in the corporation’s reference period that are on or after the first day of the taxation year, if the corporation’s amortization period ends in the taxation year by reason of subclause 46 (2) (b) (ii), (iii), (iv), (v) or (vi), or (b) the number of days in the corporation’s reference period that are in the taxation year, in any other case, “B” is the number of days in the corporation’s reference period, “C” is the corporation’s total federal balance at the end of the taxation year, “D” is the corporation’s total Ontario balance at the end of the taxation year, and “E” is the corporation’s tax rate for the taxation year for the purposes of this section. 2007, c. 11, Sched. A, s. 48 (1); 2008, c. 7, Sched. S, s. 10 (1). Tax rate (2) A corporation’s tax rate for a particular taxation year for the purposes of this section is determined under the following rules: 1. If the corporation’s amortization period ends in the particular taxation year by reason of subclause 46 (2) (b) (iv), the tax rate is, i. if the particular year is not the corporation’s first taxation year, the corporation’s adjusted basic rate for the particular year determined as if the corporation’s Ontario allocation factor for the particular year were equal to the greater of the corporation’s Ontario allocation factor for the particular year and the corporation’s Ontario allocation factor for its previous taxation year, or ii. if the particular year is the corporation’s first taxation year, the corporation’s adjusted basic rate for the particular year determined as if the corporation’s Ontario allocation factor for the particular year were equal to the greater of, A. the corporation’s Ontario allocation factor for the particular year, and B. the greatest of all amounts each of which is the Ontario allocation factor of another corporation that is a designated corporation with respect to it, for a taxation year of the designated corporation that ends in the calendar year in which the corporation’s particular year ends or in the previous calendar year. 2. If the corporation’s amortization period ends in the particular year by reason of subclause 46 (2) (b) (v), the corporation’s tax rate for the year is the corporation’s adjusted basic rate for the year determined as if the corporation’s Ontario allocation factor for the year were equal to the greatest of, i. its Ontario allocation factor for the particular year, ii. all amounts each of which is the corporation’s Ontario allocation factor for a taxation year ending in a calendar year before 2009 in or before which a transaction or event, or all or part of a series of transactions or events, occurred that resulted in subclause 46 (2) (b) (v) applying for the purposes of determining the corporation’s amortization period, and iii. all amounts each of which is the Ontario allocation factor of a corporation that is a designated corporation with respect to it for a taxation year of the designated corporation that ends in a calendar year described in subparagraph ii. 3. If neither paragraph 1 nor 2 applies for the taxation year, the tax rate is the corporation’s adjusted basic rate for the taxation year.  2007, c. 11, Sched. A, s. 48 (2); 2008, c. 7, Sched. S, s. 10 (2, 3). Same (3) For the purposes of paragraphs 1 and 2 of subsection 47 (1), the amount determined under this subsection in respect of a corporation for a taxation year is the lesser of, (a) the corporation’s post-2008 SR & ED balance at the end of the year, as determined under section 49; and (b) the corporation’s federal SR & ED transitional balance at the end of the year, as determined under section 49.  2007, c. 11, Sched. A, s. 48 (3). Total federal balance (4) For the purposes of the definition of “C” in subsection (1), a corporation’s total federal balance at a particular time is, subject to the regulations, the sum of the following amounts: 1. If the corporation was a specified corporation at its transition time, the amount calculated using the formula, F + G + H + I + J – K + L + M + N + P + 0.5Q + R + S + S.1 in which, “F” is the sum of all amounts each of which is, for the purposes of the Federal Act, the corporation’s undepreciated capital cost of a class of depreciable property immediately before its transition time, “G”   is, (a) nil, if the corporation is non-resident immediately before its transition time, or (b) in any other case, the sum of all amounts each of which, (i)  would be deductible under paragraph 110.1 (1) (a) of the Federal Act in computing the corporation’s taxable income for its last taxation year ending before its transition time if that paragraph were read without reference to the portion of that paragraph following subparagraph (viii), or (ii)  is deductible under any of paragraphs 110.1 (1) (a.1), (b), (c) and (d) of the Federal Act in computing the corporation’s taxable income for its last taxation year ending before its transition time, “H” is the sum of all amounts each of which is, for the purposes of the Federal Act, the corporation’s cumulative eligible capital immediately before its transition time in respect of a business, “I” is, (a) nil, if control of the corporation was acquired, for the purposes of subsection 37 (6.1) of the Federal Act, by a person or group of persons at the corporation’s transition time, (b) if clause (a) does not apply and the corporation elects in writing in its return for its first