© Éditeur officiel du Québec
Updated to 1 April 2016
This document has official status.


chapter I-3, r. 1

Regulation respecting the Taxation Act

Taxation Act
 (chapter I-3, s. 1086, 1st and 2nd par.)

TITLE  I
INTERPRETATION AND RULES OF GENERAL APPLICATION

title IO.C. 1981-80, title 1R.R.Q., 1981, c. I-3, r. 1, title 1O.C. 134-2009, s. 1.

0R1.  In this Regulation, “Act” means the Taxation Act (chapter I-3).

s. 0R1; O.C. 1981-80, s. 0R1; R.R.Q., 1981, c. I-3, r. 1, s. 0R1; O.C. 134-2009, s. 1.

0R2.  For the purpose of facilitating the finding of the provisions of the Act giving rise to a regulatory provision, the figures that precede the letter R in the numbering of this Regulation refer, for the purpose of guidance only, to the section of the Act providing for such regulatory provision.

s. 0R2; O.C. 1981-80, s. 0R2; R.R.Q., 1981, c. I-3, r. 1, s. 0R2; O.C. 134-2009, s. 1.

1R1.  For the purposes of the definition of “share” in section 1 of the Act, a prescribed cooperative means a cooperative described in section 119.2R2.

s. 1R1.1; O.C. 67-96, s. 1; O.C. 134-2009, s. 1.

1R2.    (Revoked).

s. 1R6; O.C. 1149-2006, s. 1; O.C. 134-2009, s. 1; O.C. 1176-2010, s. 1.

1R3.    (Revoked).

s. 1R7; O.C. 1149-2006, s. 1; O.C. 134-2009, s. 1; O.C. 1176-2010, s. 1.

1R4.  For the purposes of the definition of “foreign retirement arrangement” in section 1 of the Act, a prescribed plan or arrangement is a plan or arrangement to which any of subsections 408a, b and h of the United States' Internal Revenue Code of 1986, as amended from time to time, applies.

s. 1R4; O.C. 1660-94, s. 1; O.C. 134-2009, s. 1.

1R4.1.  For the purposes of the definition of “specified pension plan” in section 1 of the Act, a prescribed arrangement is the Saskatchewan Pension Plan established under the Saskatchewan Pension Plan Act (S.S. 1986, c. S-32.2) as amended from time to time.

O.C. 229-2014, s. 1.

1R5.  For the purposes of the definition of “bituminous sands” in section 1 of the Act, viscosity or density of hydrocarbons is determined using a number of individual samples tested

  (a)      at atmospheric pressure;

  (b)      at a temperature of 15.6 °C; and

  (c)      free of solution gas.

For the purposes of the first paragraph, the samples collected must constitute a representative sampling of that deposit from which the taxpayer is committed to produce by means of one mine.

s. 1R5; O.C. 1454-99, s. 1; O.C. 134-2009, s. 1.

1R6.  For the purposes of the definition of “small business corporation” in section 1 of the Act, a corporation is connected with another corporation at a particular time where, at that time,

  (a)      it is controlled, within the meaning of subparagraph b of the first paragraph of section 739 of the Act, but otherwise than by reason of a right referred to in paragraph b of section 20 of the Act, by the other corporation; or

  (b)      it is a corporation, shares of the capital stock of which, representing more than 10% of the issued shares of its capital stock having full voting rights and more than 10% of the fair market value of the aggregate of the issued shares of its capital stock, are the property of the other corporation.

s. 1R2; O.C. 1549-88, s. 1; O.C. 1707-97, s. 98; O.C. 134-2009, s. 1; O.C. 701-2013, s. 1.

1R7.  For the purposes of the definition of “lending assets” in section 1 of the Act,

  (a)      a share owned by a bank is a prescribed share for a taxation year where it is a preferred share of the capital stock of a corporation that is dealing at arm’s length with the bank that may reasonably be considered to be, and is reported as, a substitute or alternative for a loan to the corporation, or another corporation with whom the corporation does not deal at arm’s length, in the bank’s annual report for the year to the Superintendent of Financial Institutions of Canada or, where the bank was throughout the year subject to the supervision of the Superintendent of Financial Institutions of Canada but was not required to file an annual report for the year with the Superintendent of Financial Institutions of Canada, in its financial statements for the year; and

  (b)      a property is a prescribed property for a taxation year where

  (i)    the security is a mark-to-market property, within the meaning of section 851.22.1 of the Act, for the year of a financial institution within the meaning of that section,

  (ii)    the security is at any time in the year a property described in an inventory of a taxpayer, or

  (iii)    the property is a direct financing lease, or any other financing agreement, of a taxpayer that is reported as a loan in the taxpayer’s financial statements for the year, prepared in accordance with generally accepted accounting principles, provided that an amount is deductible in computing the taxpayer’s income for the year, in respect of the property that is the subject of the lease or agreement, under paragraph a of section 130 or the second paragraph of section 130.1 of the Act.

s. 1R3; O.C. 366-94, s. 1; O.C. 1707-97, s. 98; O.C. 1463-2001, s. 1; O.C. 1470-2002, s. 1; O.C. 134-2009, s. 1; O.C. 390-2012, s. 1.

7R1.  For the purposes of subparagraph b of the second paragraph of section 7 of the Act, Gaz Métro Limited Partnership is a prescribed partnership.

s. 7R1; O.C. 1155-2004, s. 1; O.C. 134-2009, s. 1.

8R1.  Every international development assistance program set forth in Part XXXIV of the Income Tax Regulations made under the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) is a prescribed program for the purposes of paragraph d of section 8 of the Act.

s. 8R1; O.C. 1981-80, s. 8R1; R.R.Q., 1981, c. I-3, r. 1, s. 8R1; O.C. 35-96, s. 86; O.C. 134-2009, s. 1.

11R1.  For the purposes of section 11 of the Act, a foreign business corporation means a foreign business corporation referred to in subsection 4 of section 250 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)).

s. 11R1; O.C. 1981-80, s. 11R1; R.R.Q., 1981, c. I-3, r. 1, s. 11R1; O.C. 35-96, s. 1; O.C. 1707-97, s. 98; O.C. 134-2009, s. 1.

21.6R1.  For the purposes of paragraph e of section 21.6 of the Act,

  (a)      a share last acquired before 29 June 1982 and of a class of the capital stock of a corporation that is listed on a designated stock exchange in Canada is a prescribed share where less than 10% of the issued and outstanding shares of that class are owned by the owner of that share or by the owner of that share and persons related to that owner;

  (b)      a share acquired after 28 June 1982 and of a class of the capital stock of a corporation that is listed on a designated stock exchange in Canada is a prescribed share at any particular time in respect of another corporation that receives a dividend at the particular time in respect of the share unless

  (i)    where the other corporation is a restricted financial institution,

  (1)    the share is not a taxable preferred share,

  (2)    dividends, other than dividends received on shares prescribed under section 21.6R3, are received at the particular time by the other corporation or by the other corporation and restricted financial institutions with which the other corporation does not deal at arm’s length, in respect of more than 5% of the issued and outstanding shares of that class, and

  (3)    a dividend is received at the particular time by the other corporation or a restricted financial institution with which the other corporation does not deal at arm’s length, in respect of a share, other than a share prescribed under section 21.6R3, of that class acquired after 15 December 1987 and before the particular time,

  (ii)    where the other corporation is a restricted financial institution, the share

  (1)    is not a taxable preferred share,

  (2)    was acquired after 15 December 1987 and before the particular time, and

  (3)    was, by reason of section 21.9 of the Act or paragraph a or b of section 21.9.1 of the Act, deemed to have been issued after 15 December 1987 and before the particular time, or

  (iii)    in any case, dividends, other than dividends received on shares prescribed under section 21.6R3, are received at the particular time by the other corporation or by the other corporation and persons with whom the other corporation does not deal at arm’s length, in respect of more than 10% of the issued and outstanding shares of that class;

  (c)      a share of any of the following series of preferred shares of the capital stock of Massey-Ferguson Limited issued after 15 July 1981 and before 23 March 1982 is a prescribed share:

  (i)    $25 Cumulative Redeemable Retractable Convertible Preferred Shares, Series C,

  (ii)    $25 Cumulative Redeemable Retractable Preferred Shares, Series D, or

  (iii)    $25 Cumulative Redeemable Retractable Convertible Preferred Shares, Series E.

s. 21.6R2; O.C. 2456-80, s. 1; R.R.Q., 1981, c. I-3, r. 1, s. 21.6R2; O.C. 1472-87, s. 1; O.C. 1076-88, s. 1; O.C. 1114-92, s. 1; O.C. 1114-93, s. 2; O.C. 1707-97, s. 98; O.C. 1451-2000, s. 66; O.C. 1463-2001, s. 3; O.C. 134-2009, s. 1; O.C. 1176-2010, s. 2.

21.6R2.  For the purposes of paragraph b of section 21.6R1, of section 21.6R3 and of this section, the following rules apply:

  (a)      where a taxpayer is a beneficiary of a trust and an amount has been designated to the beneficiary by the trust in a taxation year in accordance with section 666 of the Act, the taxpayer is deemed to have received the amount so designated at the time it was received by the trust;

  (b)      where a taxpayer is a member of a partnership and a dividend has been received by the partnership, the taxpayer’s share of the dividend is deemed to have been received by the taxpayer at the time the dividend was received by the partnership.

s. 21.6R3; O.C. 1472-87, s. 1; O.C. 1076-88, s. 2; O.C. 1114-92, s. 2; O.C. 1707-97, s. 98; O.C. 134-2009, s. 1.

21.6R3.  For the purposes of paragraph e of section 21.6 of the Act, a share of a class of the capital stock of a corporation listed on a designated stock exchange in Canada is a prescribed share at any particular time in respect of another corporation that is registered or licensed under the laws of a province to trade in securities and that holds the share for the purpose of sale in the course of the business ordinarily carried on by it, unless

  (a)      it may reasonably be considered that the share was acquired as part of a series of transactions or events one of the main purposes of which was to avoid or limit the application of section 740.1 of the Act; or

  (b)      the share was not acquired by the other corporation in the course of an underwriting of shares of that class to be distributed to the public and

  (i)    dividends are received at the particular time by the other corporation or by the other corporation and corporations controlled by the other corporation in respect of more than 10% of the issued and outstanding shares of that class,

  (ii)    the other corporation is a restricted financial institution and

  (1)    the share is not a taxable preferred share,

  (2)    dividends are received at the particular time by the other corporation or by the other corporation and corporations controlled by the other corporation in respect of more than 5% of the issued and outstanding shares of that class, and

  (3)    a dividend is received at the particular time by the other corporation or a corporation controlled by the other corporation in respect of a share of that class acquired after 15 December 1987 and before that particular time, or

  (iii)    the other corporation is a restricted financial institution and the share:

  (1)    is not a taxable preferred share,

  (2)    was acquired after 15 December 1987 and before the particular time, and

  (3)    was deemed to have been issued after 15 December 1987 and before the particular time by reason of section 21.9 of the Act or paragraph a or b of section 21.9.1 of the Act.

s. 21.6R4; O.C. 1114-92, s. 3; O.C. 1114-93, s. 3; O.C. 1707-97, s. 2; O.C. 1451-2000, s. 66; O.C. 134-2009, s. 1; O.C. 1176-2010, s. 3.

21.6R4.  For the purposes of paragraph e of section 21.6 of the Act,

  (a)      a share of the capital stock of a corporation that is a member institution of a deposit insurance corporation within the meaning of section 804 of the Act is a prescribed share with respect to the deposit insurance corporation and any subsidiary wholly-owned corporation of the deposit insurance corporation that is deemed to be a deposit insurance corporation under section 806.1 of the Act; and

  (b)      the Exchangeable Preference Shares of Canada Cement Lafarge Ltd., referred to as “subject shares” in this paragraph, the Exchangeable Preference Shares of Lafarge Canada Inc. and the shares of any corporation formed as a result of an amalgamation or merger of Lafarge Canada Inc. with one or more other corporations are prescribed shares at any particular time where the terms and conditions of such shares at the particular time are the same as, or substantially the same as, the terms and conditions of the subject shares as of 18 June 1987, and, for the purposes of this paragraph, the amalgamation or merger of one or more corporations with another corporation formed as a result of the amalgamation or merger of Lafarge Canada Inc. with one or more other corporations is deemed to be an amalgamation of Lafarge Canada Inc. with another corporation.

s. 21.6R5; O.C. 1114-92, s. 3; O.C. 1707-97, s. 98; O.C. 134-2009, s. 1.

21.6R5.  For the purpose of determining, under paragraph b of section 21.6R1 and of section 21.6R3, the time at which a share of a class of the capital stock of a corporation was acquired by any taxpayer, shares of that class acquired by the taxpayer at any particular time before a disposition by the taxpayer of shares of that class are deemed to have been disposed of before shares of that class acquired by the taxpayer before that particular time.

s. 21.6R6; O.C. 1114-92, s. 3; O.C. 1707-97, s. 98; O.C. 134-2009, s. 1.

21.6R6.  For the purposes of paragraph b of section 21.6R1 and of section 21.6R3, the following rules apply:

  (a)      a share of the capital stock of a corporation acquired by a person after 15 December 1987 pursuant to an agreement in writing entered into before 16 December 1987 is deemed to have been acquired by that person before 16 December 1987;

  (b)      a share of the capital stock of a corporation acquired by a person after 15 December 1987 and before 1 July 1988 as part of a distribution to the public made in accordance with the terms of a prospectus, preliminary prospectus, registration statement, offering memorandum or notice filed before 16 December 1987 with a public authority in accordance with the securities legislation of the jurisdiction in which the shares were distributed, is deemed to have been acquired by that person before 16 December 1987;

  (c)      where a share that was owned by a particular restricted financial institution on 15 December 1987 has, by one or more transactions between related restricted financial institutions, been transferred to another restricted financial institution, the share is deemed to have been acquired by the other restricted financial institution before that date and after 28 June 1982, unless at any particular time after 15 December 1987 and before the share was transferred to the other restricted financial institution, the share was owned by a shareholder who, at that particular time, was a person other than a restricted financial institution related to the other restricted financial institution; and

  (d)      where, at any particular time there has been an amalgamation, within the meaning of section 544 of the Act, and each of the predecessor corporations, within the meaning of that section, was a restricted financial institution throughout the period beginning 16 December 1987 and ending at the particular time and the predecessor corporations were related to each other throughout that period, or each of the predecessor corporations and the new corporation, within the meaning of that section, is a corporation described in any of paragraphs a to d of the definition “restricted financial institution” in section 1 of the Act, a share acquired by the new corporation from a predecessor corporation is deemed to have been acquired by the new corporation at the time it was acquired by the predecessor corporation.

s. 21.6R7; O.C. 1114-92, s. 3; O.C. 1707-97, s. 98; O.C. 134-2009, s. 1.

21.11.12R1.  For the purposes of paragraph h of section 21.11.12 of the Act, a prescribed share is a share referred to in paragraph b of section 21.6R4.

s. 21.11.12R1; O.C. 1114-92, s. 5; O.C. 134-2009, s. 1.

21.11.15R1.  For the purposes of section 21.11.15 of the Act, the following shares are prescribed shares at any particular time:

  (a)      the 8.5% Cumulative Redeemable Convertible Class A Preferred Shares of St. Marys Paper Inc. issued on 7 July 1987, where such shares are not deemed, by reason of paragraph c of section 21.11.16 of the Act, to have been issued after that date and before the particular time;

  (b)      the Cumulative Redeemable Preferred Shares of CanUtilities Holdings Ltd. issued before 1 July 1991, unless the amount of the consideration for which all such shares were issued exceeds $300,000,000 or the particular time is after 1 July 2001; and

  (c)      the shares referred to in paragraph b of section 21.6R4.

s. 21.11.15R1; O.C. 1114-92, s. 5; O.C. 134-2009, s. 1.

21.11.16R1.  For the purposes of paragraphs a, b and e of section 21.11.16 of the Act, a prescribed share is a share referred to in section 21.11.15R1.

s. 21.11.16R1; O.C. 1114-92, s. 5; O.C. 134-2009, s. 1.

21.19R1.  For the purposes of section 21.19 of the Act, a prescribed corporation is a corporation that is registered under the provisions of

  (a)      The Small Business Development Corporations Act 1979, of Ontario (S.O. 1979, c. 22);

  (b)      Manitoba Regulation 194/84, made under The Loans Act, 1983 (2) of Manitoba (S.M. 1982-83-84, c. 36);

  (c)      The Venture Capital Tax Credit Act of Saskatchewan (S.S. 1983-84, c. V-4.1);

  (d)      the Small Business Equity Corporations Act of Alberta (S.A. 1984, c. S-13.5);

  (e)      the Small Business Venture Capital Act of British Columbia (S.B.C. 1985, c. 56);

  (f)      The Venture Capital Act of Newfoundland (S.N. 1988, c. 15);

  (g)      The Labour-sponsored Venture Capital Corporations Act of Saskatchewan (S.S. 1986, c. L-0.2);

  (h)      Part 2 of the Employee Investment Act of British Columbia (R.S.B.C. 1996, c. 112);

  (i)      Part III of The Community Small Business Investment Funds Act (S.O. 1992, c. 18);

  (j)      The Labour-Sponsored Venture Capital Corporations Act (Continuing Consolidation of the Statutes of Manitoba, c. L12);

  (k)      Part II of the Risk Capital Investment Tax Credits Act of the Northwest Territories, (S.N.W.T. 1998, c. 22); or

  (l)      section 11 or Part II of the Equity Tax Credit Act of Nova Scotia (S.N.S. 1993, c. 3).

The following are also prescribed corporations for the purposes of section 21.19 of the Act:

  (a)      the corporation governed by The Act to establish the Fonds de solidarité des travailleurs du Québec (F.T.Q.) (chapter F-3.2.1);

  (b)      a corporation that is registered with the Department of Economic Development and Tourism of the Government of the Northwest Territories pursuant to the Venture Capital Policy and Directive issued by the Government of the Northwest Territories on 27 June 1985;

  (c)      a registered labour-sponsored venture capital corporation within the meaning of subsection 1 of section 248 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.));

  (d)      the corporation governed by The Manitoba Employee Ownership Fund Corporation Act (Continuing Consolidation of the Statutes of Manitoba, c. E95);

  (e)      the corporation governed by the Act to establish Fondaction, le Fonds de développement de la Confédération des syndicats nationaux pour la coopération et l’emploi (chapter F-3.1.2); and

  (f)      the corporation governed by the Act constituting Capital régional et coopératif Desjardins (chapter C-6.1).

s. 21.19R1; Erratum, 1988 G.O. 2, 4642; O.C. 615-88, s. 2; O.C. 1114-92, s. 6; O.C. 1660-94, s. 3; O.C. 35-96, s. 2; O.C. 67-96, s. 3; O.C. 1633-96, s. 1; O.C. 1707-97, s. 98; O.C. 1454-99, s. 2; O.C. 1463-2001, s. 6; O.C. 1470-2002, s. 2; O.C. 1282-2003, s. 1; O.C. 134-2009, s. 1.

21.20.1R1.  For the purposes of paragraph d of section 21.20.1 of the Act, the prescribed rate of interest in effect during a particular period is equal

  (a)      where the shares referred to in that paragraph d were issued before 1 January 1984, to the rate determined in respect of that period for the purposes of subsection 1 of section 161 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)); and

  (b)      where the shares referred to in that paragraph d were issued after 31 December 1983, to the rate determined in respect of that period in accordance with subparagraph i of paragraph a of section 4301 of the Income Tax Regulations made under the Income Tax Act.

s. 21.20.1R1; O.C. 67-96, s. 4; O.C. 1707-97, s. 98; O.C. 1463-2001, s. 7; O.C. 134-2009, s. 1.

TITLE  II
INCOME EARNED IN QUÉBEC AND INCOME EARNED IN QUÉBEC AND ELSEWHERE BY AN INDIVIDUAL RESIDENT IN QUÉBEC

title IIO.C. 1981-80, title IIR.R.Q., 1981, c. I-3, r. 1, title IIO.C. 134-2009, s. 1.

CHAPTER  I
GENERAL RULES

c. IO.C. 1981-80, title II, c. IR.R.Q., 1981, c. I-3, r. 1, title II, c. IO.C. 134-2009, s. 1.

22R1.  For the purposes of this Title and the second paragraph of section 22 of the Act, the income earned in Québec by an individual for a taxation year is the individual’s income as determined under section 28 of the Act, without reference to section 1029.8.50 of the Act, less that part of the individual’s income from carrying on a business that is attributable to an establishment situated outside Québec in Canada, and the individual’s income earned in Québec and elsewhere is the individual’s income as determined under section 28 of the Act, without reference to section 1029.8.50.

s. 22R1; O.C. 1981-80, s. 22R1; R.R.Q., 1981, c. I-3, r. 1, s. 22R1; O.C. 1544-82, s. 1; O.C. 523-96, s. 1; O.C. 1707-97, s. 3; O.C. 1466-98, s. 2; O.C. 1463-2001, s. 9; O.C. 134-2009, s. 1.

22R2.  For the purposes of section 22R1, where the individual is an individual referred to in any of sections 726.33, 726.35, 737.16 and 737.18.10 of the Act, the individual's income earned in Québec, computed for a taxation year under that section 22R1, is increased by the amount that is included by the individual in computing the individual's taxable income for the year under section 726.35 of the Act and reduced by the part, not otherwise deducted in computing the individual's income earned in Québec, of the amount deducted by the individual in computing taxable income for the year under any of sections 726.33, 737.14, 737.16 and 737.18.10 of the Act, and the individual's income earned in Québec and elsewhere, determined for the year under that section 22R1, is increased by the amount that is included by the individual in computing taxable income for the year and reduced by the amount that is deducted by the individual in computing taxable income for the year.

s. 22R1.1; O.C. 1811-86, s. 1; O.C. 1451-2000, s. 1; O.C. 1463-2001, s. 10; O.C. 1155-2004, s. 2; O.C. 1116-2007, s. 1; O.C. 134-2009, s. 1; O.C. 390-2012, s. 2.

22R3.  For the purposes of section 22R1, where the individual is a person described in the second paragraph, the individual’s income earned in Québec and the individual’s income earned in Québec and elsewhere, computed for a taxation year under that section 22R1, is reduced by the amount deducted by the individual in computing taxable income for the year under any of sections 737.14, 737.16.1, 737.21, 737.22.0.0.3, 737.22.0.0.7, 737.22.0.3, 737.22.0.4.7, 737.22.0.7, 737.25 and 737.28 of the Act.

The person referred to in the first paragraph is a foreign researcher within the meaning assigned by paragraph a of section 737.19 of the Act, a foreign researcher on a post-doctoral internship within the meaning assigned by section 737.22.0.0.1 of the Act, a foreign expert within the meaning assigned by section 737.22.0.0.5 of the Act, a foreign specialist within the meaning assigned by section 737.22.0.1 or 737.22.0.4.1 of the Act, a foreign professor, within the meaning assigned by section 737.22.0.5 of the Act, or an individual referred to in any of sections 737.14, 737.16.1, 737.25 and 737.28 of the Act.

s. 22R1.2; O.C. 1666-90, s. 1; O.C. 523-96, s. 1; O.C. 1707-97, s. 4; O.C. 1466-98, s. 3; O.C. 1451-2000, s. 2; O.C. 1463-2001, s. 11; O.C. 1282-2003, s. 2; O.C. 134-2009, s. 1; O.C. 1105-2014, s. 1.

22R4.  For the purposes of section 22R1, an individual’s income earned in Québec and an individual’s income earned in Québec and elsewhere, computed for a taxation year under that section 22R1, must be reduced by the amount deducted by the individual in computing the individual’s taxable income for the year under section 726.20.2 of the Act.

s. 22R1.3; O.C. 1707-97, s. 5; O.C. 1463-2001, s. 12; O.C. 134-2009, s. 1.

22R5.  The income derived from carrying on a business by an individual referred to in the second paragraph of section 22 of the Act is deemed to have been wholly earned in Québec for a taxation year if the individual has no establishment outside Québec in Canada during the year.

s. 22R2; O.C. 1981-80, s. 22R2; R.R.Q., 1981, c. I-3, r. 1, s. 22R2; O.C. 134-2009, s. 1.

22R6.  The income derived from carrying on a business by an individual referred to in the second paragraph of section 22 of the Act is deemed to have been wholly earned outside Québec for a taxation year if the individual has no establishment in Québec or outside Canada during the year.

s. 22R3; O.C. 1981-80, s. 22R3; R.R.Q., 1981, c. I-3, r. 1, s. 22R3; O.C. 2583-85, s. 1; O.C. 134-2009, s. 1.

22R7.  An individual resident in Québec on the last day of a taxation year and carrying on a business outside Québec in Canada who is resident in more than one province on that day is deemed, for the purposes of this Title, to have resided only in the province that may reasonably be considered to be the individual’s principal place of residence.

However, the first paragraph does not apply in respect of an individual referred to in section 8 of the Act.

s. 22R4; O.C. 1981-80, s. 22R4; R.R.Q., 1981, c. I-3, r. 1, s. 22R4; O.C. 1544-82, s. 2; O.C. 1463-2001, s. 13; O.C. 134-2009, s. 1.

CHAPTER  II
ESTABLISHMENTS IN SEVERAL JURISDICTIONS

c. IIO.C. 1981-80, title II, c. IIR.R.Q., 1981, c. I-3, r. 1, title II, c. IIO.C. 134-2009, s. 1.

DIVISION  I
GENERALITIES

div. IO.C. 1981-80, title II, c. II, div. IR.R.Q., 1981, c. I-3, r. 1, title II, c. II, div. IO.C. 134-2009, s. 1.

22R8.  Subject to the special provisions of Chapter III, where, in a taxation year, an individual referred to in the second paragraph of section 22 of the Act carries on a business and owns an establishment outside Québec in Canada and an establishment in Québec or outside Canada, the part of the individual’s income from the business that is attributable to the individual’s establishment outside Québec in Canada is one-half the aggregate of

  (a)      that proportion of the individual’s income from the business that the gross revenue of the business for the fiscal period ending in the year reasonably attributable to an establishment outside Québec in Canada is of the total gross revenue of the business for that period; and

  (b)      that proportion of the individual’s income from the business that the aggregate of the salaries and wages paid by the individual in the fiscal period of the business ending in the year to employees of the establishments outside Québec in Canada is of the aggregate of all salaries and wages paid by the individual in that period in the course of the individual’s business.

s. 22R5; O.C. 1981-80, s. 22R5; R.R.Q., 1981, c. I-3, r. 1, s. 22R5; O.C. 1463-2001, s. 14; O.C. 134-2009, s. 1.

22R9.  For the purposes of section 22R8, “gross revenue” does not include interest on a bond, debenture or obligation secured by hypothecary claim, mortgage, or dividends, rentals or royalties from property that is not used in connection with the business of the individual.

s. 22R6; O.C. 1981-80, s. 22R6; R.R.Q., 1981, c. I-3, r. 1, s. 22R6; O.C. 1466-98, s. 4; O.C. 134-2009, s. 1.

22R10.  Except where a commission is paid to a person who is not an employee of the individual, where an amount is paid under an agreement by the individual to a person in respect of services that would normally be rendered by employees of the individual, the amount so paid is, for the purposes of paragraph b of section 22R8, deemed to be salary or wages paid to an employee of the individual’s establishment to which the services are reasonably attributable and to the extent that they are so attributable.

s. 22R7; O.C. 1981-80, s. 22R7; R.R.Q., 1981, c. I-3, r. 1, s. 22R7; O.C. 1463-2001, s. 15; O.C. 134-2009, s. 1.

DIVISION  II
COMPUTATION OF GROSS REVENUE

div. IIO.C. 1981-80, title II, c. II, div. IIR.R.Q., 1981, c. I-3, r. 1, title II, c. II, div. IIO.C. 134-2009, s. 1.

22R11.  The rules in this division apply to the computation of the gross revenue reasonably attributable to an establishment of an individual referred to in the second paragraph of section 22 of the Act for a taxation year.

s. 22R8; O.C. 1981-80, s. 22R8; R.R.Q., 1981, c. I-3, r. 1, s. 22R8; O.C. 134-2009, s. 1.

22R12.  Where the merchandise sold is shipped to a jurisdiction in which the individual has an establishment, the gross revenue derived from the sale is attributable to that establishment and, if there is no such establishment, it is attributable to the establishment to which the person who has negotiated the sale is attached.

Where the buyer instructs that the merchandise be shipped to some other person, the gross revenue derived from the sale is attributable to the establishment situated in the jurisdiction of the buyer’s establishment, if the individual has an establishment in that jurisdiction, otherwise, it is attributable to the establishment to which the person who has negotiated the sale is attached.

s. 22R9; O.C. 1981-80, s. 22R9; R.R.Q., 1981, c. I-3, r. 1, s. 22R9; O.C. 134-2009, s. 1.

22R13.  Despite section 22R12, where the merchandise sold is shipped to another country where the individual has no establishment and if the merchandise was entirely produced or manufactured by the individual in one jurisdiction in Canada, the gross revenue derived from the sale is attributable to the establishment situated in that jurisdiction.

However, if the merchandise sold was produced or manufactured by the individual partly outside Québec in Canada and partly in Québec or outside Canada, the gross revenue derived from the sale attributable to the establishment situated outside Québec in Canada is that proportion of the gross revenue that the salaries and wages paid in the year to employees of that establishment is of the aggregate of the salaries and wages paid in the year to employees of all the establishments where the merchandise sold was produced or manufactured.

The same rules apply where the establishment of the buyer is situated in a jurisdiction outside Canada in which the individual has no establishment and the buyer instructs that the merchandise be shipped to another person.

s. 22R10; O.C. 1981-80, s. 22R10; R.R.Q., 1981, c. I-3, r. 1, s. 22R10; O.C. 134-2009, s. 1.

22R14.  The gross revenue derived from services rendered in a jurisdiction is attributable to the establishment situated in that jurisdiction and, if there is no such establishment, it is attributable to the establishment to which the person who has negotiated the contract is attached.

s. 22R11; O.C. 1981-80, s. 22R11; R.R.Q., 1981, c. I-3, r. 1, s. 22R11; O.C. 134-2009, s. 1.

22R15.  Where standing timber or a cutting right thereto is sold, the gross revenue from such sale is attributable to the establishment of the individual in the jurisdiction in which the timber limit containing the standing timber or to which the cutting right refers is located.

s. 22R12; O.C. 1981-80, s. 22R12; R.R.Q., 1981, c. I-3, r. 1, s. 22R12; O.C. 134-2009, s. 1.

22R16.  Where land is an establishment, the gross revenue derived therefrom is attributable to that establishment.

s. 22R13; O.C. 1981-80, s. 22R13; R.R.Q., 1981, c. I-3, r. 1, s. 22R13; O.C. 134-2009, s. 1.

CHAPTER  III
BUS AND TRUCK TRANSPORTATION BUSINESSES

c. IIIO.C. 1981-80, title II, c. IIIR.R.Q., 1981, c. I-3, r. 1, title II, c. IIIO.C. 134-2009, s. 1.

22R17.  The part of an individual’s income for a taxation year from carrying on a bus and truck transportation business that is attributable to the individual’s establishment outside Québec in Canada is one-half the aggregate of

  (a)      that proportion of the individual’s income therefrom that the number of kilometres travelled by the individual’s vehicles outside Québec in Canada in the fiscal period ending in the year is of the total number of kilometres travelled by the individual’s vehicles in that period; and

  (b)      that proportion of the individual’s income therefrom that the aggregate of salaries and wages paid by the individual in the fiscal period ending in the year to employees of the individual’s establishment outside Québec in Canada is of the aggregate of all salaries and wages paid by the individual in that period.

s. 22R14; O.C. 1981-80, s. 22R14; R.R.Q., 1981, c. I-3, r. 1, s. 22R14; O.C. 1463-2001, s. 16; O.C. 134-2009, s. 1.

CHAPTER  IV
SPECIAL CASES

c. IVO.C. 1981-80, title II, c. IVR.R.Q., 1981, c. I-3, r. 1, title II, c. IVO.C. 134-2009, s. 1.

22R18.  If the aggregate of the amounts determined as the income for a taxation year from a business carried on in Québec and elsewhere by an individual referred to in the second paragraph of section 22 of the Act is greater than the individual’s income for the year, the part of the individual’s income from a business that is attributable to an establishment outside Québec in Canada is deemed to be equal to that proportion of the individual’s income for the year that the part of the individual’s income from carrying on that business outside Québec in Canada, as otherwise determined, is of that aggregate.

For the purposes of the first paragraph, the income for a taxation year of an individual is the amount by which the aggregate of the individual’s income for the year, as determined under section 28 of the Act without reference to section 1029.8.50 of the Act, and the amount that is included by the individual in computing taxable income for the year under section 726.35 of the Act, exceeds the aggregate of,

  (a)      where the individual is referred to in any of sections 726.33, 737.16 and 737.18.10 of the Act, the amount deducted by the individual in computing taxable income for the year under any of sections 726.33, 737.14, 737.16 and 737.18.10 of the Act;

  (b)      where the individual is a foreign researcher within the meaning assigned by paragraph a of section 737.19 of the Act, a foreign researcher on a post-doctoral internship within the meaning assigned by section 737.22.0.0.1 of the Act, a foreign expert within the meaning assigned by section 737.22.0.0.5 of the Act, a foreign specialist within the meaning assigned by section 737.22.0.1 of the Act, a foreign professor within the meaning assigned by section 737.22.0.5 of the Act or an individual referred to in any of sections 737.14, 737.16.1, 737.25 and 737.28 of the Act, the amount deducted by the individual in computing taxable income for the year under any of sections 737.14, 737.16.1, 737.21, 737.22.0.0.3, 737.22.0.0.7, 737.22.0.3, 737.22.0.7, 737.25 and 737.28 of the Act; and

  (c)      the amount deducted by the individual in computing taxable income for the year under section 726.20.2 of the Act.

s. 22R15; O.C. 1981-80, s. 22R15; R.R.Q., 1981, c. I-3, r. 1, s. 22R15; O.C. 1633-96, s. 2; O.C. 1707-97, s. 6; O.C. 1466-98, s. 5; O.C. 1451-2000, s. 4; O.C. 1463-2001, s. 17; O.C. 1282-2003, s. 3; O.C. 1155-2004, s. 3; O.C. 1116-2007, s. 2; O.C. 134-2009, s. 1; O.C. 390-2012, s. 3.

22R19.  Where an individual carries on more than one business in a taxation year, this Title applies in respect of each business, and the part of the business income that is attributable for the year to the individual’s establishments outside Québec in Canada is the aggregate of the amounts so determined in respect of each business.

s. 22R16; O.C. 1981-80, s. 22R16; R.R.Q., 1981, c. I-3, r. 1, s. 22R16; O.C. 1463-2001, s. 18; O.C. 134-2009, s. 1.

22R20.  Where an individual referred to in the second paragraph of section 22 of the Act became or ceased to be resident in Canada in the taxation year, the part of the individual’s income for the year from carrying on a business that is attributable to an establishment outside Québec in Canada is computed by reference solely to a business the income from which is included in computing the individual’s taxable income under sections 23 and 24 of the Act.

s. 22R17; O.C. 1981-80, s. 22R17; R.R.Q., 1981, c. I-3, r. 1, s. 22R17; O.C. 1463-2001, s. 19; O.C. 134-2009, s. 1.

CHAPTER  V
LOSSES ATTRIBUTABLE TO AN ESTABLISHMENT OUTSIDE QUÉBEC IN CANADA

c. VO.C. 1981-80, title II, c. VR.R.Q., 1981, c. I-3, r. 1, title II, c. VO.C. 134-2009, s. 1.

22R21.  Sections 22R1 to 22R20 apply with the necessary modifications in determining the part of the losses of an individual referred to in the second paragraph of section 22 of the Act that is attributable to an establishment outside Québec in Canada.

s. 22R18; O.C. 1981-80, s. 22R18; R.R.Q., 1981, c. I-3, r. 1, s. 22R18; O.C. 1633-96, s. 44; O.C. 134-2009, s. 1.

TITLE  III
PLAN FOR THE INSURANCE OF PERSONS

title III.0.1O.C. 473-95, s. 1O.C. 1633-96, s. 44O.C. 134-2009, s. 1.

37.0.1.2R1.  For the purposes of the second paragraph of section 37.0.1.2 of the Act, the amount prescribed for a particular period in respect of an individual in relation to a particular coverage is the product obtained by multiplying the number of days, after 20 May 1993, included in the particular period by $2.74 where the particular coverage is coverage solely for the individual, or by $10.96 in any other case.

s. 37.0.1.2R1; O.C. 473-95, s. 1; O.C. 1463-2001, s. 20; O.C. 134-2009, s. 1.

37.0.1.5R1.  For the purposes of subparagraph a of the second paragraph of section 37.0.1.4 of the Act, enacted by paragraph c of section 37.0.1.5 of the Act, the amount prescribed in respect of particular coverage and benefits enjoyed by an individual during a taxation year under a plan for the insurance of persons is the total of all amounts each of which corresponds to the product obtained by multiplying, in respect of a particular person described in the second paragraph in relation to the particular coverage and benefits, the number of days, after 20 May 1993, included in the particular period referred to in subparagraph b of the second paragraph in respect of the particular person by $2.74 where the particular coverage is coverage solely for the particular person, or by $10.96 in any other case.

A particular person referred to in the first paragraph in respect of particular coverage and benefits enjoyed by an individual during a taxation year under a plan for the insurance of persons means a person who

  (a)      is an employee of the individual’s employer; and

  (b)      has enjoyed the particular coverage and benefits under the plan for a particular period, included in the year, throughout which the person was not entitled to benefit from the provisions of the Health Insurance Act (chapter A-29) and the particular benefits enjoyed by the person in relation to the particular coverage under the plan covered at least all of the services that would have been insured in the person’s respect under that Act for the particular period had the person then been entitled to benefit from the provisions of that Act.

s. 37.0.1.5R1; O.C. 473-95, s. 1; O.C. 1633-96, s. 44; S.Q. 1999, c. 89, s. 53; O.C. 149-2000; O.C. 1463-2001, s. 21; O.C. 134-2009, s. 1.

TITLE  IV
AMOUNTS NOT INCLUDED IN COMPUTING INCOME

title III.1O.C. 1981-80, title III.1R.R.Q., 1981, c. I-3, r. 1, title III.1O.C. 134-2009, s. 1.

39R1.  The amounts that an individual is not required, pursuant to paragraph g of section 39 of the Act, to include in computing the individual’s income are

  (a)      the special allowance granted by the Gouvernement du Québec to one of its officers pursuing studies at an educational institution outside Canada;

  (b)      an allocation received pursuant to the Canadian Forces Overseas School Regulations, made under subsection 1 of section 12 of the National Defence Act (R.S.C. 1985, c. N-5), by personnel employed outside Canada whose services are acquired by the Minister of National Defence pursuant to those Regulations;

  (c)      travel, personal, living or representation expense allowances fixed by Order of the Government or by a Decision of the Conseil du trésor;

  (d)      a refund to the individual in respect of travel, personal, living or representation expenses, or a payment of such expenses on the individual’s behalf, made under an Order of the Government or a Decision of the Conseil du trésor or authorized pursuant to such an Order or Decision; and

  (e)      travel, personal, living or representation expense allowances fixed by a collective agreement entered into pursuant to the Act respecting labour relations, vocational training and workforce management in the construction industry (chapter R-20).

s. 39R1; O.C. 2456-80, s. 2; O.C. 1535-81, s. 1; R.R.Q., 1981, c. I-3, r. 1, s. 39R1; O.C. 1544-82, s. 3; O.C. 2962-82, s. 2; O.C. 500-83, s. 2; O.C. 544-86, s. 2; O.C. 1471-91, s. 2; O.C. 1454-99, s. 4; O.C. 1463-2001, s. 22; O.C. 1155-2004, s. 4; S.Q. 2007, c. 3, s. 72; O.C. 134-2009, s. 1; O.C. 229-2014, s. 2.

TITLE  V
BENEFIT RELATED TO THE OPERATION OF AN AUTOMOBILE

title III.1.1O.C. 1707-97, s. 7O.C. 134-2009, s. 1.

41.1.1R1.  The amount prescribed to which subparagraph ii of subparagraph a of the second paragraph of section 41.1.1 of the Act refers is

  (a)      27 cents, except where paragraph b applies; and

  (b)      24 cents if the individual referred to in that section 41.1.1 is engaged principally in selling or leasing automobiles and an automobile is made available in the year to the individual or a person related to the individual by the individual's employer or a person related to the employer.

s. 41.1.1R1; O.C. 1707-97, s. 7; O.C. 1466-98, s. 126; O.C. 1463-2001, s. 23; O.C. 1470-2002, s. 3; O.C. 1155-2004, s. 5; O.C. 1149-2006, s. 2; O.C. 1116-2007, s. 3; O.C. 134-2009, s. 1; O.C. 1303-2009, s. 1; O.C. 701-2013, s. 2.

TITLE  VI
EMPLOYEE BENEFIT PLANS

title III.2O.C. 2962-82, s. 3O.C. 500-83, s. 3O.C. 1466-98, s. 6O.C. 134-2009, s. 1.

47.6R1.  For the purposes of the second paragraph of section 47.6 of the Act, each of the following is a prescribed arrangement:

  (a)      the “Major League Baseball Players Benefit Plan” of the United States;

  (b)      an arrangement under which all contributions are made pursuant to a law of Canada or a province, where one of the main purposes of the law is to enforce minimum standards with respect to wages, vacation entitlement or severance pay; and

  (c)      an arrangement under which all contributions are made in connection with a dispute regarding the entitlement of one or more persons to receive benefits.

s. 47.6R1; O.C. 2962-82, s. 3; O.C. 500-83, s. 3; O.C. 1466-98, s. 7; O.C. 134-2009, s. 1.

TITLE  VII
SALARY DEFERRAL ARRANGEMENTS

title III.3O.C. 1471-91, s. 4O.C. 134-2009, s. 1.

47.16R1.  A plan or arrangement referred to in paragraph l of section 47.16 of the Act is an arrangement in writing

  (a)      between an employer and an employee that is established after 27 July 1986 where

  (i)    it is reasonable to conclude, having regard to the circumstances, including the terms and conditions of the arrangement and any agreement relating thereto, that the arrangement is not established to provide benefits to the employee on or after retirement but is established for the main purpose of permitting the employee to fund, through salary or wage deferrals, a leave of absence from the employee’s employment of not less than 3 consecutive months if the leave is to be taken by the employee for the purpose of permitting the full-time attendance of the employee at a designated educational institution within the meaning assigned by subsection 1 of section 118.6 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)), or of 6 consecutive months in any other case, that is to commence immediately after a period, in this section referred to as the “deferral period”, not exceeding 6 years after the date on which the deferrals for the leave of absence commence,

  (ii)    the part of the salary or wages deferred by the employee under the arrangement or any other similar arrangement for the services rendered by the employee to the employer in a taxation year does not exceed one-third of the amount of the salary or wages that the employee would, but for the arrangements, have reasonably expected to receive in the year in respect of the services,

  (iii)    the arrangement provides that throughout the period of the leave of absence referred to in subparagraph i the employee will not receive any salary or wages from the employer, or from any other person or partnership with whom the employer does not deal at arm’s length, other than

  (1)    the amount by which the employee’s salary or wages under the arrangement was deferred or is to be reduced, or amounts that are based on a percentage of the salary or wage scale of employees of the employer, which percentage is fixed in respect of the employee for the deferral period and the leave of absence referred to in subparagraph i, or

  (2)    the reasonable fringe benefits that the employer usually pays to or on behalf of employees,

  (iv)    the arrangement provides

  (1)    that the amounts deferred in respect of the employee under the arrangement are held by or for the account of a trust governed by a plan or arrangement that is an employee benefit plan and that the amount that may reasonably be considered to be the income of the trust for a taxation year that has been earned by it for the benefit of the employee is to be paid in the year to the employee, or

  (2)    that the amounts deferred in respect of the employee under the arrangement are held by or for the account of any person other than a trust referred to in subparagraph 1 and that the amount in respect of interest or other additional amounts that may reasonably be considered to have accrued to or for the benefit of the employee to the end of a taxation year is to be paid in the year to the employee;

  (v)    the arrangement provides that the employee is to return to the employee’s regular employment with the employer or an employer that participates in the same or a similar arrangement after the leave of absence referred to in subparagraph i for a period that is not less than the period of leave of absence, and

  (vi)    subject to subparagraph iv, the arrangement provides that all amounts held for the employee’s benefit under the arrangement are to be paid to the employee not later than the end of the first taxation year that begins after the end of the deferral period;

  (b)      between an employer and an employee that is established before 28 July 1986 where it is reasonable to conclude, having regard to the circumstances, including the terms and conditions of the arrangement and any agreement relating thereto, that the arrangement is not established to provide benefits to the employee on or after retirement but is established for the main purpose of permitting the employee to fund, through salary or wage deferrals, a leave of absence from the employee’s employment and under which the deferrals for the leave of absence commenced before 1 January 1987;

  (c)      that is established for the purpose of deferring the salary or wages of a professional referee or linesman for the referee’s or linesman’s services as such with the National Hockey League if, in the case of a professional referee or linesman resident in Canada, the trust or any other person having custody and control of any funds, investments or other property under the arrangement is resident in Canada; or

  (d)      subject to section 47.16R2, between a corporation and an employee of the corporation or a corporation related thereto under which the employee, or, after the employee’s death, a dependant, the legal representative or a relation of the employee, may or is to receive an amount that may reasonably be attributed to duties of an office or employment performed by the employee on behalf of the corporation or a corporation related thereto where

  (i)    all amounts that may be received under the arrangement will be received after the time of the employee’s death or retirement from, or loss of, the office or employment, but not later than the end of the first calendar year commencing thereafter, and

  (ii)    the total of all amounts each of which may be received under the arrangement depends on the fair market value of shares of the capital stock of the corporation or a corporation related thereto at a time within the period that commences 1 year before the time of the employee’s death or retirement from, or loss of, the office or employment and that ends at the time the amount is received.

s. 47.16R1; O.C. 1471-91 s. 4; O.C. 35-96, s. 86; O.C. 67-96, s. 5; O.C. 1707-97, s. 98; O.C. 1466-98, s. 126; O.C. 1463-2001, s. 24; O.C. 134-2009, s. 1.

