68 (1) The paid-up capital for a taxation year of a financial institution that is resident in Canada, is the amount, if any, by which “A” exceeds “B” where, “A” is the sum of the following amounts, if any, in respect of the financial institution, determined as of the end of the year: 1. Its long-term debt. 2. Its capital stock or, in the case of a financial institution incorporated without share capital, its members’ contributions. 3. Its retained earnings. 4. Its accumulated other comprehensive income. 5. Its contributed surplus and all other surpluses. 6. Its reserves for the year, except to the extent that they were deducted in computing its income under Division B for the year. “B” is the sum of the following amounts, if any, in respect of the financial institution, determined as of the end of the year: 1. Its deferred tax debit balance or future tax assets. 2. Its deficit, if any, deducted in computing its shareholders’ equity. 3. Any amount deducted under subsection 130.1 (1) or 137 (2) of the Federal Act in computing its income under Division B for the year, to the extent that the amount can reasonably be regarded as being included in the amount of “A” for the year. 4. Any amount, except to the extent that it has been deducted by the financial institution in computing its income under Part II of the Corporations Tax Act or Division B of this Part for the year or any previous taxation year, that is deductible by the financial institution by reason of the application of subsection 37 (1) of the Federal Act in respect of scientific research and experimental development.  2007, c. 11, Sched. A, s. 68 (1). Same (2) The following provisions apply for the purposes of paragraph 4 of the definition of “B” in subsection (1): 1. Paragraph 87 (2) (l) of the Federal Act. 2. Paragraph 88 (1) (e.2) of the Federal Act with respect to the application of paragraph 87 (2) (l) of that Act to a winding-up to which section 88 of that Act applies.  2007, c. 11, Sched. A, s. 68 (2). Taxable paid-up capital (3) The taxable paid-up capital for a taxation year of a financial institution that is resident in Canada is the amount, if any, by which the financial institution’s paid-up capital for the year exceeds its investment allowance for the year in respect of all of its assets, each of which is a share of the capital stock or long-term debt of, (a) a related financial institution that has a permanent establishment in Ontario and is not exempt from tax under this Division or Part III of the Corporations Tax Act; or (b) a related insurance corporation that has a permanent establishment in Ontario.  2007, c. 11, Sched. A, s. 68 (3). Investment allowance (4) The investment allowance for a taxation year of a corporation that is a financial institution resident in Canada in respect of a share of the capital stock or long-term debt of a related financial institution or related insurance corporation is the amount calculated using the formula, A × B/C in which, “A” is the carrying value of the asset to the corporation as of the end of the year, “B” is the Ontario allocation factor of the related financial institution or the related insurance corporation, as the case may be, for its last taxation year ending in the corporation’s year, and “C” is the corporation’s Ontario allocation factor for the year. 2007, c. 11, Sched. A, s. 68 (4). Exception, taxable paid-up capital of eligible institution (5) Despite subsection (3), the taxable paid-up capital for a taxation year of a financial institution resident in Canada that is an eligible institution for the year is the amount, if any, by which its paid-up capital for the year exceeds its investment allowance for the year in respect of all of its assets, each of which is a share of the capital stock or long-term debt of a corporation that is a qualifying corporation in respect of the eligible institution.  2007, c. 11, Sched. A, s. 68 (5). Eligible institution (6) A financial institution is an eligible institution for a taxation year for the purposes of this section if, (a) its Ontario allocation factor for the year is one; and (b) it is not controlled, directly or indirectly, at any time in the year by, (i) another financial institution, other than a corporation prescribed as a financial institution for the purposes of this Division, (ii) an insurance corporation, or (iii) a
corporation that would be considered to be a financial institution if it carried on business in Canada and had been incorporated in Canada.  2007, c. 11, Sched. A, s. 68 (6). Investment allowance, eligible institution (7) The investment allowance of an eligible institution for a taxation year in respect of an asset of the eligible institution that is a share of the capital stock or long-term debt of a qualifying corporation is the carrying value of the asset to the eligible institution as of the end of the year.  2007, c. 11, Sched. A, s. 68 (7). Qualifying corporation (8) A corporation is a qualifying corporation in respect of an eligible institution for a taxation year of the eligible institution if the corporation is a financial institution or insurance corporation that, (a) is related at the end of that year to the eligible institution; (b) has a permanent establishment in Canada at the end of that year; and (c) is not exempt from tax under this Division or Part III of the Corporations Tax Act for its last taxation year ending in the year if it is not an insurance corporation.  2007, c. 11, Sched. A, s. 68 (8). Authorized foreign bank