taxation year ending after December 31, 2008 to have this clause apply, the amount, if any, by which “I.1” exceeds the lesser of “I.2” and “I.3” where, “I.1”  is the amount, if any, by which the amount that would be deductible under subsection 37 (1) of the Federal Act in computing the corporation’s income for its last taxation year ending before its transition time if subsection 37 (6.1) of the Federal Act were read without reference to paragraph (b) of that subsection exceeds the portion of that amount deducted in computing the corporation’s income for its last taxation year ending before the transition time, “I.2”  is the amount, if any, by which “I.1” exceeds “W” in respect of the corporation under paragraph 1 of subsection (6), and “I.3”  is the amount, if any, by which the amount that would be the corporation’s total federal balance at its transition time if the election had not been made exceeds the corporation’s total Ontario balance at its transition time, or (c) the amount of “I.1” in clause (b) in respect of the corporation in any other case, “J” is, (a) nil, if control of the corporation was acquired, for the purposes of subsection 66.7 (10) of the Federal Act, by a person or group of persons at the corporation’s transition time, or (b) in any other case, the sum of, (i)  the corporation’s cumulative Canadian exploration expense immediately before its transition time, as determined for the purposes of the Federal Act, (ii)  the corporation’s cumulative Canadian development expense immediately before its transition time, as determined for the purposes of the Federal Act, and (iii)  the corporation’s cumulative Canadian oil and gas property expense immediately before its transition time, as determined for the purposes of the Federal Act, “K” is the sum of all amounts each of which is the portion of the amount of “F”, “G”, “H” or “J” that was deducted by the corporation under the Federal Act in computing its income or taxable income for its last taxation year ending before its transition time, “L” is the amount that would be deductible under paragraph 111 (1) (a) of the Federal Act in computing the corporation’s taxable income for its first taxation year ending after December 31, 2008 if, (a) that paragraph did not refer to non-capital losses for taxation years following that taxation year, (b) subsection 111 (5) of the Federal Act were read without reference to the exception provided under paragraph (a) of that subsection, (c) subsection 88 (1.1) of the Federal Act were read without reference to the exception provided under paragraph (e) of that subsection, and (d) the corporation had sufficient incomes from all sources, “M” is the amount that would be deductible under paragraph 111 (1) (b) of the Federal Act in computing the corporation’s taxable income for its first taxation year ending after December 31, 2008 if, (a) that paragraph did not refer to net capital losses for taxation years following that taxation year, and (b) the corporation had sufficient incomes from all sources and sufficient taxable capital gains, “N” is the sum of all amounts each of which is, for the purposes of the Federal Act, the adjusted cost base to the corporation at its transition time of a partnership interest owned by the corporation, “P” is the sum of all amounts each of which was deducted as a reserve under paragraph 20 (1) (l), (l.1), (m), (m.1), (n) or (o), subsection 32 (1), section 61.4 or subparagraph 138 (3) (a) (i), (ii) or (iv) of the Federal Act, as it applies for the purposes of the Corporations Tax Act, for the corporation’s last taxation year ending before its transition time, “Q” is the sum of all amounts each of which was deducted as a reserve under subparagraph 40 (1) (a) (iii) or 44 (1) (e) (iii) of the Federal Act, as it applies for the purposes of the Corporations Tax Act, for the corporation’s last taxation year ending before its transition time, “R” is the sum of all amounts each of which would be the gain to the corporation under subsection 40 (3) of the Federal Act, as it applies for the purposes of the Corporations Tax Act, from a disposition of a partnership interest at its transition time if paragraph 40 (3) (a) of the Federal Act were read at its transition time without reference to the words “(except paragraph 53 (2) (c))”, “S” is the sum of all amounts each of which is such portion of an amount, other than a reserve, that was deducted by the corporation under the Corporations Tax Act in computing the corporation’s income, taxable income or taxable income earned in Canada for a taxation year ending on or after December 13, 2006 and before the corporation’s transition time, (a) that the corporation was entitled to deduct for that year in computing its income, taxable income or taxable income earned in Canada under the Federal Act, (b) that was not deducted for that year or any subsequent taxation year ending before January 1, 2009 for the purposes of the Federal Act, and (c) that would not result in a reduction in the amount of the corporation’s total Ontario balance at its transition time if it had not been deducted for that year for the purposes of the Corporations Tax Act and had been deducted instead for the purposes of that Act for its last taxation year ending before its transition time, and “S.1” is the amount, if any, specified by the corporation under paragraph 28 (1) (b) of the Federal Act in respect of its last taxation year ending before its transition time. 2. The sum of all amounts each of which is an amount required under subsection 51 (1) or section 52 to be added at or before the particular time to the corporation’s total federal balance. 