47.16R2.  An arrangement referred to in paragraph d of section 47.16R1 does not include an arrangement between a corporation and an employee of that corporation or a corporation related thereto where, by reason of the arrangement or a series of transactions that includes the arrangement, the employee or a person with whom the employee does not deal at arm’s length is entitled, either immediately or in the future and either absolutely or contingently, to receive or obtain any amount or benefit granted or to be granted for the purpose of reducing the impact, in whole or in part, of any reduction in the fair market value of the shares of the capital stock of the corporation or a corporation related thereto.

s. 47.16R2; O.C. 1471-91 s. 4; O.C. 1707-97, s. 98; O.C. 1463-2001, s. 25; O.C. 134-2009, s. 1.

TITLE  VIII
CAPITAL COST OF AN EMPLOYEE’S MOTOR VEHICLE OR AIRCRAFT

title IVO.C. 1981-80, title IVR.R.Q., 1981, c. I-3, r. 1, title IVO.C. 2962-82, s. 4O.C. 500-83, s. 4O.C. 1697-92, s. 1O.C. 1282-2003, s. 4O.C. 134-2009, s. 1.

64R1.  In computing the income from an office or employment for a taxation year, an individual referred to in section 64 of the Act may deduct, in respect of an aircraft or a motor vehicle, such part of the capital cost thereof as is determined for the year under section 130R1.

s. 64R1; O.C. 1981-80, s. 64R1; R.R.Q., 1981, c. I-3, r. 1, s. 64R1; O.C. 2962-82, s. 4; O.C. 500-83, s. 4; O.C. 1697-92, s. 2; O.C. 1463-2001, s. 26; O.C. 134-2009, s. 1.

TITLE  IX
PENSION PLANS

title IV.0.1O.C. 1282-2003, s. 5O.C. 134-2009, s. 1.

70.2R1.  For the purposes of section 70.2 of the Act, a prescribed plan means

  (a)      the pension plan established as a consequence of the establishment, pursuant to section 27 of the Members of Parliament Retiring Allowances Act (R.S.C. 1985, c. M-5), of the Members of Parliament Retirement Compensation Arrangements Account; or

  (b)      the pension plan established by the Retirement Compensation Arrangements Regulations, No. 1, made under the Special Retirement Arrangements Act (S.C. 1992, c. 46, Sch. 1).

s. 70.2R1; O.C. 1282-2003, s. 5; O.C. 134-2009, s. 1.

TITLE  X
CAPITAL COST OF AN EMPLOYEE’S MUSICAL INSTRUMENT

title IV.0.2O.C. 1282-2003, s. 5O.C. 134-2009, s. 1.

78.4R1.  In computing the income from an office or employment for a taxation year, an individual referred to in section 78.4 of the Act may deduct, under paragraph b of that section, in respect of a musical instrument, such part of the capital cost thereof as is determined for the year under section 130R1.

s. 78.4R1; O.C. 1697-92, s. 3; O.C. 1463-2001, s. 27; O.C. 134-2009, s. 1.

TITLE  XI
AMOUNTS TO BE INCLUDED

title VO.C. 1981-80, title VR.R.Q., 1981, c. I-3, r. 1, title VO.C. 134-2009, s. 1.

CHAPTER  I
GENERAL RULES AND SPECIFIC AMOUNTS

c. IO.C. 1981-80, title V, c. IR.R.Q., 1981, c. I-3, r. 1, title V, c. IO.C. 134-2009, s. 1.

83R1.  A taxpayer may, in computing the income of the taxpayer from a business for a taxation year, value all the property included in all the inventories of the business at its fair market value.

s. 83R2; O.C. 1981-80, s. 83R2; R.R.Q., 1981, c. I-3, r. 1, s. 83R2; O.C. 1114-92, s. 7; O.C. 1463-2001, s. 28; O.C. 134-2009, s. 1.

83R2.  Despite section 83R1, a taxpayer whose business includes the breeding and raising of animals may elect in prescribed form for the taxation year and subsequent taxation years to value each animal of a particular species in the manner described in section 83R5.

However, where the aggregate value of all the animals of a particular species exceeds the fair market value of those animals, the latter may nevertheless be valued at their fair market value.

s. 83R3; O.C. 1981-80, s. 83R3; R.R.Q., 1981, c. I-3, r. 1, s. 83R3; O.C. 1463-2001, s. 29; O.C. 134-2009, s. 1.

83R3.  The election provided by section 83R2 may not be made in respect of a registered animal, an animal purchased for feedlot or similar operations, or an animal purchased by a trader for resale.

s. 83R4; O.C. 1981-80, s. 83R4; R.R.Q., 1981, c. I-3, r. 1, s. 83R4; O.C. 134-2009, s. 1.

83R4.  An election under section 83R2 may be revoked in writing by the taxpayer and, in such case, a further election may not be made.

s. 83R5; O.C. 1981-80, s. 83R5; R.R.Q., 1981, c. I-3, r. 1, s. 83R5; O.C. 134-2009, s. 1.

83R5.  Where animals of a particular species are included in the inventory of a taxpayer at the end of the taxation year immediately preceding the first year in respect of which the taxpayer elects under section 83R2, the unit price of each animal of that species is computed by dividing the total value of all animals of that species in the inventory of the preceding year by the number of animals of that species described in that inventory and, in any other case, the unit price of an animal of a species is determined by the Minister, having regard, among other things, to the unit prices of animals of a comparable species of animals used in valuing the inventories of other taxpayers in the district.

s. 83R6; O.C. 1981-80, s. 83R6; R.R.Q., 1981, c. I-3, r. 1, s. 83R6; O.C. 134-2009, s. 1.

87R1.  The amount referred to in paragraph e.1 of section 87 of the Act in respect of an insurer for a taxation year is

  (a)      where the amount determined under section 152R5 in respect of the insurer for the year is less than nil, that amount expressed as a positive number; and

  (b)      in any other case, nil.

s. 87R0.1; O.C. 1463-2001, s. 30; O.C. 134-2009, s. 1.

87R2.  For the purposes of paragraph p of section 87 of the Act, the prescribed amount is the amount deducted by the taxpayer pursuant to subsection 13 or 14 of section 127 of the Income Tax Act (R.S.C. 1952, c. 148) in computing the tax otherwise payable by the taxpayer for the year under Part I of that Income Tax Act.

s. 87R1; O.C. 1981-80, s. 87R1; O.C. 2456-80, s. 3; R.R.Q., 1981, c. I-3, r. 1, s. 87R1; O.C. 35-96, s. 86; O.C. 1463-2001, s. 31; O.C. 134-2009, s. 1.

87R3.  For the purposes of paragraph s of section 87 of the Act, the Canadian Home Insulation Program and the Canada Oil Substitution Program provided for under Part LV of the Income Tax Regulations made under the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) are prescribed programs.

s. 87R2; O.C. 2962-82, s. 5; O.C. 500-83, s. 5; O.C. 35-96, s. 86; O.C. 134-2009, s. 1.

87R4.  For the purposes of paragraph u of section 87 of the Act, a prescribed amount is any amount deducted under subsection 5 or 6 of section 127 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)), other than the part of that amount that may reasonably be considered to be related to

  (a)      an amount that is a qualified expenditure, within the meaning of subsection 9 of that section 127, and that is, for the purposes of the definition of that expression, an expenditure made after 30 April 1987 and before 10 May 1996 or a proxy amount computed by reference to an expenditure incurred as salary or wages before 10 May 1996; or

  (b)      an amount that is a flow-through mining expenditure within the meaning of subsection 9 of that section 127.

s. 87R3; O.C. 2962-82, s. 5; O.C. 500-83, s. 5; O.C. 140-90, s. 1; O.C. 35-96, s. 86; O.C. 523-96, s. 3; O.C. 1707-97, s. 8; O.C. 1155-2004, s. 6; O.C. 134-2009, s. 1.

87R5.  For the purposes of paragraph w of section 87 of the Act, the following are prescribed amounts:

  (a)      an amount described in paragraph g or i of section 488R1;

  (b)      an amount of any assistance granted to a taxpayer and that is prescribed assistance under section 241.0.1R2, or would be prescribed assistance under that section if that section applied in respect of, or for the acquisition of, a share of the capital stock of a corporation registered under the Act respecting Québec business investment companies (chapter S-29.1);

  (c)      an amount deducted under subsection 5 or 6 of section 127 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) that may reasonably be considered to be related to

  (i)    an amount that is a qualified expenditure within the meaning of subsection 9 of that section 127, and that is, for the purposes of the definition of that expression, an expenditure made after 30 April 1987 and before 10 May 1996 or a proxy amount computed by reference to an expenditure incurred as salary or wages before 10 May 1996 or

  (ii)    an amount that is a flow-through mining expenditure, within the meaning of subsection 9 of that section 127;

  (d)      an amount paid by the National Aboriginal Economic Development Board (P.C. 1983-3394, 83-10-31) pursuant to the Native Economic Development Program, or paid under the Aboriginal Capital Corporation Program of the Canadian Aboriginal Economic Development Strategy, to a corporation whose purpose is to provide loans, loan guarantees, bridge financing, venture capital, lease financing, surety bonding or other similar financing services to aboriginal enterprises and where all of the shares of the capital stock of the corporation are

  (i)    owned by aboriginal individuals,

  (ii)    held in trust for the exclusive benefit of aboriginal individuals,

  (iii)    owned by a corporation, all the shares of which are owned by aboriginal individuals or held in trust for the exclusive benefit of aboriginal individuals, or

  (iv)    owned or held in a combination of ownership or holding structures described in any of subparagraphs i to iii;

  (e)      the amount that the taxpayer is required to include, for the purposes of the Income Tax Act, in computing the taxpayer’s income for the year under paragraph x.1 of subsection 1 of section 12 of that Act;

  (f)      an amount paid pursuant to subparagraph a of the first paragraph of section 94.0.3.2 of the Tax Administration Act (chapter A-6.002); and

  (g)      an amount that may be forgiven in respect of a student loan under section 11.1 of the Canada Student Loans Act (R.S.C. 1985, c. S-23) or section 9.2 of the Canada Student Financial Assistance Act (S.C. 1994, c. 28).

s. 87R4; O.C. 140-90, s. 2; O.C. 1232-91, s. 1; O.C. 1114-92, s. 8; O.C. 1539-93, s. 1; O.C. 91-94, s. 1; O.C. 35-96, s. 86; O.C. 523-96, s. 4; O.C. 1707-97, s. 9; O.C. 1466-98, s. 8; O.C. 1282-2003, s. 6; O.C. 1155-2004, s. 7; O.C. 1116-2007, s. 4; O.C. 134-2009, s. 1; O.C. 701-2013, s. 3.

87R6.  For the purposes of paragraph z.4 of section 87 of the Act, a taxpayer’s resource loss for a taxation year is equal to the amount determined by the formula

A – B.

In the formula referred to in the first paragraph,

  (a)      A is the aggregate of all amounts each of which is a Canadian exploration and development overhead expense, within the meaning given to that expression by section 360R2, made or incurred by the taxpayer in the year, other than an amount included therein because of section 181 or 182 of the Act; and

  (b)      B is the taxpayer’s adjusted resource profits for the year within the meaning of section 145R2.

s. 87R5; O.C. 1470-2002, s. 4; O.C. 134-2009, s. 1.

91R1.  For the purposes of section 91 of the Act, a prescribed amount is

  (a)      an amount receivable by Her Majesty in right of Canada for the use and benefit of a band, within the meaning of the Indian Act (R.S.C. 1985, c. I-5), or by Petro-Canada;

  (b)      an amount receivable after 11 December 1979, in respect of a period after that date, by a person described in section 90 of the Act,

  (i)    if that amount may be considered related to the leasing of property described in paragraph b or e of section 370 of the Act and if it becomes receivable before the beginning of production, in reasonable commercial quantities, of minerals obtained from that property, or

  (ii)    if that amount may be considered related to the leasing of a right, permit or privilege for underground storage in Canada of petroleum, natural gas or related hydrocarbons;

  (c)      an amount paid under section 49 of the Canada Oil and Gas Act (R.S.C. 1985, c. O-6); or

  (d)      an amount equal to the lesser of the following amounts:

  (i)    an amount that became receivable by a person referred to in section 90 of the Act as rental for property referred to in paragraph a of section 370 of the Act or for a portion of such property and that became receivable either in a taxation year in which there was no taking of petroleum, natural gas or related hydrocarbons in relation to the property or portion thereof, as the case may be, to which the rental relates, if the amount became receivable after 31 December 1984, or prior to the taking of petroleum, natural gas or related hydrocarbons in relation to the property or portion thereof, as the case may be, to which the rental relates, if the amount became payable after 31 October 1982 and before 1 January 1985, and

  (ii)    an amount obtained by multiplying $2.50 per year per hectare by the number of hectares to which the amount referred to in subparagraph i relates.

s. 91R1; O.C. 1981-80, s. 91R1; O.C. 1535-81, s. 2; R.R.Q., 1981, c. I-3, r. 1, s. 91R1; O.C. 2509-85, s. 1; O.C. 35-96, s. 86; O.C. 134-2009, s. 1.

CHAPTER  II
ACCRUED INTEREST ON A PRESCRIBED DEBT OBLIGATION

c. I.1O.C. 7-87, s. 2O.C. 134-2009, s. 1.

DIVISION  I
GENERAL

div. IO.C. 7-87, s. 2O.C. 134-2009, s. 1.

92.5R1.  For the purposes of this chapter, a bonus or premium payable on a debt obligation is an amount of interest payable under the debt obligation.

s. 92.5R1; O.C. 7-87, s. 2; O.C. 134-2009, s. 1.

92.5R2.  For the purposes of this chapter, where a taxpayer has an interest in a debt obligation, in this section referred to as the “first interest”, under which there is a conversion privilege or an option to extend its term upon maturity, and, at the time the obligation was issued or, if later, at the time the conversion privilege or option was added or modified, circumstances could reasonably be foreseen under which the holder of the obligation would, by exercising the conversion privilege or option, acquire an interest in a debt obligation with a principal amount less than its fair market value at the time of acquisition, the subsequent interest in any debt obligation acquired by the taxpayer by exercising the conversion privilege or option is a continuation of the first interest.

s. 92.5R2; O.C. 7-87, s. 2; O.C. 1466-98, s. 9; O.C. 134-2009, s. 1.

DIVISION  II
PRESCRIBED DEBT OBLIGATION

div. IIO.C. 7-87, s. 2O.C. 134-2009, s. 1.

92.5R3.  For the purposes of section 92.5 of the Act, each of the following debt obligations, other than a debt obligation that is an indexed debt obligation, in respect of which a taxpayer has acquired an interest is a prescribed debt obligation:

  (a)      a debt obligation in respect of which no interest is stipulated to be payable in respect of its principal amount;

  (b)      a debt obligation in respect of which the proportion of the payments of principal to which the taxpayer is entitled is not equal to the proportion of the payments of interest to which the taxpayer is entitled;

  (c)      a debt obligation, other than one described in subparagraph a or b, in respect of which it can be determined, at the time the taxpayer acquired the interest therein, that the maximum amount of interest payable thereon in a year ending after that time is less than the maximum amount of interest payable thereon in a subsequent year; and

  (d)      a debt obligation, other than one described in any of subparagraphs a to c, in respect of which the amount of interest to be paid in respect of any taxation year is, under the terms and conditions of the obligation, dependent on a contingency existing after the year.

In the first paragraph, a debt obligation includes all of the issuer’s obligations to pay principal and interest under that obligation.

s. 92.5R3; O.C. 7-87, s. 2; O.C. 1076-88, s. 3; O.C. 1466-98, s. 10; O.C. 1454-99, s. 6; O.C. 134-2009, s. 1.

DIVISION  III
CALCULATION OF ACCRUED INTEREST

div. IIIO.C. 7-87, s. 2O.C. 134-2009, s. 1.

92.5R4.  The amount determined as interest on a debt obligation referred to in section 92.5 of the Act is

  (a)      in the case of a debt obligation referred to in subparagraph a of the first paragraph of section 92.5R3, the amount of interest determined under section 92.5R5;

  (b)      in the case of a debt obligation referred to in subparagraph b of the first paragraph of section 92.5R3, the amount of interest determined under section 92.5R6;

  (c)      in the case of a debt obligation referred to in subparagraph c of the first paragraph of section 92.5R3, other than an obligation in respect of which paragraph d applies, the amount of interest determined under section 92.5R8;

  (d)      in the case of a debt obligation referred to in subparagraph c of the first paragraph of section 92.5R3 for which the rate of interest stipulated to be payable in respect of each period throughout which the obligation is outstanding is fixed at the date of issue of the obligation and the stipulated rate of interest applicable at each time is not less than each stipulated rate of interest applicable before that time, the amount of interest determined under section 92.5R9; and

  (e)      in the case of a debt obligation referred to in subparagraph d of the first paragraph of section 92.5R3, the amount of interest determined under section 92.5R11.

s. 92.5R4; O.C. 7-87, s. 2; O.C. 1466-98, s. 11; O.C. 1463-2001, s. 32; O.C. 134-2009, s. 1.

92.5R5.  The amount referred to in paragraph a of section 92.5R4 for a taxation year is the amount of interest that would be determined in respect of the debt obligation if the interest thereon for that year were computed on a compound interest basis using the maximum of all rates each of which is a rate computed in respect of each possible circumstance under which an interest of the taxpayer in the debt obligation could mature or be surrendered or retracted, and using assumptions concerning the interest rate and compounding period that would result in a present value, at the date of purchase of the interest, of all the maximum payments thereunder, equal to the cost thereof to the taxpayer.

s. 92.5R5; O.C. 7-87, s. 2; O.C. 1466-98, s. 12; O.C. 134-2009, s. 1.

92.5R6.  The amount referred to in paragraph b of section 92.5R4 for a taxation year is the aggregate of all amounts each of which is the amount of interest that would be determined in respect of the taxpayer’s interest in a payment under the debt obligation if interest thereon for that year were computed on a compound interest basis using the specified cost of the taxpayer’s interest in the payment and the specified interest rate in respect of the taxpayer’s total interest in the debt obligation.

s. 92.5R6; O.C. 7-87, s. 2; O.C. 1466-98, s. 12; O.C. 134-2009, s. 1.

92.5R7.  In this section and section 92.5R6,

“specified cost” of a taxpayer’s interest in a payment under a debt obligation is its present value at the date of purchase computed using the specified interest rate; and

“specified interest rate” is the maximum of all rates each of which is a rate computed in respect of each possible circumstance under which an interest of the taxpayer in the debt obligation could mature or be surrendered or retracted, and using assumptions concerning the interest rate and compounding period that would result in a present value, at the date of purchase of the interest, of all the maximum payments to the taxpayer in respect of the taxpayer’s total interest in the debt obligation, equal to the cost of that interest to the taxpayer.

s. 92.5R7; O.C. 7-87, s. 2; Erratum, 1988 G.O. 2, 2689; O.C. 1466-98, s. 12; O.C. 134-2009, s. 1.

92.5R8.  The amount referred to in paragraph c of section 92.5R4 for a taxation year is the greater of

  (a)      the maximum amount of interest on the debt obligation in respect of the year; and

  (b)      the maximum amount of interest that would be determined in respect of the debt obligation if interest thereon for that year were computed on a compound interest basis using the maximum of all rates each of which is a rate computed in respect of each possible circumstance under which an interest of the taxpayer in the debt obligation could mature or be surrendered or retracted, and using assumptions concerning the interest rate and compounding period that would result in a present value, at the date of issue of the debt obligation, of all the maximum payments thereunder, equal to its principal amount.

s. 92.5R8; O.C. 7-87, s. 2; O.C. 1466-98, s. 12; O.C. 134-2009, s. 1.

92.5R9.  The amount referred to in paragraph d of section 92.5R4 for a taxation year is the amount of interest that would be determined in respect of the year if interest on the debt obligation for that year were computed on a compound interest basis using the maximum of all rates each of which is the compound interest rate that, for a particular assumption with respect to when the taxpayer’s interest in the obligation will mature or be surrendered or retracted, results in a present value, at the date the taxpayer acquires the interest in the obligation, of all payments under the obligation after the acquisition by the taxpayer of the taxpayer’s interest in the obligation equal to the principal amount of the obligation at the date of acquisition.

s. 92.5R8.1; O.C. 1466-98, s. 13; O.C. 134-2009, s. 1.

92.5R10.  For the purpose of making the computations referred to in sections 92.5R5 to 92.5R9, the compounding period is not to exceed 1 year and any interest rate used must be constant from the time of acquisition or issue, as the case may be, until the time of maturity, surrender or retraction.

s. 92.5R9; O.C. 7-87, s. 2; O.C. 1466-98, s. 14; O.C. 134-2009, s. 1.

92.5R11.  The amount referred to in paragraph d of section 92.5R4 for a taxation year is the maximum amount of interest payable under the debt obligation for that year.

s. 92.5R10; O.C. 7-87, s. 2; O.C. 1466-98, s. 15; O.C. 134-2009, s. 1.

CHAPTER  III
PRESCRIBED CONTRACT

c. I.1.1O.C. 421-88, s. 1O.C. 134-2009, s. 1.

92.7R1.  For the purposes of subparagraph ix of paragraph a of section 92.7 of the Act, a prescribed contract throughout a calendar year is a registered retirement savings plan or a registered retirement income fund, other than such a plan or fund to which a trust is a party, where the annuitant under the plan or fund is alive at any time in the year or was alive at any time in the preceding calendar year.

s. 92.7R1; O.C. 421-88, s. 1; O.C. 67-96, s. 6; O.C. 1707-97, s. 11; O.C. 1466-98, s. 16; O.C. 1149-2006, s. 3; O.C. 134-2009, s. 1.

92.7R2.  In section 92.7R1, “annuitant” means

  (a)      in respect of a registered retirement income fund at any time, the annuitant of such a fund within the meaning of paragraph d of section 961.1.5 of the Act; and

  (b)      in respect of a registered retirement income plan, the annuitant under such plan within the meaning of paragraph b of section 905.1 of the Act.

s. 92.7R2; O.C. 421-88, s. 1; O.C. 1114-93, s. 6; O.C. 1707-97, s. 12; O.C. 134-2009, s. 1.

CHAPTER  IV
AMOUNTS TO BE INCLUDED IN RESPECT OF A LIFE INSURANCE POLICY OR AN ANNUITY CONTRACT

c. I.2O.C. 7-87, s. 2O.C. 134-2009, s. 1.

DIVISION  I
INTERPRETATION

div. III.1O.C. 67-96, s. 8O.C. 134-2009, s. 1.

92.11R1.  For the purposes of this chapter,

“accumulating fund” at a particular time, in respect of an interest in an annuity contract or a life insurance policy means the amount determined at that time in respect of the interest in accordance with sections 92.11R2 to 92.11R13;

“amount payable” has the meaning assigned by subparagraph j of the first paragraph of section 835 of the Act;

“cash surrendered value” has the meaning assigned to it by paragraph d of section 966 of the Act;

“death benefit” does not include a dividend on a policy or interest thereon, left on deposit with an insurer, or an additional amount payable following an accidental death;

“exempt policy” has the meaning assigned to it by Division IV;

“life annuity contract” has the meaning assigned to it by sections 966R2 to 966R4;

“policy anniversary” includes, in the case of a life insurance policy that exists for a full calendar year and in respect of which there would not otherwise be a policy anniversary during the year, the end of the calendar year;

“policy loan” has the meaning assigned to it by paragraph a.1.1 of section 966 of the Act; and

“prescribed annuity contract” has the meaning assigned to it by Division III.

s. 92.11R0.1; O.C. 67-96, s. 8; O.C. 1470-2002, s. 5; O.C. 1155-2004, s. 8; O.C. 134-2009, s. 1; O.C. 390-2012, s. 4.

DIVISION  II
ACCUMULATING FUNDS

div. III.2O.C. 67-96, s. 8O.C. 134-2009, s. 1.

92.11R2.  For the purposes of section 92.11 of the Act, an accumulating fund at a particular time is,

  (a)      in respect of a taxpayer’s interest in an annuity contract that is not a contract issued by a life insurer, the amount determined under sections 92.11R4 and 92.11R5;

  (b)      in respect of a taxpayer’s interest in a life insurance policy that is not a standard policy for the purposes of exemption or an annuity contract described in paragraph a, the amount determined under sections 92.11R6 and 92.11R7; and

  (c)      in respect of a standard policy for the purposes of exemption, the amount determined under sections 92.11R8 to 92.11R12.

s. 92.11R1; O.C. 7-87, s. 2; O.C. 1114-93, s. 9; O.C. 67-96, s. 9; O.C. 134-2009, s. 1.

92.11R3.  For the purposes of this division, where an amount must be determined under any of sections 840R9 to 840R34, the following rules apply to the determination of that amount:

  (a)      the expression “policy loan” has the meaning assigned to it by paragraph a.1.1 of section 966 of the Act;

  (b)      the first paragraph of section 840R9 is to be read without reference to “that begins before 1 October 2006” and section 840R11 is not to be taken into account; and

  (c)      paragraphs a and b of section 840R22 are to be read without reference to “or in respect of the interest accrued on such loan for the benefit of the insurer at the end of the year”.

s. 92.11R1.0.1; O.C. 67-96, s. 10; O.C. 1470-2002, s. 6; O.C. 1155-2004, s. 9; O.C. 134-2009, s. 1; O.C. 390-2012, s. 5.

92.11R4.  An accumulating fund at a particular time in respect of a taxpayer’s interest in an annuity contract described in paragraph a of section 92.11R2 is an amount equal to the greater of

  (a)      the amount by which the cash surrender value of the taxpayer’s interest at that time exceeds the amount payable in respect of a loan unpaid at that time and made under the contract in respect of the interest; and

  (b)      the amount by which the actualized value at that time of the future payments to be made under the contract in respect of the taxpayer’s interest exceeds the aggregate of the actualized value at that time of future premiums to be paid under the contract in respect of the taxpayer’s interest and the amount payable in respect of a loan unpaid at that time and made under the contract in respect of the taxpayer’s interest.

s. 92.11R1.0.2; O.C. 67-96, s. 10; O.C. 134-2009, s. 1.

92.11R5.  For the purposes of paragraph b of section 92.11R4, the actualized value of future payments and that of future premiums is computed using,

  (a)      in the case where the interest rate used by the issuer for a period in order to fix the terms of the contract at the time of issue is lower than the rate used for that purpose for a subsequent period, the simple rate that, if it applied to each period, would yield the same terms; or

  (b)      in all other cases, the rates that the issuer used in order to fix the terms of the contract at the time of issue.

s. 92.11R1.0.3; O.C. 67-96, s. 10; O.C. 134-2009, s. 1.

92.11R6.  An accumulating fund at a particular time in respect of a taxpayer’s interest in a life insurance policy described in paragraph b of section 92.11R2 is an amount equal to the amount obtained by multiplying the proportional interest of the taxpayer in the policy by,

  (a)      in the case where the policy is not a deposit administration fund, where the particular time immediately follows a person’s death and where the policy was issued or subscribed on that person’s life, the aggregate of the maximum amounts that, immediately before the death and in respect of the policy, could be determined by the life insurer under section 840R22 and, in respect of a benefit in the case of accidental death, under sections 840R32 to 840R34, if the mortality rates used were adjusted to take into account the assumption that the death would occur at the time at which and in the manner in which it did occur; or

  (b)      in all other cases, the maximum amount that, at the particular time in respect of the policy, would be fixed by the life insurer under section 840R17, computed as if there were only one deposit administration fund, or under section 840R22, whichever applies.

For the purposes of the first paragraph, it is assumed that the life insurer operates its life insurance business in Canada, its taxation year ends at the particular time and the policy is a life insurance policy in Canada.

s. 92.11R1.0.4; O.C. 67-96, s. 10; O.C. 134-2009, s. 1.

92.11R7.  For the purposes of section 92.11R6, where the interest rate that a life insurer used for a period, when computing an amended net premium or the amount that it may deduct for a taxation year under section 840R22, is determined in accordance with any of paragraphs a to c of section 840R23 and that rate is lower than the rate of interest so fixed for a subsequent period, the rate that is required to be used is the simple rate that, if it applied to each period, could be used to fix premiums for the policy.

s. 92.11R1.0.5; O.C. 67-96, s. 10; O.C. 134-2009, s. 1.

92.11R8.  An accumulating fund at a particular time in respect of a policy described in paragraph c of section 92.11R2 is,

  (a)      in the case where the policy was issued not less than 20 years before the particular time, the amount that, at the particular time and in respect of the policy, would be fixed under paragraph b of section 840R22 by the life insurer in respect of future benefits provided for in the policy, if its taxation year ended at the particular time; or

  (b)      in all other cases, the proportion of the amount that, in respect of the policy, would be fixed under paragraph a at the time of the 20th anniversary of the policy, that the number of years since the issue of the policy is of 20.

s. 92.11R1.0.6; O.C. 67-96, s. 10; O.C. 134-2009, s. 1.

92.11R9.  For the purposes of section 92.11R8, where on the date of issue of a standard policy for purposes of exemption, the person whose life is insured is

  (a)      not less than 75 years old, the references in that section to the figure “20” and to the word “twentieth” are to be replaced by references to the figure “10” and the word “tenth, respectively”; and

  (b)      not less than 66 years old, but less than 75 years old, the references in that section to the figure “20” and to the word “twentieth” are to be replaced by references to the number obtained by subtracting from 20 the number of years by which the person’s age exceeds 65 and to the ordinal number corresponding to the number so obtained, respectively.

s. 92.11R1.0.7; O.C. 67-96, s. 10; O.C. 134-2009, s. 1.

92.11R10.  For the purposes of section 92.11R8, the interest rates and mortality rates used and the age of the person whose life is insured must be the same as those used in sections 840R22 to 840R29 in computing an amended net premium or the amount that an insurer may deduct for a taxation year under section 840R22 in respect of the life insurance policy in respect of which the standard policy for purposes of exemption is issued, except that

  (a)      if the life insurance policy is one to which paragraph c of section 840R23 applies and if the amount fixed under paragraph a of section 840R22 in respect of that policy exceeds the amount fixed in respect of it under paragraph b of that section 840R22, the interest rates and mortality rates used may be those used in computing the cash surrender values of that policy; and

  (b)      if the interest rate for a period, otherwise fixed under this section in respect of that interest, is lower than the interest rate so fixed for a subsequent period, the rate that is required to be used is the simple rate that, if it applied to each period, could be used in fixing premiums in respect of the life insurance policy.

s. 92.11R1.0.8; O.C. 67-96, s. 10; O.C. 134-2009, s. 1.

92.11R11.  For the purposes of section 92.11R8 and despite section 92.11R10, the following rules apply:

  (a)      where the rates referred to in section 92.11R10 do not exist, the rates that are required to be used are the minimum guaranteed interest rates that were used under the life insurance policy in order to determine the cash surrender values, and the mortality rates set forth in the table entitled “Commissioners 1958 Standard Ordinary Mortality Table”, published in Volume X of the “Transactions of the Society of Actuaries”, that apply to the person whose life is insured under the life insurance policy; and

  (b)      where, in respect of the life insurance policy in respect of which the standard policy for purposes of exemption is issued, the period for which an amount is fixed under paragraph b of section 840R22 does not extend to the date determined under paragraph b of section 92.19R5, the rate that is required to be used for the period following that period, but preceding that date, is the weighted arithmetic mean of the interest rates used to fix that amount.

s. 92.11R1.0.9; O.C. 67-96, s. 10; O.C. 134-2009, s. 1.

92.11R12.  Despite sections 92.11R10 and 92.11R11, none of the annual interest rates used in computing the accumulating fund in respect of a standard policy for purposes of exemption issued in respect of a life insurance policy may be less than

  (a)      4%, where the life insurance policy was issued after 30 April 1985; or

  (b)      3%, where the life insurance policy was issued before 1 May 1985.

s. 92.11R1.0.10; O.C. 67-96, s. 10; O.C. 134-2009, s. 1.

92.11R13.  Sections 92.19R3 to 92.19R5 also apply to sections 92.11R2 to 92.11R12.

s. 92.11R1.0.11; O.C. 67-96, s. 10; O.C. 134-2009, s. 1.

DIVISION  III
PRESCRIBED ANNUITY CONTRACT

div. IVO.C. 7-87, s. 2O.C. 134-2009, s. 1.

92.11R14.  In this division,

“annuitant” under an annuity contract, at any time, means a person who, at that time, is entitled to receive annuity payments under that contract;

“spouse” of a particular individual includes another individual who is a party to a void or voidable marriage with the particular individual.

s. 92.11R1.1; O.C. 1471-91, s. 6; O.C. 1282-2003, s. 8; O.C. 134-2009, s. 1.

92.11R15.  For the purposes of this division, an annuitant under an annuity contract is deemed to be the holder of the contract where

  (a)      another person holds the contract in trust for the annuitant; or

  (b)      the annuitant acquired the contract under a group term life insurance policy under which life insurance on another person was effected by reason of or on the occasion of the office or employment, current or former, of that other person.

s. 92.11R1.2; O.C. 1471-91, s. 6; O.C. 134-2009, s. 1.

92.11R16.  For the purposes of subparagraph b of the second paragraph of section 92.11 of the Act, a prescribed annuity contract for a taxation year means

  (a)      an annuity contract purchased pursuant to a tax-free savings account, a registered pension plan, a registered retirement savings plan, a registered retirement income fund or a deferred profit sharing plan;

  (b)      an income-averaging annuity contract;

  (c)      an income-averaging annuity respecting income from artistic activities;

  (d)      an annuity contract the cost of which may be deducted by the holder under paragraph f of section 339 of the Act in computing the holder’s income;

  (d.1)      an annuity contract that is a qualifying trust annuity in relation to a taxpayer the cost of which is deductible under paragraph f of section 339 of the Act in computing the taxpayer's income;

  (d.2)      an annuity contract that the holder acquired in circumstances to which subsection 21 of section 146 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) applied; and

  (e)      an annuity contract described in section 92.11R17.

s. 92.11R2; O.C. 7-87, s. 2; O.C. 1471-91, s. 7; O.C. 35-96, s. 86; O.C. 1466-98, s. 17; O.C. 1155-2004, s. 10; O.C. 1149-2006, s. 4; O.C. 134-2009, s. 1; O.C. 1176-2010, s. 4.

92.11R17.  An annuity contract referred to in paragraph e of section 92.11R16 is, for a taxation year, a contract

  (a)      under which annuity payments commenced in that year or in a preceding taxation year;

  (b)      the issuer of which is a corporation described in subparagraph ii of paragraph b of the definition of “retirement savings plan” in subsection 1 of section 146 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)), a life insurance corporation, a registered charity, a corporation described in any of paragraphs a to c of the definition of “specified financial institution” in section 1 of the Act, or a corporation that is neither a mutual fund corporation nor a mortgage investment corporation, but whose principal activity consists in making loans;

  (c)      a holder of which

  (i)    where the annuity payments commenced before 1 January 1987, notified the issuer of the contract in writing, before the end of the year, that the contract is to be treated as a prescribed annuity contract,

  (ii)    where the annuity payments commenced after 31 December 1986, did not notify the issuer of the contract in writing, before the end of the taxation year in which the annuity payments commenced, that the contract is not to be treated as a prescribed annuity contract, or

  (iii)    where the annuity payments commenced after 31 December 1986, notified the issuer of the contract in writing, before the end of the taxation year in which the annuity payments commenced, that the contract is not to be treated as a prescribed annuity contract, which notification was cancelled by a holder of the contract by means of a notice in writing addressed to the issuer of the contract before the end of the year;

  (d)      each holder of which is an annuitant under the contract who, throughout the year, dealt at arm’s length with the issuer of the contract and who is an individual other than a trust that is neither a testamentary trust nor a trust described in subparagraph a of the first paragraph of section 653 of the Act and in the second paragraph of that section;

  (e)      the terms of which require that from the time when the contract fulfils the requirement of this section, the conditions mentioned in section 92.11R18 are satisfied; and

  (f)      for which none of the terms provide a remedy against the issuer in case of failure to make a payment prescribed by the contract.

s. 92.11R3; O.C. 7-87, s. 2; O.C. 1471-91, s. 8; O.C. 35-96, s. 3; O.C. 1707-97, s. 13; O.C. 134-2009, s. 1; O.C. 390-2012, s. 6.

92.11R18.  For the purposes of paragraph e of section 92.11R17, the conditions that must be satisfied are:

  (a)      subject to the holder’s right to change the frequency and the quantum of the payments to be made in a taxation year under the contract without changing the present value, at the beginning of the year, of those payments, all the payments made under the contract must be equal annuity payments made at regular intervals at least once a year;

  (b)      the annuity payments under the contract must continue either for a fixed period, or

  (i)    where the holder is an individual other than a trust, for the life of the first holder or until the day of the later of the death of the first holder and the death of any of the spouse, brothers and sisters, referred to as “the survivor” in paragraph c, of the first holder, or

  (ii)    where the holder is

  (1)    a trust described in subparagraph a of the first paragraph of section 653 of the Act and in the second paragraph of that section, called “spouse trust” in paragraphs c and d, for the life of an individual to whom that subparagraph a refers if the individual is entitled to receive all of the income of the trust that arose before the individual's death,

  (2)    a joint spousal trust, until the day of the later of the death of the individual and the death of the beneficiary under the trust who is the individual's spouse,

  (3)    a testamentary trust, other than a spouse trust, where the annuity is issued before 24 October 2012, for the life of an individual who is entitled to receive income from the trust, or

  (4)    a testamentary trust, other than a spouse trust or a testamentary trust referred to in subparagraph 3, for the life of an individual who was entitled when the contract was first held to receive all of the income of the trust that arose before the individual's death;

  (c)      where the period during which the annuity payments are to be made is of a guaranteed or fixed duration, the period so guaranteed or fixed does not extend beyond the time when the following person would, if the person survived, reach the age of 91:

  (i)    where the contract provides a joint and last survivor annuity, the first holder or the survivor, whichever is younger,

  (ii)    where the holder is a spouse trust, the spouse entitled to receive the income of the trust,

  (iii)    where the holder is a testamentary trust other than a spouse trust, the youngest of the beneficiaries of the trust,

  (iv)    where the contract is held jointly, the youngest of the first holders, or

  (v)    in all other cases, the first holder;

  (d)      no loan exists under the contract and the holder’s rights under the contract may not be disposed of otherwise than at the holder’s death or, where the holder is a spouse trust, at the death of the spouse entitled to receive the income of the trust;

  (e)      no payment may be made under the contract unless it is permitted by this division.

s. 92.11R4; O.C. 7-87, s. 2; O.C. 1471-91, s. 9; O.C. 134-2009, s. 1; O.C. 1105-2014, s. 2.

92.11R19.  Despite sections 92.11R16 to 92.11R18, an annuity contract may qualify as a prescribed annuity contract even if,

  (a)      in a case where the contract provides a joint and last survivor annuity or is held jointly, the terms of the contract provide that there will be a reduction in the amount of the annuity payments to be made under the contract from the time of the death of one of the annuitants;

  (b)      the terms of the contract provide that if the holder of the contract dies upon reaching the age of 91 or before reaching that age, the contract is terminated and the holder will be paid under the contract an amount not greater than the excess of the total amount of premiums paid under it over the total amount of the annuity payments made under the contract;

  (c)      where the period during which the annuity payments are to be made is of a guaranteed or fixed duration, the terms of the contract provide that, following the death of the holder of the contract during that period, the payments which would have been made during that period, were it not for that death, may be replaced by a single payment; or

  (d)      the terms of the contract as they read on 1 December 1982 and at any time after that date provide that the holder share in the investment earnings of the issuer and that the amount of such share must be paid in the 60 days following the end of the year in respect of which it is computed.

s. 92.11R5; O.C. 7-87, s. 2; O.C. 1471-91, s. 10; O.C. 134-2009, s. 1.

DIVISION  IV
EXEMPT POLICY

div. VIIO.C. 7-87, s. 2O.C. 134-2009, s. 1.

92.19R1.  For the purposes of paragraph a of section 92.19 of the Act, an exempt policy at a particular time means a life insurance policy in respect of which the following conditions are met:

  (a)      if the particular time corresponds to a policy anniversary of the policy, the accumulating fund of the policy at that time, determined without considering any policy loan, does not exceed the aggregate of the accumulating funds, at that time, of the accumulating funds of the standard policies for purposes of exemption issued in respect of the policy not later than that time;

  (b)      it is reasonable to expect, at the particular time, that the condition provided for in paragraph a will be met on each policy anniversary of the policy on which the policy could remain in force after the particular time but before the date determined under paragraph b of section 92.19R5 with respect to the standard policies for purposes of exemption issued in respect of the policy and, to that end,

  (i)    it must be assumed that the terms of the policy do not differ from those that were in force on the last policy anniversary of the policy occurring not later than the particular time, and

  (ii)    any other reasonable assumption must be made, where necessary, about all the other factors, including, in the case of a participating life insurance policy within the meaning of subparagraph f of the first paragraph of section 835 of the Act, the assumption that the amounts of dividends paid will be as shown in the dividend scale;

  (c)      the condition in paragraph a was met on all policy anniversaries of the policy prior to the particular time; and

  (d)      the condition in paragraph b was met at all times from the first policy anniversary of the policy and before the particular time.

In the first paragraph, a life insurance policy does not include an annuity contract or a deposit administration fund policy.

s. 92.19R1; O.C. 7-87, s. 2; O.C. 67-96, s. 11; O.C. 1470-2002, s. 7; O.C. 134-2009, s. 1; O.C. 390-2012, s. 7.

92.19R2.  For the purposes of section 92.19R1, a life insurance policy that is an exempt policy at the time of its first policy anniversary is deemed to have been an exempt policy from the time of its issue up to that anniversary.

s. 92.19R3; O.C. 7-87, s. 2; O.C. 67-96, s. 13; O.C. 134-2009, s. 1.

92.19R3.  For the purposes of this division, a standard policy for the purposes of separate exemption is deemed to have been issued to a policy holder in respect of a life insurance policy

  (a)      at the date on which life insurance is issued; and

  (b)      on each anniversary of the life insurance policy where the amount of the death benefit under it exceeds 108% of the amount of the death benefit under it on the date of its issue or, if that date is later, on the date of the preceding policy anniversary.

For the purpose of determining whether the accumulating fund of the life insurance policy, on a particular policy anniversary of the policy, meets the condition in subparagraph a of the first paragraph of section 92.19R1, each standard policy for purposes of exemption referred to in the first paragraph is deemed

  (a)      to provide for a death benefit that is uniform throughout the term of the standard policy for purposes of exemption and is equal to the amount determined in section 92.19R4;

  (b)      to provide for the payment of its death benefit on the date determined in section 92.19R5; and

  (c)      to be a life insurance policy in Canada issued by a life insurer carrying on a life insurance business in Canada.

s. 92.19R4; O.C. 7-87, s. 2; Erratum, 1988 G.O. 2, 2689; O.C. 67-96, s. 14; O.C. 134-2009, s. 1.

92.19R4.  The amount referred to in subparagraph a of the second paragraph of section 92.19R3 is,

  (a)      in the case of the first standard policy for the purposes of exemption issued in respect of the life insurance policy, the amount, on the particular policy anniversary of the policy referred to in the second paragraph of section 92.19R3, of the death benefit of the life insurance policy, less the aggregate of the amounts each of which is the amount, on that policy anniversary, of the death benefit of another standard policy for the purposes of exemption issued not later than that policy anniversary in respect of the life insurance policy; or

  (b)      in all other cases, the amount by which the death benefit of the life insurance policy on the date of issue of the standard policy for the purposes of exemption exceeds 108% of the amount of the death benefit of the life insurance policy on the date of issue of the life insurance policy or, if that date is later, on the date of the preceding policy anniversary.

s. 92.19R5; O.C. 7-87, s. 2; O.C. 67-96, s. 15; O.C. 134-2009, s. 1.

92.19R5.  The date referred to in subparagraph b of the second paragraph of section 92.19R3 is the earlier of

  (a)      the date of death of the person whose life was insured under the life insurance policy; and

  (b)      the date occurring 10 years after the date of issue of the life insurance policy or, if that date is later, the date on which the person whose life is insured will reach the age of 85, if the person survives.

s. 92.19R6; O.C. 7-87, s. 2; O.C. 134-2009, s. 1.

92.19R6.  Despite sections 92.19R1 to 92.19R5, the following rules apply:

  (a)      where the amount of the death benefit of a life insurance policy is, at a particular time, reduced by a particular amount, the amount of the death benefit of the standard policies for purposes of exemption issued before the particular time in respect of the life insurance policy, except the standard policies for purposes of exemption issued in respect thereof in accordance with subparagraph a of the first paragraph of section 92.19R3, must be reduced at the particular time, in the order of the dates of issue of those policies from the nearest to the farthest from the particular time, by an amount equal to the lesser of the part of the particular amount that has not yet been used to reduce the death benefit of one or more other standard policies for purposes of exemption, and the amount immediately before the particular time of the death benefit of the standard policy for the purposes of exemption covered by it;

  (b)      where, on the 10th or on any subsequent policy anniversary of a life insurance policy, the accumulating fund thereof, determined without taking into account unpaid policy loans thereon, exceeds 250% of the accumulating fund of the policy at the time of the 3rd preceding policy anniversary, determined without taking into account unpaid policy loans thereon, each standard policy for purposes of exemption that is deemed, under sections 92.19R3 to 92.19R5, to have been issued before that time in respect of the life insurance policy is deemed to have been issued on the date of the 3rd preceding policy anniversary or, if that date is later, on the date on which it was deemed to have been issued under sections 92.19R3 to 92.19R5;

  (c)      where, on one or more occasions after 1 December 1982, a premium referred to in section 92.19R7 is paid by a taxpayer in respect of an interest, acquired for the last time not later than that date in a life insurance policy that is neither an annuity contract nor a deposit administration fund policy, or an interest in a life insurance policy issued not later than that date and that is neither an annuity contract nor a deposit administration fund policy is acquired by a taxpayer from a person who held that interest without interruption from that date, the policy is deemed to be an exempt policy from that date of its issue to the date on which occurred, after 1 December 1982, the first of such occasions; and

  (d)      a life insurance policy that, for a reason other than its conversion into an annuity contract, ceases to be an exempt policy at the time of a policy anniversary is deemed to be an exempt policy at the time of that policy anniversary in cases where either, if the anniversary occurred 60 days later, the policy would have been an exempt policy at that later date, or the person whose life was insured under the policy died on the day of that policy anniversary or within the following 60 days.

s. 92.19R7; O.C. 7-87, s. 2; O.C. 1470-2002, s. 8; O.C. 1282-2003, s. 9; O.C. 134-2009, s. 1.

