72.1 (1) This section applies to a corporation for a taxation year despite any other provision of this Part if, (a) the taxation year ends after December 31, 2006 and before January 1, 2009; (b) the corporation would, but for this section, be liable to tax determined under this Part for the year because it is a corporation whose taxable paid-up capital or its taxable paid-up capital employed in Canada, as the case may be, for the year is determined under Division B or C; and (c) the corporation’s Ontario manufacturing labour cost for the taxation year is more than 20 per cent of its total Ontario labour cost for the year.  2008, c. 7, Sched. E, s. 14. Capital tax exemption (2) If the corporation’s Ontario manufacturing labour cost for the year is at least 50 per cent of its total Ontario labour cost for the year, its total liability for tax under this Part for the year is calculated using the formula: A × [(B + C)/D] in which, “A” is the amount of tax that would, but for this section, be payable by the corporation under this Part for the year, “B” is the number of days in the taxation year that are before January 1, 2007, “C” is, (a) nil if, (i) the corporation has a permanent establishment in Ontario on March 25, 2008 to which employees of the corporation report, or (ii) the corporation is a designated corporation with respect to a particular corporation and, on March 25, 2008, the particular corporation has a permanent establishment in Ontario to which employees of the particular corporation report, or (b) the number of days in the taxation year that are after December 31, 2006 and before January 1, 2008 in any other case, and “D” is the total number of days in the taxation year. 2008, c. 7, Sched. E, s. 14. Capital tax reduction (3) If the corporation’s Ontario manufacturing labour cost for the year is less than 50 per cent but more than 20 per cent of its total Ontario labour cost for the year, its liability for tax under this Part for the year is reduced by the amount calculated using the formula: A × [(E – 0.2)/0.3] × [(F + (G × H))/D] in which, “A” is the amount of tax that would, but for this section, be payable by the corporation under this Part for the year, “E” is the percentage that its Ontario manufacturing labour cost for the year is of its total Ontario labour cost for the year, expressed in decimals, “F” is the number of days in the taxation year that are after December 31, 2007, “G” is the number of days in the taxation year that are in 2007, “H” is, (a) one if, (i) the corporation has a permanent establishment in Ontario on March 25, 2008 to which employees of the corporation report, or (ii) the corporation is a designated corporation with respect to a particular corporation and, on March 25, 2008, the particular corporation has a permanent establishment in Ontario to which employees of the particular corporation report, or (b) nil, in any other case, and “D” is the total number of days in the taxation year. 2008, c. 7, Sched. E, s. 14. Designated corporation (4) For the purposes of subsections (2) and (3), a corporation is a designated corporation with respect to a particular corporation if it is, (a) a corporation that amalgamated with one or more other corporations to form the particular corporation, if section 87 of the Income Tax Act (Canada) applies to the amalgamation; (b) a corporation that wound up into the particular corporation, if subsection 88 (1) of the Income Tax Act
(Canada) applies to the winding-up; or (c) a corporation that is a designated corporation with respect to a corporation that is itself a designated corporation with respect to the particular corporation.  2008, c. 7, Sched. E, s. 14. Ontario manufacturing labour cost (5) For the purposes of this section, a corporation’s Ontario manufacturing labour cost for a taxation year is the amount that would be its cost of manufacturing and processing labour for the year under Part LII (Canadian Manufacturing and Processing Profits) of the regulations made under the Income Tax Act (Canada) if, (a) the activities described in paragraphs (a), (b), (e), (f), (g) and (l) of the definition of “manufacturing or processing” in subsection 125.1 (3) of that Act were included in determining what constituted qualified activities under Part LII of those regulations; (b) references in Part LII of those regulations to qualified activities carried out in Canada were read instead as references to qualified activities carried out in Ontario; (c) section 5203 of those regulations did not apply; and (d) paragraph (f) of the definition of “cost of labour” in section 5204 of those regulations did not apply.  2008, c. 7, Sched. E, s. 14. Total Ontario labour cost (6) For the purposes of this section, a corporation’s total Ontario labour cost for a taxation year is the amount that would be its cost of labour for the year under Part LII (Canadian Manufacturing and Processing Profits) of the regulations made under the Income Tax Act (Canada) if, (a) the only salaries and wages taken into account for the purposes of paragraphs (a) and (b) of the definitions of “cost of labour” in sections 5202 and 5204 of those regulations and for the purposes of paragraph (a) of the definitions of “cost of manufacturing and processing labour” in those sections were salaries and wages paid or payable to employees of permanent establishments situated in Ontario; (b) the reference in paragraph (d) of the definition of “cost of labour” in section 5202 of those regulations to an active business carried on outside Canada were read instead as a reference to an active business carried on outside Ontario; and (c) the reference in paragraph (e) of the definition of “cost of labour” in section 5204 of those regulations to an active business carried on outside Canada were read instead as a reference to an active business carried on outside Ontario.  2008, c. 7, Sched. E, s. 14. Employees reporting to permanent establishment in Ontario (7) For the purposes of this section, a corporation is deemed to have no employees reporting to a permanent establishment of the corporation in Ontario on March 25, 2008 unless, before that date, the corporation or another corporation that is a designated corporation with respect to the corporation remitted to the Receiver General for Canada amounts deducted or withheld under subsection 153 (1) of the Income Tax Act (Canada) from payments made in February or March of 2008 to its employees of that permanent establishment.  2008, c. 7, Sched. E, s. 14. Section Amendments with date in force (d/m/y) 2008, c. 7, Sched. E, s. 14 - 01/01/2007 CTS 3 NO 14 - 1