2007, c. 11, Sched. A, s. 48 (4); 2008, c. 7, Sched. S, s. 10 (4). Reduction of total federal balance (5) Despite subsection (4), a corporation’s total federal balance at a particular time shall be reduced by the sum of all amounts each of which is an amount required under subsection 52 (4) to be deducted at or before the particular time in computing the corporation’s total federal balance.  2007, c. 11, Sched. A, s. 48 (5). Total Ontario balance (6) For the purposes of the definition of “D” in subsection (1), a corporation’s total Ontario balance at a particular time is, subject to the regulations, the sum of: 1. If the corporation was a specified corporation at its transition time, the amount calculated using the formula, T + U + V + W + X – Y + Z + AA + BB + CC + 0.5DD + EE + EE.1 + FF in which, “T” is the sum of all amounts each of which is, for the purposes of the Corporations Tax Act, the corporation’s undepreciated capital cost of a class of depreciable property immediately before its transition time, “U” is, (a) nil, if the corporation is non-resident immediately before its transition time, or (b) in any other case, the sum of all amounts each of which, (i)  would be deductible under paragraph 110.1 (1) (a) of the Federal Act, as it applies for the purposes of the Corporations Tax Act, in computing the corporation’s taxable income for its last taxation year ending before its transition time if that paragraph were read without reference to the portion of that paragraph following subparagraph (viii), or (ii)  is deductible under paragraph 110.1 (1) (a.1), (b), (c) or (d) of the Federal Act, as it applies for the purposes of the Corporations Tax Act, in computing the corporation’s taxable income for its last taxation year ending before its transition time, “V” is the sum of all amounts each of which is, for the purposes of the Corporations Tax Act, the corporation’s cumulative eligible capital immediately before its transition time in respect of a business, “W” is, (a) nil, if control of the corporation was acquired, for the purposes of subsection 37 (6.1) of the Federal Act, by a person or group of persons at the corporation’s transition time, or (b) in any other case, the sum of the corporation’s adjusted Ontario SR & ED incentive balance at the end of its taxation year ending immediately before its transition time and the amount, if any, by which “W.1” exceeds “W.2” where, “W.1”  is the amount that would be deductible under subsection 37 (1) of the Federal Act, as that subsection applies for the purposes of the Corporations Tax Act, in computing the corporation’s income for its last taxation year ending before its transition time if subsection 37 (6.1) of the Federal Act were read without reference to paragraph (b) of that subsection, and “W.2”  is the amount in respect of the amount described in the definition of “W.1” that was deducted by the corporation under the Corporations Tax Act in computing its income for its last taxation year ending before its transition time, “X” is, (a) nil, if control of the corporation was acquired, for the purposes of subsection 66.7 (10) of the Federal Act, by a person or group of persons at the corporation’s transition time, or (b) in any other case, the sum of, (i)  the corporation’s cumulative Canadian exploration expense immediately before its transition time, as determined for the purposes of the Corporations Tax Act, (ii)  the corporation’s cumulative Canadian development expense immediately before its transition time, as determined for the purposes of the Corporations Tax Act, and (iii)  the corporation’s cumulative Canadian oil and gas property expense immediately before its transition time, as determined for the purposes of the Corporations Tax Act, “Y” is the sum of all amounts each of which is the portion of the amount of “T”, “U”, “V” or “X” deducted under the Corporations Tax Act in computing the corporation’s income or taxable income for its last taxation year ending before its transition time, “Z” is the amount that would be deductible under paragraph 111 (1) (a) of the Federal Act, as it applies for the purposes of the
Corporations Tax Act, in computing the corporation’s taxable income for its first taxation year ending after December 31, 2008 if, (a) that paragraph did not refer to non-capital losses for taxation years following that taxation year, (b) subsection 111 (5) of the Federal Act were read without reference to the exception provided under paragraph (a) of that subsection, (c) subsection 88 (1.1) of the Federal Act were read without reference to the exception provided under paragraph (e) of that subsection, and (d) the corporation had, for the purposes of the Corporations Tax Act, sufficient incomes from all sources, “AA”   is the amount that would be deductible under paragraph 111 (1) (b) of the Federal Act, as it applies for the purposes of the