92.19R7.  A premium paid at a particular time under a life insurance policy is a premium to which paragraph c of section 92.19R6 refers where the total amount of one or more premiums paid at that time under the policy exceeds the amount of the premium that was to be paid under the policy at that time, as determined not later than 1 December 1982 and as adjusted to take into account those events among the following events occurring after that date in respect of the policy:

  (a)      a change in the underwriting class;

  (b)      a change in the premium following a change in the frequency of premium payments during a year having no effect on the actualized value at the beginning of the year of the aggregate of the premiums to be paid in that year under the policy;

  (c)      the addition or deletion of an accidental death benefit or a guaranteed purchase option or of a disability benefit providing for annuity payments or a waiver of premium payments;

  (d)      an adjustment of the premium attributable to interest, death or expenses or a change in the death benefit under the policy following an increase in the Consumer Price Index published by Statistics Canada under the Statistics Act (R.S.C. 1985, c. S-19), the adjustment being made by the life insurer for each class in accordance with the terms of the policy as they read on 1 December 1982 and not resulting from the exercise of a conversion privilege under the policy;

  (e)      a change resulting from the provision of an additional death benefit under a participating life insurance policy within the meaning of subparagraph f of the first paragraph of section 835 of the Act, either as policy dividends or other amounts distributed out of the life insurer's income from the carrying on of the participating life insurance business as determined under sections 841R1 to 841R5, or as interest earned on policy dividends left on deposit with the life insurer;

  (f)      the reinstatement, within the time prescribed in subparagraph iii of paragraph a of section 966 of the Act, of lapsed policies or reinstatement owing to an amount outstanding under a policy loan;

  (g)      a change in premium following correction of erroneous information contained in the policy application;

  (h)      payment of a premium after the due date or payment of a premium within 30 days preceding the due date, as determined not later that 1 December 1982; or

  (i)      payment of the interest referred to in paragraph b.3 of section 966 of the Act.

s. 92.19R8; O.C. 7-87, s. 2; O.C. 1114-93, s. 12; O.C. 35-96, s. 86; O.C. 1470-2002, s. 9; O.C. 1282-2003, s. 10; O.C. 134-2009, s. 1; O.C. 390-2012, s. 8.

92.19R8.  For the purposes of section 92.19R7, a life insurance policy issued following exercise of a renewal privilege provided for in the terms of another policy as they read on 1 December 1982 is the continuation of that other policy.

s. 92.19R9; O.C. 1114-93, s. 13; O.C. 134-2009, s. 1.

CHAPTER  V
TRANSITION AMOUNT IN RESPECT OF UNPAID CLAIMS RESERVE

c. I.2.2O.C. 1454-99, s. 8O.C. 134-2009, s. 1.

92.21R1.  In this chapter, “transition amount” of an insurer means the amount deducted under section 157.12 of the Act in computing the insurer’s income for its taxation year that includes 23 February 1994.

s. 92.21R9; O.C. 1454-99, s. 8; O.C. 134-2009, s. 1.

92.21R2.  For the purposes of section 92.21 of the Act and subject to section 92.21R3, the prescribed portion of an amount in respect of an insurer for a taxation year that ends after 22 February 1994 is equal to the amount determined by the formula

[(0.05A + 0.10B + 0.15C)/365] × D.

In the formula in the first paragraph,

  (a)      A is the total of the number of days in the taxation year that are in 1994 or 1995 and, where the taxation year includes 23 February 1994, the number of days in 1994 that are before the 1st day of the taxation year;

  (b)      B is the number of days in the taxation year, other than 29 February, that are in any of the years 1996 to 2001;

  (c)      C is the number of days in the taxation year that are in 2002 or 2003; and

  (d)      D is, subject to section 92.21R4 and subparagraph b of the first paragraph of section 92.21R5, the insurer’s transition amount.

s. 92.21R10; O.C. 1454-99, s. 8; O.C. 134-2009, s. 1.

92.21R3.  Where sections 556 to 564.1 and 565 of the Act have applied to the winding-up of an insurer, in this section referred to as the “subsidiary”, the following rules apply:

  (a)      for the purposes of subparagraphs a to c of the second paragraph of section 92.21R2 in respect of the subsidiary, the days that are after the day on which the subsidiary’s property was distributed to its parent on the winding-up are not to be taken into consideration; and

  (b)      for the purposes of section 92.21 of the Act, the prescribed portion of an amount in respect of the parent for a taxation year that includes the day referred to in paragraph a is equal to the aggregate of

  (i)    the amount that would be determined under section 92.21R2 in respect of the parent for the year if the parent’s transition amount did not include the subsidiary’s transition amount, and

  (ii)    the amount that would be determined under section 92.21R2 in respect of the parent for the year if the day referred to in paragraph a and any days before that day were not taken into consideration for the purposes of subparagraphs a to c of the second paragraph of that section and the amount referred to in subparagraph d of that paragraph were equal to the subsidiary’s transition amount.

s. 92.21R11; O.C. 1454-99, s. 8; O.C. 134-2009, s. 1.

92.21R4.  Where section 832.3 or 832.9 of the Act has applied in respect of the transfer of an insurance business of an insurer, there is to be subtracted from the insurer’s transition amount, for the purposes of subparagraph d of the second paragraph of section 92.21R2 in respect of a taxation year of the insurer ending after the insurer ceased to carry on all or substantially all of the business, the part of the insurer’s transition amount that may reasonably be attributed to the business.

s. 92.21R12; O.C. 1454-99, s. 8; O.C. 134-2009, s. 1.

92.21R5.  Where an insurer ceases to carry on all or substantially all of an insurance business, otherwise than as a result of an amalgamation to which section 545 of the Act applies, a winding-up to which sections 556 to 564.1 and 565 of the Act apply or a transfer of the business to which section 832.3 or 832.9 of the Act applies, the following rules apply:

  (a)      for the purposes of section 92.21 of the Act, the prescribed portion of an amount in respect of the insurer for its taxation year in which the cessation of business occurs is equal to the aggregate of the amount determined in accordance with section 92.21R2 and the amount by which the amount referred to in the second paragraph exceeds that part of the aggregate of the amounts included under section 92.21 of the Act in computing the income of the insurer for preceding taxation years that may reasonably be considered to relate to the amount referred to in the second paragraph; and

  (b)      there is to be subtracted from the insurer’s transition amount, for the purposes of subparagraph d of the second paragraph of section 92.21R2 in respect of the taxation year of the insurer in which the insurer ceases to carry on the business or a subsequent taxation year, the amount referred to in the second paragraph.

The amount to which the first paragraph refers is equal to the part of the insurer’s transition amount that may reasonably be attributed to the insurance business referred to in that paragraph.

s. 92.21R13; O.C. 1454-99, s. 8; O.C. 134-2009, s. 1; O.C. 1176-2010, s. 5.

CHAPTER  VI
DISPOSITION OF DEPRECIABLE PROPERTY

c. I.3O.C. 7-87, s. 2O.C. 134-2009, s. 1.

93R1.  For the purposes of subparagraph e of the second paragraph of section 93 of the Act, the prescribed manner and the prescribed delay are those prescribed by section 130R70.

s. 93R1; O.C. 1981-80, s. 93R1; R.R.Q., 1981, c. I-3, r. 1, s. 93R1; O.C. 1282-2003, s. 11; O.C. 134-2009, s. 1.

93R2.  For the purposes of subparagraph f of the second paragraph of section 93 of the Act, a prescribed amount is an amount referred to in paragraph c of section 87R5.

s. 93R2; O.C. 1539-93, s. 2; O.C. 1282-2003, s. 12; O.C. 134-2009, s. 1.

93.6R1.  Property referred to in subparagraph t of the first paragraph, or the second or fourth paragraph, of Class 12 in Schedule B is prescribed property for the purposes of section 93.6 of the Act.

s. 93.6R1; O.C. 67-96, s. 16; O.C. 1463-2001, s. 33; O.C. 134-2009, s. 1.

93.7R1.  An offshore region referred to in section 4609 of the Income Tax Regulations made under the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) is a prescribed offshore region for the purposes of subparagraph j of the first paragraph of section 93.7 of the Act.

s. 93.7R2; O.C. 67-96, s. 16; O.C. 134-2009, s. 1.

96.2R1.  For the purposes of section 96.2 of the Act, prescribed energy conservation property means property included in Class 43.1 or 43.2 in Schedule B.

s. 96.2R1; O.C. 1454-99, s. 9; O.C. 1116-2007, s. 5; O.C. 134-2009, s. 1.

99R1.  For the purposes of paragraph d.3 of section 99 of the Act, the prescribed amount is,

  (a)      in respect of a passenger vehicle acquired between 31 August 1989 and 1 January 1991, $24,000; and

  (b)      in respect of a passenger vehicle acquired after 31 December 1990, the amount determined by the formula

A + B.

In the formula in subparagraph b of the first paragraph,

  (a)      A is

  (i)    $24,000, if the passenger vehicle was acquired before 1 January 1997,

  (ii)    $25,000, if the passenger vehicle was acquired after 31 December 1996 and before 1 January 1998,

  (iii)    $26,000, if the passenger vehicle was acquired after 31 December 1997 and before 1 January 2000,

  (iv)    $27,000, if the passenger vehicle was acquired after 31 December 1999 and before 1 January 2001, and

  (v)    $30,000, if the passenger vehicle was acquired after 31 December 2000; and

  (b)      B is the sum that would have been payable in respect of federal and provincial sales taxes on the acquisition of the passenger vehicle if it had been acquired, at a cost equal to the amount determined in subparagraph a before the application of the federal and provincial sales taxes, at the time of the acquisition.

s. 99R2; O.C. 1697-92, s. 4; O.C. 1463-2001, s. 35; O.C. 1470-2002, s. 10; O.C. 134-2009, s. 1.

99R2.  For the purposes of paragraph e of section 99 of the Act,

  (a)      a prescribed property is a property referred to in section 130R152; and

  (b)      a prescribed business is a business referred to in section 130R153.

s. 99R1; O.C. 1981-80, s. 99R1; R.R.Q., 1981, c. I-3, r. 1, s. 99R1; O.C. 1282-2003, s. 13; O.C. 134-2009, s. 1.

101R1.  For the purposes of section 101 of the Act, an amount referred to in paragraph c of section 87R5 is a prescribed amount.

s. 101R0.1; O.C. 1539-93, s. 3; O.C. 134-2009, s. 1.

101R2.  For the purposes of section 101 of the Act, the assistance referred to therein does not include

  (a)      a deduction granted under the Act to promote industrial development by means of fiscal advantages (chapter D-9) or under the Act respecting fiscal incentives to industrial development (chapter S-34), as those Acts read before they were repealed;

  (b)      an amount deducted under sections 360 and 361 of the Act;

  (c)      an amount paid under the Act to promote scientific research and development (R.S.C. 1970, c. I-10), or an amount paid before 20 December 1984 under the Act respecting assistance for regional industrial development (S.Q. 1968, c. 27) or a plan equivalent to that instituted by that Act and considered to be equivalent under it;

  (d)      an amount received as a grant under a program referred to in section 313.1R1;

  (e)      an amount described in paragraph b of section 225 of the Act; or

  (f)      an amount referred to in paragraph g or i of section 488R1.

s. 101R1; O.C. 1981-80, s. 101R1; R.R.Q., 1981, c. I-3, r. 1, s. 101R1; O.C. 544-86, s. 4; O.C. 140-90, s. 3; O.C. 1232-91, s. 2; O.C. 1539-93, s. 4; O.C. 523-96, s. 5; O.C. 1707-97, s. 14; O.C. 1466-98, s. 18; O.C. 134-2009, s. 1.

101.1R1.  For the purposes of section 101.1 of the Act, the amount that an insurer is deemed to have deducted in respect of depreciable property of a prescribed class for taxation years prior to its 1977 taxation year is the amount deemed to have been so deducted under subsection 22 of section 13 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)).

s. 101.1R1; O.C. 1981-80, s. 101.1R1; R.R.Q., 1981, c. I-3, r. 1, s. 101.1R1; O.C. 35-96, s. 86; O.C. 134-2009, s. 1.

101.2R1.  For the purposes of section 101.2 of the Act, the amount that a life insurer is deemed to have deducted in computing its income for taxation years prior to its 1978 taxation year in respect of depreciable property of a prescribed class is equal to the aggregate of the total depreciation, determined immediately after the 1977 taxation year of the insurer and without reference to that section, that was granted to the insurer in respect of property of that class, and the amount that the maximum depreciation which the insurer was entitled to claim in respect of that property for its taxation years ending after 1968 and before 1978 exceeds that aggregate depreciation.

s. 101.2R1; O.C. 1981-80, s. 101.2R1; R.R.Q., 1981, c. I-3, r. 1, s. 101.2R1; O.C. 134-2009, s. 1.

101.3R1.  For the purposes of section 101.3 of the Act, a prescribed amount is

  (a)      an amount determined under subsection 7 or 8 of section 127 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)), other than the part of that amount that may reasonably be considered to be related to an amount that is a qualified expenditure, within the meaning of subsection 9 of that section 127, and that constitutes, for the purposes of the definition of that expression, an expenditure made after 30 April 1987 and before 10 May 1996; and

  (b)      a tax deduction provided for in subsection 5 or 6 of section 127 of the Income Tax Act.

s. 101.3R1; O.C. 2962-82, s. 7; O.C. 500-83, s. 7; O.C. 35-96, s. 86; O.C. 1707-97, s. 15; O.C. 134-2009, s. 1.

101.8R1.  For the purposes of paragraph a of section 101.8 of the Act, a prescribed property in respect of a taxpayer is a property that, if it were acquired by the taxpayer, would be included in Class 10 in Schedule B under subparagraph f of the second paragraph of that class.

s. 101.8R1; O.C. 1470-2002, s. 11; O.C. 134-2009, s. 1.

101.8R2.  For the purposes of paragraph b of section 101.8 of the Act, the following properties are prescribed:

  (a)      a road, other than a specified temporary access road, sidewalk, runway, parking area, storage area or similar surface construction;

  (b)      a bridge; and

  (c)      a property ancillary to any property referred to in paragraph a or b.

s. 101.8R2; O.C. 1470-2002, s. 11; O.C. 134-2009, s. 1.

CHAPTER  VII
DISPOSITION OF VESSELS

c. IIO.C. 1981-80, title IV, c. IIR.R.Q., 1981, c. I-3, r. 1, title IV, c. IIO.C. 134-2009, s. 1.

104R1.  In this chapter,

“conversion” has the meaning assigned by subsection 21 of section 13 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.));

“conversion cost” has the meaning assigned by subsection 21 of section 13 of the Income Tax Act;

“vessel” means a vessel as defined in the Canada Shipping Act (S.C. 2001, c. 26).

s. 104R1; O.C. 1981-80, s. 104R1; R.R.Q., 1981, c. I-3, r. 1, s. 104R1; O.C. 35-96, s. 4; O.C. 134-2009, s. 1.

104R2.  Where a deduction has been made for a year under the Act, the Provincial Income Tax Act (R.S.Q. 1964, c. 69) or the Corporation Tax Act (R.S.Q. 1964, c. 67) in respect of capital cost allowance of a vessel, section 94 of the Act is applicable to the prescribed class, as well as to any other class prescribed by either of those Acts, to which the vessel may have been transferred.

s. 104R2; O.C. 1981-80, s. 104R2; R.R.Q., 1981, c. I-3, r. 1, s. 104R2; O.C. 134-2009, s. 1.

104R3.  Where a vessel owned by a taxpayer on 1 January 1966, or constructed pursuant to a construction contract entered into by the taxpayer prior to that date without the vessel being completed by such date, is disposed of by the taxpayer prior to 1974, section 94 of the Act and Title IV of Book III of Part I of the Act does not apply to the proceeds of disposition

  (a)      if an amount at least equal to the proceeds of disposition is used by the taxpayer, before the month of May 1974 and during the taxation year in which the taxpayer disposed of the vessel or within 4 months following the end of that taxation year, under the conditions provided for in subparagraph i of paragraph a of subsection 15 of section 13 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)), either for replacement of the vessel or to incur any conversion cost with respect to another vessel owned by the taxpayer; or

  (b)      if, under the conditions provided for in subparagraph ii of paragraph a of subsection 15 of section 13 of the Income Tax Act, the taxpayer deposits on or before the day on which the taxpayer’s fiscal return is to be filed for the taxation year of disposal of the vessel, either an amount at least equal to the tax that would, but for this paragraph, be payable by the taxpayer under Part I of the Act in respect of the proceeds of disposition, or satisfactory security therefor to guarantee that the proceeds of disposition will be used before 1975 for replacement of the vessel.

s. 104R3; O.C. 1981-80, s. 104R3; R.R.Q., 1981, c. I-3, r. 1, s. 104R3; O.C. 35-96, s. 5; O.C. 1707-97, s. 16; O.C. 134-2009, s. 1.

104R4.  In the case of a disposition referred to in section 104R3, the taxpayer may, within the time prescribed under the Act for the filing of the taxpayer’s fiscal return for the taxation year in which the taxpayer disposed of the vessel, elect to have the vessel considered as a prescribed class or, if any conversion cost in respect of the vessel has been included in a separate prescribed class, have the vessel transferred to that class and, if the taxpayer so elects, the vessel is deemed to have been so transferred immediately before the disposition by the taxpayer.

However, this section does not apply unless the proceeds of disposition of the vessel exceed the amount that would be the undepreciated capital cost of property of the class to which the vessel would be so transferred.

s. 104R4; O.C. 1981-80, s. 104R4; R.R.Q., 1981, c. I-3, r. 1, s. 104R4; O.C. 1282-2003, s. 14; O.C. 134-2009, s. 1.

104R5.  If section 104R3 does not apply to the proceeds of disposition of a vessel or if the taxpayer does not make an election under section 104R4 within the time prescribed therein, the taxpayer may, on disposal of a vessel owned by the taxpayer, elect to have the proceeds that would be included in computing the taxpayer’s income for the year under Part I of the Act, treated as proceeds of disposition of property of another prescribed class that includes a vessel owned by the taxpayer.

s. 104R5; O.C. 1981-80, s. 104R5; R.R.Q., 1981, c. I-3, r. 1, s. 104R5; O.C. 134-2009, s. 1.

104R6.  Where a separate prescribed class has been constituted under the Act, the Provincial Income Tax Act (R.S.Q. 1964, c. 69) or the Corporation Tax Act (R.S.Q. 1964, c. 67), by virtue of the conversion of a vessel, owned by a taxpayer and the vessel is disposed of by the taxpayer without making an election under section 104R4, such separate prescribed class is deemed to have been transferred to the class in which the vessel was included immediately before the disposition thereof.

s. 104R6; O.C. 1981-80, s. 104R6; R.R.Q., 1981, c. I-3, r. 1, s. 104R6; O.C. 134-2009, s. 1.

104R7.  All or any part of a deposit made under paragraph b of section 104R3, under the Provincial Income Tax Act (R.S.Q. 1964, c. 69) or under the Corporation Tax Act (R.S.Q. 1964, c. 67) may be paid out to or on behalf of any person who, before 1975 and under the conditions in paragraph a of section 104R3, replaces the vessel disposed of by another vessel

  (a)      that was constructed in Canada;

  (b)      that is registered in Canada or in any place to which the British Commonwealth Merchant Shipping Agreement signed at London on 10 December 1931 applies; and

  (c)      in respect of the capital cost of which no allowance has been made to any other taxpayer under this Act, the Provincial Income Tax Act, or the Corporation Tax Act.

Similarly, such amount may be paid out to or on behalf of any person who incurs any conversion cost with respect to a vessel the person owns and that is described in subparagraph b of the first paragraph.

However, the ratio of the amount paid out to the amount of the deposit may not exceed the ratio of the capital cost of the vessel or the conversion cost of the vessel, as the case may be, to the proceeds of disposition of the vessel disposed of and any deposit or part of a deposit not so paid out before the month of July 1975 or not paid out pursuant to section 104R8 is assigned to the Consolidated Revenue Fund.

s. 104R7; O.C. 1981-80, s. 104R7; R.R.Q., 1981, c. I-3, r. 1, s. 104R7; O.C. 134-2009, s. 1.

104R8.  Despite any other provision of this chapter, where a deposit was made by a taxpayer under paragraph b of section 104R3 and the proceeds of disposition in respect of which the deposit was made are not used by any person before 1975, in accordance with the conditions in paragraph a of that section, to acquire a vessel described in subparagraphs a to c of the first paragraph of section 104R7 or to incur any conversion cost with respect to a vessel owned by that person and described in subparagraph b of the first paragraph of that section, the Minister may refund to the taxpayer the deposit, or the part thereof not paid out to the taxpayer under that section.

Where a refund is so made, the taxpayer is required, in computing the income of the taxpayer for the taxation year in which the vessel was disposed of, to add that proportion of the amount that would have been included in computing the taxpayer’s income for the year under Part I of the Act, had the deposit not been made under paragraph b of section 104R3, that the portion of the proceeds of disposition not so used before 1975 as replacement of a vessel is of the total proceeds of disposition.

s. 104R8; O.C. 1981-80, s. 104R8; R.R.Q., 1981, c. I-3, r. 1, s. 104R8; O.C. 134-2009, s. 1.

104R9.  Where a taxpayer has made an election under section 104R4 with respect to a vessel and the proceeds of disposition of that vessel have been used before 1975 for replacement thereof, under conditions mentioned in paragraph a of section 104R3, or where a refund is made under section 104R8, the Minister is to issue such reassessments of tax, interest or penalties as are necessary to give effect to sections 104R3, 104R4 and 104R8.

This section also applies with respect to an election under the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)).

s. 104R9; O.C. 1981-80, s. 104R9; R.R.Q., 1981, c. I-3, r. 1, s. 104R9; O.C. 35-96, s. 86; O.C. 134-2009, s. 1.

104R10.  For the purposes of this Title, of sections 130.1, 142 and 149 of the Act, and of the regulatory provisions made under paragraph a of section 130 of the Act, a vessel in respect of which any conversion cost is incurred after 23 March 1967 is, to the extent of the conversion cost, deemed to be included in a separate prescribed class.

s. 104R10; O.C. 1981-80, s. 104R10; R.R.Q., 1981, c. I-3, r. 1, s. 104R10; O.C. 134-2009, s. 1.

CHAPTER  VIII
DEVELOPMENT BONDS

c. II.1O.C. 2962-82, s. 8O.C. 500-83, s. 8O.C. 134-2009, s. 1.

119.2R1.  The expression “qualified corporation” in section 119.2 of the Act means a taxable Canadian corporation that is a cooperative, within the meaning of section 119.2R2, all or substantially all of the assets of which are used in a qualified business carried on by it in Canada, or a small business corporation.

s. 119.2R1; O.C. 2962-82, s. 8; O.C. 500-83, s. 8; O.C. 615-88, s. 4; O.C. 1232-91, s. 3; O.C. 1633-96, s. 3; O.C. 1707-97, s. 98; O.C. 1466-98, s. 19; O.C. 134-2009, s. 1.

119.2R2.  For the purposes of section 119.2R1, a cooperative is a cooperative incorporated under a statute of Québec, of another province or of Canada for the purposes of marketing natural products belonging to its members or customers or acquired from those persons, carrying out any processing operation necessary or related to that marketing, purchasing supplies, materials or necessary household articles for its members or customers, or for resale to its members or customers, or for furnishing services to them and for which

  (a)      the Act under which it was incorporated, its charter, articles of association, by-laws or contracts with its members or customers, give reason to believe that payments will be made to them in proportion to their purchases;

  (b)      none of the members, except other cooperatives, has more than one vote in the conduct of the corporation’s business;

  (c)      at least 90% of the members are individuals, other cooperatives, or corporations or partnerships that carry on the business of farming; and

  (d)      at least 90% of its shares are held by members described in paragraph c or by trusts governed by TSFAs, registered retirement income funds, registered education savings plans or registered retirement savings plans, the annuitants, holders or subscribers under which are members described in that paragraph.

s. 119.2R3; O.C. 2962-82, s. 8; O.C. 500-83, s. 8; O.C. 67-96, s. 17; O.C. 1707-97, s. 98; O.C. 134-2009, s. 1; O.C. 66-2016, s. 1.

CHAPTER  IX
INDEXED DEBT OBLIGATIONS

c. III.0.1O.C. 1454-99, s. 10O.C. 134-2009, s. 1.

125.0.1R1.  In this chapter,

“excluded payment” with respect to a taxpayer for a taxation year means, subject to the second paragraph, an indexed payment under an indexed debt obligation where

  (a)      the non-indexed debt obligation associated with the indexed debt obligation provides for the payment, at least annually, of interest at a single fixed rate; and

  (b)      the indexed payment corresponds to one of the interest payments referred to in paragraph a;

“indexed payment” means, in relation to an indexed debt obligation, an amount payable under the obligation that is determined by reference to the purchasing power of money;

“inflation adjustment period” of an indexed debt obligation means, in relation to a taxpayer,

  (a)      where the taxpayer acquires and disposes of the taxpayer’s interest in the obligation in the same regular adjustment period of the obligation, the period that begins when the taxpayer acquires the interest in the obligation and ends when the taxpayer disposes of the interest; and

  (b)      in any other case, each of the following consecutive periods:

  (i)    the period that begins when the taxpayer acquires the taxpayer’s interest in the obligation and ends at the end of the regular adjustment period of the obligation in which the taxpayer acquires the interest in the obligation,

  (ii)    each succeeding regular adjustment period of the obligation throughout which the taxpayer holds the interest in the obligation, and

  (iii)    where the taxpayer does not dispose of the interest in the obligation at the end of a regular adjustment period of the obligation, the period that begins immediately after the last period referred to in subparagraph i or ii and that ends when the taxpayer disposes of the interest in the obligation;

“regular adjustment period” of an indexed debt obligation means

  (a)      where the terms or conditions of the obligation provide that, while the obligation is outstanding, indexed payments are to be made at regular intervals not exceeding 12 months in length, each of the following periods:

  (i)    the period that begins when the obligation is issued and ends when the first indexed payment is required to be made, and

  (ii)    each succeeding period beginning when an indexed payment is required to be made and ending when the next indexed payment is required to be made;

  (b)      where paragraph a does not apply and the obligation is outstanding for less than 12 months, the period that begins when the obligation is issued and ends when the obligation ceases to be outstanding; and

  (c)      in any other case, each of the following periods:

  (i)    the 12-month period that begins when the obligation is issued,

  (ii)    each succeeding 12-month period throughout which the obligation is outstanding, and

  (iii)    where the obligation ceases to be outstanding at a time other than the end of a 12-month period referred to in subparagraph i or ii, the period that commences immediately after the last period referred to in those subparagraphs and that ends when the obligation ceases to be outstanding.

For the purposes of the definition of “excluded payment” in the first paragraph, an excluded payment does not include payments under an indexed debt obligation where, at any time in the taxation year, the taxpayer’s proportionate interest in a payment to be made under the obligation after that time differs from the taxpayer’s proportionate interest in any other payment to be made under the obligation after that time.

s. 125.0.1R1; O.C. 1454-99, s. 10; O.C. 134-2009, s. 1.

125.0.1R2.  For the purposes of this chapter, the non-indexed debt obligation associated with an indexed debt obligation is the debt obligation that would result if the indexed debt obligation were amended to eliminate all adjustments determined by reference to changes in the purchasing power of money.

s. 125.0.1R2; O.C. 1454-99, s. 10; O.C. 134-2009, s. 1.

125.0.1R3.  For the purposes of paragraph a of section 125.0.1 of the Act, where, at any time in a taxation year of a taxpayer, the taxpayer holds an interest in an indexed debt obligation, the amount determined in accordance with the second paragraph is deemed to be interest received or receivable by the taxpayer in the year in respect of the obligation.

The amount to which the first paragraph refers is equal to the aggregate of

  (a)      the amount determined by the formula

A – B;

  (b)      where the non-indexed debt obligation associated with the indexed debt obligation is an obligation that is described in any of subparagraphs a to d of the first paragraph of section 92.5R3, the amount of interest that would be determined in accordance with section 92.5R4 to accrue to the taxpayer in respect of the non-indexed debt obligation in the particular period described in the 5th paragraph if, for the purposes of that section 92.5R4, the particular period were a taxation year of the taxpayer and the taxpayer’s interest in the indexed debt obligation were an interest in the non-indexed debt obligation.

In the formula in subparagraph a of the second paragraph,

  (a)      A is the aggregate of all amounts each of which is the amount by which the amount payable in respect of the taxpayer’s interest in an indexed payment under the indexed debt obligation, other than a payment that is an excluded payment with respect to the taxpayer for the year, has, because of a change in the purchasing power of money, increased over an inflation adjustment period of the indexed debt obligation that ends in the year, exceeds

  (b)      B is the aggregate of

  (i)    the aggregate of all amounts each of which is that portion of the aggregate determined in accordance with subparagraph a that is required, otherwise than because of section 125.0.1 of the Act, to be included in computing the taxpayer’s income for the year or a preceding taxation year;

  (ii)    the aggregate of all amounts each of which is the amount by which the amount payable in respect of the taxpayer’s interest in an indexed payment under the indexed debt obligation, other than a payment that is an excluded payment with respect to the taxpayer for the year, has, because of a change in the purchasing power of money, decreased over an inflation adjustment period of the obligation that ends in the year.

For the purpose of determining the amount by which an indexed payment under an indexed debt obligation has increased or decreased over a period because of a change in the purchasing power of money, the amount of the indexed payment is determined using the method for computing the amount of the payment at the time it is to be made, adjusted in a reasonable manner to take into account the earlier date of computation.

The particular period to which subparagraph b of the second paragraph refers is the period that begins at the beginning of the first inflation adjustment period of the indexed debt obligation in respect of the taxpayer that ends in the year, and ends at the end of the last inflation adjustment period of the indexed debt obligation in respect of the taxpayer that ends in the year.

s. 125.0.1R3; O.C. 1454-99, s. 10; O.C. 134-2009, s. 1.

125.0.1R4.  For the purposes of paragraph b of section 125.0.1 of the Act, where, at any time in a taxation year of a taxpayer, the taxpayer holds an interest in an indexed debt obligation, the amount by which the amount determined in accordance with subparagraph b of the third paragraph of section 125.0.1R3 in respect of the taxpayer’s interest in the obligation exceeds the amount determined in accordance with subparagraph a of that paragraph in respect of the taxpayer’s interest in the obligation, is deemed to be interest paid or payable in respect of the year by the taxpayer in respect of the obligation.

s. 125.0.1R4; O.C. 1454-99, s. 10; O.C. 134-2009, s. 1.

125.0.2R1.  For the purposes of subparagraph a of the first paragraph of section 125.0.2 of the Act, where at any time in a taxation year of a taxpayer an indexed debt obligation is an obligation of the taxpayer, the amount that would be determined in accordance with subparagraph a of the second paragraph of section 125.0.1R3 in respect of the taxpayer for the year if, at each time at which the obligation is an obligation of the taxpayer, the taxpayer were the holder of the obligation and not the debtor under the obligation, is deemed to be interest payable in respect of the year by the taxpayer in respect of the obligation.

s. 125.0.2R1; O.C. 1454-99, s. 10; O.C. 134-2009, s. 1.

125.0.2R2.  For the purposes of subparagraph b of the first paragraph of section 125.0.2 of the Act, where at any time in a taxation year of a taxpayer an indexed debt obligation is an obligation of the taxpayer, the amount that would be determined in accordance with section 125.0.1R4 in respect of the taxpayer for the year if, at each time at which the obligation is an obligation of the taxpayer, the taxpayer were the holder of the obligation and not the debtor under the obligation, is deemed to be interest received or receivable by the taxpayer in the year in respect of the obligation.

s. 125.0.2R2; O.C. 1454-99, s. 10; O.C. 134-2009, s. 1.

CHAPTER  X
LEASING PROPERTIES

c. III.1O.C. 366-94, s. 3O.C. 134-2009, s. 1.

125.1R1.  For the purposes of section 125.1 of the Act, the following properties are prescribed:

  (a)      an exempt property, within the meaning assigned to that expression by the first paragraph of section 130R71, other than a property leased before 3 February 1990 that is

  (i)    a truck or a tractor that is designed to be used on public highways and has a “gross vehicle weight rating” within the meaning of the Motor Vehicle Safety Regulations made under the Motor Vehicle Safety Act (S.C. 1993, c. 16) of at least 11,778 kg,

  (ii)    a trailer that is designed to be used on public highways and to be hauled, under normal operating conditions, by a truck or tractor described in subparagraph i, or

  (iii)    a railway car; and

  (b)      a property that is the subject of a lease, where the fair market value of the tangible property that is the subject of that lease, other than exempt property within the meaning assigned to that expression by the first paragraph of section 130R71, did not exceed, at the time the lease was entered into, $25,000.

s. 125.1R1; O.C. 366-94, s. 3; O.C. 35-96, s. 86; O.C. 134-2009, s. 1.

125.1R2.  For the purposes of paragraph d of section 125.1 of the Act, the rate of interest that is prescribed at any time is the rate equal to the rate that is determined for the month including that time pursuant to section 4302 of the Income Tax Regulations made under the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)).

s. 125.1R2; O.C. 366-94, s. 3; O.C. 35-96, s. 86; O.C. 134-2009, s. 1.

CHAPTER  XI
AMOUNT OWING BY A PERSON NOT RESIDENT IN CANADA

c. IVO.C. 1981-80, title V, c. IVO.C. 2456-80, s. 4R.R.Q., 1981, c. I-3, r. 1, title V, c. IVO.C. 1155-2004, s. 11O.C. 134-2009, s. 1.

127.6R1.  For the purposes of section 127.6 of the Act, the rate of interest prescribed, for any particular period, is the rate that corresponds to the rate determined, for that period, under subparagraph i of paragraph a of section 4301 of the Income Tax Regulations made under the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)).

s. 127.6R1; O.C. 1155-2004, s. 13; O.C. 134-2009, s. 1.

127.12R1.  For the purposes of section 127.12 of the Act, the prescribed tax is that referred to in Part XIII of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)).

s. 127.12R1; O.C. 1155-2004, s. 13; O.C. 134-2009, s. 1.

TITLE  XII
ALLOWANCES IN RESPECT OF CAPITAL COST

title VIO.C. 1981-80, title VIR.R.Q., 1981, c. I-3, r. 1, title VIO.C. 134-2009, s. 1.

CHAPTER  I
APPLICATION

c. IO.C. 1981-80, title VI, c. IR.R.Q., 1981, c. I-3, r. 1,title VI, c. IO.C. 134-2009, s. 1.

130R1.  The amounts that a taxpayer may deduct in computing the taxpayer’s income for a taxation year as allowances in respect of capital cost of property are those provided for by this Title and by the following provisions of Part XI of the Income Tax Regulations made under the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)):

  (a)      paragraphs d and n to q of subsection 1 of section 1100; and

  (b)      subsection 11 of section 1100 and subsections 12 and 13 of section 1102.

The amounts described in first paragraph are the prescribed amounts of the capital cost of property that a taxpayer may deduct in computing the taxpayer’s income under paragraph a of section 130 of the Act and under other special provisions of that Act.

s. 130R1; O.C. 1981-80, s. 130R1; R.R.Q., 1981, c. I-3, r. 1, s. 130R1; O.C. 1697-92, s. 5; O.C. 35-96, s. 86; O.C. 134-2009, s. 1.

CHAPTER  II
INTERPRETATION

c. IIO.C. 1981-80, title VI, c. IIO.C. 1983-80, s. 1O.C. 3926-80, s. 1O.C. 1535-81, s. 3R.R.Q., 1981, c. I-3, r. 1, title VI, c. IIO.C. 2962-82, s. 11O.C. 500-83, s. 11O.C. 2727-84, s. 2S.Q. 1984, c. 47, s. 216O.C. 2509-85, s. 2O.C. 2583-85, s. 3O.C. 615-88, s. 6O.C. 134-2009, s. 1.

130R2.  Where the taxpayer is an individual and the taxpayer’s income for the taxation year includes income from a business, the fiscal period of which does not coincide with the calendar year, in respect of the depreciable properties acquired for the purpose of gaining or producing income from the business, a reference in this Title to “the taxation year” is deemed to be a reference to the fiscal period of the business and a reference to “the end of the taxation year” is deemed to be a reference to the end of the fiscal period of the business.

s. 130R2; O.C. 1981-80, s. 130R2; O.C. 1983-80, s. 1; O.C. 3926-80, s. 1; O.C. 1535-81, s. 3; R.R.Q., 1981, c. I-3, r. 1, s. 130R2; O.C. 2962-82, s. 11; O.C. 500-83, s. 11; O.C. 2727-84, s. 2; S.Q. 1984, c. 47, s. 216; O.C. 2509-85, s. 2; O.C. 2583-85, s. 3; O.C. 615-88, s. 6; O.C. 1666-90, s. 3; O.C. 1114-92, s. 10; O.C. 1697-92, s. 6; O.C. 1539-93, s. 5; S.Q. 1994, c. 21, s. 50; O.C. 216-95; O.C. 35-96, s. 6; O.C. 1631-96, s. 1; O.C. 1707-97, s. 18; O.C. 1466-98, s. 20; O.C. 1454-99, s. 11; O.C. 1463-2001, s. 36; O.C. 1470-2002, s. 12; O.C. 1282-2003, s. 15; O.C. 1249-2005, s. 2; O.C. 1149-2006, s. 5; O.C. 1116-2007, s. 6; O.C. 134-2009, s. 1.

130R3.  In this Title and Schedule B referred to therein, unless the context indicates otherwise,

“bitumen development phase” of a taxpayer's oil sands project means a development phase that expands the oil sands project's capacity to extract and initially process tar sands to produce bitumen or a similar product;

“Canadian field processing” means

  (a)      the processing in Canada of raw natural gas at a field separation and dehydration facility;

  (b)      the processing in Canada of raw natural gas at a natural gas processing plant, to any stage that is not beyond the stage of natural gas that is acceptable to a common carrier of natural gas;

  (c)      the processing in Canada of hydrogen sulphide derived from raw natural gas to any stage that is not beyond the marketable sulphur stage;

  (d)      the processing in Canada of natural gas liquids, at a natural gas processing plant where the input is raw natural gas derived from a natural accumulation of natural gas, to any stage that is not beyond the marketable liquefied petroleum stage or its equivalent; or

  (e)      the processing in Canada of crude oil, other than heavy crude oil recovered from an oil or gas well or a tar sands deposit, recovered from a natural accumulation of petroleum to any stage that is not beyond the crude oil stage or its equivalent;

“Canadian film or video production” means a film or video production of a corporation, other than a Québec film production, in respect of which the Minister of Canadian Heritage has issued to the corporation, for the purposes of section 125.4 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)), a certificate that has not been revoked;

“certified feature film” has the meaning assigned by subsection 2 of section 1104 of the Income Tax Regulations made under the Income Tax Act;

“certified production” has the meaning assigned by subsection 2 of section 1104 of the Income Tax Regulations made under the Income Tax Act, but does not include a motion picture film or a video tape that is a certified Québec film or a Québec film production;

“certified Québec film” for a taxation year means a motion picture film or a video tape recognized as a Québec film by the Institut québécois du cinéma or the Société de développement des entreprises culturelles and in respect of which

  (a)      the Institut québécois du cinéma or the Société de développement des entreprises culturelles has issued a certificate that has not been revoked, certifying that it is a Québec film for which the work of scenery, filming or taping and editing began after 31 December 1982 and for which the principal taping or filming work began before the end of the taxation year but not later than 18 December 1990, unless it is a film or a tape described in subparagraph b or c of the fourth paragraph in this section, or was completed not later than 60 days after the end of the taxation year; and

  (b)      unless it is a film or a tape that would be described in section 726.4.7.2 of the Act if the references made therein to an individual read as references to a taxpayer, the ministère du Revenu made, not later than at the end of the taxation year during which the film or tape was acquired, an advance ruling confirming the rate of depreciation applicable in respect of the film or tape and, where applicable, the percentage indicated, applicable for an individual referred to in section 726.4.6 or 726.4.7 of the Act, in respect of the film or tape;

“completion” of a specified development phase of a taxpayer's oil sands project means the first attainment of a level of average output, attributable to the specified development phase and measured over a 60-day period, equal to at least 60% of the planned level of average daily output, as determined in paragraph b of the definition of “specified development phase”, in respect of that phase;

“computer software” includes system software and a right or licence to use computer software;

“data network infrastructure equipment” means network infrastructure equipment that controls, transfers, modulates or directs data, and that operates in support of telecommunications applications such as e-mail, instant messaging, audio- and video-over-Internet Protocol or Web browsing, Web searching and Web hosting, including data switches, multiplexers, routers, remote access servers, hubs, domain name servers and modems, but does not include

  (a)      network equipment, other than radio network equipment, that operates in support of telecommunications applications, if the bandwidth made available by that equipment to a single end-user of the network is 64 kbits/s or less in either direction;

  (b)      radio network equipment that operates in support of wireless telecommunications applications unless the equipment supports digital transmission on a radio channel;

  (c)      network equipment that operates in support of broadcast telecommunications applications and that is unidirectional;

  (d)      network equipment that is end-user equipment, including telephone sets, personal digital assistants and facsimile transmission devices;

  (e)      equipment that is described in subparagraph i of the first paragraph of Class 10 in Schedule B, subparagraph p of the second paragraph of that class or any of Classes 45, 50 and 52 in that schedule;

  (f)      wires or cables, or similar property; and

  (g)      structures;

“designated asset” in respect of a development phase of a taxpayer's oil sands project, means a property that is a building, a structure, machinery or equipment and is, or is an integral and substantial part of,

  (a)      in the case of a bitumen development phase,

  (i)    a crusher,

  (ii)    a froth treatment plant,

  (iii)    a primary separation unit,

  (iv)    a steam generation plant,

  (v)    a cogeneration plant, or

  (vi)    a water treatment plant; or

  (b)      in the case of an upgrading development phase,

  (i)    a gasifier unit,

  (ii)    a vacuum distillation unit,

  (iii)    a hydrocracker unit,

  (iv)    a hydrotreater unit,

  (v)    a hydroprocessor unit, or

  (vi)    a coker;

“designated costs of underground storage” for a designated taxpayer means the costs incurred by the taxpayer, after 11 December 1979, for development of a well, mine or other similar underground property for the purposes of storing petroleum, natural gas related hydrocarbons in Canada;

“development phase” of a taxpayer's oil sands project means the acquisition, construction, fabrication or installation of a group of assets, by or on behalf of the taxpayer, that may reasonably be considered to constitute a discrete expansion in the capacity of the oil sands project when complete, including the initiation of a new oil sands project;

“eligible non-residential building” means a taxpayer's building, other than a building that was used, or acquired for use, by any person or partnership before 19 March 2007, that is located in Canada, is included in Class 1 in Schedule B and is acquired by the taxpayer after 18 March 2007 to be used by the taxpayer, or a lessee of the taxpayer, for a non-residential use;

“gas or oil well equipment” includes equipment, structures and pipelines acquired to be used in a gas or oil field in the production therefrom of natural gas or crude oil, other than a well casing, and a pipeline acquired to be used solely for transmitting gas to a natural gas processing plant, but does not include

  (a)      equipment or structures acquired for the refining of oil or the processing of natural gas, including the separation therefrom of liquid hydrocarbons, sulphur or other joint products or by-products; or

  (b)      a pipeline for removal or for collection for immediate removal of natural gas or crude oil from a gas or oil field, except a pipeline acquired to be used solely for transmitting gas to a natural gas processing plant;

“general-purpose electronic data processing equipment” means electronic equipment that, in its operation, requires an internally stored computer program that

  (a)      is executed by the equipment;

  (b)      can be altered by the user of the equipment;

  (c)      instructs the equipment to read and select, alter or store data from an external medium such as a card, disk or tape; and

  (d)      depends upon the characteristics of the data being processed to determine the sequence of its execution;

“oil sands project” of a taxpayer means an undertaking by the taxpayer for the extraction of tar sands from a mineral resource owned by the taxpayer, which undertaking may include the processing of the tar sands to a stage that is not beyond the crude oil stage or its equivalent;

“oil sands property” of a taxpayer means property acquired by the taxpayer for the purpose of earning income from an oil sands project of the taxpayer;

“ore” includes any ore from a mineral resource that has been processed to any stage that is prior to the prime metal stage or its equivalent;

“overburden removal cost” of a taxpayer means any expense incurred by the taxpayer in clearing or removing overburden from a mine in Canada that the taxpayer operates or owns, to the extent that the expense

  (a)      is incurred between 16 November 1978 and 1 January 1988 and after the mine has come into production in reasonable commercial quantities;

  (b)      has not been deducted by the taxpayer in computing the taxpayer’s income at the end of the taxation year during which it was incurred; and

  (c)      is not, in whole or in part, deductible otherwise than pursuant to paragraph a of section 130 of the Act in computing the income of the taxpayer for a taxation year subsequent to that in which it was incurred;

“preliminary work activity” means activity that is preliminary to the acquisition, construction, fabrication or installation, by or on behalf of a taxpayer, of designated assets in respect of the taxpayer's oil sands project including, without limiting the generality of the foregoing, the following activities:

  (a)      obtaining permits or regulatory approvals;

  (b)      performing design or engineering work;

  (c)      conducting feasibility studies;

  (d)      conducting environmental assessments;

  (e)      clearing or excavating land;

  (f)      building roads; and

  (g)      entering into contracts;

“Québec film production” means a motion picture film or a video tape recognized as a Québec film by the Société de développement des entreprises culturelles and in respect of which the Société has made a favourable advance ruling that is in force or has issued a certificate that has not been revoked, certifying that it is a Québec film for which the principal taping or filming work began after 18 December 1990 and before the end of the taxation year, or was completed not later than 60 days after the end of the taxation year;

“railway system” includes a railroad owned or operated by a common carrier, together with all buildings, rolling stock, equipment and other properties pertaining thereto, but does not include a tramway;

“specified development phase” of a taxpayer's oil sands project means a bitumen development phase or an upgrading development phase of the oil sands project which can reasonably be expected to result in a planned level of average daily output, where that output is bitumen or a similar product in the case of a bitumen development phase, or synthetic crude oil or a similar product in the case of an upgrading development phase, and in respect of which phase,

  (a)      not including any preliminary work activity, one or more designated assets was, before 19 March 2007, acquired by the taxpayer, or in the process of being constructed, fabricated or installed, by or on behalf of the taxpayer; and

  (b)      the planned level of average daily output is the lesser of,

  (i)    the level that was the demonstrated intention of the taxpayer as of 19 March 2007 to produce from the specified development phase, and

  (ii)    the maximum level of output associated with the design capacity, as of 19 March 2007, of the designated assets referred to in paragraph a;

“specified oil sands property” of a taxpayer means oil sands property, acquired by the taxpayer before 1 January 2012, the taxpayer's use of which is reasonably required

  (a)      for a specified development phase of an oil sands project of the taxpayer to reach completion; or

  (b)      as part of a bitumen development phase of an oil sands project of the taxpayer, to the extent that the output from the bitumen development phase is required for an upgrading development phase that is a specified development phase of the oil sands project to reach completion, and it is reasonable to conclude that all or substantially all of the output from the bitumen development phase will be so used, and where it was the demonstrated intention of the taxpayer as of 19 March 2007 to produce, from a mineral resource owned by the taxpayer, the bitumen feedstock required for the upgrading development phase to reach completion;

“specified temporary access road” means

  (a)      a temporary access road to an oil or gas well in Canada; or

  (b)      a temporary access road in Canada, the cost of which would be a Canadian exploration expense under paragraph c or c.1 of section 395 of the Act if section 396 of the Act were read without reference to its paragraphs c and c.1;

“system software” means a combination of computer programs and associated procedures, related technical documentation and data or a right or licence to use such a combination, where the combination

  (a)      performs compilation, assembly, mapping, management or processing of other programs;

  (b)      facilitates the functioning of a computer system by other programs;

  (c)      provides service or utility functions such as media conversion, sorting, merging, system accounting, performance measurement, system diagnostics or programming aids;

  (d)      provides general support functions such as data management, report generation or security control; or

  (e)      provides general capability to meet widespread categories of problem solving or processing requirements where the attributes of the work to be performed are introduced mainly in the form of parameters, constants or descriptors rather than in program logic;

“tar sands ore” means ore extracted from a deposit of bituminous sands or oil shales;

“telegraph system” includes the buildings, structures, general plant and communication and other equipment pertaining thereto;

“telephone system” includes the buildings, structure, general plant and communication and other equipment pertaining thereto;

“television commercial message” has the meaning assigned by subsection 2 of section 1104 of the Income Tax Regulations made under the Income Tax Act;

“tramway or trolley bus system” includes the buildings, structures, rolling stock and general plan and equipment pertaining thereto and, where omnibuses other than trolley buses are operated in connection therewith, includes the properties pertaining to those operations;

“upgrading development phase” of a taxpayer's oil sands project means a development phase that expands the oil sands project's capacity to process bitumen or a similar feedstock, all or substantially all of which is from a mineral resource owned by the taxpayer, to the crude oil stage or its equivalent.

In the definition of “certified Québec film” in the first paragraph, for the taxation year concerned, “certified Québec film” does not include a motion picture film or a video tape for which, unless it is a film or a tape described in subparagraph b or c of the fourth paragraph, the principal taping or filming work began after 18 December 1990, or that is acquired

  (a)      after the first day of its use for commercial purposes or the first anniversary of the day on which the principal filming or taping work was completed, whichever is earlier;

  (b)      from a person to whom the purchaser did not pay cash before the end of the year in an amount at least equal to 5% of the capital cost to the purchaser of the film or the video tape at that time;

  (c)      from a person to whom the purchaser gave in total or partial payment for the film or the video tape a bond, debenture, bill, note, hypothecary claim, mortgage or any other similar security under which an amount was payable after the fourth year following the taxation year during which the film or the video tape was purchased;

  (d)      from a person not resident in Canada; or

  (e)      unless it is a film or a tape that would be described in section 726.4.7.2 of the Act if the references made therein to an individual read as references made to a taxpayer, by a taxpayer or partnership whose financial commitment in the film or tape represents not more than 30% of the capital cost of the film or tape for the taxpayer or partnership, whichever applies.

In subparagraph e of the second paragraph, the expression “financial commitment” of a taxpayer or partnership in a motion picture film or video tape means the amount that would be determined for the taxpayer or partnership in respect of the film or tape under section 726.4.7.4 of the Act if the references made in that section to a certified Québec film were read as references made to the motion picture film or video tape and if the references made therein to an investor who is an individual likewise included an investor that is a corporation.

In the definition of “Québec film production” in the first paragraph, for the taxation year referred to in that definition, “Québec film production” does not include a motion picture or a video tape

  (a)      for which the principal taping or filming work began before 19 December 1990;

  (b)      for which the principal taping or filming work began after 18 December 1990 and was completed not later than 31 December 1991 and in respect of which the funds for its production were obtained from an individual or a partnership, as the case may be, not later than 28 February 1991;

  (c)      that is referred to in paragraph b of section 726.4.7.2 of the Act; or

  (d)      that is acquired

  (i)    after the first day it is used for commercial purposes or the first anniversary of the day on which the principal taping or filming work is completed, whichever is earlier,

  (ii)    from a person to whom the purchaser does not pay in cash before the end of the year at least 5% of the capital cost to the purchaser of the film or the video tape at that time,

  (iii)    from a person to whom the purchaser issues in payment or part payment of the film or the video tape, a bond, debenture, bill, note, hypothecary claim, mortgage or similar security under which an amount is payable after the fourth year following the taxation year during which the film or the video tape is acquired, or

  (iv)    from a person not resident in Canada.

For the purposes of paragraphs b to d of the definition of “Canadian field processing” in the first paragraph,

  (a)      gas is not considered to cease to be raw natural gas solely because of its processing in a field separation and dehydration facility until it is received by a common carrier of natural gas; and

  (b)      where all or part of a natural gas processing plant is devoted primarily to the recovery of ethane, the plant, or the part of the plant, as the case may be, is considered not to be a natural gas processing plant.

s. 130R2; O.C. 1981-80, s. 130R2; O.C. 1983-80, s. 1; O.C. 3926-80, s. 1; O.C. 1535-81, s. 3; R.R.Q., 1981, c. I-3, r. 1, s. 130R2; O.C. 2962-82, s. 11; O.C. 500-83, s. 11; O.C. 2727-84, s. 2; S.Q. 1984 c. 47, s. 216; O.C. 2509-85, s. 2; O.C. 2583-85, s. 3; O.C. 615-88, s. 6; O.C. 1666-90, s. 3; O.C. 1114-92, s. 10; O.C. 1697-92, s. 6; O.C. 1539-93, s. 5; S.Q. 1994 c. 21, s. 50; O.C. 216-95; O.C. 35-96, s. 6; O.C. 1631-96, s. 1; O.C. 1707-97, s. 18; O.C. 1466-98, s. 20; O.C. 1454-99, s. 11; O.C. 1463-2001, s. 36; O.C. 1470-2002, s. 12; O.C. 1282-2003, s. 15; O.C. 1249-2005, s. 2; O.C. 1149-2006, s. 5; O.C. 1116-2007, s. 6; O.C. 134-2009, s. 1; O.C. 1176-2010, s. 6; O.C. 390-2012, s. 9.

130R4.  For the purposes of sections 130R109 and 130R110, “revenue guarantee” means a contract or other arrangement entitling a taxpayer to receive a minimum rental revenue from a certified feature film, a certified production, a certified Québec film or a Québec film production, or other fixed revenue in respect of a right to the use of such property.

s. 130R2; O.C. 1981-80, s. 130R2; O.C. 1983-80, s. 1; O.C. 3926-80, s. 1; O.C. 1535-81, s. 3; R.R.Q., 1981, c. I-3, r. 1, s. 130R2; O.C. 2962-82, s. 11; O.C. 500-83, s. 11; O.C. 2727-84, s. 2; S.Q. 1984, c. 47, s. 216; O.C. 2509-85, s. 2; O.C. 2583-85, s. 3; O.C. 615-88, s. 6; O.C. 1666-90, s. 3; O.C. 1114-92, s. 10; O.C. 1697-92, s. 6; O.C. 1539-93, s. 5; S.Q. 1994, c. 21, s. 50; O.C. 216-95; O.C. 35-96, s. 6; O.C. 1631-96, s. 1; O.C. 1707-97, s. 18; O.C. 1466-98, s. 20; O.C. 1454-99, s. 11; O.C. 1463-2001, s. 36; O.C. 1470-2002, s. 12; O.C. 1282-2003, s. 15; O.C. 1249-2005, s. 2; O.C. 1149-2006, s. 5; O.C. 1116-2007, s. 6; O.C. 134-2009, s. 1.

130R5.  In this Title and Schedule B referred to therein, unless the provisions of section 130R6 indicates otherwise,

“industrial mineral mine” includes a peat bog or peat deposit but does not include a mineral resource; and

“mineral” includes peat.

s. 130R2; O.C. 1981-80, s. 130R2; O.C. 1983-80, s. 1; O.C. 3926-80, s. 1; O.C. 1535-81, s. 3; R.R.Q., 1981, c. I-3, r. 1, s. 130R2; O.C. 2962-82, s. 11; O.C. 500-83, s. 11; O.C. 2727-84, s. 2; S.Q. 1984, c. 47, s. 216; O.C. 2509-85, s. 2; O.C. 2583-85, s. 3; O.C. 615-88, s. 6; O.C. 1666-90, s. 3; O.C. 1114-92, s. 10; O.C. 1697-92, s. 6; O.C. 1539-93, s. 5; S.Q. 1994, c. 21, s. 50; O.C. 216-95; O.C. 35-96, s. 6; O.C. 1631-96, s. 1; O.C. 1707-97, s. 18; O.C. 1466-98, s. 20; O.C. 1454-99, s. 11; O.C. 1463-2001, s. 36; O.C. 1470-2002, s. 12; O.C. 1282-2003, s. 15; O.C. 1249-2005, s. 2; O.C. 1149-2006, s. 5; O.C. 1116-2007, s. 6; O.C. 134-2009, s. 1; O.C. 1303-2009, s. 2.

130R6.  In Class 10 in Schedule B, “mine“ includes a well for the extraction of material from a deposit of bituminous sands or oil shales or from a deposit of calcium chloride, sylvite or halite.

For the purposes of Class 10 in Schedule B, income from a mine includes income attributable to the processing of

  (a)      ore, other than iron ore or tar sands ore, from a mineral resource not owned by the taxpayer, to any stage that is not beyond the prime metal stage or its equivalent,

  (b)      iron ore from a mineral resource not owned by the taxpayer, to any stage that is not beyond the pellet stage or its equivalent,

  (c)      tar sands ore from a mineral resource not owned by the taxpayer, to any stage that is not beyond the crude oil stage or its equivalent, or

  (d)      material extracted by a well from a mineral resource not owned by the taxpayer that is a deposit of bituminous sands or oil shales to any stage that is not beyond the crude oil stage or its equivalent.

s. 130R2; O.C. 1981-80, s. 130R2; O.C. 1983-80, s. 1; O.C. 3926-80, s. 1; O.C. 1535-81, s. 3; R.R.Q., 1981, c. I-3, r. 1, s. 130R2; O.C. 2962-82, s. 11; O.C. 500-83, s. 11; O.C. 2727-84, s. 2; S.Q. 1984, c. 47, s. 216; O.C. 2509-85, s. 2; O.C. 2583-85, s. 3; O.C. 615-88, s. 6; O.C. 1666-90, s. 3; O.C. 1114-92, s. 10; O.C. 1697-92, s. 6; O.C. 1539-93, s. 5; S.Q. 1994, c. 21, s. 50; O.C. 216-95; O.C. 35-96, s. 6; O.C. 1631-96, s. 1; O.C. 1707-97, s. 18; O.C. 1466-98, s. 20; O.C. 1454-99, s. 11; O.C. 1463-2001, s. 36; O.C. 1470-2002, s. 12; O.C. 1282-2003, s. 15; O.C. 1249-2005, s. 2; O.C. 1149-2006, s. 5; O.C. 1116-2007, s. 6; O.C. 134-2009, s. 1.

130R7.  For the purposes of sections 1R5, 130R66 to 130R69.2, 130R143, 130R144, 130R169 to 130R172.2 and Classes 12, 28, 41 and 41.1 in Schedule B,

  (a)      “mine” includes a well for the extraction of material from a deposit of bituminous sands or oil shales or from a deposit of calcium chloride, sylvite or halite, and a pit for the extraction of kaolin or tar sands ore, but does not include

  (i)    an oil or gas well, or

  (ii)    a sand pit, gravel pit, clay pit, shale pit, peat bog, deposit of peat or a stone quarry, other than a deposit of bituminous sands or oil shales or a kaolin pit;

  (b)      all wells of a taxpayer for the extraction of material from one or more deposits of calcium chloride, sylvite or halite, the material produced from which is sent to the same plant for processing, are deemed to be one mine of the taxpayer;

  (c)      all wells of a taxpayer for the extraction of material from a deposit of bituminous sands or oil shales that may reasonably be considered to constitute one project, are deemed to be one mine of the taxpayer.

For the purposes of subparagraph a of the first paragraph, “stone quarry” includes a mine producing dimension stone or crushed rock for use as aggregates or for other construction purposes.

s. 130R2; O.C. 1981-80, s. 130R2; O.C. 1983-80, s. 1; O.C. 3926-80, s. 1; O.C. 1535-81, s. 3; R.R.Q., 1981, c. I-3, r. 1, s. 130R2; O.C. 2962-82, s. 11; O.C. 500-83, s. 11; O.C. 2727-84, s. 2; S.Q. 1984, c. 47, s. 216; O.C. 2509-85, s. 2; O.C. 2583-85, s. 3; O.C. 615-88, s. 6; O.C. 1666-90, s. 3; O.C. 1114-92, s. 10; O.C. 1697-92, s. 6; O.C. 1539-93, s. 5; S.Q. 1994, c. 21, s. 50; O.C. 216-95; O.C. 35-96, s. 6; O.C. 1631-96, s. 1; O.C. 1707-97, s. 18; O.C. 1466-98, s. 20; O.C. 1454-99, s. 11; O.C. 1463-2001, s. 36; O.C. 1470-2002, s. 12; O.C. 1282-2003, s. 15; O.C. 1249-2005, s. 2; O.C. 1149-2006, s. 5; O.C. 1116-2007, s. 6; O.C. 134-2009, s. 1; O.C. 390-2012, s. 10.

130R8.  For the purposes of sections 130R66 to 130R69.2, 130R169 to 130R172.2 and Classes 10, 28, 41 and 41.1 in Schedule B, a taxpayer's income from a mine includes income that may reasonably be attributed to

  (a)      the processing by the taxpayer of

  (i)    ore, other than iron ore or tar sands ore, all or substantially all of which is from a mineral resource owned by the taxpayer to any stage that is not beyond the prime metal stage or its equivalent,

  (ii)    iron ore all or substantially all of which is from a mineral resource owned by the taxpayer to any stage that is not beyond the pellet stage or its equivalent,

  (iii)    tar sands ore all or substantially all of which is from a mineral resource owned by the taxpayer to any stage that is not beyond the crude oil stage or its equivalent, or

  (iv)    material extracted by a well, all or substantially all of which is from a deposit of bituminous sands or oil shales owned by the taxpayer, to any stage that is not beyond the crude oil stage or its equivalent;

  (b)      the production by the taxpayer of material from a deposit of bituminous sands or oil shales; and

  (c)      the transportation by the taxpayer of ore that would be referred to in any of subparagraphs i to iii of paragraph a if that subparagraph were read without reference to “all or substantially all of which is” and that has been processed by the taxpayer to any stage that is not beyond the stage mentioned in any of those subparagraphs i to iii, as the case may be, to the extent that such transportation is effected through the use of property of the taxpayer that is included in Class 10 in Schedule B because of subparagraph m of the second paragraph of that class or that would be so included if that subparagraph m were read without reference to “property included in Class 28 or” and if subparagraph i of subparagraph e of the first paragraph of Class 41 in that schedule were read without the reference therein to that subparagraph m.

s. 130R2; O.C. 1981-80, s. 130R2; O.C. 1983-80, s. 1; O.C. 3926-80, s. 1; O.C. 1535-81, s. 3; R.R.Q., 1981, c. I-3, r. 1, s. 130R2; O.C. 2962-82, s. 11; O.C. 500-83, s. 11; O.C. 2727-84, s. 2; S.Q. 1984, c. 47, s. 216; O.C. 2509-85, s. 2; O.C. 2583-85, s. 3; O.C. 615-88, s. 6; O.C. 1666-90, s. 3; O.C. 1114-92, s. 10; O.C. 1697-92, s. 6; O.C. 1539-93, s. 5; S.Q. 1994, c. 21, s. 50; O.C. 216-95; O.C. 35-96, s. 6; O.C. 1631-96, s. 1; O.C. 1707-97, s. 18; O.C. 1466-98, s. 20; O.C. 1454-99, s. 11; O.C. 1463-2001, s. 36; O.C. 1470-2002, s. 12; O.C. 1282-2003, s. 15; O.C. 1249-2005, s. 2; O.C. 1149-2006, s. 5; O.C. 1116-2007, s. 6; O.C. 134-2009, s. 1; O.C. 390-2012, s. 11.

130R9.  For the purposes of Classes 41 and 41.1 in Schedule B, gross revenue from a mine includes

  (a)      revenue that may reasonably be attributed to the processing by the taxpayer of

  (i)    ore, other than iron ore or tar sands ore, from a mineral resource owned by the taxpayer to any stage that is not beyond the prime metal stage or its equivalent,

  (ii)    iron ore from a mineral resource owned by the taxpayer to any stage that is not beyond the pellet stage or its equivalent,

  (iii)    tar sands ore from a mineral resource owned by the taxpayer to any stage that is not beyond the crude oil stage or its equivalent, or

  (iv)    material extracted by a well from a mineral resource owned by the taxpayer that is a deposit of bituminous sands or oil shales to any stage that is not beyond the crude oil stage or its equivalent;

  (b)      the amount by which any revenue that may reasonably be attributed to the processing by the taxpayer of the following ore or material exceeds the cost to the taxpayer of the ore or material processed:

  (i)    ore, other than iron ore or tar sands ore, from a mineral resource not owned by the taxpayer, to any stage that is not beyond the prime metal stage or its equivalent,

  (ii)    iron ore from a mineral resource not owned by the taxpayer to any stage that is not beyond the pellet stage or its equivalent,

  (iii)    tar sands ore from a mineral resource not owned by the taxpayer to any stage that is not beyond the crude oil stage or its equivalent, and

  (iv)    material extracted by a well from a mineral resource not owned by the taxpayer that is a deposit of bituminous sands or oil shales to any stage that is not beyond the crude oil stage or its equivalent; and

  (c)      revenue that may reasonably be attributed to the production by the taxpayer of material from a deposit of bituminous sands or oil shales.

For the purposes of the first paragraph, gross revenue from a mine does not include revenue that may reasonably be attributed to the addition of diluent, for the purpose of transportation, to material extracted from a deposit of bituminous sands or oil shales.

s. 130R2; O.C. 1981-80, s. 130R2; O.C. 1983-80, s. 1; O.C. 3926-80, s. 1; O.C. 1535-81, s. 3; R.R.Q., 1981, c. I-3, r. 1, s. 130R2; O.C. 2962-82, s. 11; O.C. 500-83, s. 11; O.C. 2727-84, s. 2; S.Q. 1984, c. 47, s. 216; O.C. 2509-85, s. 2; O.C. 2583-85, s. 3; O.C. 615-88, s. 6; O.C. 1666-90, s. 3; O.C. 1114-92, s. 10; O.C. 1697-92, s. 6; O.C. 1539-93, s. 5; S.Q. 1994, c. 21, s. 50; O.C. 216-95; O.C. 35-96, s. 6; O.C. 1631-96, s. 1; O.C. 1707-97, s. 18; O.C. 1466-98, s. 20; O.C. 1454-99, s. 11; O.C. 1463-2001, s. 36; O.C. 1470-2002, s. 12; O.C. 1282-2003, s. 15; O.C. 1249-2005, s. 2; O.C. 1149-2006, s. 5; O.C. 1116-2007, s. 6; O.C. 134-2009, s. 1; O.C. 390-2012, s. 12.

130R10.  In subparagraph t of the first paragraph of Class 12 in Schedule B,

“incorporeal property” means a patent, a licence, a permit, know-how, a commercial secret or other similar property constituting knowledge, but does not include a trade mark, in industrial design, a copyright or other similar property constituting the expression of knowledge;

“technology transfer” means the transmission to a taxpayer of knowledge in the form of know-how, techniques, processes or formulas, with a view to enabling the taxpayer to implement an innovation or invention concerning the taxpayer’s business.

For the purposes of subparagraph t of the first paragraph of Class 12 in Schedule B, an incorporeal property is deemed to be used only in Québec where it is used as part of the process of implementing an innovation or invention and where the efforts to implement that innovation or invention are made only in Québec.

s. 130R2; O.C. 1981-80, s. 130R2; O.C. 1983-80, s. 1; O.C. 3926-80, s. 1; O.C. 1535-81, s. 3; R.R.Q., 1981, c. I-3, r. 1, s. 130R2; O.C. 2962-82, s. 11; O.C. 500-83, s. 11; O.C. 2727-84, s. 2; S.Q. 1984, c. 47, s. 216; O.C. 2509-85, s. 2; O.C. 2583-85, s. 3; O.C. 615-88, s. 6; O.C. 1666-90, s. 3; O.C. 1114-92, s. 10; O.C. 1697-92, s. 6; O.C. 1539-93, s. 5; S.Q. 1994, c. 21, s. 50; O.C. 216-95; O.C. 35-96, s. 6; O.C. 1631-96, s. 1; O.C. 1707-97, s. 18; O.C. 1466-98, s. 20; O.C. 1454-99, s. 11; O.C. 1463-2001, s. 36; O.C. 1470-2002, s. 12; O.C. 1282-2003, s. 15; O.C. 1249-2005, s. 2; O.C. 1149-2006, s. 5; O.C. 1116-2007, s. 6; O.C. 134-2009, s. 1.

130R11.  For the purposes of section 130R98 and of paragraphs b of section 130R123, b of section 130R149 and a of section 130R160, where, but for this section, a taxpayer would be considered to be dealing not at arm’s length with another person as a result of a transaction or series of transactions the principal purpose of which may reasonably be considered to have been to cause one or more of sections 130R98, 130R124, 130R148 and 130R160 to apply in respect of the acquisition of a property, the taxpayer is deemed to be dealing at arm’s length with the other person in respect of the acquisition of that property.

s. 130R2; O.C. 1981-80, s. 130R2; O.C. 1983-80, s. 1; O.C. 3926-80, s. 1; O.C. 1535-81, s. 3; R.R.Q., 1981, c. I-3, r. 1, s. 130R2; O.C. 2962-82, s. 11; O.C. 500-83, s. 11; O.C. 2727-84, s. 2; S.Q. 1984, c. 47, s. 216; O.C. 2509-85, s. 2; O.C. 2583-85, s. 3; O.C. 615-88, s. 6; O.C. 1666-90, s. 3; O.C. 1114-92, s. 10; O.C. 1697-92, s. 6; O.C. 1539-93, s. 5; S.Q. 1994, c. 21, s. 50; O.C. 216-95; O.C. 35-96, s. 6; O.C. 1631-96, s. 1; O.C. 1707-97, s. 18; O.C. 1466-98, s. 20; O.C. 1454-99, s. 11; O.C. 1463-2001, s. 36; O.C. 1470-2002, s. 12; O.C. 1282-2003, s. 15; O.C. 1249-2005, s. 2; O.C. 1149-2006, s. 5; O.C. 1116-2007, s. 6; O.C. 134-2009, s. 1.

130R12.  For the purposes of sections 130R23.1 and 130R52 and Class 29 in Schedule B, “manufacturing or processing” does not include

  (a)      farming or fishing;

  (b)      logging;

  (c)      construction;

  (d)      operating an oil or gas well or extracting petroleum or natural gas from a natural accumulation of petroleum or natural gas;

  (e)      extracting minerals from a mineral resource;

  (f)      processing of

  (i)    ore, other than iron ore or tar sands ore, from a mineral resource to any stage that is not beyond the prime metal stage or its equivalent,

  (ii)    iron ore from a mineral resource to any stage that is not beyond the pellet stage or its equivalent, or

  (iii)    tar sands ore from a mineral resource to any stage that is not beyond the crude oil stage or its equivalent;

  (g)      producing industrial minerals;

  (h)      producing or processing electrical energy or steam for sale;

  (i)      processing natural gas as part of the business of selling or distributing gas in the course of operating a public utility;

  (j)      processing heavy crude oil recovered from a natural reservoir in Canada, to a stage that is not beyond the crude oil stage or its equivalent; or

  (k)      Canadian field processing.

s. 130R2; O.C. 1981-80, s. 130R2; O.C. 1983-80, s. 1; O.C. 3926-80, s. 1; O.C. 1535-81, s. 3; R.R.Q., 1981, c. I-3, r. 1, s. 130R2; O.C. 2962-82, s. 11; O.C. 500-83, s. 11; O.C. 2727-84, s. 2; S.Q. 1984, c. 47, s. 216; O.C. 2509-85, s. 2; O.C. 2583-85, s. 3; O.C. 615-88, s. 6; O.C. 1666-90, s. 3; O.C. 1114-92, s. 10; O.C. 1697-92, s. 6; O.C. 1539-93, s. 5; S.Q. 1994, c. 21, s. 50; O.C. 216-95; O.C. 35-96, s. 6; O.C. 1631-96, s. 1; O.C. 1707-97, s. 18; O.C. 1466-98, s. 20; O.C. 1454-99, s. 11; O.C. 1463-2001, s. 36; O.C. 1470-2002, s. 12; O.C. 1282-2003, s. 15; O.C. 1249-2005, s. 2; O.C. 1149-2006, s. 5; O.C. 1116-2007, s. 6; O.C. 134-2009, s. 1; O.C. 1176-2010, s. 7.

130R13.  For the purposes of subparagraph d of the first paragraph of Class 34 in Schedule B and the second paragraph of that class, the Minister may revoke the certificate granted if inaccurate information was provided or if the taxpayer does not comply with the plan described in subparagraph d, and a certificate so revoked is null and void from the date on which it was issued.

s. 130R2; O.C. 1981-80, s. 130R2; O.C. 1983-80, s. 1; O.C. 3926-80, s. 1; O.C. 1535-81, s. 3; R.R.Q., 1981, c. I-3, r. 1, s. 130R2; O.C. 2962-82, s. 11; O.C. 500-83, s. 11; O.C. 2727-84, s. 2; S.Q. 1984, c. 47, s. 216; O.C. 2509-85, s. 2; O.C. 2583-85, s. 3; O.C. 615-88, s. 6; O.C. 1666-90, s. 3; O.C. 1114-92, s. 10; O.C. 1697-92, s. 6; O.C. 1539-93, s. 5; S.Q. 1994, c. 21, s. 50; O.C. 216-95; O.C. 35-96, s. 6; O.C. 1631-96, s. 1; O.C. 1707-97, s. 18; O.C. 1466-98, s. 20; O.C. 1454-99, s. 11; O.C. 1463-2001, s. 36; O.C. 1470-2002, s. 12; O.C. 1282-2003, s. 15; O.C. 1249-2005, s. 2; O.C. 1149-2006, s. 5; O.C. 1116-2007, s. 6; O.C. 134-2009, s. 1.

130R14.  In Class 37 in Schedule B, an “amusement park” means a park open to the public where there are sideshows, rides and permanent audiovisual shows.

s. 130R2; O.C. 1981-80, s. 130R2; O.C. 1983-80, s. 1; O.C. 3926-80, s. 1; O.C. 1535-81, s. 3; R.R.Q., 1981, c. I-3, r. 1, s. 130R2; O.C. 2962-82, s. 11; O.C. 500-83, s. 11; O.C. 2727-84, s. 2; S.Q. 1984, c. 47, s. 216; O.C. 2509-85, s. 2; O.C. 2583-85, s. 3; O.C. 615-88, s. 6; O.C. 1666-90, s. 3; O.C. 1114-92, s. 10; O.C. 1697-92, s. 6; O.C. 1539-93, s. 5; S.Q. 1994, c. 21, s. 50; O.C. 216-95; O.C. 35-96, s. 6; O.C. 1631-96, s. 1; O.C. 1707-97, s. 18; O.C. 1466-98, s. 20; O.C. 1454-99, s. 11; O.C. 1463-2001, s. 36; O.C. 1470-2002, s. 12; O.C. 1282-2003, s. 15; O.C. 1249-2005, s. 2; O.C. 1149-2006, s. 5; O.C. 1116-2007, s. 6; O.C. 134-2009, s. 1.

130R15.  For the purposes of this section, section 130R16 and Classes 43.1 and 43.2 in Schedule B,

“basic oxygen furnace gas” means the gas that is produced intermittently in a basic oxygen furnace of a steel mill by the chemical reaction of carbon in molten steel and pure oxygen;

“biogas” means the gas produced by the anaerobic digestion of organic waste that is food and animal waste, manure, plant residue, pulp and paper by-product, separated organics, sludge from an eligible sewage treatment facility or wood waste;

“bio-oil” means liquid fuel that is created from wood waste or plant residues using a thermo-chemical conversion process that takes place in the absence of oxygen;

“blast furnace gas” means the gas produced in a blast furnace of a steel mill, by the chemical reaction of carbon in the form of coke, coal or natural gas, the oxygen in air and iron ore;

“digester gas” means a mixture of gases that are produced from the decomposition of organic waste in a digester and that are extracted from an eligible sewage treatment facility;

“distribution equipment” means equipment, other than transmission equipment, used to distribute electrical energy generated by electrical generating equipment;

“district energy equipment” means property that is part of a district energy system and that consists of pipes or pumps used to collect and distribute an energy transfer medium, meters, control equipment, chillers and heat exchangers that are attached to the main distribution line of a district energy system, but does not include

  (a)      property used to distribute water that is for consumption, disposal or treatment; or

  (b)      property that is part of the internal heating or cooling system of a building;

“district energy system” means a system that is used primarily to provide heating or cooling by continuously circulating, from a central generation unit to one or more buildings through a system of interconnected pipes, an energy transfer medium that is heated or cooled using thermal energy;

“eligible landfill site” means a landfill site that is situated in Canada, or a former landfill site that is situated in Canada, and, if a permit or licence in respect of the site is or was required under any law of Canada or of a province, for which the permit or licence has been issued;

“eligible sewage treatment facility” means a sewage treatment facility that is situated in Canada and for which a permit or licence is issued under any law of Canada or of a province;

“eligible waste fuel” means biogas, bio-oil, digester gas, landfill gas, municipal waste, plant residue, pulp and paper waste and wood waste;

“eligible waste management facility” means a waste management facility that is situated in Canada and for which a permit or licence is issued under any law of Canada or of a province;

“enhanced combined cycle system” means an electrical generating system in which thermal waste from one or more natural gas compressor systems is recovered and used to contribute at least 20% of the energy input of a combined cycle process in order to enhance the generation of electricity, but does not include the natural gas compressor systems;

“food and animal waste” means organic waste that is disposed of in accordance with the laws of Canada or a province and that is

  (a)      generated during the preparation or processing of food or beverage for human or animal consumption;

  (b)      food or beverage that is no longer fit for human or animal consumption; or

  (c)      animal remains;

“fossil fuel” means a fuel that is petroleum, natural gas or related hydrocarbons, basic oxygen furnace gas, blast furnace gas, coal, coal gas, coke, coke oven gas, lignite or peat;

“landfill gas” means a mixture of gases that are produced from the decomposition of organic waste and that are extracted from an eligible landfill site;

“municipal waste” means the combustible portion of waste material, other than waste material that is considered to be toxic or hazardous waste pursuant to any law of Canada or of a province, that is generated in Canada and that is accepted at an eligible landfill site or an eligible waste management facility and that, when burned to generate energy, emits only those fluids or other emissions that are in compliance with the laws of Canada or of a province;

“plant residue” means residue of plants, other than wood waste and waste that no longer has the chemical properties of the plants of which it is a residue, that would otherwise be waste material and that is used

  (a)      in a system that converts biomass into bio-oil or biogas; or

  (b)      as an eligible waste fuel;

“producer gas” means fuel the composition of which, excluding its water content, is all or substantially all non-condensable gases that is generated primarily from eligible waste fuel using a thermo-chemical conversion process and that is not generated using any fuels other than eligible waste fuel or fossil fuel;

“pulp and paper by-product” means tall oil soaps and crude tall oil that are produced as by-products of the processing of wood into pulp or paper and the by-product of a pulp or paper plant's effluent treatment or its de-inking processes;

“pulp and paper waste” means

  (a)      tall oil soaps, crude tall oil and turpentine that are produced as by-products of the processing of wood into pulp or paper; and

  (b)      the by-product of a pulp or paper plant's effluent treatment, or its de-inking processes, if that by-product has a solid content of at least 40% before combustion;

“separated organics” means organic waste, other than waste that is considered to be toxic or hazardous waste under any law of Canada or a province, that could, but for its use in a system that converts biomass into biogas, be disposed of in an eligible waste management facility or eligible landfill site;

“solution gas” means a fossil fuel that is gas that would otherwise be flared and has been extracted from a solution of gas and produced oil;

“spent pulping liquor” means the by-product of a chemical process of transforming wood into pulp, consisting of wood residue and pulping agents;

“thermal waste” means waste heat energy extracted from a distinct point of rejection in an industrial process that would otherwise

  (a)      be vented to the atmosphere or transferred to a liquid; and

  (b)      not be used for a useful purpose;

“transmission equipment” means equipment used to transmit more than 75% of the annual electrical energy generated by electrical generating equipment, but does not include a building;

“wood waste” includes scrap wood, sawdust, wood chips, bark, limbs, saw-ends and hog fuel, but does not include spent pulping liquor and any waste that no longer has the physical or chemical properties of wood.

s. 130R2; O.C. 1981-80, s. 130R2; O.C. 1983-80, s. 1; O.C. 3926-80, s. 1; O.C. 1535-81, s. 3; R.R.Q., 1981, c. I-3, r. 1, s. 130R2; O.C. 2962-82, s. 11; O.C. 500-83, s. 11; O.C. 2727-84, s. 2; S.Q. 1984, c. 47, s. 216; O.C. 2509-85, s. 2; O.C. 2583-85, s. 3; O.C. 615-88, s. 6; O.C. 1666-90, s. 3; O.C. 1114-92, s. 10; O.C. 1697-92, s. 6; O.C. 1539-93, s. 5; S.Q. 1994, c. 21, s. 50; O.C. 216-95; O.C. 35-96, s. 6; O.C. 1631-96, s. 1; O.C. 1707-97, s. 18; O.C. 1466-98, s. 20; O.C. 1454-99, s. 11; O.C. 1463-2001, s. 36; O.C. 1470-2002, s. 12; O.C. 1282-2003, s. 15; O.C. 1249-2005, s. 2; O.C. 1149-2006, s. 5; O.C. 1116-2007, s. 6; O.C. 134-2009, s. 1; O.C. 1176-2010, s. 8; O.C. 390-2012, s. 13; O.C. 701-2013, s. 7; O.C. 229-2014, s. 3; O.C. 1105-2014, s. 3; O.C. 66-2016, s. 2.

130R16.  Where property of a taxpayer is not operating in the manner required by subparagraph c of the first paragraph of Class 43.1 in Schedule B, as it reads having regard to, if applicable, paragraph a of Class 43.2 in that schedule, solely because of a deficiency, failing or shutdown, that is beyond the control of the taxpayer, of the system of which it is part and that previously operated in the manner required by that subparagraph, that property is deemed, for the purposes of that subparagraph, to be operating in the manner required under that subparagraph during the period of the deficiency, failing or shutdown, if the taxpayer makes all reasonable efforts to rectify the circumstances within a reasonable time.

For the purposes of the first paragraph, a taxpayer’s system referred to in that paragraph that has at any particular time operated in the manner required by subparagraph c of the first paragraph of Class 43.1 in Schedule B, as it reads having regard to, if applicable, paragraph a of Class 43.2 in that schedule, includes at any time after the particular time a property of another person or partnership if

  (a)      the property would reasonably be considered to be part of the taxpayer’s system were the property owned by the taxpayer;

  (b)      the property utilizes steam obtained from the taxpayer’s system primarily in an industrial process, other than the generation of electrical energy;

  (c)      the operation of the property is necessary for the taxpayer’s system to operate in the manner required by subparagraph c of the first paragraph of Class 43.1 in Schedule B, as it reads having regard to, if applicable, paragraph a of Class 43.2 in that schedule; and

  (d)      at the time that the taxpayer’s system first became operational, the deficiency, failing or shutdown in the operation of the property could not reasonably have been anticipated by the taxpayer to occur within 5 years after that time.

For the purposes of the first paragraph, a district energy system is deemed to meet the requirements of subparagraph c of the first paragraph of Class 43.1 in Schedule B, as it reads having regard to, if applicable, paragraph a of Class 43.2 in that schedule, if the electrical cogeneration equipment that produces the thermal energy used by the system is deemed by the first paragraph to meet the requirements of that subparagraph c, as it reads having regard to, if applicable, paragraph a of Class 43.2 in that schedule.

A property that would otherwise be eligible for inclusion in Class 43.1 or Class 43.2 in Schedule B by a taxpayer is deemed not to be eligible for inclusion in either of those classes if

  (a)      the property is included in Class 43.1 in that Schedule because of subparagraph i of subparagraph c of the first paragraph of that class or is described in any of subparagraphs ix, x, xii, xiv, xv and xvii of subparagraph a of the second paragraph of Class 43.1 in that Schedule or in paragraph a of Class 43.2 in that Schedule; and

  (b)      at the time the property becomes available for use by the taxpayer, the taxpayer has not satisfied the requirements, applicable in respect of the property, of all environmental laws, by-laws and regulations of Canada, a province or a municipality in Canada, or of a public or municipal body performing a function of government in Canada.

s. 130R2; O.C. 1981-80, s. 130R2; O.C. 1983-80, s. 1; O.C. 3926-80, s. 1; O.C. 1535-81, s. 3; R.R.Q., 1981, c. I-3, r. 1, s. 130R2; O.C. 2962-82, s. 11; O.C. 500-83, s. 11; O.C. 2727-84, s. 2; S.Q. 1984, c. 47, s. 216; O.C. 2509-85, s. 2; O.C. 2583-85, s. 3; O.C. 615-88, s. 6; O.C. 1666-90, s. 3; O.C. 1114-92, s. 10; O.C. 1697-92, s. 6; O.C. 1539-93, s. 5; S.Q. 1994, c. 21, s. 50; O.C. 216-95; O.C. 35-96, s. 6; O.C. 1631-96, s. 1; O.C. 1707-97, s. 18; O.C. 1466-98, s. 20; O.C. 1454-99, s. 11; O.C. 1463-2001, s. 36; O.C. 1470-2002, s. 12; O.C. 1282-2003, s. 15; O.C. 1249-2005, s. 2; O.C. 1149-2006, s. 5; O.C. 1116-2007, s. 6; O.C. 134-2009, s. 1; O.C. 229-2014, s. 4; O.C. 66-2016, s. 3.

130R17.  Where a taxpayer acquired a property that is described in Class 43.1 in Schedule B in circumstances in which the fourth paragraph of that class applied,

  (a)      the portion of the property, determined by reference to capital cost, that does not exceed the capital cost of the property to the person from whom the property was acquired is included in that class; and

  (b)      the portion of the property, determined by reference to capital cost, that exceeds the capital cost of the property to the person from whom the property was acquired is not included in that class.

s. 130R2; O.C. 1981-80, s. 130R2; O.C. 1983-80, s. 1; O.C. 3926-80, s. 1; O.C. 1535-81, s. 3; R.R.Q., 1981, c. I-3, r. 1, s. 130R2; O.C. 2962-82, s. 11; O.C. 500-83, s. 11; O.C. 2727-84, s. 2; S.Q. 1984, c. 47, s. 216; O.C. 2509-85, s. 2; O.C. 2583-85, s. 3; O.C. 615-88, s. 6; O.C. 1666-90, s. 3; O.C. 1114-92, s. 10; O.C. 1697-92, s. 6; O.C. 1539-93, s. 5; S.Q. 1994, c. 21, s. 50; O.C. 216-95; O.C. 35-96, s. 6; O.C. 1631-96, s. 1; O.C. 1707-97, s. 18; O.C. 1466-98, s. 20; O.C. 1454-99, s. 11; O.C. 1463-2001, s. 36; O.C. 1470-2002, s. 12; O.C. 1282-2003, s. 15; O.C. 1249-2005, s. 2; O.C. 1149-2006, s. 5; O.C. 1116-2007, s. 6; O.C. 134-2009, s. 1.

130R18.  Where a taxpayer acquired a property that is described in Class 43.2 in Schedule B in circumstances in which the fourth paragraph of Class 43.1 in that schedule applied and the property was included in Class 43.2 of the person from whom the taxpayer acquired the property,

  (a)      the portion of the property, determined by reference to capital cost, that does not exceed the capital cost of the property to the person from whom the property was acquired is included in Class 43.2 in Schedule B; and

  (b)      the portion of the property, determined by reference to capital cost, that exceeds the capital cost of the property to the person from whom the property was acquired is not included in Class 43.1 or 43.2 in Schedule B.

s. 130R2; O.C. 1981-80, s. 130R2; O.C. 1983-80, s. 1; O.C. 3926-80, s. 1; O.C. 1535-81, s. 3; R.R.Q., 1981, c. I-3, r. 1, s. 130R2; O.C. 2962-82, s. 11; O.C. 500-83, s. 11; O.C. 2727-84, s. 2; S.Q. 1984, c. 47, s. 216; O.C. 2509-85, s. 2; O.C. 2583-85, s. 3; O.C. 615-88, s. 6; O.C. 1666-90, s. 3; O.C. 1114-92, s. 10; O.C. 1697-92, s. 6; O.C. 1539-93, s. 5; S.Q. 1994, c. 21, s. 50; O.C. 216-95; O.C. 35-96, s. 6; O.C. 1631-96, s. 1; O.C. 1707-97, s. 18; O.C. 1466-98, s. 20; O.C. 1454-99, s. 11; O.C. 1463-2001, s. 36; O.C. 1470-2002, s. 12; O.C. 1282-2003, s. 15; O.C. 1249-2005, s. 2; O.C. 1149-2006, s. 5; O.C. 1116-2007, s. 6; O.C. 134-2009, s. 1.

CHAPTER  III
CLASSES OF PROPERTY

c. IIIO.C. 1981-80, title VI, c. IIIO.C. 1983-80, s. 2R.R.Q., 1981, c. I-3, r. 1, title VI, c. IIIO.C. 2847-84, s. 1O.C. 134-2009, s. 1.

DIVISION  I
GENERAL ALLOWANCES

div. IO.C. 1981-80, title VI, c. III, div. IO.C. 1983-80, s. 2R.R.Q., 1981, c. I-3, r. 1, title VI, c. III, div. IO.C. 2847-84, s. 1O.C. 134-2009, s. 1.

130R19.  Subject to sections 130R21, 130R119 and 130R120, the allowance referred to in section 130R1 may not exceed, for a class of property mentioned in section 130R22, the amount obtained by applying the percentage determined in respect of that class in section 130R22 to the undepreciated capital cost of the property of the same class at the end of the taxation year for which the taxpayer claims such an allowance, before any deduction under this section for the year.

Where the class of property mentioned in section 130R22 includes an automobile acquired by the taxpayer after 18 April 1978 and before 18 June 1987 or after 17 June 1987 pursuant to an obligation in writing entered into before 18 June 1987, and the automobile is used exclusively for earning income, is not intended to be leased by the taxpayer to a person, where the principal business of the taxpayer is the leasing of automobiles to persons dealing with the taxpayer at arm’s length, and is not used under a permit for the transport of passengers for remuneration, the allowance under section 130R1 is respect of that class may not exceed the amount that would have been obtained under the first paragraph if the undepreciated capital cost of the property of the class, determined with reference to section 130R119 and before any deduction under this section for the year, had been reduced by the aggregate of

  (a)      the amount by which, in respect of each automobile, its capital cost exceeds $16,000; and

  (b)      50%, in respect of each automobile acquired during the taxation year, of its capital cost or $16,000, whichever is lesser.

s. 130R3; O.C. 1981-80, s. 130R3; O.C. 1983-80, s. 2; R.R.Q., 1981, c. I-3, r. 1, s. 130R3; O.C. 2847-84, s. 1; O.C. 1697-92, s. 7; O.C. 134-2009, s. 1.

130R20.  Subparagraph b of the second paragraph of section 130R19 does not apply where the taxpayer acquired the automobile in any of the circumstances set forth in paragraph a or b of section 130R123 if,

  (a)      the automobile was a depreciable property of the person from whom the taxpayer acquired it and belonged to that person without interruption for at least 364 days before the end of the taxation year of the taxpayer during which the taxpayer acquired the automobile, until the day of its acquisition by the taxpayer; or

  (b)      this section was applied in respect of the automobile for the purpose of determining the amount that the person from whom the taxpayer acquired the property was entitled to deduct under section 130R1.

s. 130R3.1; O.C. 2847-84, s. 1; O.C. 1697-92, s. 8; O.C. 134-2009, s. 1.

130R21.  The allowance under section 130R1 that a taxpayer may claim for a taxation year in respect of a class of property referred to in section 130R22 that includes an automobile, other than an automobile used under a permit for the transport of passengers for remuneration, that the taxpayer acquired before 18 June 1987, or after 17 June 1987 pursuant to an obligation in writing entered into before 18 June 1987, or an automobile that would have been such an automobile if the taxpayer had acquired it before 18 June 1987 and that is a passenger vehicle acquired during the taxpayer’s 1987 taxation year, may not exceed, where the taxpayer is an individual who, during the year, uses the automobile in part for the purpose of earning income and in part for personal use, the amount that would have been obtained under the first paragraph of section 130R19 in respect of the class for the year if

  (a)      the cost of the automobile to the taxpayer, other than an automobile referred to in subparagraph a or c of the second paragraph of section 130.1R1 or a passenger vehicle, did not exceed $16,000; or

  (b)      where the year is the 1988 taxation year or a taxation year subsequent to the 1988 taxation year and where the taxpayer has, without interruption since the year in question, used the automobile in part for the purpose of earning income and in part for personal use, the aggregate of the amounts each of which is an amount that the taxpayer deducted as an allowance in respect of the automobile in computing the taxpayer’s income for a preceding taxation year, referred to as “particular preceding taxation year” in this section, for which section 130R4 of the preceding Regulation, within the meaning of section 2000R1, applied in respect of the automobile and that, where applicable, is not a taxation year that ended before a taxation year prior to the 1988 taxation year, for which that section 130R4 did not apply in respect of the automobile was equal to the aggregate of the amounts each of which is an amount determined in respect of the automobile for a particular preceding taxation year according to the following formula:

(A – B) x C.