Corporations Tax Act, in computing the corporation’s taxable income for its first taxation year ending after December 31, 2008 if, (a) that paragraph did not refer to net capital losses for taxation years following that taxation year, and (b) the corporation had, for the purposes of the Corporations Tax Act, sufficient incomes from all sources and sufficient taxable capital gains, “BB” is the sum of all amounts each of which is, for the purposes of the Corporations Tax Act, the adjusted cost base to the corporation at its transition time of a partnership interest owned by the corporation, “CC”   is the sum of all amounts each of which was deducted as a reserve under paragraph 20 (1) (l), (l.1), (m), (m.1), (n) or (o), subsection 32 (1), section 61.4 or subparagraph 138 (3) (a) (i), (ii) or (iv) of the Federal Act for the corporation’s last taxation year ending before its transition time, “DD” is the sum of all amounts each of which was deducted as a reserve under subparagraph 40 (1) (a) (iii) or 44 (1) (e) (iii) of the Federal Act for the corporation’s last taxation year ending before its transition time, “EE” is the sum of all amounts each of which would be the gain to the corporation under subsection 40 (3) of the Federal Act from a disposition of a partnership interest at its transition time if paragraph 40 (3) (a) of the Federal Act were read at its transition time without reference to the words “(except paragraph 53 (2) (c))”, “EE.1” is the amount, if any, specified by the corporation under paragraph 28 (1) (b) of the Federal Act, as it applies for the purposes of the Corporations Tax Act, in respect of its last taxation year ending before its transition time, and “FF” is the amount determined under the prescribed rules. 2. The sum of all amounts each of which is an amount required under subsection 51 (1) or section 52 to be added to the corporation’s total Ontario balance at or before the particular time. 2007, c. 11, Sched. A, s. 48 (6); 2008, c. 7, Sched. S, s. 10 (5). Reduction of total Ontario balance (7) Despite subsection (6), a corporation’s total Ontario balance at a particular time shall be reduced by the sum of all amounts each of which is an amount required under subsection 52 (4) to be deducted at or before the particular time in computing the corporation’s total Ontario balance.  2007, c. 11, Sched. A, s. 48 (7). Additional rules (8) The following rules apply for the purposes of determining a corporation’s total federal balance or total Ontario balance: 1. If the corporation has a transition time and is non-resident immediately before that time, i. no amount referred to in paragraph 1 of subsection (4) or paragraph 1 of subsection (6) that is or would have been relevant or potentially relevant in the calculation of income from a business shall be included in the corporation’s total federal balance or total Ontario balance under either of those paragraphs unless the business is carried on in Canada and it is not a treaty-protected business, ii. no amount referred to in paragraph 1 of subsection (4) or paragraph 1 of subsection (6) that is or would have been relevant or potentially relevant in the calculation of a capital gain from the disposition of a property shall be included in the corporation’s total federal balance or total Ontario balance under either of those paragraphs unless the property is taxable Canadian property and is not treaty-protected property, and iii. no amount referred to in paragraph 1 of subsection (4) or paragraph 1 of subsection (6) that is or would have been relevant or potentially relevant in the calculation of income from property shall be included in the corporation’s total federal balance or total Ontario balance under either of those paragraphs. 2. If the corporation has a transition time and is a life insurer resident in Canada immediately before its transition time, i. no amount referred to in paragraph 1 of subsection (4) or paragraph 1 of subsection (6) that is or would have been relevant or potentially relevant in the calculation of income carried on from an insurance business shall be included in the corporation’s total federal balance or total Ontario balance under either of those paragraphs unless the corporation carries on its insurance business in Canada, and ii. no amount referred to in paragraph 1 of subsection (4) or paragraph 1 of subsection (6) that is or would have been relevant or potentially relevant in the calculation of a capital gain from the disposition of a property used or held by the corporation in the course of carrying on an insurance business shall be included in the corporation’s total federal balance or total Ontario balance under either of those paragraphs unless the property is designated insurance property. 3. The amount determined under the definition of “S” in paragraph 1 of subsection (4), i. is determined for a parent corporation as if the parent corporation were the same corporation and a continuation of a subsidiary corporation if the parent corporation’s transition time is after the end of the taxation year in which, for the purposes of paragraph 88 (1) (e.2) of the Federal Act, it received the assets of the subsidiary corporation in the course of a winding-up, and ii. is determined in respect of a corporation that is formed as a result of an amalgamation or merger before its transition time as if the corporation were the same corporation as and a continuation of each of its predecessor corporations.  2007, c. 11, Sched. A, s. 48 (8). Section Amendments with date in force (d/m/y) 2008, c. 7, Sched. S, s. 10 (1-5) - 01/01/2008 Calculation of amounts for purposes of s. 48