In the formula in subparagraph b of the first paragraph in respect of an automobile of a taxpayer for a particular taxation year,

  (a)      A is the product obtained by multiplying the cost of the automobile for the taxpayer by the proportion that the number of kilometres travelled by the automobile during the 1988 taxation year for the purpose of enabling the taxpayer to earn income, is of the total number of kilometres travelled by the automobile during that year;

  (b)      B is the aggregate of the amounts each of which is an amount determined using the formula in subparagraph b of the first paragraph in respect of the automobile for a taxation year that is prior to the particular year and that is a particular preceding taxation year in respect of the automobile; and

  (c)      C is a rate of 15% where the particular year is the taxation year during which the automobile was acquired by the taxpayer, and 30% in all other cases.

For the purposes of subparagraph a of the second paragraph, the cost of an automobile to a taxpayer, other than an automobile referred to in subparagraph a or c of the second paragraph of section 130.1R1, may not exceed $16,000, where the automobile was acquired by the taxpayer before 18 June 1987 or after 17 June 1987 pursuant to an obligation in writing entered into before 18 June 1987, or $20,000 in all other cases.

s. 130R3.2; O.C. 1697-92, s. 9; O.C. 134-2009, s. 1.

130R22.  The percentage mentioned in section 130R19, in respect of the property of classes mentioned in Schedule B, is the following:

  (a)      Class 1: 4%;

  (b)      Class 2: 6%;

  (c)      Class 3: 5%;

  (d)      Class 4: 6%;

  (e)      Class 5: 10%;

  (f)      Class 6: 10%;

  (g)      Class 7: 15%;

  (h)      Class 8: 20%;

  (i)      Class 8.1: 33 1/3%;

  (j)      Class 9: 25%;

  (k)      Class 10: 30%;

  (l)      Class 10.1: 30%;

  (m)      Class 11: 35%;

  (n)      Class 12: 100%;

  (o)      Class 16: 40%;

  (p)      Class 17: 8%;

  (q)      Class 18: 60%;

  (r)      Class 22: 50%;

  (s)      Class 23: 100%;

  (t)      Class 25: 100%;

  (u)      Class 26: 5%;

  (v)      Class 28: 30%;

  (w)      Class 30: 40%;

  (x)      Class 31: 5%;

  (y)      Class 32: 10%;

  (z)      Class 33: 15%;

  (z.1)      Class 35: 7%;

  (z.2)      Class 37: 15%;

  (z.3)      Class 41: 25%;

  (z.3.1)      Class 41.1: 25%;

  (z.4)      Class 42: 12%;

  (z.5)      Class 43: 30%;

  (z.6)      Class 43.1: 30%;

  (z.7)      Class 43.2: 50%;

  (z.8)      Class 44: 25%;

  (z.9)      Class 45: 45%;

  (z.10)      Class 46: 30%;

  (z.11)      Class 47: 8%;

  (z.12)      Class 48: 15%;

  (z.13)      Class 49: 8%;

  (z.14)      Class 50: 55%;

  (z.15)      Class 51: 6%; and

  (z.16)      Class 52: 100%.

s. 130R6; O.C. 1981-80, s. 130R6; O.C. 1983-80, s. 5; R.R.Q.,1981, c. I-3, r. 1, s. 130R6; O.C. 2962-82, s. 12; O.C. 500-83, s. 12; O.C. 1697-92, s. 11; O.C. 1631-96, s. 2; O.C. 1454-99, s. 12; O.C. 1149-2006, s. 6; O.C. 1116-2007, s. 7; O.C. 134-2009, s. 1; O.C. 1176-2010, s. 9; O.C. 390-2012, s. 14.

130R23.  Where the taxpayer’s taxation year is less than 12 months, the amount allowed as a deduction under this Title, otherwise than under sections 130R37, 130R40 to 130R43, 130R66 to 130R69, 130R106, 130R107, 130R113, 130R115 or 130R209 to 130R221, may not exceed the proportion of the maximum amount allowable that the number of days in the taxation year is of 365.

s. 130R7; O.C. 1981-80, s. 130R7; R.R.Q., 1981, c. I-3, r. 1, s. 130R7; O.C. 2847-84, s. 2; O.C. 1631-96, s. 3; O.C. 1282-2003, s. 16; O.C. 1249-2005, s. 3; O.C. 134-2009, s. 1.

DIVISION  I.1
PROPERTY OF CLASS 1

O.C. 1176-2010, s. 10.

130R23.1.  A taxpayer may deduct as additional allowance in respect of property that is a building for which section 130R163.1 prescribes a separate class, an amount not exceeding 6% of the undepreciated capital cost to the taxpayer of the property of that class as of the end of the taxation year, computed before any deduction under this section for the year, if at least 90% of the floor space of the building is used at the end of the year for the manufacturing or processing in Canada of goods for sale or lease.

O.C. 1176-2010, s. 10.

130R23.2.  A taxpayer may deduct as additional allowance in respect of property that is a building for which section 130R163.1 prescribes a separate class, an amount not exceeding 2% of the undepreciated capital cost to the taxpayer of the property of that class as of the end of the taxation year, computed before any deduction under this section for the year, if at least 90% of the floor space of the building is used at the end of the year for a non-residential use in Canada and an additional allowance is not allowed for the year under section 130R23.1 in respect of the property.

O.C. 1176-2010, s. 10.

DIVISION  II
LEASEHOLD INTERESTS

div. IIIO.C. 1981-80, title VI, c. III, div. IIIR.R.Q., 1981, c. I-3, r. 1, title VI, c. III, div. IIIO.C. 134-2009, s. 1.

130R24.  In respect of property of Class 13 in Schedule B, the taxpayer may deduct an amount not exceeding the lesser of the aggregate of each amount equal to the proportion, described in section 130R27, of that part of the capital cost to the taxpayer, incurred in a taxation year of a particular leasehold interest, and the undepreciated capital cost of property of that class at the end of the taxation year, before any deduction under this section.

s. 130R13; O.C. 1981-80, s. 130R13; R.R.Q., 1981, c. I-3, r. 1, s. 130R13; O.C. 134-2009, s. 1.

130R25.  For the purposes of this division, the capital cost to a taxpayer of a property is deemed to have been incurred at the time when the property became available for use by the taxpayer for the purposes of the Act.

s. 130R13.1; O.C. 1631-96, s. 4; O.C. 134-2009, s. 1.

130R26.  For the purposes of section 130R24, capital cost includes any amount expended by a taxpayer for or in respect of an improvement or alteration to a leased property, other than an amount expended by reason of the fact that the taxpayer or a former lessee

  (a)      erected a building or other structure on leased land;

  (b)      made an addition to a leased building or other structure; or

  (c)      made an alteration to a leased building or other structure that substantially changed its nature.

However, in the case of property not included in Class 31 or 32 in Schedule B and acquired from a former lessee before 1976, the first paragraph is to be read without reference to “or a former lessee”.

s. 130R14; O.C. 1981-80, s. 130R14; R.R.Q., 1981, c. I-3, r. 1, s. 130R14; O.C. 134-2009, s. 1.

130R27.  The proportion of the capital cost referred to in section 130R24 is the lesser of:

  (a)      1/5; and

  (b)      that proportion that the number 1 is of the number of 12 month periods, not exceeding 40, falling between the beginning of the taxation year in which the capital cost was incurred and the day the lease is to terminate.

Despite the foregoing, where the part of the capital cost referred to in section 130R24, other than the part of the capital cost of a property referred to in any of subparagraphs b to d of the second paragraph of section 130R119, is incurred after 12 November 1981, the proportion of that part is equal, for the taxation year during which it is incurred, to 50% of the amount that would be determined in its respect under the first paragraph.

s. 130R15; O.C. 1981-80, s. 130R15; R.R.Q., 1981, c. I-3, r. 1, s. 130R15; O.C. 2847-84, s. 3; O.C. 366-94, s. 4; O.C. 1631-96, s. 5; O.C. 134-2009, s. 1.

130R28.  Where an item of the capital cost of a leasehold interest was incurred before the taxation year in which the interest was acquired, it is deemed to have been incurred in the taxation year in which the interest was acquired.

s. 130R16; O.C. 1981-80, s. 130R16; R.R.Q., 1981, c. I-3, r. 1, s. 130R16; O.C. 134-2009, s. 1.

130R29.  Where, under a lease, a lessee has a right to renew the lease after the term and such term occurs after the end of the taxation year in which the capital cost was incurred, the lease is deemed to terminate on the day on which the term next succeeding the term in which the capital cost was incurred is to terminate.

s. 130R17; O.C. 1981-80, s. 130R17; R.R.Q., 1981, c. I-3, r. 1, s. 130R17; O.C. 134-2009, s. 1.

130R30.  The proportion of the part of the capital cost incurred in a particular taxation year of a particular leasehold interest may not exceed the amount obtained by deducting from that part of the capital cost the aggregate of the amounts deductible and claimed in previous years in respect thereof.

s. 130R18; O.C. 1981-80, s. 130R18; R.R.Q., 1981, c. I-3, r. 1, s. 130R18; O.C. 134-2009, s. 1; O.C. 1303-2009, s. 3.

130R31.  Where, at the end of a taxation year, the total of the aggregate referred to in section 130R30 and the proceeds of disposition of part or all of a particular leasehold interest equals or exceeds the capital cost of the interest, the proportion in that section is, for all subsequent years, deemed to be nil.

s. 130R19; O.C. 1981-80, s. 130R19; R.R.Q., 1981, c. I-3, r. 1, s. 130R19; O.C. 134-2009, s. 1.

130R32.  Where, at the end of a taxation year, the undepreciated capital cost of property of Class 13 in Schedule B is nil, the proportion of any part of the capital cost is, for all subsequent years, deemed to be nil.

s. 130R20; O.C. 1981-80, s. 130R20; R.R.Q., 1981, c. I-3, r. 1, s. 130R20; O.C. 134-2009, s. 1.

130R33.  Where the taxpayer has a leasehold interest, a reference in Schedule B to a property that is a building or other structure includes that leasehold interest to the extent that the taxpayer acquired it by reason of the fact that the taxpayer has carried out an operation referred to in any of subparagraphs a to c of the first paragraph of section 130R26, or acquired it after 1975 or, in the case of property of Class 31 or 32 in that schedule, after 18 November 1974, from a former lessee who has acquired it by reason of the fact that the lessee or a preceding lessee had carried out such an operation.

s. 130R21; O.C. 1981-80, s. 130R21; R.R.Q., 1981, c. I-3, r. 1, s. 130R21; O.C. 134-2009, s. 1.

130R34.  Where a taxpayer acquires a property that, if it were acquired by a person with whom the taxpayer does not deal at arm’s length at the time of the acquisition, would be a leasehold interest referred to in section 130R33 for that person, a reference in Schedule B to a property that is a building or other structure includes that property.

s. 130R21.1; O.C. 1631-96, s. 6; O.C. 134-2009, s. 1.

130R35.  Where a taxpayer acquires a property that, if it were acquired by a person with whom the taxpayer does not deal at arm’s length at the time of the acquisition, would be a leasehold interest of that person, a reference in this division to a leasehold interest includes, in respect of the taxpayer, that property, and the terms and conditions of the leasehold interest in that property for the taxpayer are deemed to be the same as those that would have applied to that person if the person had acquired the property.

s. 130R21.2; O.C. 1631-96, s. 6; O.C. 134-2009, s. 1.

130R36.  For the purposes of this division, where an item of capital cost has been incurred before the commencement of the taxpayer’s 1949 taxation year, there is to be added to the capital cost of each item the amount that was allowed in respect thereof as depreciation under the Income War Tax Act (R.S.C. 1927, c. 97) and was deducted from the original cost to arrive at the capital cost of the item.

s. 130R22; O.C. 1981-80, s. 130R22; R.R.Q., 1981, c. I-3, r. 1, s. 130R22; O.C. 134-2009, s. 1.

DIVISION  III
PATENTS, CONCESSIONS AND LICENCES

div. IVO.C. 1981-80, title VI, c. III, div. IVR.R.Q., 1981, c. I-3, r. 1, title VI, c. III, div. IVO.C. 134-2009, s. 1.

130R37.  In respect of property of Class 14 in Schedule B, the taxpayer may deduct an amount not exceeding the lesser of

  (a)      the aggregate of the amounts obtained by apportioning the capital cost to the taxpayer of each property over the life of the property remaining at the time the cost was incurred; and

  (b)      the undepreciated capital cost to the taxpayer of property of the class at the end of the taxation year, before any deduction under this section.

s. 130R23; O.C. 1981-80, s. 130R23; R.R.Q., 1981, c. I-3, r. 1, s. 130R23; O.C. 134-2009, s. 1.

130R38.  Where a part or all of the cost of a patent is determined by reference to the use of the patent, a taxpayer may, in computing the taxpayer’s income for a taxation year from a business or property, as the case may be, deduct in lieu of the deduction allowed under section 130R37 such amount as the taxpayer may claim in respect of property of Class 14 in Schedule B not exceeding the lesser of

  (a)      the aggregate of that part of the capital cost determined by reference to the use of the patent in the year, and the amount that would be computed under paragraph a of that section 130R37 if the capital cost of the patent did not include the amount determined by reference to the use of the patent in that year and previous years; and

  (b)      the undepreciated capital cost to the taxpayer of property of the class as of the end of the taxation year before making any deduction under this section.

s. 130R24; O.C. 1981-80, s. 130R24; R.R.Q., 1981, c. I-3, r. 1, s. 130R24; O.C. 134-2009, s. 1.

130R39.  Where the capital cost to a taxpayer of a property that is a patent or a right to use patented information is determined in whole or in part by reference to the use of the property and that property is included in Class 44 in Schedule B, in lieu of the amount provided for in section 130R19, the taxpayer may deduct for a taxation year in respect of the property of that class an amount not exceeding the lesser of

  (a)      the aggregate of

  (i)    the part of the capital cost that is determined by reference to the use of the property in the year, and

  (ii)    the amount that would be deductible for the year under section 130R19 in respect of property of that class if the capital cost thereof did not include the amounts determined under subparagraph i for the year and preceding taxation years; and

  (b)      the undepreciated capital cost to the taxpayer at the end of the year, before any deduction under this section for the year, of property of that class.

s. 130R24.1; O.C. 1631-96, s. 7; O.C. 134-2009, s. 1.

DIVISION  IV
PROPERTY USED IN TIMBER LIMITS

div. VO.C. 1981-80, title VI, c. III, div. VR.R.Q., 1981, c. I-3, r. 1, title VI, c. III, div. VO.C. 134-2009, s. 1.

130R40.  In respect of property of Class 15 in Schedule B, the taxpayer may deduct the lesser of an amount computed on the basis of a rate per cubic metre of timber cut in the taxation year and the undepreciated capital cost to the taxpayer of property of that class at the end of the year, before any deduction under this division.

s. 130R25; O.C. 1981-80, s. 130R25; R.R.Q., 1981, c. I-3, r. 1, s. 130R25; O.C. 134-2009, s. 1.

130R41.  The rate referred to in section 130R40, where all the property of the class is used in connection with a timber limit, is the amount determined by dividing the undepreciated capital cost, to the taxpayer, of the property at the end of the taxation year, before any deduction under this Title, by the number of cubic metres of timber in that limit computed by deducting from the quantity shown by the latest cruise, the quantity cut since that cruise up to the beginning of the year.

s. 130R26; O.C. 1981-80, s. 130R26; R.R.Q., 1981, c. I-3, r. 1, s. 130R26; O.C. 134-2009, s. 1.

130R42.  Where a part of the property of Class 15 in Schedule B is used in connection with one timber limit and a part is used in connection with another limit, the rate is computed as though each part of the property were a separate class.

s. 130R27; O.C. 1981-80, s. 130R27; R.R.Q., 1981, c. I-3, r. 1, s. 130R27; O.C. 134-2009, s. 1.

130R43.  In this division, capital cost includes the amount expended by the taxpayer on improvements to a watercourse in order to facilitate the removal of timber from a limit.

s. 130R28; O.C. 1981-80, s. 130R28; R.R.Q., 1981, c. I-3, r. 1, s. 130R28; O.C. 134-2009, s. 1.

DIVISION  V
PROPERTY OF CLASSES 24, 27, 29 AND 34

div. VIO.C. 1981-80, title VI, c. III, div. IVR.R.Q., 1981, c. I-3, r. 1, title VI, c. III, div. VIO.C. 2847-84, s. 4O.C. 134-2009, s. 1.

130R44.  In this division,

“designated property” of a class means a property deemed to be such under section 130R124, a property of the class acquired by the taxpayer before 13 November 1981 or a property described in any of subparagraphs b to d of the second paragraph of section 130R119;

“specified transaction” means a transaction in respect of which any of sections 527, 544, 556, 617, 620 and 626 of the Act applies.

s. 130R29; O.C. 1981-80, s. 130R29; R.R.Q., 1981, c. I-3, r. 1, s. 130R29; O.C. 2847-84, s. 4; O.C. 366-94, s. 5; O.C. 1631-96, s. 8; O.C. 134-2009, s. 1.

130R45.  For the purposes of this division, a property is deemed, subject to subparagraph d of the first paragraph of section 130R124, to have been acquired by a taxpayer at the time when the property became available for use by the taxpayer according to the Act.

s. 130R29.1; O.C. 1631-96, s. 9; O.C. 134-2009, s. 1.

130R46.  In respect of property of Classes 24, 27, 29 and 34 in Schedule B, a taxpayer may, subject to section 130R49, deduct

  (a)      for the taxation year including 12 November 1981, the amount prescribed by section 130R47; and

  (b)      for a taxation year beginning after 12 November 1981, the amount prescribed by section 130R48.

s. 130R30; O.C. 1981-80, s. 130R30; R.R.Q., 1981, c. I-3, r. 1, s. 130R30; O.C. 2847-84, s. 4; O.C. 134-2009, s. 1.

130R47.  The taxpayer may deduct under paragraph a of section 130R46 an amount not exceeding the aggregate of

  (a)      50% of the lesser of the capital cost to the taxpayer of the designated property of the class acquired by the taxpayer during the year and the undepreciated capital cost to the taxpayer of the property of that class at the end of the year, computed before any deduction under section 130R46 for the year, and as if no amount had been included in respect of property acquired after 12 November 1981 that was not designated property of the class;

  (b)      the amount by which the undepreciated capital cost referred to in paragraph a exceeds the capital cost of the designated property referred to in paragraph a; and

  (c)      the lesser of 25% of the capital cost to the taxpayer of all property of the class that is not designated property and acquired by the taxpayer during the year and the undepreciated capital cost to the taxpayer of the property of the class at the end of the year, before any deduction under section 130R46 for the year.

s. 130R30.1; O.C. 2847-84, s. 4; O.C. 134-2009, s. 1.

130R48.  A taxpayer may deduct under paragraph b of section 130R46 an amount not exceeding the aggregate of

  (a)      the lesser of 50% of the capital cost to the taxpayer of all the designated properties of the class acquired by the taxpayer during the year and the undepreciated capital cost to the taxpayer of the property of that class at the end of the year, computed before any deduction under section 130R46 for the year and, where one of the designated properties referred to in this paragraph was acquired in a specified transaction, as if no amount had been included in respect of the property that was not designated property of the class acquired by the taxpayer during the year;

  (b)      25% of the lesser of the undepreciated capital cost to the taxpayer of the property of the class at the end of the year, computed before any deduction under section 130R46 for the year and as if no amount had been included in respect of a designated property of that class acquired by the taxpayer during the year, and the capital cost to the taxpayer of the property in the class acquired by the taxpayer during the year and that was not designated property; and

  (c)      the lesser of

  (i)    the amount by which the undepreciated capital cost to the taxpayer of the property of the class at the end of the year, before any deduction under section 130R46 for the year, exceeds the capital cost to the taxpayer of the property of the class acquired by the taxpayer during the year, and

  (ii)    the aggregate of 50% of the capital cost to the taxpayer of the property of the class acquired by the taxpayer during the preceding taxation year but that is not designated property acquired in a specified transaction and of the amount by which the amount determined under subparagraph i for the year in respect of the class exceeds the aggregate of 75% of the capital cost to the taxpayer of the property of the class that is not designated property acquired by the taxpayer during the preceding taxation year and of 50% of the capital cost to the taxpayer of the designated property of the class acquired by the taxpayer during the preceding taxation year that is not designated property acquired in a specified transaction.

s. 130R30.2; O.C. 2847-84, s. 4; O.C. 134-2009, s. 1.

130R49.  The amount that a taxpayer may deduct for a taxation year under section 130R46 in respect of property of a class in Schedule B may also not exceed the undepreciated capital cost to the taxpayer of the property of the class at the end of the year, computed before any deduction under section 130R46 for the year.

s. 130R30.3; O.C. 2847-84, s. 4; O.C. 134-2009, s. 1.

DIVISION  VI
SPECIFIED ENERGY PROPERTY

div. VI.0.1O.C. 91-94, s. 2O.C. 134-2009, s. 1.

130R50.  In no case may the aggregate of the deductions that a taxpayer may claim for a taxation year as capital cost allowance in respect of property of any of Classes 34, 43.1, 43.2, 47 and 48 in Schedule B that is specified energy property owned by the taxpayer exceed the amount by which the amount determined under the second paragraph exceeds the aggregate of the amounts each of which is

  (a)      the aggregate of the following amounts:

  (i)    the amount that would be the income of the taxpayer for the year from property described in any of Classes 34, 43.1, 43.2, 47 and 48, other than specified energy property, or from the business of selling the product of the property, if that income were computed after deducting the maximum amount allowable in respect of the property for the year under paragraph a of section 130 of the Act, and

  (ii)    the taxpayer’s income for the year from specified energy property or from the business of selling the product of such property, computed without reference to paragraph a of section 130 of the Act, or

  (b)      the aggregate of the following amounts:

  (i)    the taxpayer’s share of the amount that would be the income of a partnership for the year from property described in any of Classes 34, 43.1, 43.2, 47 and 48, other than specified energy property, or from the business of selling the product of the property, if that income were computed after deducting the maximum amount allowable in respect of the property for the year under paragraph a of section 130 of the Act, and

  (ii)    the income of a partnership for the year from specified energy property or from the business of selling the product of such property of the partnership, to the extent of the taxpayer’s share of such income.

The amount to which the first paragraph refers is the aggregate of the amounts each of which is

  (a)      the taxpayer’s loss for the year from specified energy property or from the business of selling the product of such property, computed without reference to paragraph a of section 130 of the Act, or

  (b)      the loss of a partnership for the year from specified energy property or from the business of selling the product of such property of the partnership, to the extent of the taxpayer’s share of such loss.

s. 130R30.3.1; O.C. 91-94, s. 2; O.C. 1707-97, s. 98; O.C. 1454-99, s. 13; O.C. 1116-2007, s. 8; O.C. 134-2009, s. 1.

130R51.  Subject to sections 130R53 to 130R55, in this division and Chapter V, “specified energy property” of a taxpayer or partnership, in this section referred to as “the owner”, for a taxation year means property in Class 34 in Schedule B acquired by the owner after 9 February 1988 or property in any of Classes 43.1, 43.2, 47 and 48 in that schedule, other than, where the owner is a corporation or a partnership described in the second paragraph, a particular property

  (a)      acquired to be used by the owner primarily for the purpose of gaining or producing income from a business carried on in Canada, other than the business of selling the product of the particular property, or from another property situated in Canada; or

  (b)      leased in the year, in the ordinary course of carrying on a business of the owner in Canada, to

  (i)    a person who may reasonably be expected to use the property primarily for the purpose of gaining or producing income from a business carried on in Canada, other than the business of selling the product of the particular property, or from another property situated in Canada, or

  (ii)    a corporation or partnership described in section 130R52.

The corporation or the partnership to which the first paragraph refers in respect of a particular property for a taxation year is

  (a)      a corporation at least 90% of whose gross revenue from all sources for the year is derived from a principal business that is, throughout the year, one of the following:

  (i)    the renting or leasing of leasing property or property that would be leasing property but for sections 130R97 to 130R99,

  (ii)    the renting or leasing of property referred to in subparagraph i combined with the selling and servicing of similar property, or

  (iii)    the manufacturing of property described in any of Classes 34, 43.1, 43.2, 47 and 48 in Schedule B that it sells or leases; or

  (b)      a partnership each member of which is

  (i)    a corporation described in subparagraph a or in paragraph a of section 130R52, or

  (ii)    another partnership described in this subparagraph.

s. 130R30.3.2; O.C. 91-94, s. 2; O.C. 1707-97, s. 20; O.C. 1466-98, s. 126; O.C. 1454-99, s. 14; O.C. 1116-2007, s. 9; O.C. 134-2009, s. 1; O.C. 66-2016, s. 4.

130R52.  Section 130R50 does not apply to a taxation year of a taxpayer that is, throughout the year,

  (a)      a corporation whose principal business throughout the year is

  (i)    manufacturing or processing,

  (ii)    mining operations, or

  (iii)    the sale, distribution or production of electricity, natural gas, oil, steam, heat or any other form of energy or potential energy; or

  (b)      a partnership each member of which is

  (i)    a corporation described in paragraph a, or

  (ii)    another partnership described in this paragraph.

s. 130R30.3.3; O.C. 91-94, s. 2; O.C. 1707-97, s. 98; O.C. 1454-99, s. 15; O.C. 134-2009, s. 1; O.C. 66-2016, s. 5.

130R53.  Specified energy property of a person or partnership does not include property acquired by the person or partnership after 9 February 1988 but before 1 January 1990,

  (a)      pursuant to an obligation in writing entered into by the person or partnership before 10 February 1988;

  (b)      pursuant to the terms of a final prospectus, preliminary prospectus, registration statement or offering memorandum filed before 10 February 1988 with a public authority in Canada pursuant to the securities legislation of a province;

  (c)      pursuant to the terms of an offering memorandum distributed as part of an offering of securities where the following conditions are fulfilled:

  (i)    the offering memorandum contains a complete or substantially complete description of the securities in the offering as well as the terms and conditions of the offering,

  (ii)    the offering memorandum was distributed before 10 February 1988,

  (iii)    solicitations in respect of the sale of the securities in the offering memorandum were made before 10 February 1988, and

  (iv)    the sale of the securities was substantially in accordance with the offering memorandum; or

  (d)      as part of a project where, before 10 February 1988, the following conditions were fulfilled:

  (i)    some of the machinery or equipment to be used in the project was acquired, or agreements in writing for the acquisition of that machinery or equipment were entered into, by or on behalf of the person or partnership, and

  (ii)    an approval had been received by or on behalf of the person or partnership from a government environmental authority in respect of the location of the project.

s. 130R30.3.4; O.C. 91-94, s. 2; O.C. 1707-97, s. 98; O.C. 1466-98, s. 21; O.C. 134-2009, s. 1.

130R54.  Where a taxpayer acquires a property in the course of a reorganization in respect of which, if a dividend were received by a corporation in the course of the reorganization, section 308.1 of the Act would not be applicable to the dividend by reason of the application of section 308.3 of the Act, or from a person with whom the taxpayer does not deal at arm’s length, otherwise than by virtue of a right referred to in paragraph b of section 20 of the Act, at the time the property was acquired, and where the property would otherwise be specified energy property of the taxpayer, the property is deemed not to be specified energy property of the taxpayer if, immediately before it was so acquired, it was not, by virtue of this section or section 130R53 or 130R55, specified energy property of the person from whom the property was so acquired.

s. 130R30.3.5; O.C. 91-94, s. 2; O.C. 1707-97, s. 98; O.C. 134-2009, s. 1.

130R55.  Where a taxpayer or a partnership has acquired a property that is a replacement property within the meaning of subsection 3 of section 96 of the Act, and where the property would otherwise be specified energy property of the taxpayer or partnership, the property is deemed not to be specified energy property of the taxpayer or partnership if the former property, referred to in subsection 1 of that section, was not, by virtue of this section or section 130R53 or 130R54, specified energy property of the taxpayer or partnership immediately before it was disposed of by the taxpayer or partnership.

s. 130R30.3.6; O.C. 91-94, s. 2; O.C. 1707-97, s. 98; O.C. 134-2009, s. 1.

DIVISION  VII
PROPERTY OF CLASS 38

div. VI.1O.C. 1697-92, s. 12O.C. 134-2009, s. 1.

130R56.  A taxpayer may deduct, in respect of property of Class 38 in Schedule B, an amount not exceeding the amount obtained by applying to the undepreciated capital cost to the taxpayer of the property of that class at the end of the taxation year, computed before any deduction under this section for the year, the percentage represented by the aggregate of the following percentages:

  (a)      40% multiplied by the proportion that the number of days in the year that follow 31 December 1987 but that precede 1 January 1989, is of the number of days in the year that follow 31 December 1987;

  (b)      35% multiplied by the proportion that the number of days in the year that follow 31 December 1988 but that precede 1 January 1990, is of the number of days in the year; and

  (c)      30% multiplied by the proportion that the number of days in the year that follow 31 December 1989, is of the number of days in the year.

s. 130R30.4; O.C. 1697-92, s. 12; O.C. 134-2009, s. 1.

DIVISION  VIII
PROPERTY OF CLASS 39

div. VI.2O.C. 1697-92, s. 12O.C. 134-2009, s. 1.

130R57.  A taxpayer may deduct, in respect of property of Class 39 in Schedule B, an amount not exceeding the amount obtained by applying to the undepreciated capital cost to the taxpayer of the property of that class at the end of the taxation year, computed before any deduction under this section for the year, the percentage represented by the aggregate of the following percentages:

  (a)      40% multiplied by the proportion that the number of days in the year that follow 31 December 1987 but that precede 1 January 1989, is of the number of days in the year that follow 31 December 1987;

  (b)      35% multiplied by the proportion that the number of days in the year that follow 31 December 1988 but that precede 1 January 1990, is of the number of days in the year;

  (c)      30% multiplied by the proportion that the number of days in the year that follow 31 December 1989 but that precede 1 January 1991, is of the number of days in the year; and

  (d)      25% multiplied by the proportion that the number of days in the year that follow 31 December 1990, is of the number of days in the year.

s. 130R30.5; O.C. 1697-92, s. 12; O.C. 134-2009, s. 1.

DIVISION  IX
PROPERTY OF CLASS 40

div. VI.3O.C. 1697-92, s. 12O.C. 134-2009, s. 1.

130R58.  A taxpayer may deduct, in respect of property of Class 40 in Schedule B, an amount not exceeding the amount obtained by applying to the undepreciated capital cost to the taxpayer of the property of that class at the end of the taxation year, computed before any deduction under this section for the year, the percentage represented by the aggregate of the following percentages:

  (a)      40% multiplied by the proportion that the number of days in the year that follow 31 December 1987 but that precede 1 January 1989, is of the number of days in the year that follow 31 December 1987;

  (b)      35% multiplied by the proportion that the number of days in the year that follow 31 December 1988 but that precede 1 January 1990, is of the number of days in the year; and

  (c)      30% multiplied by the proportion that the number of days in the year that follow 31 December 1989 but that precede 1 January 1991, is of the number of days in the year.

s. 130R30.6; O.C. 1697-92, s. 12; O.C. 134-2009, s. 1.

DIVISION  X
GRAIN STORAGE

div. VIIO.C. 1981-80, title VI, c. III, div. VIIR.R.Q., 1981, c. I-3, r. 1, title VI, c. III, div. VIIO.C. 134-2009, s. 1.

130R59.  A taxpayer may deduct as additional allowance the amount provided by section 130R61 in respect of property that is

  (a)      a grain elevator, situated in that part of Canada that is defined in section 2 of the Canada Grain Act (R.S.C. 1985, c. G-10) as the “Eastern Division”, the principal use of which

  (i)    is the receiving of grain directly from producers for storage or forwarding or both,

  (ii)    is the receiving and storing of grain for direct processing into other products, or

  (iii)    has been certified or authorized by the Minister to be the receiving of grain that has not been officially inspected or weighed;

  (b)      an addition to a grain elevator described in paragraph a;

  (c)      fixed machinery installed in a grain elevator in respect of which, or in respect of an addition to which, an additional amount has been or may be claimed under this section;

  (d)      fixed machinery, designed for the purpose of drying grain, installed in a grain elevator described in paragraph a;

  (e)      machinery designed for the purpose of drying grain on a farm; or

  (f)      a building or other structure designed for the purpose of storing grain on a farm.

s. 130R31; O.C. 1981-80, s. 130R31; R.R.Q., 1981, c. I-3, r. 1, s. 130R31; O.C. 35-96, s. 86; O.C. 134-2009, s. 1.

130R60.  The property referred to in section 130R59 must have been acquired by the taxpayer in the taxation year or in 1 of the 3 immediately preceding taxation years, at a time after 1 April 1972 but before 1 August 1974, and must not have been used for any purpose whatever before it was acquired by the taxpayer.

s. 130R32; O.C. 1981-80, s. 130R32; R.R.Q., 1981, c. I-3, r. 1, s. 130R32; O.C. 134-2009, s. 1.

130R61.  The additional allowance provided by section 130R59 may not exceed the lesser of

  (a)      where the property is included in Class 3 in Schedule B, 22% of the capital cost thereof; where the property is included in Class 6 in that schedule, 20% of the capital cost thereof; or where the property is included in Class 8 in that schedule,

  (i)    14% of the capital cost thereof in the case of property referred to in any of paragraphs c, d and f of section 130R59, or

  (ii)    14% of the lesser of $15,000 and the capital cost thereof in the case of property described in paragraph e of section 130R59; and

  (b)      the undepreciated capital cost to the taxpayer as of the end of the taxation year of property of the class, before making any deduction under this section for the year.

s. 130R33; O.C. 1981-80, s. 130R33; R.R.Q., 1981, c. I-3, r. 1, s. 130R33; O.C. 134-2009, s. 1.

DIVISION  XI
VESSELS

div. VIIIO.C. 1981-80, title VI, c. III, div. VIIIR.R.Q., 1981, c. I-3, r. 1, title VI, c. III, div. VIIIO.C. 2847-84, s. 5O.C. 134-2009, s. 1.

130R62.  A taxpayer may deduct the amount provided for in section 130R63 in respect of a property that is

  (a)      a vessel described in section 130R165;

  (b)      a property included in a separate prescribed class by reason of section 104R10; or

  (c)      a property constituted as a class under subsection 2 of section 24 of Chapter 91 of the Statutes of Canada, 1966-1967.

s. 130R34; O.C. 1981-80, s. 130R34; R.R.Q., 1981, c. I-3, r. 1, s. 130R34; O.C. 2847-84, s. 5; O.C. 1631-96, s. 10; O.C. 134-2009, s. 1.

130R63.  The deduction under section 130R62 may not exceed the lesser of the following amounts:

  (a)      in the case of a property, other than a property described in any of subparagraphs b to d of the second paragraph of section 130R119, acquired during the taxation year and after 12 November 1981, 16 2/3% of the capital cost of the property to the taxpayer and, in all other cases, 33 1/3% of that capital cost; and

  (b)      the undepreciated capital cost of the property of the class at the end of the taxation year, before any deduction under this division for the year.

For the purposes of subparagraph a of the first paragraph, a property is deemed to have been acquired by a taxpayer at the time when the property became available for use by the taxpayer according to the Act.

s. 130R35; O.C. 1981-80, s. 130R35; R.R.Q., 1981, c. I-3, r. 1, s. 130R35; O.C. 2847-84, s. 6; O.C. 366-94, s. 6; O.C. 1631-96, s. 11; O.C. 134-2009, s. 1.

DIVISION  XII
OFFSHORE DRILLING VESSELS

div. IXO.C. 1981-80, title VI, c. III, div. IXR.R.Q., 1981,c. I-3, r. 1, title VI, c. III, div. IXO.C. 134-2009, s. 1.

130R64.  A taxpayer may deduct, as additional allowance in respect of property for which a separate class is prescribed by section 130R166, an amount not exceeding 15% of the undepreciated capital cost to the taxpayer of property of that class as of the end of the taxation year, before any deduction under section 130R19 and this section for the year.

s. 130R36; O.C. 1981-80, s. 130R36; R.R.Q., 1981, c. I-3, r. 1, s. 130R36; O.C. 134-2009, s. 1.

DIVISION  XIII
FISHING VESSELS

div. XO.C. 1981-80, title VI, c. III, div. XR.R.Q., 1981, c. I-3, r. 1, title VI, c. III, div. XO.C. 1076-88, s. 5O.C. 134-2009, s. 1.

130R65.  A taxpayer may deduct as additional allowance in respect of property of the class prescribed under section 130R164, an amount not exceeding the lesser of

  (a)      the amount by which the depreciation that could have been taken on the property, if the Orders in Council referred to in that section were applicable to the taxation year, exceeds the amount allowed under section 130R22 in respect of the property; and

  (b)      the undepreciated capital cost to the taxpayer of property of the prescribed class at the end of the taxation year, before any deduction under this section for the year.

s. 130R37; O.C. 1981-80, s. 130R37; R.R.Q., 1981, c. I-3, r. 1, s. 130R37; O.C. 134-2009, s. 1.

DIVISION  XIV
MINES

div. XIO.C. 1981-80, title VI, c. III, div. XIR.R.Q., 1981,c. I-3, r. 1, title VI, c. III, div. XIO.C. 2509-85, s. 3O.C. 134-2009, s. 1.

130R66.  A taxpayer may deduct as additional allowance in respect of property described in Class 28 in Schedule B acquired for the purpose of gaining or producing income from a mine or in respect of property acquired for the purpose of gaining or producing income from a mine and for which a separate class is prescribed by section 130R169, an amount not exceeding the lesser of

  (a)      the taxpayer's income for the year from the mine, determined without reference to paragraph z.4 of section 87 of the Act and before any deduction under this section, sections 130R67 to 130R69.2, section 145 of the Act, any of Divisions II, III, IV and IV.2 of Chapter X of Title VI of Book III of Part I of the Act or section 88.4 of the Act respecting the application of the Taxation Act (chapter I-4); and

  (b)      the undepreciated capital cost to the taxpayer of property of that class at the end of the taxation year, before any deduction under this division for the year.

s. 130R38; O.C. 1981-80, s. 130R38; R.R.Q., 1981, c. I-3, r. 1, s. 130R38; O.C. 2509-85, s. 3; O.C. 1697-92, s. 13; O.C. 1454-99, s. 62; O.C. 1470-2002, s. 13; O.C. 1282-2003, s. 17; O.C. 134-2009, s. 1; O.C. 390-2012, s. 15.

130R67.  A taxpayer may deduct as additional allowance in respect of property acquired for the purpose of gaining or producing income from more than one mine and for which a separate class is prescribed under section 130R170, an amount not exceeding the lesser of

  (a)      the taxpayer's income for the year from the mine, determined without reference to paragraph z.4 of section 87 of the Act and before any deduction under this section, section 130R69 or 130R69.2, section 145 of the Act, any of Divisions II, III, IV and IV.2 of Chapter X of Title VI of Book III of Part I of the Act or section 88.4 of the Act respecting the application of the Taxation Act (chapter I-4); and

  (b)      the undepreciated capital cost to the taxpayer of property of that class at the end of the taxation year, before any deduction under this division for the year.

s. 130R39; O.C. 1981-80, s. 130R39; R.R.Q., 1981, c. I-3, r. 1, s. 130R39; O.C. 1697-92, s. 14; O.C. 1454-99, s. 62; O.C. 1470-2002, s. 14; O.C. 1282-2003, s. 18; O.C. 134-2009, s. 1; O.C. 390-2012, s. 16.

130R68.  A taxpayer may deduct as additional allowance in respect of property acquired for the purpose of gaining or producing income from a mine and for which a separate class is prescribed under section 130R171, an amount not exceeding the lesser of

  (a)      the taxpayer's income for the year from the mine, determined without reference to paragraph z.4 of section 87 of the Act and before any deduction under this section, any of sections 130R67, 130R69 and 130R69.2, section 145 of the Act, any of Divisions II, III, IV and IV.2 of Chapter X of Title VI of Book III of Part I of the Act or section 88.4 of the Act respecting the application of the Taxation Act (chapter I-4); and

  (b)      the undepreciated capital cost to the taxpayer of property of that class at the end of the taxation year, determined without reference to section 130R119 and before any deduction under this division for the year.

s. 130R39.1; O.C. 1697-92, s. 15; O.C. 1454-99, s. 62; O.C. 1470-2002, s. 15; O.C. 1282-2003, s. 19; O.C. 134-2009, s. 1; O.C. 390-2012, s. 17.

130R69.  A taxpayer may deduct as additional allowance in respect of property acquired for the purpose of gaining or producing income from more than one mine and for which a separate class is prescribed under section 130R172, an amount not exceeding the lesser of

  (a)      the taxpayer’s income for the year from the mines, determined without reference to paragraph z.4 of section 87 of the Act and before any deduction under this section, section 145 of the Act, Division II, III, IV or IV.2 of Chapter X of Title VI of Book III of Part I of the Act or section 88.4 of the Act respecting the application of the Taxation Act (chapter I-4); and

  (b)      the undepreciated capital cost to the taxpayer of property of that class at the end of the taxation year, determined without reference to section 130R119 and before any deduction under this division for the year.

s. 130R39.2; O.C. 1697-92, s. 15; O.C. 1454-99, s. 62; O.C. 1470-2002, s. 16; O.C. 1282-2003, s. 20; O.C. 134-2009, s. 1.

130R69.1.  A taxpayer may deduct as additional allowance in respect of property acquired for the purpose of gaining or producing income from a mine and for which a separate class is prescribed under section 130R172.1, an amount not exceeding the amount determined by the formula

A × B.

In the formula in the first paragraph,

  (a)      A is the lesser of

  (i)    the taxpayer's income for the year from the mine, before making any deduction under this section, any of sections 130R67 to 130R69, section 130R69.2, any of Divisions II, III, IV and IV.2 of Chapter X of Title VI of Book III of Part I of the Act or section 88.4 of the Act respecting the application of the Taxation Act (chapter I-4), and

  (ii)    the undepreciated capital cost to the taxpayer of property of that class at the end of the taxation year, computed without reference to section 130R119, after any deduction under section 130R22 for the taxation year and before any deduction under this section for the year; and

  (b)      B is the percentage that is the total of

  (i)    that proportion of 100% that the number of days in the taxation year that are before 1 January 2011 is of the number of days in the taxation year,

  (ii)    that proportion of 90% that the number of days in the taxation year that are after 31 December 2010 and before 1 January 2012 is of the number of days in the taxation year,

  (iii)    that proportion of 80% that the number of days in the taxation year that are after 31 December 2011 and before 1 January 2013 is of the number of days in the taxation year,

  (iv)    that proportion of 60% that the number of days in the taxation year that are after 31 December 2012 and before 1 January 2014 is of the number of days in the taxation year, and

  (v)    that proportion of 30% that the number of days in the taxation year that are after 31 December 2013 and before 1 January 2015 is of the number of days in the taxation year.

O.C. 390-2012, s. 18.

130R69.2.  A taxpayer may deduct as additional allowance in respect of property acquired for the purpose of gaining or producing income from more than one mine and for which a separate class is prescribed under section 130R172.2, an amount not exceeding the amount determined by the formula

A × B.

In the formula in the first paragraph,

  (a)      A is the lesser of

  (i)    the taxpayer's income for the year from the mine, before any deduction under this section, section 130R69, any of Divisions II, III, IV and IV.2 of Chapter X of Title VI of Book III of Part I of the Act or section 88.4 of the Act respecting the application of the Taxation Act (chapter I-4), and

  (ii)    the undepreciated capital cost to the taxpayer of property of that class at the end of the taxation year, computed without reference to section 130R119, after any deduction under section 130R22 for the taxation year and before any deduction under this section for the year; and

  (b)      B is the percentage that is the total of

  (i)    that proportion of 100% that the number of days in the taxation year that are before 1 January 2011 is of the number of days in the taxation year,

  (ii)    that proportion of 90% that the number of days in the taxation year that are after 31 December 2010 and before 1 January 2012 is of the number of days in the taxation year,

  (iii)    that proportion of 80% that the number of days in the taxation year that are after 31 December 2011 and before 1 January 2013 is of the number of days in the taxation year,

  (iv)    that proportion of 60% that the number of days in the taxation year that are after 31 December 2012 and before 1 January 2014 is of the number of days in the taxation year, and

  (v)    that proportion of 30% that the number of days in the taxation year that are after 31 December 2013 and before 1 January 2015 is of the number of days in the taxation year.

O.C. 390-2012, s. 18.

130R70.  Any election under subparagraph e of the second paragraph of section 93 of the Act in respect of property of a prescribed class acquired by a corporation for the purpose of gaining or producing income from a mine must be made by filing with the Minister, on or before the corporation’s filing-due date for the corporation’s taxation year in which the exempt period in respect of the mine ended, one of the following documents in duplicate:

  (a)      where the directors of the corporation are legally entitled to administer the affairs of the corporation, a certified copy of the resolution authorizing the election to be made in respect of that class; and

  (b)      where the directors of the corporation are not legally entitled to administer the affairs of the corporation, a certified copy of the authorization to make the election in respect of that class, by the person or persons legally entitled to administer the affairs of the corporation.

s. 130R41; O.C. 1981-80, s. 130R41; R.R.Q., 1981, c. I-3, r. 1, s. 130R41; O.C. 1797-97, s. 98; O.C. 1466-98, s. 22; O.C. 1282-2003, s. 21; O.C. 134-2009, s. 1.

DIVISION  XV
LEASING PROPERTIES

div. XI.1O.C. 366-94, s. 7O.C. 134-2009, s. 1.

130R71.  In this division,

“exempt property” means

  (a)      a property whose capital cost to the taxpayer does not exceed $1,000,000 and that is general-purpose office furniture or office equipment included in Class 8 in Schedule B, including mobile office equipment such as cellular telephones and pagers, or general-purpose electronic data processing equipment and ancillary data processing equipment described in subparagraph g of the first paragraph of Class 10 in that schedule;

  (b)      a property whose capital cost to the taxpayer does not exceed $1,000,000 and that is general-purpose electronic data processing equipment and ancillary data processing equipment included in any of Classes 45, 50 and 52 in Schedule B;

  (c)      furniture, appliances, television receivers, radio receivers, telephones, furnaces, hot-water heaters and other similar property designed for residential use;

  (d)      a motor vehicle that is designed or adapted primarily to carry individuals on public highways and streets and that has a seating capacity for not more than the driver and 8 passengers, or a motor vehicle of a type commonly called a van or pick-up truck, or a similar vehicle;

  (e)      a truck or tractor designed to haul freight on public highways;

  (f)      a trailer designed to haul freight and to be hauled, under normal operating conditions, by a truck or tractor referred to in subparagraph e;

  (g)      a building or part thereof included in any of Classes 1, 3, 6, 20, 31 and 32 in Schedule B, including its component parts such as electric wiring, plumbing, sprinkler systems, air-conditioning equipment, heating equipment, lighting fixtures, elevators and escalators, other than a building or part thereof leased primarily to a lessee referred to in the third paragraph who owned the building or part thereof at any time before the commencement of the lease, but not during a period ending not later than 1 year after the later of the date on which the construction of the building or part thereof was completed and the date of acquisition by the lessee of that building or part thereof;

  (h)      vessel mooring space; and

  (i)      a property that is included in Class 35 in Schedule B;

“specified leasing property” of a taxpayer at any time means tangible depreciable property other than exempt property, that is

  (a)      used at that time by the taxpayer or a person with whom the taxpayer does not deal at arm’s length primarily for the purpose of gaining or producing gross revenue that is rent or leasing revenue;

  (b)      the subject of a lease at that time to a person with whom the taxpayer deals at arm’s length, the expected term of which at the time it was entered into was more than 1 year; and

  (c)      the subject of a lease where the fair market value of the tangible property that is the subject of the lease, other than the exempt property, exceeded $25,000 at the time the lease was entered into.

For the purposes of the definition of “specified leasing property” in the first paragraph and for greater precision, specified leasing property does not include systems software or property described in subparagraph q or r of the second paragraph of Class 10 in Schedule B or in any of subparagraphs n, o and r of the first paragraph of Class 12 in that schedule.

The lessee referred to in paragraph g of the definition of “exempt property” in the first paragraph is a person exempt from tax under Book VIII of Part I of the Act or a person who uses the building in the course of carrying on a business the income from which is, by reason of a provision of the Act, exempt from tax under Part I of the Act, or a Canadian government, a municipality or any other Canadian public authority.

s. 130R42.1; O.C. 366-94, s. 7; O.C. 1631-96, s. 12; O.C. 1466-98, s. 126; O.C. 1155-2004, s. 14; O.C. 1149-2006, s. 7; O.C. 134-2009, s. 1; O.C. 1176-2010, s. 11.

130R72.  For the purposes of paragraph c of the definition of “specified leasing property” in the first paragraph of section 130R71, where it may reasonably be concluded, in view of the circumstances, that one of the main reasons for the existence of 2 or more leases is to avoid the application of section 130R76 by reason of each such lease being a lease where the fair market value of the tangible property that is the subject of the lease, other than exempt property, did not exceed $25,000 at the time the lease was entered into, each such lease is deemed to be a lease of tangible property that had, at the time the lease was entered into, a fair market value exceeding $25,000.

s. 130R42.2; O.C. 366-94, s. 7; O.C. 1466-98, s. 126; O.C. 134-2009, s. 1.

130R73.  For the purposes of the definition of “specified leasing property” in the first paragraph of section 130R71 and despite section 130R72, where a taxpayer referred to in section 130R92 so elects in the taxpayer’s fiscal return required be filed under Part I of the Act for a taxation year in respect of the year and subsequent taxation years, the property of the taxpayer that is the subject of leases entered into during those years is deemed not to be exempt property for those years and the fair market value of the tangible property that is the subject of each such lease is deemed to exceed $25,000 at the time the lease is entered into.

s. 130R42.3; O.C. 366-94, s. 7; O.C. 134-2009, s. 1.

130R74.  Subject to section 130R79 and for the purposes of the definition of “specified leasing property” in the first paragraph of section 130R71, a taxpayer who at any time acquires from a person with whom the taxpayer deals at arm’s length a property that is the subject of a lease with a remaining term at that time of more than 1 year is deemed to have entered into, at that time, a lease with an expected term of more than 1 year.

s. 130R42.4; O.C. 366-94, s. 7; O.C. 134-2009, s. 1.

130R75.  For the purposes of paragraph a of the definition of “exempt property” in the first paragraph of section 130R71, where a property is owned by 2 or more persons or partnerships or a combination of persons or partnerships, the capital cost of the property to each such person or partnership is deemed to be equal to the aggregate of the amounts each of which represents the capital cost of the property to each of those persons or partnerships.

s. 130R42.5; O.C. 366-94, s. 7; O.C. 1707-97, s. 98; O.C. 1466-98, s. 126; O.C. 134-2009, s. 1.

130R75.1.  Despite the definition of “exempt property” in the first paragraph of section 130R71, exempt property does not include property that is the subject of a lease if that property had, at the time the lease was entered into, a fair market value in excess of $1,000,000 and the lessee of the property is

  (a)      a person who is exempt from tax by reason of Book VIII of Part I of the Act;

  (b)      a person who uses the property in the course of carrying on a business, the income from which is exempt from tax under Part I of the Act by reason of any provision of the Act;

  (c)      a Canadian government; or

  (d)      a person not resident in Canada, except if the person uses the property primarily in the course of carrying on a business in Canada that is not a treaty-protected business.

For the purposes of the first paragraph, if it is reasonable, having regard to all the circumstances, to conclude that one of the main reasons for the existence of two or more leases was to avoid the application of the first paragraph by reason of each such lease being a lease of property where the property that was the subject of the lease had a fair market value, at the time the lease was entered into, not in excess of $1,000,000, each such lease is deemed to be a lease of property that had, at the time the lease was entered into, a fair market value in excess of $1,000,000.

O.C. 1105-2014, s. 4.

130R76.  Despite Chapter I and Divisions I, II, IV to XIV and XVIII, the amount deductible by a taxpayer for a taxation year in respect of a property that is a specified leasing property at the end of the year is equal to the lesser of

  (a)      the amount by which the aggregate of the following amounts exceeds the aggregate of the amounts deducted by the taxpayer in respect of the property by reason of this section before the beginning of the year and after the time, referred to in this section as the “particular time”, when the property last became a specified leasing property of the taxpayer:

  (i)    the amounts that would be considered to be repayments during the year or a preceding taxation year as principal on a loan made by the taxpayer if

  (1)    the taxpayer had made the loan at the particular time and the principal amount of the loan were equal to the fair market value of the property at that time,

  (2)    interest, capitalized semi-annually and not in advance, had been charged on the principal amount of the loan outstanding from time to time at the rate, determined pursuant to section 125.1R2, in effect at the earlier of the particular time and any time prior to the particular time at which the taxpayer last entered into an agreement to lease the property or, where a particular lease provides that the amount paid or payable by the lessee of the property for the use of or right to use the property varies according to the rates of interest in effect from time to time, at the beginning of the period for which the interest is computed if the taxpayer so elects, in respect of all property that is the subject of the particular lease, in the taxpayer’s fiscal return filed under Part I of the Act for the taxation year during which the particular lease was entered into, and

  (3)    the amounts received or receivable by the taxpayer before the end of the year for the use of or the right to use the property before the end of the year and after the particular time were blended payments of principal and interest on the loan, computed pursuant to subparagraph 2, that are applied firstly on account of interest on principal, secondly on account of interest on unpaid interest and thirdly on account of the principal amount outstanding, and

  (ii)    the amount that would have been deductible under this Title for the taxation year that includes the particular time if

  (1)    the property had been transferred to a separate prescribed class at the later of the beginning of that taxation year or the time when the property was acquired by the taxpayer,

  (2)    that taxation year had ended immediately before the particular time, and

  (3)    where the property was not a specified leasing property immediately before the particular time, section 130R23 had applied; or

  (b)      the amount by which the aggregate of the amounts that would have been deducted by the taxpayer in respect of the property under paragraph a of section 130 of the Act in computing the taxpayer’s income for the year and the preceding taxation years, if this section and sections 130R85 and 130R91 had not applied and if the taxpayer, in each such year, had deducted under paragraph a of that section 130 the maximum amount deductible in respect of the property under this Title if it were read without reference to this section and sections 130R85 and 130R91, exceeds the total depreciation allowed to the taxpayer before the beginning of the year in respect of the property.

s. 130R42.6; O.C. 366-94, s. 7; O.C. 1466-98, s. 126; O.C. 134-2009, s. 1.

130R77.  For the purposes of this division, a property is deemed to be the subject of a lease for an expected term of more than 1 year at any time if at that time, as the case may be,

  (a)      the property had been leased by the lessee, by a person with whom the lessee does not deal at arm’s length or by the lessee and such person for a period of more than 1 year ending at that time; or

  (b)      it may reasonably be concluded, in view of the circumstances, that the lessor knew or ought to have known that the lessee, a person with whom the lessee does not deal at arm’s length or the lessee and such person would lease the property for more than 1 year.

s. 130R42.7; O.C. 366-94, s. 7; O.C. 134-2009, s. 1.

130R78.  Despite section 130R76 as well as Chapter I and Divisions I, II, IV to XIV and XVIII, where in a taxation year a taxpayer has acquired a property that the taxpayer has not used for any purpose in that year and where the first use made of it is a lease of the property in respect of which section 130R76 applies, the amount deductible by the taxpayer for the year under this Title in respect of the property is deemed to be nil.

s. 130R42.8; O.C. 366-94, s. 7; O.C. 134-2009, s. 1.

130R79.  Where, at any time, a taxpayer acquires, from a person with whom the taxpayer does not deal at arm's length or by reason of an amalgamation, within the meaning of section 544 of the Act, a property that was a specified leasing property of the person from whom the taxpayer acquired it, the taxpayer is deemed, for the purposes of paragraph a of section 130R76 and for the purposes of computing the taxpayer’s income in respect of the lease for any period subsequent to that time, to be the same person as, and the continuation of, the person from whom the taxpayer acquired the property.

s. 130R42.9; O.C. 366-94, s. 7; O.C. 134-2009, s. 1.

130R80.  For the purposes of the definition of “specified leasing property” in the first paragraph of section 130R71 and section 130R76, where, at a particular time, a taxpayer provides a property, referred to in this section as the “replacement property”, to a lessee for the remaining term of a lease as a replacement for a similar property, referred to in this section as the “original property”, that the taxpayer had leased to the lessee and where the amount payable by the lessee for the use of or the right to use the replacement property is the same as the amount that was so payable in respect of the original property, the following rules apply:

  (a)      the replacement property is deemed to have been leased by the taxpayer to the lessee at the same time and for the same term as the original property;

  (b)      the amount of the loan referred to in subparagraph 1 of subparagraph i of paragraph a of section 130R76 is deemed to be equal to the amount of that loan determined in respect of the original property;

  (c)      the amount determined under subparagraph ii of paragraph a of section 130R76 in respect of the replacement property is deemed to be equal to the amount so determined in respect of the original property;

  (d)      the amounts received or receivable by the taxpayer for the use of or the right to use the original property before the particular time are deemed to have been received or receivable, as the case may be, by the taxpayer for the use of or the right to use the replacement property; and

  (e)      the original property is deemed to have ceased to be the subject of the lease at the particular time.

s. 130R42.10; O.C. 366-94, s. 7; O.C. 1466-98, s. 126; O.C. 134-2009, s. 1.

130R81.  For the purposes of section 130R76, where, for any period, an amount that would have been received or receivable by a taxpayer during that period for the use of or the right to use any of the taxpayer’s properties during that period is not received or receivable by the taxpayer by reason of a breakdown or defect in the property during that period and before the end of the lease for the property, that amount is deemed to be an amount received or receivable, as the case may be, by the taxpayer.

s. 130R42.11; O.C. 366-94, s. 7; O.C. 134-2009, s. 1.

130R82.  For the purposes of the definition of “specified leasing property” in the first paragraph of section 130R71 and section 130R76, where, at a particular time, an addition or alteration, referred to in this section as the “additional property”, is made by a taxpayer to any of the taxpayer’s properties, referred to in this section as the “original property”, that is a specified leasing property at the particular time and where by reason of the addition or alteration, the total amount receivable by the taxpayer after the particular time for the use of or the right to use the original property and the additional property exceeds the amount so receivable in respect of the original property, the following rules apply:

  (a)      the taxpayer is deemed to have leased the additional property to the lessee at the particular time;

  (b)      the expected term of the lease for the additional property is deemed to be greater than 1 year;

  (c)      the rate of interest in effect at the particular time in respect of the additional property is deemed to be equal to the rate of interest in effect at that time in respect of the lease for the original property;

  (d)      the definition of “specified leasing property” in the first paragraph of section 130R71 is, in respect of the additional property, to be read without reference to its subparagraph c; and

  (e)      the amount by which the total amount receivable by the taxpayer after the particular time for the use of or the right to use the original property and the additional property exceeds the amount so receivable in respect of the original property is deemed to be an amount receivable by the taxpayer for the use of or the right to use the additional property.

s. 130R42.12; O.C. 366-94, s. 7; O.C. 1466-98, s. 126; O.C. 134-2009, s. 1.

130R83.  For the purposes of the definition of “specified leasing property” in the first paragraph of section 130R71 and section 130R76, where, at any time, a lease, referred to in this section as the “original lease”, is renegotiated in the course of a bona fide renegotiation and where by reason of that renegotiation the amount paid or payable by the lessee for the use of or the right to use the property that is the subject of the lease is altered in respect of a period subsequent to that time, otherwise than by reason of an addition or alteration to which section 130R82 applies, the following rules apply:

  (a)      the original lease is deemed to have expired and the renegotiated lease is deemed to be a new lease, in respect of the property, entered into at that time; and

  (b)      section 130R77 does not apply in respect of a period preceding that time during which the property was leased by the lessee or a person with whom the lessee did not deal at arm’s length.

s. 130R42.13; O.C. 366-94, s. 7; O.C. 134-2009, s. 1.

130R84.  For the purposes of the definition of “specified leasing property” in the first paragraph of section 130R71 and section 130R76, where a taxpayer leases to another person a building or part thereof that is not exempt property, subparagraph b of the definition of “specified leasing property” in the first paragraph of section 130R71, sections 130R74 and 130R77 and paragraph b of section 130R82 is to be read, in respect of that building or part thereof, with the words “3 years” substituted for the words “one year” wherever they occur.

s. 130R42.14; O.C. 366-94, s. 7; O.C. 1466-98, s. 126; O.C. 134-2009, s. 1.

DIVISION  XVI
RENTAL PROPERTIES

div. XIIO.C. 1981-80, title VI, c. III, div. XIIR.R.Q., 1981, c. I-3, r. 1, title VI, c. III, div. XIIO.C. 134-2009, s. 1.

130R85.  The aggregate of the deductions that a taxpayer may claim for a taxation year as capital cost allowance in respect of rental property owned by the taxpayer may not exceed the amount by which the amount determined under the second paragraph exceeds the aggregate of the amounts each of which is

  (a)      the taxpayer’s revenue for the year, computed without reference to paragraph a of section 130 of the Act, arising from the rental, whether or not by lease, of rental property of which the taxpayer is the owner, or

  (b)      the revenue of a partnership for the year arising from the rental, whether or not by lease, of rental property of the partnership, to the extent of the taxpayer’s participation in that revenue.

The amount to which the first paragraph refers is the aggregate of the amounts each of which is

  (a)      the taxpayer’s loss for the year, computed without reference to paragraph a of section 130 of the Act, arising from the rental, whether or not by lease, of rental property of which the taxpayer is the owner, or

  (b)      the loss of a partnership for the year arising from the rental, whether or not by lease, of rental property of the partnership, to the extent of the taxpayer’s participation in that loss.

s. 130R43; O.C. 1981-80, s. 130R43; R.R.Q., 1981, c. I-3, r. 1, s. 130R43; O.C. 1697-92, s. 16; O.C. 1707-97, s. 98; O.C. 134-2009, s. 1.

130R86.  Subject to section 130R87, section 130R85 does not apply in respect of a taxation year of a taxpayer that was, throughout the year,

  (a)      a life insurance corporation or a corporation whose principal business was the leasing, rental, development, sale or any combination thereof, of immovable property owned by it; or

  (b)      a partnership each member of which was

  (i)    a corporation described in paragraph a, or

  (ii)    another partnership described in this paragraph.

s. 130R45; O.C. 1981-80, s. 130R45; R.R.Q., 1981, c. I-3, r. 1, s. 130R45; O.C. 2962-82, s. 13; O.C. 500-83, s. 13; O.C. 1707-97, s. 98; O.C. 134-2009, s. 1; O.C. 66-2016, s. 6.

130R87.  Section 130R86 does not apply where a taxpayer or a partnership holds a leasehold interest in a property included, under section 130R33, in any of Classes 1, 3 and 6 in Schedule B, and that property is leased by the taxpayer or the partnership to the owner of the land on which the property is located or to a person who has an interest in or an option on that land.

s. 130R45.1; O.C. 2962-82, s. 14; O.C. 500-83, s. 14; O.C. 1697-92, s. 18; O.C. 1707-97, s. 98; O.C. 134-2009, s. 1.

130R88.  In this division and sections 130R156 to 130R203, a rental property of a taxpayer or of a partnership is a property that, during the year, is used by the taxpayer or partnership mainly for earning or producing a gross revenue that is a rent and that

  (a)      is a building owned by the taxpayer or the partnership, whether jointly with another person or otherwise, or a leasehold interest in immovable property included in any of Classes 1, 3, 6 and 13 in Schedule B and owned by the taxpayer or partnership; and

  (b)      is not a property leased by the taxpayer or the partnership to a lessee, in the ordinary course of the taxpayer’s or partnership’s business of selling goods or rendering services, under an agreement by which the lessee undertakes to use the property to carry on the business of selling or promoting the sale of the taxpayer’s or partnership’s goods or services.

s. 130R46; O.C. 1981-80, s. 130R46; R.R.Q., 1981, c. I-3, r. 1, s. 130R46; O.C. 1697-92, s. 18; O.C. 1707-97, s. 98; O.C. 134-2009, s. 1.

130R89.  For the purposes of section 130R88, the gross revenue derived from the following sources in a taxation year must be considered to be rent derived from property in that taxation year:

  (a)      the right of a person or partnership, other than the owner of the property, to use or occupy the property or a part thereof; and

  (b)      services offered to a person or partnership that are ancillary to the use or occupation by the person or the partnership of the property or the part thereof.

s. 130R46.1; O.C. 1549-88, s. 2; O.C. 1697-92, s. 19; O.C. 1707-97, s. 98; O.C. 134-2009, s. 1.

130R90.  Section 130R89 does not apply, in a particular taxation year, to property owned by

  (a)      a corporation, where the property is used in a business carried on in the year by the corporation;

  (b)      an individual, where the property is used in a business carried on in the year by the individual in which the individual is personally active on a continuous basis throughout that portion of the year during which the business is ordinarily carried on; or

  (c)      a partnership, where the property is used in a business carried on in the year by the partnership if not less than 2/3 of the income or loss, as the case may be, of the partnership for the year is included in the computation of the income of

  (i)    members of the partnership who are individuals that are personally active in the business of the partnership on a continuous basis throughout that portion of the year during which the business is ordinarily carried on, and

  (ii)    members of the partnership that are corporations.

s. 130R46.2; O.C. 1549-88, s. 2; O.C. 1707-97, s. 98; O.C. 134-2009, s. 1.

DIVISION  XVII
LEASING PROPERTIES

div. XIVO.C. 1981-80, title VI, c. III, div. XIVR.R.Q., 1981, c. I-3, r. 1, title VI, c. III, div. XIVO.C. 134-2009, s. 1.

130R91.  The aggregate of deductions that a taxpayer may claim for a taxation year as allowance in respect of capital cost in respect of leasing property owned by the taxpayer may not exceed the amount by which the amount determined under the second paragraph is exceeded by the aggregate of the amounts each of which is

  (a)      the taxpayer’s revenue for the year, computed without reference to paragraph a of section 130 of the Act, arising from the rental of, whether or not by lease, or from royalties earned on leasing property or property that would be leasing property but for sections 130R97 to 130R99, of which the taxpayer is the owner, or

  (b)      the revenue of a partnership for the year arising from the rental of, whether or not by lease, or from royalties earned on leasing property or property that would be leasing property but for sections 130R97 to 130R99, of which the partnership is the owner, to the extent of the taxpayer’s participation in that revenue.

The amount to which the first paragraph refers is the aggregate of the amounts each of which is

  (a)      the taxpayer’s loss for the year, computed without reference to paragraph a of section 130 of the Act, arising from the rental of, whether or not by lease, or from royalties earned on property referred to in subparagraph a of the first paragraph, or

  (b)      the loss of a partnership for the year arising from the rental of, whether or not by lease, or from royalties earned on property referred to in subparagraph b of the first paragraph, to the extent of the taxpayer’s participation in that loss.

s. 130R48; O.C. 1981-80, s. 130R48; R.R.Q., 1981, c. I-3, r. 1, s. 130R48; O.C. 1697-92, s. 20; O.C. 1707-97, s. 98; O.C. 134-2009, s. 1.

130R92.  Section 130R91 does not apply in respect of a taxation year of a taxpayer that was, throughout the year,

  (a)      a corporation whose principal business was the rental of leasing property or property that would be leasing property but for sections 130R97 to 130R99 or the rental of such property combined with the sale and servicing of property similar to the property leased if the gross revenue of the corporation for the year from such principal business was not less than 90% of its gross revenue for the year from all sources; or

  (b)      a partnership each member of which was

  (i)    a corporation described in paragraph a, or

  (ii)    another partnership described in this paragraph.

s. 130R50; O.C. 1981-80, s. 130R50; R.R.Q., 1981, c. I-3, r. 1, s. 130R50; O.C. 1707-97, s. 98; O.C. 134-2009, s. 1; O.C. 66-2016, s. 7.

130R93.  Subject to section 130R97 and for the purposes of this division and sections 130R156 to 130R203, a leasing property of a taxpayer or of a partnership is a depreciable property of which the taxpayer or the partnership is the owner, together with another person or otherwise, and which, during the year, is used by the taxpayer or partnership mainly for earning or producing gross revenue consisting of rent, royalty or leasing revenue and that is not

  (a)      rental property within the meaning of section 130R88;

  (b)      computer tax shelter property;

  (c)      a property described in subparagraph q or r of the second paragraph of Class 10 in Schedule B or in subparagraph n or r of the first paragraph of Class 12 in that schedule; or

  (d)      a property leased by the taxpayer or the partnership to a lessee, in the ordinary course of the taxpayer’s or partnership’s business of selling goods or rendering services, under an agreement by which the lessee undertakes to use the property to carry on the business of selling, or promoting the sale of, the taxpayer’s or partnership’s goods or services.

s. 130R51; O.C. 1981-80, s. 130R51; R.R.Q., 1981, c. I-3, r. 1, s. 130R51; O.C. 2727-84, s. 3; O.C. 1697-92, s. 22; O.C. 1539-93, s. 6; O.C. 1707-97, s. 98; O.C. 1282-2003, s. 22; O.C. 134-2009, s. 1; O.C. 1176-2010, s. 12.

130R94.  For the purposes of section 130R93 where, in a taxation year, a taxpayer or a partnership acquired a property that was not used during that year, and subsequently the taxpayer first used the property principally for the purpose of earning or producing gross revenue consisting of rent, royalty or leasing revenue, the property is deemed to have been so used during the taxation year in which it was acquired.

s. 130R51.1; O.C. 2962-82, s. 15; O.C. 500-83, s. 15; O.C. 1707-97, s. 98; O.C. 134-2009, s. 1.

130R95.  For the purposes of the definition of “specified leasing property” in the first paragraph of section 130R71 and section 130R93, the gross revenue derived from the following sources in a taxation year must be considered to be rent derived from a property in that taxation year:

  (a)      the right of a person or partnership, other than the owner of the property, to use or occupy the property or a part thereof; and

  (b)      services offered to a person or partnership that are ancillary to the use or occupation by the person or the partnership of the property or the part thereof.

s. 130R51.2; O.C. 1549-88, s. 3; O.C. 1697-92, s. 23; O.C. 366-94, s. 8; O.C. 1707-97, s. 98; O.C. 134-2009, s. 1.

130R96.  Section 130R95 does not apply, in a particular taxation year, to property owned by

  (a)      a corporation, where the property is used in a business carried on in the year by the corporation;

  (b)      an individual, where the property is used in a business carried on in the year by the individual in which the individual is personally active on a continuous basis throughout that portion of the year during which the business is ordinarily carried on; or

  (c)      a partnership, where the property is used in a business carried on in the year by the partnership if not less than 2/3 of the income or loss, as the case may be, of the partnership for the year is included in the computation of the income of

  (i)    members of the partnership who are individuals that are personally active in the business of the partnership on a continuous basis throughout that portion of the year during which the business is ordinarily carried on, and

  (ii)    members of the partnership that are corporations.

s. 130R51.3; O.C. 1549-88, s. 3; O.C. 1707-97, s. 98; O.C. 134-2009, s. 1.

130R97.  Leasing property referred to in section 130R93 does not include

  (a)      any property that the taxpayer or the partnership acquired before 26 May 1976 or was obliged to acquire under the terms of an agreement in writing entered into before 26 May 1976;

  (b)      any property the construction, manufacture or production of which was commenced by the taxpayer or the partnership before 26 May 1976 or was commenced under an agreement in writing entered into by the taxpayer or the partnership before 26 May 1976; or

  (c)      any property that the taxpayer or the partnership acquired on or before 31 December 1976 or was obliged to acquire under the terms of an agreement in writing entered into on or before 31 December 1976, if

  (i)    arrangements, evidenced by writing, respecting the acquisition, construction, manufacture or production of the property had been substantially advanced before 26 May 1976, and

  (ii)    the taxpayer or the partnership had, before 26 May 1976, demonstrated a bona fide intention to acquire the property for the purpose of gaining or producing gross revenue that is rent, royalty or leasing revenue.

s. 130R52; O.C. 1981-80, s. 130R52; R.R.Q., 1981, c. I-3, r. 1, s. 130R52; O.C. 1697-92, s. 24; O.C. 1707-97, s. 98; O.C. 134-2009, s. 1.

130R98.  Despite section 130R93, where a taxpayer acquires, in the course of a reorganization in respect of which, if a dividend were received by a corporation in the course of the reorganization, section 308.1 of the Act would not be applicable to the dividend by reason of the application of section 308.3 of the Act, or from a person with whom the taxpayer was not dealing at arm’s length, otherwise than by virtue of a right referred to in paragraph b of section 20 of the Act, at the time the property was acquired, a property that would otherwise be leasing property of the taxpayer, that property is deemed not to be such property if, immediately before it was so acquired, it was not, by virtue of this section or section 130R97 or 130R99, a leasing property of the person from whom it was so acquired.

s. 130R53; O.C. 1981-80, s. 130R53; R.R.Q., 1981, c. I-3, r. 1, s. 130R53; O.C. 2962-82, s. 16; O.C. 500-83, s. 16; O.C. 1472-87, s. 5; O.C. 1471-91, s. 14; O.C. 1697-92, s. 25; O.C. 1707-97, s. 98; O.C. 134-2009, s. 1.

130R99.  Despite section 130R93, a property acquired by a taxpayer or a partnership that is a “replacement property” referred to in section 96 of the Act and that would otherwise be a leasing property of the taxpayer or partnership is deemed not to be such a property, if the replaced property referred to in that section 96 was, by reason of this section or section 130R97 or 130R98, not such a property immediately before it was disposed of by the taxpayer or partnership.

s. 130R54; O.C. 1981-80, s. 130R54; R.R.Q., 1981, c. I-3, r. 1, s. 130R54; O.C. 1631-96, s. 13; O.C. 1707-97, s. 98; O.C. 134-2009, s. 1.

DIVISION  XVIII
RAILWAY AND RELATED PROPERTY

div. XV; O.C. 1981-80, title VI, c. III, div. XV; R.R.Q., 1981, c. I-3, r. 1, title VI, c. III, div. XV; O.C. 134-2009, s. 1.

130R100.  A taxpayer may deduct as additional allowance in respect of property for which a separate class is prescribed by paragraph a of section 130R176 or section 130R179 or 130R181, an amount not exceeding 8%, 4% and 3% respectively of the undepreciated capital cost to the taxpayer of property of that class at the end of the taxation year, before any deduction under section 130R19 and this section for the year.

s. 130R55; O.C. 1981-80, s. 130R55; R.R.Q., 1981, c. I-3, r. 1, s. 130R55; O.C. 366-94, s. 9; O.C. 134-2009, s. 1.

130R101.  A taxpayer may deduct as additional allowance in respect of property for which a separate class is prescribed by any of paragraphs b to d of section 130R176, an amount not exceeding 6% of the undepreciated capital cost to the taxpayer of property of that class at the end of the taxation year, before any deduction under section 130R19 and this section for the year.

s. 130R55.0.1; O.C. 366-94, s. 10; O.C. 134-2009, s. 1.

130R102.  A taxpayer that, throughout the taxation year, is a common carrier owning and operating a railway may deduct, as additional allowance in respect of property for which a separate class is prescribed by any of sections 130R177, 130R178, 130R180 and 130R182, an amount not exceeding 3% in the case of section 130R177, 6% in the case of sections 130R178 and 130R180 or 5% in the case of section 130R182, of the undepreciated capital cost to the taxpayer of property of that class at the end of the taxation year, before any deduction under section 130R19 and this section for the year.

s. 130R55.0.2; O.C. 1631-96, s. 14; O.C. 1707-97, s. 98; O.C. 1149-2006, s. 8; O.C. 134-2009, s. 1.

130R103.  A taxpayer that is a common carrier owning and operating a railway may deduct, as additional allowance for a taxation year in respect of property described in section 130R104 and included in any class in Schedule B, an amount not exceeding the lesser of the undepreciated capital cost to the taxpayer of property of that class at the end of the year, after any deductions under sections 130R19 and 130R100 for the year, but before any deduction under this section for the year, and 6% of the capital cost to the taxpayer of the property of that class.

s. 130R55.1; O.C. 1983-80, s. 7; R.R.Q., 1981, c. I-3, r. 1, s. 130R55.1; O.C. 1707-97, s. 98; O.C. 134-2009, s. 1.

130R104.  The property referred to in section 130R103 is the property of the taxpayer that is described in section 130R105 and that

  (a)      is located in Canada or was acquired by the taxpayer principally for use in Canada;

  (b)      was acquired by the taxpayer for that railway, after 10 April 1978 and before 1 January 1988, in the taxation year referred to in section 130R103 or in one of the 4 taxation years immediately preceding that year; and

  (c)      was not used for any purpose whatever before it was acquired by the taxpayer.

s. 130R55.2; O.C. 1983-80, s. 7; R.R.Q., 1981, c. I-3, r. 1, s. 130R55.2; O.C. 2583-85, s. 4; O.C. 134-2009, s. 1.

130R105.  The property described in section 130R104 means property that is

  (a)      included in Class 1 in Schedule B pursuant to paragraph h or i of that class;

  (b)      included in Class 6 in Schedule B pursuant to paragraph j of that class:

  (c)      included in Class 10 in Schedule B pursuant to any of subparagraphs i to iii of subparagraph m of the second paragraph of that class;

  (d)      included in Class 28 in Schedule B pursuant to subparagraph ii of subparagraph e of the first paragraph of that class, except for a property described in subparagraph iv of subparagraph m of the second paragraph of Class 10;

  (e)      included in Class 35 in Schedule B;

  (f)      a bridge, a culvert, a subway or a tunnel used for a railway track and grading and included in Class 1 in Schedule B;

  (g)      a trestle used for a railway track and grading and included in Class 3 in Schedule B;

  (h)      machinery or equipment included in Class 8 in Schedule B and used for a railway track and grading or a property that is railway traffic control or signalling equipment, including switching, block signalling, interlocking, crossing protection, detection, speed-control or retarding equipment, but not including property that is principally electronic equipment or systems software therefor; or

  (i)      machinery or equipment included in Class 8 in Schedule B and that was acquired principally for purposes of maintenance or service of a railway locomotive or railway car or was used as part of either.

s. 130R55.3; O.C. 1983-80, s. 7; R.R.Q., 1981, c. I-3, r. 1, s. 130R55.3; O.C. 1631-96, s. 61; O.C. 134-2009, s. 1.

DIVISION  XIX
CERTIFIED PRODUCTIONS

div. XV.1; O.C. 1114-92, s. 11; O.C. 134-2009, s. 1.

130R106.  A taxpayer may deduct an amount as additional depreciation in respect of property for which section 130R189 prescribes a separate class, to the extent that that amount does not exceed the lesser of

  (a)      the aggregate of the taxpayer’s revenue for the year from that property and from property described in subparagraph n of the first paragraph of Class 12 in Schedule B, determined before any deduction under this section; and

  (b)      the undepreciated capital cost to the taxpayer of property of that class at the end of the taxation year, before any deduction under this section for the year.

s. 130R55.3.1; O.C. 1114-92, s. 11; O.C. 1697-92, s. 26; O.C. 134-2009, s. 1.

DIVISION  XX
CANADIAN FILM OR VIDEO PRODUCTIONS

div. XV.2; O.C. 1249-2005, s. 4; O.C. 134-2009, s. 1.

130R107.  A taxpayer may deduct an amount as additional depreciation in respect of property for which section 130R190 prescribes a separate class, to the extent that that amount does not exceed the lesser of

  (a)      the taxpayer’s income for the year from that property, determined before any deduction under this section; and

  (b)      the undepreciated capital cost to the taxpayer of property of that class at the end of the taxation year, before any deduction under this section for the year.

s. 130R55.3.2; O.C. 1249-2005, s. 4; O.C. 134-2009, s. 1.

DIVISION  XXI
MOTION PICTURE FILMS AND VIDEO TAPES

div. XVI; O.C. 1983-80, s. 7; R.R.Q., 1981, c. I-3, r. 1, title VI, c. III, div. XVI; O.C. 2727-84, s. 4; O.C. 134-2009, s. 1.

130R108.  The allowance that a taxpayer may claim for a particular taxation year in respect of property of Class 12 in Schedule B, where the taxpayer has acquired after the 1977 taxation year but before 1979 a property of that class that is a certified feature film, a certified short production or a certified feature production for which the principal photography or taping was completed after the particular year but before 2 March 1979, may not exceed the amount that would otherwise be computed under section 130R19 in respect of the property of that class for the particular year if the capital cost of the property to the taxpayer were reduced by an amount equal to the amount by which the capital cost to the taxpayer of that property at the end of the particular year exceeds the amount that may reasonably be deemed to be the proportional share of the taxpayer in production expenses incurred in respect of the property before 2 March 1979.

s. 130R55.4; O.C. 1983-80, s. 7; R.R.Q., 1981, c. I-3, r. 1, s. 130R55.4; O.C. 134-2009, s. 1.

130R109.  The depreciation that a taxpayer may claim for a particular taxation year in respect of property in Class 10 or 12 in Schedule B, where the taxpayer acquired a property of that class that is a certified feature film, a certified production, a certified Québec film or a Québec film production, may not exceed the amount that could be deducted under section 130R19 in respect of property in that class for the particular year if the capital cost of the property to the taxpayer were reduced by the amount prescribed by section 130R110.

s. 130R55.5; O.C. 1983-80, s. 7; R.R.Q., 1981, c. I-3, r. 1, s. 130R55.5; O.C. 2727-84, s. 5; O.C. 615-88, s. 7; O.C. 1114-92, s. 12; O.C. 1539-93, s. 7; O.C. 134-2009, s. 1.

130R110.  The amount referred to in section 130R109 is equal to the aggregate of

  (a)      where the principal photography or taping of the property referred to therein is not completed until the 60 days immediately following the end of the particular year referred to therein, the amount by which the capital cost to the taxpayer of the property at the end of that year exceeds the aggregate of the amounts computed under paragraphs c to f in respect of the property at the end of that year and the amount that may reasonably be considered to be the proportional share of the taxpayer in the production costs incurred in respect of the property before the end of that year;

  (b)      where the principal filming or taping work of the property referred to is not completed before the expiry of 60 days immediately following the end of the particular year, the amount by which the capital cost to the taxpayer of the property at the end of that year exceeds the aggregate of the amounts computed under paragraphs c to f in respect of the property at the end of that year and the amount that may be considered to be the proportional share of the taxpayer of the lesser of the production cost incurred in respect of the property before the end of that year, and the proportion of the production cost incurred with respect to the property before the time when the principal filming or taping work of the property was completed, that the proportion, certified by the Société de développement des entreprises culturelles or the Minister of Communications of Canada, as the case may be, that the part of the work completed at the end of that year is of the whole of the work;

  (c)      where a revenue guarantee, other than a revenue guarantee that is certified by the Minister of Communications of Canada to be a guarantee under which the person who agrees to provide the revenue is a licensed broadcaster or a bona fide film or tape distributor, is granted in respect of the property referred to therein at any time before the later of the day on which the principal photography or taping was completed and the day on which the taxpayer acquired the property and that, by reason of that guarantee, it may reasonably be considered certain, having regard to all the circumstances, that the taxpayer will receive revenue according to the terms and conditions of that guarantee, the amount that may reasonably be considered to be the portion of the revenue that the taxpayer did not include in computing the taxpayer’s income for the particular year referred to therein or for a prior taxation year;

  (d)      where a revenue guarantee is entered into at any time in respect of the property referred to therein, other than a revenue guarantee in respect of which paragraph c applies, or under which the person who agrees to provide the revenue under the terms of the guarantee does not deal at arm’s length with the taxpayer or the person from whom the taxpayer acquired the property, and in respect of which the Minister of Communications of Canada certifies that the person who agrees to provide the revenue under the terms of the guarantee is a licenced broadcaster or bona fide film or tape distributor and that the cost of the property does not include any amount for or in respect of the guarantee, and where the taxpayer and the person who agrees to furnish the revenue under the terms of the guarantee do not deal at arm’s length, the person from whom the taxpayer acquired the property and the person who agrees to furnish the revenue under the terms of the guarantee do not deal at arm’s length or the person from whom the taxpayer acquired the property or a person who does not deal at arm’s length with that person agrees, in any manner whatsoever, to fulfill, in whole or in part, the obligations of the person who agrees to furnish the revenue under the terms of the guarantee, the amount that may reasonably be considered to be the portion of the revenue that the taxpayer is to receive under the terms of the guarantee that has not been included in computing the taxpayer’s income for the particular year referred to therein or for a prior taxation year;

  (e)      where a revenue guarantee is granted at any time in respect of the property referred to therein, other than a guarantee in respect of which paragraph c or d applies, the amount that may reasonably be considered to be the portion of the revenue that the taxpayer is to receive according to the terms and conditions of that guarantee, that the taxpayer is not entitled to until the fourth year following the first day on which the person who agrees to furnish the revenue according to the terms and conditions of that guarantee has the right to use the property and that was not included in computing the income of the taxpayer for the particular year referred to therein or for a prior taxation year; and

  (f)      the portion of any debt obligation of the taxpayer outstanding at the end of that year that is convertible into an interest in the property referred to in section 130R109.

s. 130R55.6; O.C. 1983-80, s. 7; O.C. 1535-81, s. 4; R.R.Q., 1981, c. I-3, r. 1, s. 130R55.6; O.C. 2727-84, s. 6; S.Q. 1984,c. 47, s. 216; O.C. 615-88, s. 8; Erratum, 1988 G.O. 2, 4642; O.C. 1666-90, s. 4; O.C. 1114-92, s. 13; S.Q. 1994, c. 21, s. 50; O.C. 216-95; O.C. 1249-2005, s. 5; O.C. 134-2009, s. 1.

130R111.  For the purposes of paragraphs a and b of section 130R110, the reference to “until the 60 days immediately following the end of the particular year referred to therein” used in paragraph a of that section and the reference to “before the expiry of 60 days immediately following the end of the particular year” used in paragraph b of that section are to be read as a reference to

  (a)      “before 1 July 1988”, in respect of a motion picture film or video tape acquired in 1987, other than a certified Québec film or a film or tape in respect of which paragraph b applies; and

  (b)      “before 1 January 1989”, in respect of a motion picture film or video tape acquired in 1987 or 1988 that is described in subparagraph n of the first paragraph of Class 12 in Schedule B and that is part of a series of motion picture films or video tapes that includes another property described in subparagraph n of the first paragraph of that class.

s. 130R55.6.1; O.C. 1114-92, s. 14; O.C. 1697-92, s. 27; O.C. 134-2009, s. 1.

130R112.  Where a taxpayer has acquired property described in subparagraph l of the second paragraph of Class 10 in Schedule B or subparagraph m of the first paragraph of Class 12 in that schedule, the deduction in respect of the property otherwise allowed to the taxpayer in computing the taxpayer’s income for a taxation year may not exceed the amount that would otherwise be deducted under section 130R19 if the capital cost to the taxpayer of the property were reduced by the portion of any debt obligation of the taxpayer outstanding at the end of that year that is convertible into an interest in the property.

s. 130R55.6.1.1; O.C. 1249-2005, s. 6; O.C. 134-2009, s. 1.

DIVISION  XXII
YEAR 2000 COMPUTER HARDWARE AND SYSTEMS SOFTWARE

div. XVI.1; O.C. 1282-2003, s. 23; O.C. 134-2009, s. 1.

130R113.  A taxpayer may elect to deduct as additional allowance, for a taxation year, an amount that does not exceed the amount determined under section 130R114, where the taxpayer

  (a)      is not a large corporation within the meaning of subsection 8 of section 225.1 of the Income Tax Act (R.S.C. 1985, c 1 (5th Suppl.)), in the year, or a partnership any member of which is such a corporation in a taxation year that includes any time that is in the partnership’s fiscal period; and

  (b)      acquired property included in Class 10 in Schedule B under subparagraph g of the first paragraph of that class in the year but after 31 December 1997 and before 1 November 1999, for the purpose of replacing property that was acquired before 1 January 1998 that has a material risk of malfunctioning because of the change of the calendar year to 2000 and that is described in that subparagraph g or in subparagraph o of the first paragraph of Class 12 in Schedule B.

s. 130R55.6.2; O.C. 1282-2003, s. 23; O.C. 134-2009, s. 1.

130R114.  The amount to which section 130R113 refers is equal to the least of

  (a)      the amount by which $50,000 exceeds

  (i)    the aggregate of all amounts each of which is an amount claimed by the taxpayer under section 130R113 for a preceding taxation year,

  (ii)    the aggregate of all amounts each of which is an amount claimed by the taxpayer under section 130R115 for the year or a preceding taxation year, and

  (iii)    the aggregate of all amounts each of which is an amount claimed under section 130R113 or 130R115 by a corporation for a taxation year in which it was associated with the taxpayer;

  (b)      85% of the capital cost to the taxpayer of all property described in paragraph b of section 130R113; and

  (c)      the undepreciated capital cost to the taxpayer, at the end of the year, of property included in Class 10 in Schedule B, computed without reference to Division XXIV and after all deductions claimed under this Title for the year except those under section 130R113.

s. 130R55.6.3; O.C. 1282-2003, s. 23; O.C. 134-2009, s. 1.

130R115.  A taxpayer may elect to deduct as additional allowance, for a taxation year, an amount that does not exceed the amount determined under section 130R116, where the taxpayer

  (a)      is not a large corporation within the meaning of subsection 8 of section 225.1 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)), in the year, or a partnership any member of which is such a corporation in a taxation year that includes any time that is in the partnership’s fiscal period; and

  (b)      acquired property included in Class 12 in Schedule B under subparagraph o of the first paragraph of that class in the year but after 31 December 1997 and before 1 November 1999, for the purpose of replacing property that was acquired before 1 January 1998 that has a material risk of malfunctioning because of the change of the calendar year to 2000 and that is described in subparagraph g of the first paragraph of Class 10 in Schedule B or in that subparagraph o.

s. 130R55.6.4; O.C. 1282-2003, s. 23; O.C. 134-2009, s. 1.

130R116.  The amount to which section 130R115 refers is equal to the least of

  (a)      the amount by which $50,000 exceeds

  (i)    the aggregate of all amounts each of which is an amount claimed by the taxpayer under section 130R115 for a preceding taxation year,

  (ii)    the aggregate of all amounts each of which is an amount claimed by the taxpayer under section 130R113 for the year or a preceding taxation year, and

  (iii)    the aggregate of all amounts each of which is an amount claimed under section 130R113 or 130R115 by a corporation for a taxation year in which it was associated with the taxpayer;

  (b)      50% of the capital cost to the taxpayer of all property described in paragraph b of section 130R115; and

  (c)      the undepreciated capital cost to the taxpayer, at the end of the year, of property included in Class 12 in Schedule B, computed without reference to Division XXIV after all deductions claimed under this Title for the year except those under section 130R115.

s. 130R55.6.5; O.C. 1282-2003, s. 23; O.C. 134-2009, s. 1.

DIVISION  XXIII
COMPUTER TAX SHELTER PROPERTY

div. XVI.2; O.C. 1282-2003, s. 23; O.C 134-2009, s. 1O.C. 1176-2010, s. 13.

130R117.  The aggregate of all amounts each of which is a deduction in respect of computer tax shelter property allowed to a taxpayer under this Title in computing the taxpayer’s income for a taxation year may not exceed the amount determined according to the formula

A – B.

In the formula in the first paragraph,

  (a)      A is the aggregate of all amounts each of which is

  (i)    the taxpayer’s income for the year from a business in which computer tax shelter property owned by the taxpayer is used, computed without reference to any deduction under this Title in respect of such property, or

  (ii)    the income of a partnership from a business in which computer tax shelter property owned by the partnership is used, to the extent of the taxpayer’s share of such income that is included in computing the taxpayer’s income for the year;

  (b)      B is the aggregate of all amounts each of which is

  (i)    a loss of the taxpayer from a business in which computer tax shelter property is used, computed without reference to any deduction under this Title in respect of such property, or

  (ii)    a loss of a partnership from a business in which computer tax shelter property is used, to the extent of the taxpayer’s share of such loss that is included in computing the taxpayer’s income for the year.

s. 130R55.6.6; O.C. 1282-2003, s. 23; O.C. 134-2009, s. 1; O.C. 1176-2010, s. 14.

130R118.  For the purposes of this Title, depreciable property of a prescribed class of a person or partnership that is computer software or property of Class 50 or 52 in Schedule B is computer tax shelter property where

  (a)      the person’s or partnership’s interest in the property is a tax shelter investment within the meaning of section 851.38 of the Act, determined without reference to section 130R117; or

  (b)      an interest in the person or partnership is a tax shelter investment within the meaning of section 851.38 of the Act, determined without reference to section 130R117.

s. 130R55.6.7; O.C. 1282-2003, s. 23; O.C. 134-2009, s. 1; O.C. 1176-2010, s. 15.

DIVISION  XXIV
PROPERTY ACQUIRED DURING THE YEAR

div. XVII; O.C. 2847-84, s. 8; O.C. 134-2009, s. 1.

130R119.  The amount that a taxpayer may deduct for a taxation year under section 130R1 in respect of property of a class in Schedule B is computed as if the undepreciated capital cost to the taxpayer at the end of the year, before any deduction under section 130R1 for the year, of the property were reduced by half the amount determined in respect of that class at the end of the year under section 130R120.

The rule prescribed in the first paragraph does not apply in respect of

  (a)      property that is

  (i)    property referred to in any of sections 130R62, 130R161, 130R192, 130R193 and 130R194,

  (ii)    property included in any of Classes 13 to 15, 23, 24, 27, 29, 34 and 52 in Schedule B, or

  (iii)    property included in a separate class pursuant to an election made by the taxpayer in accordance with section 130R198 or 130R199;

  (b)      where the taxpayer is a corporation referred to in section 130R92 throughout the year, a property that is a specified leasing property, within the meaning assigned to that expression by the first paragraph of section 130R71, of the taxpayer at the end of the year;

  (c)      a property that is deemed to have been acquired by the taxpayer in a prior taxation year by reason of paragraph b of section 125.1 of the Act in respect of the lease of which the property was the subject immediately before the time at which the taxpayer last acquired it; and

  (d)      a property that is considered to be available for use by the taxpayer by reason of subparagraph b of the first paragraph of section 93.7 of the Act or subparagraph c of the first paragraph of section 93.8 of that Act.

s. 130R55.7; O.C. 2847-84, s. 8; O.C. 544-86, s. 5; O.C. 1697-92, s. 28; O.C. 366-94, s. 11; O.C. 1631-96, s. 15; O.C. 1707-97, s. 98; O.C. 1463-2001, s. 37; O.C. 1470-2002, s. 18; O.C. 134-2009, s. 1; O.C. 1176-2010, s. 16.

130R120.  The amount that, in accordance with section 130R119, must be determined in respect of a class in Schedule B at the end of a taxation year is established according to the formula

A – B.

In the formula in the first paragraph,

  (a)      A is any amount added, in respect of a property that is neither a property described in subparagraph q or r of the second paragraph of Class 10 in Schedule B, in any of subparagraphs a to c, e to i, k, l, p, q and s of the first paragraph of Class 12 in that schedule or in the third paragraph of that Class 12, nor a property to which subparagraph b of the second paragraph of section 130R19 applies for the year, to the undepreciated capital cost to the taxpayer of property of the class either under subparagraph i of subparagraph e of the first paragraph of section 93 of the Act in respect of a property acquired during the year or that became available for use by the taxpayer in the year, or under subparagraph ii.1 or ii.2 of that paragraph e in respect of an amount repaid during the year; and

  (b)      B is any amount deducted from the undepreciated capital cost to the taxpayer of property of the class under subparagraph c or d of the second paragraph of section 93 of the Act in respect of a property disposed of during the year or under subparagraph g of that paragraph in respect of an amount that the taxpayer received or was entitled to receive during the year.

s. 130R55.8; O.C. 2847-84, s. 8; O.C. 1114-92, s. 15; O.C. 1697-92, s. 29; O.C. 1539-93, s. 8; O.C. 366-94, s. 12; O.C. 1631-96, s. 16; O.C. 1282-2003, s. 24; O.C. 1249-2005, s. 7; O.C. 134-2009, s. 1.

130R121.  For the purposes of subparagraph b of the second paragraph of section 130R120, the proceeds of disposition of a property of Class 10 in Schedule B that would be referred to in the third paragraph of Class 16 in that schedule if it had been acquired after 12 November 1981 are deemed to be the proceeds of disposition of a property of Class 16 and not of a property of Class 10.

s. 130R55.9; O.C. 2847-84, s. 8; O.C. 1282-2003, s. 25; O.C. 134-2009, s. 1.

130R122.  Where a taxpayer has acquired a property of a class in Schedule B or incurred a capital cost in respect of a property of such a class, between 12 November 1981 and 1 January 1983, the rules in section 130R124 apply in respect of the property if

  (a)      the taxpayer was required to acquire the property under an agreement in writing entered into before 13 November 1981 or, where the property is a property described in Class 31 in Schedule B, before 1 January 1982;

  (b)      the taxpayer or a person with whom the taxpayer was not dealing at arm’s length commenced construction, manufacture or production of the property before 13 November 1981 or, where the property is a property described in Class 31 in Schedule B, before 1 January 1982;

  (c)      the taxpayer or a person with whom the taxpayer was not dealing at arm’s length made, for the construction, manufacture or production of the property, arrangements in writing that were substantially advanced before 13 November 1981, and if the construction, manufacture or production commenced before 1 June 1982; or

  (d)      the taxpayer was required to acquire the property under an agreement in writing entered into before 1 June 1982 and if arrangements in writing for the acquisition or leasing of the property were substantially advanced before 13 November 1981.

s. 130R55.10; O.C. 2847-84, s. 8; O.C. 134-2009, s. 1.

130R123.  Where a taxpayer acquired a property of a class in Schedule B that was a depreciable property of the person from whom the taxpayer acquired it and that had belonged to that person without interruption for at least 364 days before the end of the taxation year of the taxpayer during which the taxpayer acquired the property, or since 12 November 1981, to the day of its acquisition by the taxpayer, or that was a property in respect of which the rules in section 130R124 were applied for the purpose of determining the amount that the person from whom the taxpayer acquired the property was entitled to deduct under section 130R1, the rules in section 130R124 apply in respect of the property if it was acquired

  (a)      in the course of a reorganization in respect of which, if a dividend were received by a corporation in the course of the reorganization, section 308.1 of the Act would not be applicable to the dividend by reason of the application of section 308.3 of the Act; or

  (b)      from a person with whom the taxpayer did not deal at arm’s length at the time of acquisition of the property otherwise than under a right referred to in paragraph b of section 20 of the Act.

s. 130R55.11; O.C. 2847-84, s. 8; O.C. 1471-91, s. 15; O.C. 1697-92, s. 30; O.C. 1707-97, s. 98; O.C. 134-2009, s. 1.

130R124.  The following rules apply in respect of a property referred to in section 130R122 or 130R123:

  (a)      no amount may be included under subparagraph a of the second paragraph of section 130R120 in respect of the property;

  (b)      if sections 130R24 to 130R36 apply in respect of the property, section 130R27 must be read, in respect of the property, without reference to the second paragraph;

  (c)      if the property is acquired before 1 January 1988 and is included in a class in respect of which section 130R46 applies, the property is deemed to be a designated property of the class;

  (d)      if the property is acquired after 31 December 1987 and is included in a class in respect of which paragraph b of section 130R46 applies, the following rules apply:

  (i)    the property is deemed to be a designated property of the class, and

  (ii)    for the purposes of computing the amount determined under section 130R48 for any taxation year of the taxpayer ending after the time the property was actually acquired by the taxpayer, the property is deemed, other than for the purposes of determining the period referred to in section 130R123 during which a person from whom the taxpayer acquired the property, referred to as the “last transferor” in this section, owned the property before it was acquired by the taxpayer, and subject to the third paragraph, to have been acquired by the taxpayer immediately after the commencement of the taxpayer’s first taxation year that commenced at the time that is the earlier of

  (1)    the time when the property was last acquired by the last transferor, and

  (2)    where the property was transferred in a series of transfers to which section 130R123 and this section apply, the time when the property was last acquired by the first taxpayer, referred to as the “first transferor” in this section, having transferred the property in that series,

  (iii)    the property is deemed to have become available for use by the taxpayer at the earlier of

  (1)    the time when it became available for use by the taxpayer, and

  (2)    the time, determined without reference to subparagraph c of the first paragraph of section 93.7 of the Act and subparagraph d of the first paragraph of section 93.8 of the Act, when, as the case may be, it became available for use by the last transferor or it became available for use by the first transferor in a series of transfers of the same property to which section 130R123 and this section apply; and

  (e)      if the property is property described in section 130R62, subparagraph a of the first paragraph of section 130R63 is to be read as follows in respect of that property:

“(a) 33 1/3% of the capital cost of the property to the taxpayer;”.

For the purposes of subparagraph ii of subparagraph d of the first paragraph, where the taxpayer is a corporation incorporated after the end of the first or the last transferor’s taxation year, as the case may be, during which the transferor last acquired the property, the following rules apply:

  (a)      the taxpayer is deemed to have been in existence throughout the period commencing immediately before the end of that year and ending immediately after the time when it was so incorporated; and

  (b)      the taxpayer’s fiscal periods, throughout the period described in subparagraph a, are deemed to have ended on the day of the year on which its first fiscal period ended.

Subparagraph ii of subparagraph d of the first paragraph does not apply where the property was acquired by the taxpayer before the end of the first or the last transferor’s taxation year, as the case may be, that includes the time when the transferor acquired the property.

s. 130R55.12; O.C. 2847-84, s. 8; O.C. 1631-96, s. 17; O.C. 1707-97, s. 21; O.C. 1466-98, s. 126; O.C. 1282-2003, s. 26; O.C. 134-2009, s. 1.

130R125.  A taxpayer who disposes of a property in any of the circumstances mentioned in section 130R123 may not include any amount under subparagraph b of the second paragraph of section 130R120 in respect of that disposition if subparagraph a of the first paragraph of section 130R124 applied in respect of the property for the purchaser.

s. 130R55.13; O.C. 2847-84, s. 8; O.C. 1631-96, s. 18; O.C. 1282-2003, s. 27; O.C. 134-2009, s. 1.

130R126.  Where a taxpayer is deemed under a provision of the Act to have disposed of and acquired or reacquired a property,

  (a)      for the purposes of paragraph b of section 130R123 and of sections 130R98, 130R149, 130R150 and 130R160, the acquisition or reacquisition by the taxpayer is deemed to have been from a person with whom the taxpayer was not dealing at arm’s length at the time of the acquisition or reacquisition; and

  (b)      for the purposes of the portion of section 130R123 before paragraph a, the taxpayer is deemed to be the person from whom the taxpayer acquired or reacquired the property.

s. 130R55.14; O.C. 1697-92, s. 31; O.C. 134-2009, s. 1.

130R127.  Where in a particular taxation year a taxpayer disposes of a property included in Class 10.1 in Schedule B that was owned by the taxpayer at the end of the preceding taxation year, the following rules apply:

  (a)      the amount that the taxpayer may deduct in computing the taxpayer’s income for the year under section 130R1 in respect of the property is computed as if the property had not been disposed of in the particular year and as if the number of days in the particular year were one-half of the number of days in the particular year otherwise determined; and

  (b)      no amount may be deducted in computing the taxpayer’s income under section 130R1 in respect of the property for any subsequent taxation year.

s. 130R55.15; O.C. 1631-96, s. 19; O.C. 134-2009, s. 1.

CHAPTER  IV
RULES RESPECTING CLASSES OF PROPERTY

c. IV; O.C. 1981-80, title VI, c. IV; R.R.Q., 1981, c. I-3, r. 1, title VI, c. IV; O.C. 134-2009, s. 1.

DIVISION  I
ELECTION BY A TAXPAYER

div. I; O.C. 1981-80, title VI, c. IV, div. I; R.R.Q., 1981, c. I-3, r. 1, title VI, c. IV, div. I; O.C. 134-2009, s. 1.

130R128.  In respect of properties otherwise included in any of Classes 2 to 10 and 11 in Schedule B or in Class 12 in that schedule, except in the case of a property referred to in any of sections 130R192 to 130R194, a taxpayer may elect to include in Class 1 in that schedule all such properties acquired for the purpose of gaining or producing income from the same business.

s. 130R56; O.C. 1981-80, s. 130R56; R.R.Q., 1981, c. I-3, r. 1, s. 130R56; O.C. 1697-92, s. 32; O.C. 1463-2001, s. 38; O.C. 1470-2002, s. 19; O.C. 134-2009, s. 1.

130R129.  Where the chief depreciable properties of a taxpayer are included in any of Classes 2, 4 and 17 in Schedule B, the taxpayer may elect to include in any of Classes 2, 4 and 17, as the case may be, a property that would otherwise be included in another class and that was acquired by the taxpayer before 26 May 1976 for the purpose of gaining or producing income from the same business as that for which those properties otherwise included in any of Classes 2, 4 and 17 were acquired.

s. 130R57; O.C. 1981-80, s. 130R57; R.R.Q., 1981, c. I-3, r. 1, s. 130R57; O.C. 134-2009, s. 1.

130R130.  In respect of properties otherwise included in Class 19 or 21 in Schedule B, a taxpayer may elect to include in Class 8 in that schedule all properties of Class 19 or all properties of Class 21, as the case may be, owned by the taxpayer at the beginning of the year.

s. 130R58; O.C. 1981-80, s. 130R58; R.R.Q., 1981, c. I-3, r. 1, s. 130R58; O.C. 134-2009, s. 1.

130R131.  In respect of properties otherwise included in Class 20 in Schedule B, a taxpayer may elect to include in any of Classes 1, 3 and 6 in Schedule B, as specified in the letter to be filed pursuant to section 130R139 in respect of such election, all the properties in Class 20 in that schedule owned by the taxpayer at the commencement of the year.

s. 130R58.0.1; O.C. 1697-92, s. 33; O.C. 134-2009, s. 1.

130R132.  A taxpayer may elect to include in Class 37 in Schedule B the properties that the taxpayer acquired before 10 March 1982 and that would be included in that class if the taxpayer had acquired them after that date.

s. 130R58.1; O.C. 2962-82, s. 17; O.C. 500-83, s. 17; O.C. 134-2009, s. 1.

130R133.  In respect of a property that would otherwise be included in Class 7 in Schedule B under paragraph h of that class and to which sections 130R101 and 130R176, or sections 130R102 and 130R178 would apply if Class 35 in that schedule applied to the property, a taxpayer may elect to include the property in Class 35 if the taxpayer so elects by letter attached to the taxpayer’s fiscal return for the taxation year in which the property was acquired by the taxpayer, on or before the taxpayer’s filing-due date for that year.

s. 130R58.1.1; O.C. 1149-2006, s. 9; O.C. 134-2009, s. 1.

130R134.  A taxpayer may elect not to include a property in Class 44 in Schedule B, provided the election is made, by letter attached to the taxpayer’s fiscal return for the taxation year in which the property was acquired by the taxpayer, on or before the taxpayer’s filing-due date for that year.

s. 130R58.2; O.C. 1631-96, s. 20; O.C. 1466-98, s. 23; O.C. 134-2009, s. 1.

130R135.  Where a taxpayer has acquired after 25 May 1976, all or any part of a property included in a particular class in Schedule B and where the property or a part thereof would have been included in another class in that schedule if it had been acquired before 26 May 1976, the taxpayer may elect to transfer, in the year of acquisition:

  (a)      the property, or the part thereof, from the particular class to the other class; or

  (b)      the part of the property acquired before 26 May 1976 from the other class to the particular class.

An election under the first paragraph must be made by letter attached to the taxpayer’s fiscal return, on or before the taxpayer’s filing-due date for the taxation year in which the acquisition occurred or for the following taxation year.

s. 130R59; O.C. 1981-80, s. 130R59; R.R.Q., 1981, c. I-3, r. 1, s. 130R59; O.C. 1466-98, s. 24; O.C. 134-2009, s. 1.

130R136.  Section 130R135 applies only if

  (a)      the taxpayer was required to acquire the property under the terms of an agreement in writing entered into before 26 May 1976;

  (b)      the taxpayer commenced the construction, manufacture or production of the property before 26 May 1976 or the construction, manufacture or production of the property was commenced under an agreement in writing entered into by the taxpayer before 26 May 1976; or

  (c)      the taxpayer acquired the property on or before 31 December 1976 or was required to acquire the property under the terms of an agreement in writing entered into on or before 31 December 1976, if

  (i)    arrangements in writing, respecting the acquisition, construction, manufacture or production of the property had been substantially advanced before 26 May 1976, or

  (ii)    the taxpayer had, before 26 May 1976, demonstrated a bona fide intention to acquire the property.

s. 130R60; O.C. 1981-80, s. 130R60; R.R.Q., 1981, c. I-3, r. 1, s. 130R60; O.C. 134-2009, s. 1.

130R137.  A taxpayer referred to in section 130R138 may elect to transfer the property referred to in paragraph a of that section, immediately before it is disposed of, from the class referred to in that paragraph a to the class referred to in paragraph b of that section.

An election under the first paragraph must be made by letter to that effect attached to the taxpayer’s fiscal return, on or before the taxpayer’s filing-due date for the taxation year in which the property referred to in paragraph a of section 130R138 is disposed of by the taxpayer.

s. 130R61; O.C. 1981-80, s. 130R61; R.R.Q., 1981, c. I-3, r. 1, s. 130R61; O.C. 1466-98, s. 25; O.C. 134-2009, s. 1.

130R138.  A taxpayer may make the election referred to in section 130R137 if the taxpayer

  (a)      disposed of a property included in a class in Schedule B that would have been a property included in the class referred to in paragraph b if the taxpayer had acquired it at the time the property referred to in paragraph b was acquired and from the person from whom that property was acquired; and

  (b)      acquired, before the end of the taxation year during which the property referred to in paragraph a was disposed of, a property included in a class in Schedule B, other than the class referred to in paragraph a and other than a separate class referred to in Chapter V, with the exception of section 130R176, that would have been a property included in the class referred to in paragraph a if the taxpayer had acquired it at the time the property referred to in paragraph a was acquired and from the person from whom that property was acquired.

s. 130R62; O.C. 1981-80, s. 130R62; R.R.Q., 1981, c. I-3, r. 1, s. 130R62; O.C. 2847-84, s. 9; O.C. 1697-92, s. 34; O.C. 366-94, s. 13; O.C. 134-2009, s. 1.

130R139.  Any election by a taxpayer under sections 130R128 to 130R132 for a taxation year is made by filing with the taxpayer’s fiscal return for the year, on or before the taxpayer’s filing-due date for the year, a letter to that effect.

s. 130R63; O.C. 1981-80, s. 130R63; R.R.Q., 1981, c. I-3, r. 1, s. 130R63; O.C. 2962-82, s. 18; O.C. 500-83, s. 18; O.C. 1466-98, s. 26; O.C. 134-2009, s. 1.

130R140.  An election under paragraph b of section 130R143 in respect of property described therein or property described in section 130R144, or under this division is effective from the first day of the taxation year in respect of which the election is made and continues to be effective for all subsequent years.

s. 130R64; O.C. 1981-80, s. 130R64; R.R.Q., 1981, c. I-3, r. 1, s. 130R64; O.C. 1454-99, s. 17; O.C. 134-2009, s. 1.

DIVISION  II
TRANSFER OF PROPERTY FROM CLASS 40 TO CLASS  10

div. I.1; O.C. 1697-92, s. 35; O.C. 134-2009, s. 1.

130R141.  For the purposes of this Title and Schedule B, where property owned by a taxpayer would otherwise be included in Class 40 in that schedule, all such property owned by the taxpayer must be transferred from that class to Class 10 in that schedule immediately after the beginning of the first taxation year of the taxpayer beginning after 31 December 1989.

s. 130R64.1; O.C. 1697-92, s. 35; O.C. 134-2009, s. 1.

DIVISION  III
TRANSFER OF PROPERTY TO CLASS 8, 10 OR 43

div. I.2; O.C. 1631-96, s. 21; O.C. 1149-2006, s. 10; O.C. 134-2009, s. 1.

130R142.  For the purposes of this Title and Schedule B, where one or more properties of a taxpayer are included in a separate class pursuant to an election made by the taxpayer in accordance with section 130R198 or 130R199, all the properties in that class immediately after the beginning of the taxpayer’s fifth taxation year beginning after the end of the first taxation year in which a property of the class became available for use by the taxpayer for the purposes of section 93.6 of the Act must be transferred immediately after the beginning of that fifth taxation year from the separate class to the class in which the property would, but for the election, have been included.

s. 130R64.2; O.C. 1631-96, s. 21; O.C. 1463-2001, s. 39; O.C. 134-2009, s. 1.

DIVISION  IV
ELECTRICAL PLANT USED FOR MINING

div. II; O.C. 1981-80, title VI, c. IV, div. II; R.R.Q., 1981, c. I-3, r. 1, title VI, c. IV, div. II; O.C. 134-2009, s. 1.

130R143.  Where the generating or distributing equipment and plant, including structures, of a producer or distributor of electrical energy were acquired for the purpose of providing power to a consumer for use by the consumer in the operation in Canada of a mine, ore mill, smelter, metal refinery or any combination thereof and at least 80% of the producer’s or distributor’s output of electrical energy for the first 2 taxation years in which the producer or the distributor, as the case may be, sold power was sold to the consumer for that purpose, the property must be included in

  (a)      Class 10 in Schedule B if it is property that the producer or the distributor acquired

  (i)    before 1 January 1988, or

  (ii)    before 1 January 1990

  (1)    pursuant to an obligation in writing entered into by the taxpayer before 18 June 1987,

  (2)    that was under construction by or on behalf of the taxpayer on 18 June 1987, or

  (3)    that is machinery or equipment that is a fixed and integral part of a building, structure, plant facility or other property that was under construction by or on behalf of the taxpayer on 18 June 1987; or

  (b)      Class 41 or 41.1 in Schedule B in any other case, except where the property would otherwise be included in Class 43.1 or 43.2 in Schedule B and the taxpayer has, by a letter filed with the fiscal return of the taxpayer filed in accordance with sections 1000 to 1003 of the Act for the taxation year in which the property was acquired, elected to include the property in Class 43.1 or 43.2, as the case may be.

s. 130R65; O.C. 1981-80, s. 130R65; R.R.Q., 1981, c. I-3, r. 1, s. 130R65; O.C. 1697-92, s. 36; O.C. 1454-99, s. 18; O.C. 1116-2007, s. 10; O.C. 134-2009, s. 1; O.C. 390-2012, s. 21.

130R144.  Section 130R143 also applies where a taxpayer has acquired generating or distributing equipment and plant, including structures, for the purpose of providing power for the taxpayer’s own consumption in operating a mine, ore mill, smelter, metal refinery or any combination thereof and where at least 80% of the output of electrical energy was so used in the first 2 taxation years in which power was so produced.

s. 130R66; O.C. 1981-80, s. 130R66; R.R.Q., 1981, c. I-3, r. 1, s. 130R66; O.C. 1454-99, s. 19; O.C. 134-2009, s. 1.

130R145.  Sections 130R143 and 130R144 are to be read without reference to the expression “metal refinery” where the property referred to therein was acquired before 8 November 1969.

s. 130R67; O.C. 1981-80, s. 130R67; R.R.Q., 1981, c. I-3, r. 1, s. 130R67; O.C. 134-2009, s. 1.

130R146.  Despite sections 130R143 and 130R144, where a taxpayer acquired property referred to therein after 7 November 1969 from a person with whom the taxpayer was not dealing at arm’s length, that property may not be included in Class 10 in Schedule B unless it had been included in that class by the person from whom it was acquired pursuant to subsections 8 and 9 of section 1102 of the Income Tax Regulations made under the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)), as they applied before 8 November 1969 for the purposes of the former Acts within the meaning of section 1 of the Act respecting the application of the Taxation Act (chapter I-4).

s. 130R68; O.C. 1981-80, s. 130R68; R.R.Q., 1981, c. I-3, r. 1, s. 130R68; O.C. 35-96, s. 86; O.C. 134-2009, s. 1.

DIVISION  V
RAILWAYS

div. III; O.C. 1981-80, title VI, c. IV, div. III; R.R.Q., 1981, c. I-3, r. 1, title VI, c. IV, div. III; O.C. 134-2009, s. 1.

130R147.  For the purposes of section 221 of the Act, where a taxpayer is deemed to have acquired depreciable property of a prescribed class at the time a repair, replacement, alteration or renovation expenditure in respect of property described therein was incurred,

  (a)      if the expenditure was incurred before 26 May 1976, the class prescribed is Class 4 in Schedule B; and

  (b)      if the expenditure was incurred after 25 May 1976, the class prescribed is the class in Schedule B in which the depreciable property that was repaired, replaced, altered or renovated would be included if such property had been acquired at the time the expenditure was incurred.

s. 130R69; O.C. 1981-80, s. 130R69; R.R.Q., 1981, c. I-3, r. 1, s. 130R69; O.C. 134-2009, s. 1.

DIVISION  VI
PROPERTY ACQUIRED BY CERTAIN TRANSFERS, OR REORGANIZATIONS

div. IV; O.C. 1981-80, title VI, c. IV, div. IV; R.R.Q., 1981, c. I-3, r. 1, title VI, c. IV, div. IV; O.C. 1697-92, s. 37; O.C. 134-2009, s. 1.

130R148.  Subject to sections 130R149 and 130R150.2 and for the purposes of this Title and Schedule B, where a property, immediately before it was acquired by the taxpayer, was property of a prescribed class or a separate prescribed class of the person from whom it was so acquired, the property is deemed to be property of that same prescribed class or separate prescribed class, as the case may be, of the taxpayer.

s. 130R70; O.C. 1981-80, s. 130R70; R.R.Q., 1981, c. I-3, r. 1, s. 130R70; O.C. 134-2009, s. 1; O.C. 390-2012, s. 22.

130R149.  Section 130R148 does not apply unless the taxpayer acquires the property referred to therein,

  (a)      in the course of a reorganization in respect of which, if a dividend were received by a corporation in the course of the reorganization, section 308.1 of the Act would not be applicable to the dividend by reason of the application of section 308.3 of the Act; or

  (b)      from a person with whom the taxpayer is not dealing at arm’s length, otherwise than by virtue of a right referred to in paragraph b of section 20 of the Act, at the time the property is acquired.

s. 130R71; O.C. 1981-80, s. 130R71; R.R.Q., 1981, c. I-3, r. 1, s. 130R71; O.C. 1472-87, s. 6; O.C. 1471-91, s. 16; O.C. 1697-92, s. 38; O.C. 1707-97, s. 98; O.C. 134-2009, s. 1.

130R150.  For the purposes of this Title and Schedule B, where a taxpayer has acquired, after 25 May 1976, property of a particular class in that schedule that had been previously owned before 26 May 1976 by the taxpayer or by a person with whom the taxpayer was not dealing at arm's length, otherwise than by virtue of a right referred to in paragraph b of section 20 of the Act, at the time the property was acquired, and at that particular time, the property was included in a different class in that schedule, other than Class 28 or 41, the property is deemed to be property in the different class and not property in the particular class.

s. 130R72; O.C. 1981-80, s. 130R72; R.R.Q., 1981, c. I-3, r. 1, s. 130R72; O.C. 1697-92, s. 39; O.C. 134-2009, s. 1; O.C. 390-2012, s. 23.

130R150.1.  Despite section 130R148, where a taxpayer acquires from a person or partnership, in circumstances described in paragraph a or b of section 130R149, property that was of a separate prescribed class of the person or partnership under section 130R194.1, the property is deemed to be in the same prescribed class of the taxpayer and not to be in a separate prescribed class in relation to that class, if the person or partnership was entitled to deduct, for a taxation year or a fiscal period, as the case may be, prior to the taxation year or fiscal period of disposition of the property, an amount in computing the taxpayer's income from a business under section 156.7.1 of the Act in respect of the property.

O.C. 390-2012, s. 24.

130R150.2.  Where, after 18 March 2007, a taxpayer acquires an oil sands property in circumstances to which subsection 130R150 applies and the property was depreciable property that was included in Class 41, because of any of subparagraphs a to c of the first paragraph of that class, of the person or partnership from whom the taxpayer acquired the property, the following rules apply:

  (a)      there may be included in Class 41 of the taxpayer only that portion of the property the capital cost of which portion to the taxpayer is the lesser of the undepreciated capital cost of Class 41 to that person or partnership immediately before the disposition of the property by the person or partnership and the amount by which that undepreciated capital cost is reduced as a result of that disposition; and

  (b)      that portion of the property that is not the portion included in Class 41 of the taxpayer because of paragraph a must be included in Class 41.1 of the taxpayer.

O.C. 390-2012, s. 24.

130R151.  Where property, while leased by a taxpayer under a lease contract, was the subject of the joint election referred to in section 125.1 of the Act and the taxpayer subsequently acquires the property through the exercise of a right to acquire it under the contract, paragraphs b and c of section 130R194.1 or the second and fourth paragraphs of Class 12 in Schedule B apply, in respect of the property while it was so leased by the taxpayer, as if the period during which the property was so leased by the taxpayer also included the subsequent period during which the taxpayer owns the property.

Where the property, while leased by the taxpayer under the lease contract, was property that was included in Class 12 in Schedule B under the second or fourth paragraph of that class, or in Class 18 in that schedule under paragraph b of that class, and in respect of which a separate prescribed class had been created, the property must, where it is acquired by the taxpayer through the exercise of a right to acquire it under the lease contract, be included in the same separate prescribed class of the taxpayer.

s. 130R72.1; O.C. 1249-2005, s. 8; O.C. 134-2009, s. 1; O.C. 390-2012, s. 25.

DIVISION  VII
MANUFACTURING AND PROCESSING BUSINESSES

div. V; O.C. 1981-80, title VI, c. IV, div. V; R.R.Q., 1981, c. I-3, r. 1, title VI, c. IV, div. V; O.C. 134-2009, s. 1.

130R152.  For the purposes of paragraph e of section 99 of the Act, property is prescribed that is a building included in Class 3 or 6, or machinery and equipment included in Class 8 in Schedule B.

Such property does not include, however, property acquired for use outside Canada, or property that may reasonably be regarded as having been acquired for the purpose of producing coal from a coal mine, or oil, gas, metals or industrial minerals from a resource referred to in section 360R4.

s. 130R73; O.C. 1981-80, s. 130R73; R.R.Q., 1981, c. I-3, r. 1, s. 130R73; O.C. 134-2009, s. 1.

130R153.  For the purposes of paragraph e of section 99 of the Act, a business carried on by the taxpayer is considered to be a manufacturing or processing business, if for the fiscal period during which the property was acquired, or for the fiscal period during which a reasonable volume of business was first carried on, whichever was later, the revenue received by the taxpayer, in the course of carrying on the business, from manufacturing or processing, was not less than 2/3 of the revenue of the business for the period.

For the purposes of this section, the revenue from manufacturing or processing includes the revenue arising from

  (a)      the sale of goods processed or manufactured by the taxpayer in Canada;

  (b)      the leasing or renting of goods processed or manufactured by the taxpayer in Canada;

  (c)      advertisements in a newspaper or magazine produced by the taxpayer in Canada; and

  (d)      construction carried on by the taxpayer in Canada.

s. 130R74; O.C. 1981-80, s. 130R74; R.R.Q., 1981, c. I-3, r. 1, s. 130R74; O.C. 134-2009, s. 1.

130R154.  For the purposes of section 130R153, “revenue” means gross revenue, minus

  (a)      amounts that were paid or credited in the period to customers of the business in relation to such revenue as a bonus, rebate or discount, or for returned or damaged goods; and

  (b)      amounts included therein pursuant to any of sections 93 to 104 and 186 of the Act.

s. 130R75; O.C. 1981-80, s. 130R75; R.R.Q., 1981, c. I-3, r. 1, s. 130R75; O.C. 134-2009, s. 1.

130R154.1.  A taxpayer that acquires a property after 18 March 2007 and before 1 January 2016 that is manufacturing or processing machinery or equipment may, by letter attached to the taxpayer's fiscal return filed pursuant to sections 1000 to 1003 of the Act for the taxation year in which the property was acquired, elect to include the property in Class 29 in Schedule B if

  (a)      Class 43.1 or 43.2 in that schedule would otherwise apply to the property; and

  (b)      Class 29 in that schedule would apply to the property if that schedule were read without reference to Classes 43.1 and 43.2.

O.C. 1176-2010, s. 17; O.C. 1105-2014, s. 5.

DIVISION  VIII
ADDITIONS AND ALTERATIONS

div. VI; O.C. 1983-80, s. 8; R.R.Q., 1981, c. I-3, r. 1, title VI, c. IV, div. VI; O.C. 134-2009, s. 1.

130R155.  For the purposes of this Title and Schedule B, where a taxpayer acquires a property that is an addition or alteration to another property included in a particular class in that schedule, where the property would have been included in that particular class if it had been acquired at the same time as the other property and where the other property would have been included in a class other than that particular class if it had been acquired at the same time as that property, it is deemed, except where otherwise provided by that Title or that schedule, to be a property included in that other class.

s. 130R75.1; O.C. 1983-80, s. 8; R.R.Q., 1981, c. I-3, r. 1, s. 130R75.1; O.C. 134-2009, s. 1.

130R155.1.  For the purposes of sections 130R23.1, 130R23.2 and 130R163.1, the capital cost of an addition to or an alteration of a taxpayer's building is deemed to be the capital cost to the taxpayer of a separate building if the building to which the addition or alteration was made is not included in a separate class under section 130R163.1.

O.C. 1176-2010, s. 18.

130R155.2.  If an addition or an alteration is deemed to be a separate building under section 130R155.1, sections 130R23.1 and 130R23.2 are to be read with “the floor space of the building” replaced by “the total floor space of the separate building and the building to which the addition or alteration was made”.

O.C. 1176-2010, s. 18.

130R155.3.  For the purposes of this Title and Schedule B, if an eligible non-residential building of a taxpayer was under construction on 19 March 2007, the portion, if any, of the capital cost of the building that was incurred by the taxpayer before 19 March 2007 is deemed to have been incurred by the taxpayer on 19 March 2007 unless the taxpayer elects, by letter attached to the taxpayer's fiscal return filed pursuant to sections 1000 to 1003 of the Act for the taxation year in which the building was acquired, that this section not apply to that cost.

O.C. 1176-2010, s. 18.

130R155.4.  For the purposes of this Title and Schedule B, any property acquired by a taxpayer after 25 February 2008 that is, in the course of the refurbishment or reconditioning of a railway locomotive of the taxpayer, incorporated into the locomotive is, except as otherwise provided in that Title or in that schedule, deemed to be included in Class 10 in that schedule because of subparagraph t of the second paragraph of that class, if the railway locomotive

  (a)      is included in a class in that schedule other than Class 10; and

  (b)      would be included in Class 10 in that schedule if it had not been used or acquired for use for any purpose by any taxpayer before 26 February 2008.

O.C. 1176-2010, s. 18.

CHAPTER  V
SEPARATE CLASSES

c. V; O.C. 1981-80, title VI, c. V; R.R.Q., 1981, c. I-3, r. 1, title VI, c. V; O.C. 134-2009, s. 1.

130R156.  Where 2 or more properties of a taxpayer are described in the same class in Schedule B and where some of the properties were acquired for the purpose of gaining or producing income from a business and some other properties for gaining or producing income from another business or from property, a separate class is hereby prescribed for each business in respect of such properties.

s. 130R76; O.C. 1981-80, s. 130R76; R.R.Q., 1981, c. I-3, r. 1, s. 130R76; O.C. 134-2009, s. 1.

130R157.  For the purposes of section 130R156, a life insurance business and an insurance business other than a life insurance business must each be regarded as a separate business.

s. 130R77; O.C. 1981-80, s. 130R77; R.R.Q., 1981, c. I-3, r. 1, s. 130R77; O.C. 134-2009, s. 1.

130R158.  Properties of a member of a partnership that can reasonably be regarded to be the member’s interest in a depreciable property of the partnership must be included in a separate class from other properties of such member described in the same class in Schedule B.

s. 130R80; O.C. 1981-80, s. 130R80; R.R.Q., 1981, c. I-3, r. 1, s. 130R80; O.C. 1707-97, s. 98; O.C. 134-2009, s. 1.

130R159.  Subject to section 130R184, rental properties of a taxpayer, the capital cost of which is $50,000 or more must be included in a separate class from other properties of the taxpayer described in the same class in Schedule B.

However, this section does not apply to a rental property acquired by the taxpayer before 1972 or to a rental property that is a building, an interest therein or a leasehold interest acquired by the taxpayer by reason of the fact that the taxpayer erected a building on leased land, if the erection of the building was commenced by the taxpayer before 1972 or pursuant to an agreement in writing entered into by the taxpayer before 1972.

s. 130R81; O.C. 1981-80, s. 130R81; R.R.Q., 1981, c. I-3, r. 1, s. 130R81; O.C. 2962-82, s. 19; O.C. 500-83, s. 19; O.C. 1697-92, s. 40; O.C. 134-2009, s. 1.

130R160.  Section 130R159 does not apply to a rental property

  (a)      that was acquired by the taxpayer either in the course of a reorganization in respect of which, if a dividend were received by a corporation in the course of the reorganization, section 308.1 of the Act would not apply to the dividend by reason of the application of section 308.3 of the Act, or from a person with whom the taxpayer was not dealing at arm’s length, otherwise than by virtue of a right referred to in paragraph b of section 20 of the Act, at the time of the acquisition of the property; and

  (b)      that was, immediately before it was so acquired by the taxpayer, a rental property of the person from whom it was so acquired of a prescribed class otherwise than under section 130R159.

s. 130R82; O.C. 1981-80, s. 130R82; R.R.Q., 1981, c. I-3, r. 1, s. 130R82; O.C. 1472-87, s. 7; O.C. 1471-91, s. 17; O.C. 1697-92, s. 41; O.C. 1707-97, s. 98; O.C. 134-2009, s. 1.

130R161.  Each property of a taxpayer that is a certified Quebec film must be included in a separate class from that of the other properties of the taxpayer belonging to the same class in Schedule B.

s. 130R82.1; O.C. 2727-84, s. 7; O.C. 1539-93, s. 9; O.C. 134-2009, s. 1.

130R162.  Except in the case of a corporation or partnership described in section 130R86, rental properties of a taxpayer, other than properties that must be included in a separate class under section 130R159, must be included in a separate class from other properties of the taxpayer described in the same class in Schedule B.

s. 130R83; O.C. 1981-80, s. 130R83; R.R.Q., 1981, c. I-3, r. 1, s. 130R83; O.C. 1707-97, s. 98; O.C. 134-2009, s. 1.

130R163.  For the purposes of this Title, where any property of a taxpayer is a property of Class 31 or 32 in Schedule B and the capital cost of the property is $50,000 or more, a separate class is hereby prescribed for each such property of the taxpayer that would otherwise be included in the same class in Schedule B.

s. 130R84; O.C. 1981-80, s. 130R84; R.R.Q., 1981, c. I-3, r. 1, s. 130R84; O.C. 134-2009, s. 1.

130R163.1.  For the purposes of this Title, a separate class is hereby prescribed for each eligible non-residential building of a taxpayer in respect of which the taxpayer has, by letter attached to the fiscal return of the taxpayer filed pursuant to sections 1000 to 1003 of the Act for the taxation year in which the building was acquired, elected that this section apply.

O.C. 1176-2010, s. 19.

130R163.2.  Property of a taxpayer in respect of which the taxpayer is a transferee, within the meaning of section 96.0.2 of the Act, must, where the taxpayer has, jointly with the transferor of the property within the meaning of that section 96.0.2, made a valid election under paragraph c of subsection 4.2 of section 13 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)), be included in a separate class from other properties of the taxpayer described in the same class in Schedule B.

O.C. 1105-2014, s. 6.

130R164.  Where property of a taxpayer that would otherwise be included in Class 7 in Schedule B is a property in respect of which a depreciation allowance could have been taken under Order in Council P.C. 2798 of 10 April 1942, P.C. 7580 of 26 August 1942, as amended by P.C. 3297 of 22 April 1943, or P.C. 3979 of 1 June 1944, if those Orders in Council were applicable to the taxation year, a separate class is hereby prescribed for each ship, including the furniture, fittings and equipment attached hereto.

s. 130R85; O.C. 1981-80, s. 130R85; R.R.Q., 1981, c. I-3, r. 1, s. 130R85; O.C. 134-2009, s. 1.

130R165.  A separate class is hereby prescribed for each vessel of a taxpayer, including the furniture, fittings, radiocommunication equipment and other equipment attached thereto, where the vessel

  (a)      was constructed in Canada;

  (b)      is registered in Canada; and

  (c)      had not been used for any purpose whatever before it was acquired by the taxpayer.

s. 130R86; O.C. 1981-80, s. 130R86; R.R.Q., 1981, c. I-3, r. 1, s. 130R86; O.C. 1631-96, s. 22; O.C. 134-2009, s. 1.

130R166.  A separate class is hereby prescribed for all vessels included in Class 7 in Schedule B, including furniture, fittings, radiocommunication equipment and other equipment attached thereto, acquired by a taxpayer

  (a)      after 25 May 1976 and designed principally to determine the existence of accumulation of petroleum or natural gas, except a mineral resource, and to locate such accumulation or to determine its extent or quality, or to drill an oil or gas well; or

  (b)      after 22 May 1979 and designed principally to determine the existence of a mineral resource, to locate such resource or determine its extent or quality.

s. 130R87; O.C. 1981-80, s. 130R87; O.C. 1983-80, s. 9; R.R.Q., 1981, c. I-3, r. 1, s. 130R87; O.C. 35-96, s. 7; O.C. 134-2009, s. 1.

130R167.  For the purposes of this Title, each property of a taxpayer that is a timber limit or a right to cut timber in such limit is deemed to be a separate class of property, except where that property is a timber resource property.

s. 130R88; O.C. 1981-80, s. 130R88; R.R.Q., 1981, c. I-3, r. 1, s. 130R88; O.C. 134-2009, s. 1.

130R168.  For the purposes of this Title, where a taxpayer has more than one industrial mineral mine in respect of which an allowance may be claimed under section 130R216, or has more than one right to remove industrial minerals from such a mine, each such mine and each such right is deemed to be a separate class.

The same applies where the taxpayer has both such a mine and such a right.

s. 130R89; O.C. 1981-80, s. 130R89; R.R.Q., 1981, c. I-3, r. 1, s. 130R89; O.C. 134-2009, s. 1.

130R169.  Where one or more properties of a taxpayer are included in Class 28 in Schedule B and some or all of the properties, referred to in this section as “single mine properties”, were acquired for the purpose of gaining or producing income from one mine and not from any other mine, a separate class is prescribed for the single mine properties that

  (a)      were acquired for the purpose of gaining or producing income from that mine only;

  (b)      would otherwise be included in Class 28 in that schedule; and

  (c)      are not included in a separate class because of section 130R170.

s. 130R90; O.C. 1981-80, s. 130R90; R.R.Q., 1981, c. I-3, r. 1, s. 130R90; O.C. 1282-2003, s. 28; O.C. 134-2009, s. 1; O.C. 390-2012, s. 26.

130R170.  Where more than one property of a taxpayer is described in Class 28 in Schedule B and some or all of the properties, referred to in this section as “multiple mine properties”, were acquired for the purpose of gaining or producing income from particular mines and not from any other mine, a separate class is prescribed for the multiple mine properties that

  (a)      were acquired for the purpose of gaining or producing income from the particular mines; and

  (b)      would otherwise be included in Class 28 in that schedule.

s. 130R91; O.C. 1981-80, s. 130R91; R.R.Q., 1981, c. I-3, r. 1, s. 130R91; O.C. 1282-2003, s. 29; O.C. 134-2009, s. 1; O.C. 390-2012, s. 26.

130R171.  Where one or more properties of a taxpayer are described in Class 41 in Schedule B under any of subparagraphs a to c of the first paragraph of that class and some or all of the properties, referred to in this section as “single mine properties”, were acquired for the purpose of gaining or producing income from one mine and not from any other mine, a separate class is prescribed for the single mine properties that

  (a)      were acquired for the purpose of gaining or producing income from that mine only;

  (b)      would otherwise be included in Class 41 in that schedule; and

  (c)      are not included in a separate class because of section 130R172.

s. 130R91.1; O.C. 1697-92, s. 42; O.C. 1454-99, s. 20; O.C. 1282-2003, s. 30; O.C. 134-2009, s. 1; O.C. 390-2012, s. 26.

130R172.  Where one or more properties of a taxpayer are described in Class 41 in Schedule B under any of subparagraphs a to c of the first paragraph of that class and some or all of the properties, referred to in this section as “multiple mine properties”, were acquired for the purpose of gaining or producing income from particular mines and not from any other mine, a separate class is prescribed for the multiple mine properties that

  (a)      were acquired for the purpose of gaining or producing income from the particular mines; and

  (b)      would otherwise be included in Class 41 in that schedule.

s. 130R91.2; O.C. 1697-92, s. 42; O.C. 1454-99, s. 20; O.C. 1282-2003, s. 31; O.C. 134-2009, s. 1; O.C. 390-2012, s. 26.

130R172.1.  Where one or more properties of a taxpayer are included in Class 41.1 in Schedule B under paragraph a of that class and some or all of the properties, referred to in this section as “single mine properties”, were acquired for the purpose of gaining or producing income from one mine and not from any other mine, a separate class is prescribed for the single mine properties that

  (a)      were acquired for the purpose of gaining or producing income from that mine only;

  (b)      would otherwise be included in Class 41.1 in that schedule under paragraph a of that class; and

  (c)      are not included in a separate class because of section 130R172.2.

O.C. 390-2012, s. 27.

130R172.2.  Where one or more properties are included in Class 41.1 in Schedule B under paragraph a of that class and some or all of the properties, referred to in this section as “multiple mine properties”, were acquired for the purpose of gaining or producing income from particular mines and not from any other mine, a separate class is prescribed for the multiple mine properties that

  (a)      were acquired for the purpose of gaining or producing income from the particular mines; and

  (b)      would otherwise be included in Class 41.1 in that schedule under paragraph a of that class.

O.C. 390-2012, s. 27.

130R173.  Where, by virtue of an agreement, contract or arrangement entered into on or after 31 May 1954, a taxpayer was deemed to have acquired a property of a separate class under the Corporation Tax Act (R.S.Q. 1964, c. 67) or under the Provincial Income Tax Act (R.S.Q. 1964, c. 69) and the taxpayer subsequently effectively acquires the property, such property remains included in the same class.

s. 130R92; O.C. 1981-80, s. 130R92; R.R.Q., 1981, c. I-3, r. 1, s. 130R92; O.C. 134-2009, s. 1.

130R174.  For the purposes of this Title, each unmanned telecommunication spacecraft included in Class 10 in Schedule B under subparagraph i of the first paragraph of that class, or in Class 30 in that schedule, is deemed to be a separate class of property.

s. 130R93; O.C. 1981-80, s. 130R93; R.R.Q., 1981, c. I-3, r. 1, s. 130R93; O.C. 1697-92, s. 43; O.C. 134-2009, s. 1.

130R175.  For the purposes of this Title, except in the case of a corporation or a partnership described in section 130R92, where more than one property of a taxpayer is described in the same class in Schedule B and where one of the properties is a leasing property and one of the properties is a property other than a leasing property, a separate class is hereby prescribed for properties that are leasing properties and would otherwise be included in the class.

s. 130R94; O.C. 1981-80, s. 130R94; R.R.Q., 1981, c. I-3, r. 1, s. 130R94; O.C. 1707-97, s. 98; O.C. 134-2009, s. 1.

130R176.  Where a taxpayer has more than one railway car included in Class 35 in Schedule B that is leased or used in Canada in a taxation year, other than a railway car owned by a corporation or by a partnership any member of which is a corporation, that at any time in the year was a common carrier that owned or operated a railway or leased railway cars, through one or more transactions between persons not dealing with each other at arm’s length, to an associated corporation that was, at that time, a common carrier that owned or operated a railway, a separate class is hereby prescribed for each of the following:

  (a)      the aggregate of such property acquired by the taxpayer before 3 February 1990, other than property acquired for the purpose of being leased to another person;

  (b)      the aggregate of such property acquired by the taxpayer after 2 February 1990, other than property acquired for the purpose of being leased to another person;

  (c)      the aggregate of such property acquired by the taxpayer before 27 April 1989 for the purpose of being leased to another person; and

  (d)      the aggregate of such property acquired by the taxpayer after 26 April 1989 for the purpose of being leased to another person.

s. 130R95; O.C. 1981-80, s. 130R95; R.R.Q., 1981, c. I-3, r. 1, s. 130R95; O.C. 366-94, s. 14; O.C. 1707-97, s. 98; O.C. 134-2009, s. 1.

130R177.  A separate class is hereby prescribed for all property included in Class 35 in Schedule B that is acquired after 6 December 1991 and before 28 February 2000 by a taxpayer that at the time of the acquisition is a common carrier owning and operating a railway.

s. 130R95.1; O.C. 1631-96, s. 23; O.C. 1707-97, s. 98; O.C. 1149-2006, s. 11; O.C. 134-2009, s. 1.

130R178.  A separate class is hereby prescribed for all property included in Class 35 in Schedule B that is acquired at a time after 27 February 2000 by a taxpayer that was at that time a common carrier that owned and operated a railway.

s. 130R95.2; O.C. 1149-2006, s. 12; O.C. 134-2009, s. 1.

130R179.  A separate class is hereby prescribed for all property included in Class 1 in Schedule B that a taxpayer has acquired after 31 March 1977 and before 1 January 1988 and that is

  (a)      railway track and grading, including components such as rails, ballast, ties and other material;

  (b)      a bridge, culvert, subway or tunnel that is ancillary to railway track or grading; or

  (c)      railway traffic control or signalling equipment, including switching, block signalling, interlocking, crossing protection, detection, speed control or retarding equipment, but not including property that is principally electronic equipment or system software therefor.

s. 130R96; O.C. 1981-80, s. 130R96; O.C. 3211-81, s. 1; R.R.Q., 1981, c. I-3, r. 1, s. 130R96; O.C. 2583-85, s. 5; O.C. 1631-96, s. 61; O.C. 134-2009, s. 1.

130R180.  A separate class is hereby prescribed for all property included in Class 1 in Schedule B acquired after 6 December 1991 by a taxpayer that at the time of the acquisition is a common carrier owning and operating a railway, and that is

  (a)      railway track and grading, including components such as rails, ballast, ties and other material;

  (b)      a bridge, culvert, subway or tunnel that is ancillary to railway track and grading; or

  (c)      railway traffic control or signalling equipment, including switching, block signalling, interlocking, crossing protection, detection, speed control or retarding equipment, but not including property that is principally electronic equipment or systems software therefor.

s. 130R96.1; O.C. 1631-96, s. 24; O.C. 1707-97, s. 98; O.C. 134-2009, s. 1.

130R181.  A separate class is hereby prescribed for all property included in Class 3 in Schedule B that a taxpayer has acquired after 31 March 1977 and before 1 January 1988 and that is trestles ancillary to railway track or grading.

s. 130R97; O.C. 1981-80, s. 130R97; O.C. 3211-81, s. 2; R.R.Q., 1981, c. I-3, r. 1, s. 130R97; O.C. 2583-85, s. 6; O.C. 134-2009, s. 1.

130R182.  A separate class is hereby prescribed for all property included in Class 3 in Schedule B that is acquired after 6 December 1991 by a taxpayer that at the time of the acquisition is a common carrier owning and operating a railway, where that property is trestles ancillary to railway track and grading.

s. 130R97.0.1; O.C. 1631-96, s. 25; O.C. 1707-97, s. 98; O.C. 134-2009, s. 1.

130R183.  A separate class is hereby prescribed for each property of a taxpayer included in Class 36 in Schedule B.

s. 130R97.1; O.C. 2962-82, s. 20; O.C. 500-83, s. 20; O.C. 134-2009, s. 1.

130R184.  For the purposes of this Title, where 2 or more properties of a taxpayer are included in the same class in Schedule B and those properties are not all leasehold interests referred to in section 130R87, a separate class is hereby prescribed for all the properties constituting such leasehold interests that would otherwise be included in that class.

s. 130R97.2; O.C. 2962-82, s. 20; O.C. 500-83, s. 20; O.C. 134-2009, s. 1.

130R185.  A separate class is hereby prescribed for each automobile acquired by an individual before 18 June 1987 or after 17 June 1987 pursuant to an obligation in writing entered into before 18 June 1987 and used by the taxpayer in part to earn income and in part for personal use, other than an automobile used by virtue of a permit for transportation of passengers for remuneration.

s. 130R98; O.C. 1981-80, s. 130R98; O.C. 1983-80, s. 10; R.R.Q., 1981, c. I-3, r. 1, s. 130R98; O.C. 1697-92, s. 44; O.C. 134-2009, s. 1.

130R186.  A separate class is hereby prescribed for each property described in Class 10.1 in Schedule B.

s. 130R98.0.1; O.C. 1697-92, s. 45; O.C. 134-2009, s. 1.

130R187.  A separate class is hereby prescribed for each pipeline included in Class 2 in Schedule B and referred to in section 130R188 which is the property of a taxpayer and in respect of which the taxpayer has elected, in the manner referred to in the second paragraph, to apply this section.

Such election must be made by the taxpayer by means of a letter attached to the taxpayer’s fiscal return filed pursuant to sections 1000 to 1003 of the Act for the taxation year during which the construction, extension, conversion or program referred to in section 130R188 was completed.

Such election is effective from the first day of the taxation year for which it is made and continues to be effective for all subsequent taxation years.

s. 130R98.1; O.C. 615-88, s. 9; O.C. 366-94, s. 15; O.C. 134-2009, s. 1.

130R188.  A pipeline to which section 130R187 may apply is a pipeline of a taxpayer

  (a)      the construction of which began after 31 December 1984 and was completed after 1 September 1985 and the capital cost of which to the taxpayer is not less than $10,000,000;

  (b)      that has been extended or converted, where the extension or conversion was completed after 1 September 1985 and where the capital cost to the taxpayer of the extension or the cost to the taxpayer of the conversion, as the case may be, is not less than $10,000,000; or

  (c)      that has been extended or converted as part of a single program of extension and conversion, where that program was completed after 1 September 1985 and where the total capital cost to the taxpayer of the extension and the total cost to the taxpayer of the conversion is not less than $10,000,000.

s. 130R98.2; O.C. 615-88, s. 9; O.C. 134-2009, s. 1.

130R189.  A separate class is hereby prescribed for all property of a taxpayer included in Class 10 in Schedule B under subparagraph q or r of the second paragraph of that class.

s. 130R98.3; O.C. 1114-92, s. 16; O.C. 1539-93, s. 10; O.C. 134-2009, s. 1.

130R190.  A separate class is hereby prescribed for all property of a corporation included in Class 10 in Schedule B under subparagraph s of the second paragraph of that class that is property

  (a)      in respect of which the corporation is deemed under subsection 3 of section 125.4 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) to have paid an amount on account of its tax payable under Part I of that Act for a taxation year; or

  (b)      acquired from another corporation where

  (i)    the other corporation is deemed under subsection 3 of section 125.4 of the Income Tax Act to have paid an amount on account of its tax payable under Part I of that Act for a taxation year in respect of the property, and

  (ii)    the corporations are related to each other throughout the period that began when the other corporation first incurred a qualified labour expenditure, within the meaning of subsection 1 of section 125.4 of the Income Tax Act, in respect of the property and that ended when the other corporation disposed of the property to the corporation.

s. 130R98.3.1; O.C. 1249-2005, s. 9; O.C. 134-2009, s. 1.

130R191.  A separate class is hereby prescribed for each property included in Class 38 in Schedule B or in Class 8 in that schedule under paragraph l of that class, of which a taxpayer is the owner and in respect of which the taxpayer elected, in the manner referred to in the second paragraph, to apply this section.

Such election must be made by the taxpayer by means of a letter attached to the fiscal return of the taxpayer filed pursuant to sections 1000 to 1003 of the Act for the taxation year in which the property was acquired.

Such election is effective from the first day of the taxation year for which it is made and continues to have effect for all subsequent taxation years.

s. 130R98.4; O.C. 1697-92, s. 46; O.C. 134-2009, s. 1.

130R192.  A separate class is hereby prescribed for each property of a taxpayer described in Class 12 in Schedule B under subparagraph t of the first paragraph or under the second paragraph of that class.

s. 130R98.5; O.C. 1697-92, s. 46; O.C. 134-2009, s. 1.

130R193.  A separate class is hereby prescribed for all property of a taxpayer that is included in Class 12 in Schedule B under subparagraphs i to iii of subparagraph b of the fourth paragraph of that class.

s. 130R98.5.1; O.C. 1463-2001, s. 40; O.C. 1470-2002, s. 20; O.C. 134-2009, s. 1.

130R194.  A separate class is hereby prescribed for all property of a taxpayer included in Class 12 in Schedule B under subparagraph iv of subparagraph b of the fourth paragraph of that class.

s. 130R98.5.2; O.C. 1470-2002, s. 21; O.C. 134-2009, s. 1.

130R194.1.  A separate class is hereby prescribed for all property of a taxpayer included in Class 18 in Schedule B under paragraph b of that class where each property

  (a)      is acquired before 1 January 2016;

  (b)      is fuelled by liquefied natural gas at the time of its acquisition by the taxpayer or has had additions or alterations made to it to allow the property to be so fuelled at the latest 12 months after being acquired by the taxpayer; and

  (c)      begins to be used within a reasonable time after being acquired by the taxpayer and to be, for a period of at least 730 consecutive days after the day on which that use began, or a shorter period in the case of involuntary loss or destruction of the property by fire, theft or water, or material breakdown of the property, used mainly in the course of the carrying on of a freight transport enterprise by

  (i)    the taxpayer, at any time in that period during which the taxpayer is the owner of the property; or

  (ii)    a subsequent acquirer, other than the taxpayer, having acquired the property in any of the circumstances described in section 130R149, at any time in that period during which the subsequent acquirer is the owner of the property.

O.C. 390-2012, s. 30; O.C. 229-2014, s. 5.

130R195.  Where, for a taxation year, a property of a taxpayer or partnership is a specified energy property, a separate class is hereby prescribed in respect of that property for that taxation year and for all subsequent taxation years.

s. 130R98.6; O.C. 91-94, s. 3; O.C. 1707-97, s. 98; O.C. 134-2009, s. 1.

130R196.  Despite section 130R175, where at the end of a taxation year a property of a taxpayer is a specified leasing property within the meaning assigned to that expression by the first paragraph of section 130R71, a separate class is hereby prescribed in respect of that property, including any addition or alteration to that property included in the same class in Schedule B, for that taxation year and for all subsequent taxation years.

s. 130R98.7; O.C. 366-94, s. 16; O.C. 134-2009, s. 1.

130R197.  A separate class is hereby prescribed for the property included in a class in Schedule B that is exempt property within the meaning assigned to that expression by the first paragraph of section 130R71, of the taxpayer referred to in section 130R92 and in respect of which the taxpayer has elected, in the manner referred to in the second paragraph, to apply this section.

Such election must be made by the taxpayer by means of a letter attached to the taxpayer’s fiscal return filed pursuant to sections 1000 to 1003 of the Act for the taxation year during which the property was acquired.

Such election is effective from the first day of the taxation year for which it is made and continues to be effective for all subsequent taxation years.

s. 130R98.8; O.C. 366-94, s. 16; O.C. 134-2009, s. 1.

130R198.  A separate class is hereby prescribed for one or more properties of a taxpayer acquired in a taxation year and included in the year in Class 8 in Schedule B, in respect of which the taxpayer has, by means of a letter attached to the taxpayer’s fiscal return filed pursuant to sections 1000 to 1003 of the Act for that taxation year, elected to apply this section, where each of the properties has a capital cost to the taxpayer of at least $400 and is

  (a)      computer software;

  (b)      a photocopier; or

  (c)      office equipment that is electronic communications equipment, such as a facsimile transmission device or telephone equipment.

s. 130R98.9; O.C. 1631-96, s. 26; O.C. 1463-2001, s. 41; O.C. 1149-2006, s. 13; O.C. 134-2009, s. 1.

130R199.  A separate class is hereby prescribed for one or more properties of a taxpayer acquired in a taxation year and included in the year in Class 43 in Schedule B because of paragraph a of that class, in respect of which the taxpayer has, by means of a letter attached to the taxpayer’s fiscal return filed pursuant to sections 1000 to 1003 of the Act for that taxation year, elected to apply this section, where each of the properties has a capital cost to the taxpayer of at least $400.

s. 130R98.10; O.C. 1463-2001, s. 42; O.C. 134-2009, s. 1.

130R200.  For the purposes of this Title, where one or more properties of a taxpayer are included in the same class in Schedule B and the properties are not all computer tax shelter property, a separate class is hereby prescribed for all the properties that are computer tax shelter properties and that would otherwise be included in the class.

s. 130R98.11; O.C. 1282-2003, s. 32; O.C. 134-2009, s. 1; O.C. 1176-2010, s. 20.

130R201.  A separate class is hereby prescribed for one or more properties of a taxpayer included in Class 7 in Schedule B because of paragraph j or k of that class if the taxpayer has, by means of a letter attached to the taxpayer’s fiscal return filed pursuant to sections 1000 to 1003 of the Act for the taxation year in which the property or properties were acquired, elected to apply this section to the property or properties.

s. 130R98.13; O.C. 1116-2007, s. 12; O.C. 134-2009, s. 1; O.C. 1176-2010, s. 21.

130R202.  A separate class is hereby prescribed for one or more properties of a taxpayer included in Class 49 in Schedule B if the taxpayer has, by a letter attached to the taxpayer’s fiscal return filed in accordance with sections 1000 to 1003 of the Act for the taxation year in which the property or properties were acquired, elected that this section apply to the property or properties.

s. 130R98.14; O.C. 1116-2007, s. 12; O.C. 134-2009, s. 1.

130R203.  A reference in this Title to a class mentioned in Schedule B includes a reference to the corresponding separate classes established by this chapter.

s. 130R99; O.C. 1981-80, s. 130R99; R.R.Q., 1981, c. I-3, r. 1, s. 130R99; O.C. 134-2009, s. 1.

CHAPTER  VI
PROPERTY NOT INCLUDED

c. VI; O.C. 1981-80, title VI, c. VI; R.R.Q., 1981, c. I-3, r. 1, title VI, c. VI; O.C. 134-2009, s. 1.

130R204.  The property described in this chapter is excluded from the application of this Title and Schedule B and does not give rise to any capital cost allowance.

s. 130R100; O.C. 1981-80, s. 130R100; R.R.Q., 1981, c. I-3, r. 1, s. 130R100; O.C. 134-2009, s. 1.

130R205.  Property excluded from the application of this Title and Schedule B is property

  (a)      the cost of which would be deductible in computing the taxpayer’s income but for Divisions I to IV.1 of Chapter X of Title VI of Book III of Part I of the Act;

  (b)      the cost of which is included in the taxpayer’s Canadian renewable and conservation expense within the meaning assigned by section 399.7R1;

  (c)      that is described in the taxpayer’s inventory;

  (d)      that was not acquired by the taxpayer for the purpose of gaining or producing income;

  (e)      that was acquired by an expenditure in respect of which the taxpayer is allowed a deduction in computing the taxpayer’s income under sections 222 to 230 of the Act;

  (f)      that is mentioned in section 134 of the Act and acquired after 31 December 1974 and in respect of which an amount disbursed or expended by the taxpayer for its use or maintenance is not deductible under that section if such property is not property

  (i)    that the taxpayer was required to acquire under the terms of an agreement in writing entered into before 13 November 1974, or

  (ii)    whose construction was commenced by the taxpayer before 13 November 1974 or was commenced under an agreement in writing entered into by the taxpayer before that date if, in each case, it is completed substantially according to plans and specifications agreed to by the taxpayer before that date;

  (g)      in respect of which an allowance is claimed and permitted in accordance with Title XIII;

  (h)      that was deemed under section 18 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)), enacted by subsection 1 of section 8 of Chapter 32 of the Statutes of Canada, 1958, to have been acquired by the taxpayer and that did not vest in the taxpayer before the 1963 taxation year;

  (i)      of a life insurer and used or held by the life insurer in the carrying on of an insurance business outside Canada;

  (j)      that the taxpayer acquired after 12 November 1981, that was not acquired from a person with whom the taxpayer did not deal at arm’s length, otherwise than under a right referred to in paragraph b of section 20 of the Act, at the time of the acquisition, if the property was acquired in one of the circumstances in which section 130R148 applies, and that is

  (i)    a drawing, a print, an etching, a sculpture, a painting or other similar work of art, whose cost to the taxpayer was at least $200 and of which the artist was not a Canadian at the time the property was created,

  (ii)    a hand-woven tapestry or carpet or a hand-made appliqué, whose cost to the taxpayer was at least $215/m2, and of which the artist was not a Canadian at the time the property was created,

  (iii)    an engraving or etching, a lithograph, a woodcut or a geographical or a marine chart, made before 1 January 1900, or

  (iv)    an antique object made more than 100 years before the time of its acquisition and whose cost to the taxpayer was at least $1,000; and

  (k)      that is linefill in a pipeline.

In subparagraphs i and ii of subparagraph j of the first paragraph, “Canadian” means a Canadian citizen within the meaning of the Citizenship Act (R.S.C. 1985, c. C-29) or a permanent resident within the meaning of the Immigration and Refugee Protection Act (S.C. 2001, c. 27).

s. 130R101; O.C. 1981-80, s. 130R101; O.C. 3926-80, s. 3; R.R.Q., 1981, c. I-3, r. 1, s. 130R101; O.C. 2847-84, s. 10; O.C. 35-96, s. 86; O.C. 1631-96, s. 27; O.C. 1466-98, s. 27; O.C. 1470-2002, s. 22; O.C. 1155-2004, s. 15; O.C. 134-2009, s. 1.

130R206.  In the case of a taxpayer who is a member of a partnership, the classes of property described in this Title and in Schedule B are deemed not to include any property that is an interest of the taxpayer in depreciable property of the partnership.

s. 130R102; O.C. 1981-80, s. 130R102; R.R.Q., 1981, c. I-3, r. 1, s. 130R102; O.C. 1707-97, s. 98; O.C. 134-2009, s. 1.

130R207.  The classes of property described in Schedule B are deemed not to include the land upon which a property described therein was constructed or is situated.

s. 130R103; O.C. 1981-80, s. 130R103; R.R.Q., 1981, c. I-3, r. 1, s. 130R103; O.C. 134-2009, s. 1.

130R208.  Where the taxpayer is not resident in Canada, the classes of property described in this Title and in Schedule B are deemed not to include property that is situated outside Canada.

s. 130R104; O.C. 1981-80, s. 130R104; R.R.Q., 1981, c. I-3, r. 1, s. 130R104; O.C. 134-2009, s. 1.

CHAPTER  VII
SPECIAL CASES

c. VII; O.C. 1981-80, title VI, c. VII; R.R.Q., 1981, c. I-3, r. 1, title VI, c. VII; O.C. 134-2009, s. 1.

DIVISION  I
TIMBER LIMITS AND CUTTING RIGHTS

div. I; O.C. 1981-80, title VI, c. VII, div. I; R.R.Q., 1981, c. I-3, r. 1, title VI, c. VII, div. I; O.C. 134-2009, s. 1.

130R209.  This division applies in respect of a timber limit or a right to cut timber that is not a timber resource property.

s. 130R105; O.C. 1981-80, s. 130R105; R.R.Q., 1981, c. I-3, r. 1, s. 130R105; O.C. 134-2009, s. 1.

130R210.  A taxpayer may deduct in computing the taxpayer’s income for a taxation year, in respect of the capital cost of a timber limit or of a cutting right, the lesser of such undepreciated capital cost, before any deduction under this division and, the amount computed under section 130R211.

s. 130R106; O.C. 1981-80, s. 130R106; R.R.Q., 1981, c. I-3, r. 1, s. 130R106; O.C. 134-2009, s. 1.

130R211.  The amount to which section 130R210 refers is the aggregate of an amount computed on the basis of a rate determined under sections 130R212 to 130R214 per cubic metre of timber cut in the year and the lesser of

  (a)      one tenth of the amount expended by the taxpayer after the commencement of the 1949 taxation year for surveys, cruises or preparation of prints, maps and plans for the purpose of obtaining a timber limit or cutting right, where such amount is included in the capital cost to the taxpayer of the timber limit or cutting right; and

  (b)      the amount by which the amount so expended exceeds the amounts deducted by the taxpayer under this paragraph and paragraph a for the taxpayer’s previous taxation years.

s. 130R107; O.C. 1981-80, s. 130R107; R.R.Q., 1981, c. I-3, r. 1, s. 130R107; O.C. 134-2009, s. 1.

130R212.  Where the taxpayer has not been granted an allowance in respect of a timber limit or cutting right in computing the taxpayer’s income for a previous taxation year, the rate referred to in section 130R211 is the amount equal to the quotient obtained by dividing the amount by which the capital cost of the limit or right exceeds the aggregate of the estimated value of the property if the merchantable timber were removed and the amount referred to in paragraph a of section 130R211 by the quantity of timber, expressed in cubic metres of timber, in the timber limit or that the taxpayer has obtained a right to cut, as shown by a bona fide cruise.

s. 130R108; O.C. 1981-80, s. 130R108; R.R.Q., 1981, c. I-3, r. 1, s. 130R108; O.C. 134-2009, s. 1.

130R213.  Where the taxpayer has been granted an allowance in respect of a timber limit or cutting right in computing the taxpayer’s income for a previous taxation year, the rate computed in section 130R212 is, except where section 130R214 applies, the rate employed to determine the allowance for the last year for which an allowance was granted.

s. 130R109; O.C. 1981-80, s. 130R109; R.R.Q., 1981, c. I-3, r. 1, s. 130R109; O.C. 134-2009, s. 1.

130R214.  In the case described in section 130R213, where it is established that the quantity of timber that is in the limit or that the taxpayer has a right to cut is in fact substantially different from the quantity that was employed in determining the rate for the last year for which an allowance was granted, the rate referred to in section 130R211 is the amount equal to the quotient obtained by dividing the amount by which the undepreciated capital cost to the taxpayer of the limit or right at the beginning of the year exceeds the estimated value of the property if the merchantable timber were removed by the estimated quantity of timber, expressed in cubic metres, that is in the limit or that could be subject to a cutting right, at the beginning of the year.

The same rule applies where it is established that the capital cost of the limit or cutting right is substantially different from the amount that was employed in determining the rate used for that last year.

s. 130R110; O.C. 1981-80, s. 130R110; R.R.Q., 1981, c. I-3, r. 1, s. 130R110; O.C. 134-2009, s. 1.

130R215.  Despite the deduction determined under sections 130R211 to 130R214, the taxpayer may elect for a taxation year that the deduction be the lesser of $100 and the amount received by the taxpayer in the taxation year from the sale of the timber.

s. 130R111; O.C. 1981-80, s. 130R111; R.R.Q., 1981, c. I-3, r. 1, s. 130R111; O.C. 134-2009, s. 1.

DIVISION  II
INDUSTRIAL MINERAL MINES

div. II; O.C. 1981-80, title VI, c. VII, div. II; R.R.Q., 1981, c. I-3, r. 1, title VI, c. VII, div. II; O.C. 134-2009, s. 1.

130R216.  A taxpayer may deduct, in computing the taxpayer’s income for a taxation year, the amounts provided in this division in respect of the capital cost of an industrial mineral mine or of a right to remove industrial minerals from such mine, hereinafter respectively called “mine” and “right”.

s. 130R112; O.C. 1981-80, s. 130R112; R.R.Q., 1981, c. I-3, r. 1, s. 130R112; O.C. 134-2009, s. 1.

130R217.  The amount that may be deducted by a taxpayer under this division is the lesser of the amount computed on the basis of a rate determined under sections 130R218 to 130R220 per unit of mineral mined in the taxation year and that of the undepreciated capital cost to the taxpayer of the mine or right at the end of the taxation year, before any deduction under this division.

s. 130R113; O.C. 1981-80, s. 130R113; R.R.Q., 1981, c. I-3, r. 1, s. 130R113; O.C. 134-2009, s. 1.

130R218.  Where the taxpayer has not been granted an allowance in respect of a mine or right in computing the taxpayer’s income for a previous taxation year, the rate referred to in section 130R217 is the amount equal to the quotient obtained by dividing the amount by which the capital cost to the taxpayer of the mine or right exceeds the estimated value of the property if all merchantable mineable material were removed by the specified number of units of material that the taxpayer acquired the right to remove or, in any other case, the number of units of merchantable mineable material estimated as being in the mine when the mine or right was acquired.

s. 130R114; O.C. 1981-80, s. 130R114; R.R.Q., 1981, c. I-3, r. 1, s. 130R114; O.C. 134-2009, s. 1.

130R219.  Where the taxpayer has been granted an allowance in respect of a mine or a right in computing the taxpayer’s income for a previous taxation year, the rate referred to in section 130R218 is, except where section 130R220 applies, that employed to determine the allowance for the last year for which an allowance was granted.

s. 130R115; O.C. 1981-80, s. 130R115; R.R.Q., 1981, c. I-3, r. 1, s. 130R115; O.C. 134-2009, s. 1.

130R220.  In the case referred to in section 130R219, where it is established that the number of units of material remaining to be mined in the previous taxation year was substantially different from that employed in determining the rate used for the last year for which an allowance was granted, the rate described in section 130R217 is the amount equal to the quotient obtained by dividing the amount by which the undepreciated capital cost to the taxpayer of the mine or right at the beginning of the year exceeds the estimated value of the property if all merchantable mineable material were removed by the specified number of units that the taxpayer had a right to remove, at the beginning of the year, or in any other case, the number of units of merchantable mineable material estimated as remaining in the mine at the beginning of the year.

The same rule applies where it is established that the capital cost of the mine or right is substantially different from the amount that was employed in determining the rate used for that year.

s. 130R116; O.C. 1981-80, s. 130R116; R.R.Q., 1981, c. I-3, r. 1, s. 130R116; O.C. 134-2009, s. 1.

130R221.  Despite the deduction provided in sections 130R217 to 130R220, the taxpayer may elect, for the taxation year, that the deduction be the lesser of $100 and the amount received by the taxpayer in the year from the sale of mineral.

s. 130R117; O.C. 1981-80, s. 130R117; R.R.Q., 1981, c. I-3, r. 1, s. 130R117; O.C. 134-2009, s. 1.

DIVISION  III
RAILWAY SIDINGS

div. IV; O.C. 1981-80, title VI, c. VII, div. IV; R.R.Q., 1981, c. I-3, r. 1, title VI, c. VII, div. IV; O.C. 134-2009, s. 1.

130R222.  Where a taxpayer, other than an operator of a railway system, has made a capital expenditure pursuant to a contract or arrangement with an operator of a railway system under which a railway siding that does not become the taxpayer’s property is constructed to provide service to the taxpayer’s place of business or to a property acquired by the taxpayer for the purpose of gaining or producing income, the latter, in computing income from the business or property for the taxation year, is allowed a deduction not exceeding 4% of any amount remaining, after deducting from the capital expenditure the aggregate of all amounts previously allowed as deductions in respect of the expenditure.

s. 130R120; O.C. 1981-80, s. 130R120; R.R.Q., 1981, c. I-3, r. 1, s. 130R120; O.C. 1707-97, s. 22; O.C. 134-2009, s. 1.

TITLE  XIII
DEPRECIATION WITH RESPECT TO FARMING AND FISHING

title VII; O.C. 1981-80, title VII; R.R.Q., 1981, c. I-3, r. 1, title VII; O.C. 134-2009, s. 1.

130R223.  A taxpayer who, in computing the taxpayer’s income for a taxation year from farming or fishing, has elected to have the provisions of the Corporation Tax Act (R.S.Q. 1964, c. 67) or of the Provincial Income Tax Act (R.S.Q. 1964, c. 69) apply and has deducted a part of the capital cost of property used for the purpose of gaining or producing income for farming or fishing in accordance with the method allowed under Part XVII of the Income Tax Regulations made under the Income Tax Act (R.S.C. 1952, c. 148) as it read on 31 December 1971, may still use such method in respect of any such property acquired before 1972 and, for such purpose, that Part XVII of this Regulation applies to determine the amount that may be deducted under paragraph a of section 130 of the Act.

s. 130R200; O.C. 1981-80, s. 130R200; R.R.Q., 1981, c. I-3, r. 1, s. 130R200; O.C. 35-96, s. 86; O.C. 134-2009, s. 1.

TITLE  XIV
TERMINAL LOSS

title VIIIO.C. 1981-80, title VIIIO.C. 1983-80, s. 11R.R.Q., 1981, c. I-3, r. 1, title VIIIO.C. 134-2009, s. 1.

130.1R1.  For the purposes of the third paragraph of section 130.1 of the Act, the prescribed amount is $16,000.

Despite the first paragraph, the prescribed amount is the capital cost, otherwise determined, of the automobile to the taxpayer where it is an automobile

  (a)      acquired by the taxpayer before 19 April 1978;

  (b)      used under a permit to transport passengers for remuneration; or

  (c)      intended to be leased to a person by the taxpayer, if the principal business of the taxpayer is the leasing of automobiles to persons dealing at arm’s length with the taxpayer.

s. 130.1R1; O.C. 1981-80, s. 130.1R1; O.C. 1983-80, s. 11; R.R.Q., 1981, c. I-3, r. 1, s. 130.1R1; O.C. 2847-84, s. 11; O.C. 1697-92, s. 48; O.C. 134-2009, s. 1.

130.1R2.  For the purposes of the third paragraph of section 130.1 of the Act, the prescribed part of the excess amount referred to in the first paragraph of that section at the end of a taxation year in respect of the depreciable property of a taxpayer of a class referred to in Schedule B that includes an automobile is

  (a)      where the year is a taxation year beginning before 18 June 1987 and ending after 31 December 1987, and where the automobile was acquired by the taxpayer after 17 June 1987 otherwise than in accordance with an obligation in writing entered into before 18 June 1987 and is not an automobile described in subparagraph c of the second paragraph of section 130.1R1, an amount equal to what that excess amount would be if the cost of the automobile to the taxpayer did not exceed $16,000; and

  (b)      in all other cases, an amount equal to what that excess amount would be if

  (i)    the cost of the automobile to the taxpayer, other than an automobile described in subparagraph a or c of the second paragraph of section 130.1R1 or a passenger vehicle that the taxpayer acquired during the 1987 taxation year, did not exceed $16,000; and

  (ii)    where the year is the 1988 taxation year or a taxation year subsequent to the 1988 taxation year and where the taxpayer has, without interruption since the year in question, used the automobile in part for the purpose of earning income and in part for personal use, the aggregate of the amounts each of which is an amount that the taxpayer deducted as an allowance in respect of the automobile in computing the taxpayer’s income for a preceding taxation year, referred to as “particular preceding taxation year” in this subparagraph, for which section 130R4 of the preceding Regulation, within the meaning of section 2000R1, applied in respect of the automobile and which, where applicable, is not a taxation year that ended before a taxation year preceding to the 1988 taxation year, for which that section 130R4 did not apply in respect of the automobile, was equal to the aggregate of the amounts each of which is an amount determined, according to the formula in subparagraph b of the first paragraph of section 130R21, in respect of the automobile for a particular preceding taxation year.

s. 130.1R2; O.C. 1697-92, s. 49; O.C. 134-2009, s. 1.

TITLE  XV
ALLOWANCE FOR THE USE OF AN AUTOMOBILE

title IX; O.C. 1981-80, title IX; R.R.Q., 1981, c. I-3, r. 1, title IX; O.C. 1697-92, s. 50; O.C. 134-2009, s. 1.

133.2.1R1.  For the purposes of section 133.2.1 of the Act, the amount prescribed in respect of the use of one or more automobiles in a taxation year by an individual for kilometres driven in the year for the purpose of earning income of the individual is the aggregate of

  (a)      the product obtained by multiplying $0.55 by the number of those kilometres, up to and including 5,000;

  (b)      the product obtained by multiplying $0.49 by the number of those kilometres in excess of 5,000; and

  (c)      the product obtained by multiplying $0.04 by the number of those kilometres driven in the Yukon Territory, the Northwest Territories or Nunavut.

s. 133.2.1R1; O.C. 1697-92, s. 52; O.C. 1463-2001, s. 43; O.C. 1470-2002, s. 23; O.C. 1155-2004, s. 16; O.C. 1149-2006, s. 15; O.C. 1116-2007, s. 13; O.C. 134-2009, s. 1; O.C. 1303-2009, s. 6; O.C. 701-2013, s. 8; O.C. 66-2016, s. 8.

TITLE  XVI
OTHER DEDUCTIONS

title X; O.C. 1981-80, title X; R.R.Q., 1981, c. I-3, r. 1, title X; O.C. 134-2009, s. 1.

CHAPTER  I
PRESCRIBED RESERVE AMOUNT AND RECOVERY RATE

c. I.1; O.C. 366-94, s. 17; O.C. 134-2009, s. 1.

140.1R1.  In this chapter,

“designated country” has the meaning assigned by the Guidelines for banks established pursuant to section 175 of the Bank Act (R.S.C. 1985, c. B-1), as it read in its version of 31 May 1992, and issued by the Office of the Superintendent of Financial Institutions of Canada, as amended from time to time;

“exposure to a designated country” has the same meaning as in the Guidelines for banks established pursuant to section 175 of the Bank Act, as it read in its version of 31 May 1992, and issued by the Office of the Superintendent of Financial Institutions of Canada, as amended from time to time;

“general provisions” means the general country risk provisions within the meaning of the Guidelines for banks established pursuant to section 175 of the Bank Act, as it read in its version of 31 May 1992, and issued by the Office of the Superintendent of Financial Institutions of Canada, as amended from time to time;

“provisionable assets” has the same meaning as in the Guidelines for banks established pursuant to section 175 of the Bank Act, as it read in its version of 31 May 1992, and issued by the Office of the Superintendent of Financial Institutions of Canada, as amended from time to time;

“specific provisions” has the meaning assigned by the Guidelines for banks established pursuant to section 175 of the Bank Act, as it read in its version of 31 May 1992, and issued by the Office of the Superintendent of Financial Institutions of Canada, as amended from time to time;

“specified loan” means

  (a)      a United Mexican States Collateralized Par Bond maturing in 2019; or

  (b)      a United Mexican States Collateralized Discount Bond maturing in 2019.

s. 140.1R1; O.C. 366-94, s. 17; O.C. 35-96, s. 86; O.C. 1633-96, s. 4; O.C. 1470-2002, s. 24; O.C. 134-2009, s. 1.

140.1R2.  For the purposes of subparagraph a of the first paragraph of section 140.1 of the Act, the prescribed reserve amount for a taxpayer for a taxation year means the aggregate of

  (a)      where the taxpayer is a bank, an amount equal to the lesser of the following amounts:

  (i)    the reserve amount reported in its annual report for the year that is filed with and accepted by the Superintendent of Financial Institutions of Canada or, where the taxpayer was subject to the supervision of the Superintendent of Financial Institutions of Canada throughout the year but was not required to file an annual report with the Superintendent for the year, in its financial statements for the year, as general provisions or as specific provisions in respect of exposures to designated countries that are related to loans or lending assets made or acquired by it in the ordinary course of its business, and

  (ii)    an amount in respect of its loans or lending assets at the end of the year that were made or acquired by it in the ordinary course of its business and reported for the year to the Superintendent of Financial Institutions of Canada, pursuant to the guidelines established by the Superintendent, as being part of the aggregate of the exposures to designated countries for the taxpayer, for the purpose of determining the taxpayer’s general provisions or specific provisions referred to in subparagraph i, or that the taxpayer acquired after 16 August 1990 and reported for the year to the Superintendent of Financial Institutions of Canada, pursuant to the guidelines established by the Superintendent, as an exposure to a designated country, referred to in the second paragraph as “loans” equal to the positive or negative amount, as the case may be, determined by the following formula:

[45% × (A + B)] – (B + C); and

  (b)      where the taxpayer is a bank, the positive or negative amount that would be determined by the formula referred to in subparagraph ii of subparagraph a, in respect of specified loans owned by the taxpayer at the end of the year, if that subparagraph ii applied in respect of the loans.

In the formula in subparagraph ii of subparagraph a of the first paragraph,

  (a)      A is the aggregate of the amounts each of which is equal to the amount that would be the amortized cost of a loan to the taxpayer at the end of the year if section 21.26 of the Act were read without reference to its paragraph e and section 21.27 of the Act without reference to its paragraph d;

  (b)      B is the aggregate of the amounts each of which is equal to the amount by which the principal amount of a loan outstanding at the time it was acquired by the taxpayer exceeds the amortized cost of the loan to the taxpayer immediately after that time; and

  (c)      C is the aggregate of the amounts each of which is equal to

  (i)    an amount deducted in respect of a loan under subparagraph b of the first paragraph of section 140.1 of the Act in computing the taxpayer’s income for the year, or

  (ii)    an amount in respect of a loan representing the amount by which the aggregate of the amounts deducted in respect of the loan under section 141 of the Act in computing the taxpayer’s income for the year or a preceding taxation year exceeds the aggregate of the amounts included in respect of the loan under paragraph i of section 87 of the Act in computing the taxpayer’s income for the year or a preceding taxation year.

s. 140.1R2; O.C. 366-94, s. 17; O.C. 1466-98, s. 126; O.C. 1463-2001, s. 44; O.C. 1470-2002, s. 25; O.C. 134-2009, s. 1.

140.1R3.  The loans and lending assets of a taxpayer referred to in subparagraph ii of subparagraph a of the first paragraph of section 140.1R2 do not include the loans and lending assets acquired by the taxpayer before 1 November 1988 from a person with whom the taxpayer dealt at arm’s length, if the taxpayer elects to have this section apply by notifying the Minister in writing, with supporting evidence, that the taxpayer has made a valid election with the Minister of National Revenue under section 8003 of the Income Tax Regulations made under the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) concerning the application of subparagraph ii of paragraph a of section 8000 of those Regulations.

s. 140.1R3; O.C. 366-94, s. 17; O.C. 35-96, s. 86; O.C. 1466-98, s. 126; O.C. 1451-2000, s. 66; O.C. 134-2009, s. 1.

140.1R4.  For the purposes of subparagraph ii of subparagraph a of the first paragraph of section 140.1R2, the rules in the second paragraph apply where a loan or lending asset of a person related to a taxpayer, referred to in this section as the “holder”,

  (a)      was reported by the taxpayer for the year to the Superintendent of Financial Institutions of Canada, pursuant to the guidelines established by the Superintendent, as an exposure to a designated country;

  (b)      was acquired by the holder, or by another person related to the taxpayer, after 16 August 1990, as part of a series of transactions or events in which the taxpayer or a person related to the taxpayer disposed of a loan or lending asset that

  (i)    is, for the taxation year immediately preceding the year during which it was disposed of, a loan or lending asset that the taxpayer reported to the Superintendent of Financial Institutions of Canada, pursuant to the guidelines established by the Superintendent, as an exposure to a designated country, and

  (ii)    is a loan or lending asset in respect of which the loss that would result from the disposition thereof would be a loss in respect of which the taxpayer or a person related to the taxpayer could claim a deduction under Part I of the Act; and

  (c)      had an amortized cost to the holder, immediately after the time of its acquisition by the holder, of less than 55% of its principal amount.

The rules referred to in the first paragraph are the following:

  (a)      the loan or lending asset is deemed

  (i)    to be a loan or lending asset of the taxpayer at the end of the year,

  (ii)    to be a loan or lending asset of the taxpayer acquired by the taxpayer at the time of its acquisition by the holder, and

  (iii)    to have an amortized cost to the taxpayer, at any time, equal to its amortized cost to the holder at that time; and

  (b)      the amounts deducted in respect of the loan or lending asset under section 141 of the Act or included under paragraph i of section 87 of the Act in computing the income of the holder for a particular year are deemed to have been so deducted or included, as the case may be, in computing the taxpayer’s income for the year during which the particular year ends.

s. 140.1R4; O.C. 366-94, s. 17; O.C. 1466-98, s. 126; O.C. 134-2009, s. 1.

140.1R5.  For the purposes of subparagraph b of the second paragraph of section 140.1R2, the following rules apply:

  (a)      the principal amount outstanding at any time of a lending asset of a taxpayer that is a share of the capital stock of a corporation is equal to the part of the consideration received by the corporation for the issue of the share that is outstanding at that time;

  (b)      where a taxpayer realizes a loss on the disposition of a loan or lending asset described in subparagraph ii of subparagraph a of the first paragraph of section 140.1R2 or on the disposition of a specified loan described in subparagraph b of that first paragraph, referred to in this paragraph as the “former loan”, for consideration that included another loan or lending asset that was a loan or lending asset described in that subparagraph ii or in that subparagraph b, referred to in this paragraph as the “new loan”, and where, in the case of a former loan that is not a specified loan, that loss is included in computing the taxpayer’s provisionable assets, as reported for the year with the Superintendent of Financial Institutions of Canada, pursuant to the guidelines established by the Superintendent, for the purpose of determining the taxpayer’s general provisions or specific provisions in respect of exposures to designated countries, the principal amount of the new loan outstanding at the time it was acquired by the taxpayer is deemed to be equal to the principal amount of the former loan outstanding immediately before that time; and

  (c)      where, at the end of a particular taxation year, a taxpayer is the owner of a specified loan that was described in an inventory of the taxpayer at the end of the preceding taxation year, the amortized cost of the specified loan for the taxpayer at the end of the particular taxation year is equal to its value determined in accordance with sections 83 to 85.6 of the Act at the end of the preceding taxation year for the purposes of computing the taxpayer’s income for that preceding year.

s. 140.1R6; O.C. 366-94, s. 17; O.C. 1707-97, s. 98; O.C. 1470-2002, s. 27; O.C. 134-2009, s. 1.

CHAPTER  II
MINING TAXES

c. II; O.C. 1981-80, title X, c. II; R.R.Q., 1981, c. I-3, r. 1, title X, c. II; O.C. 1116-2007, s. 15; O.C. 134-2009, s. 1.

143R1.  In this chapter,

“income” of a taxpayer for a taxation year from mining operations in a province means the income, for the taxation year, that is derived from mining operations in the province as computed under the laws of the province that impose an eligible tax described in the second paragraph of section 143R2;

“mine” includes any work or undertaking in which a mineral ore is extracted or produced and includes a quarry;

“mineral ore” includes an unprocessed mineral or mineral-bearing substance;

“mining operations” means

  (a)      the extraction or production of mineral ore from or in a mine;

  (b)      the transportation of mineral ore to the point of egress from the mine; and

  (c)      the processing of

  (i)    mineral ore, other than iron ore, to a stage that is not beyond the prime metal stage or its equivalent, and

  (ii)    iron ore to a stage that is not beyond the pellet stage or its equivalent;

“non-Crown royalty” means a royalty contingent on production of a mine or computed by reference to the volume or value of production from mining operations in a province but does not include a royalty that is payable to the State or Her Majesty in right of Canada or a province other than Québec;

“processing” includes all forms of beneficiation, smelting and refining.

s. 143R1; O.C. 1981-80, s. 143R1; R.R.Q., 1981, c. I-3, r. 1, s. 143R1; O.C. 1116-2007, s. 16; O.C. 134-2009, s. 1.

143R2.  For the purposes of section 143 of the Act, the amount allowed in respect of taxes on income from mining operations of a taxpayer for a taxation year is the aggregate of all amounts each of which is an eligible tax referred to in the second paragraph that is paid or payable by the taxpayer

  (a)      on the income of the taxpayer for the taxation year from mining operations; or

  (b)      on a non-Crown royalty included in computing the income of the taxpayer for the taxation year.

An eligible tax is

  (a)      a tax, on the income of a taxpayer for a taxation year from mining operations in a province, that is

  (i)    levied under a law of the province,

  (ii)    imposed only on persons engaged in mining operations in the province, and

  (iii)    paid or payable to

  (1)    the province,

  (2)    an agent or mandatary of Her Majesty in right of the province, or

  (3)    a municipality in the province, in lieu of taxes on property or on any interest in property, or any right in property, other than in lieu of taxes on residential property or on any interest, or any right, in residential property; and

  (b)      a tax, on an amount received or receivable by a person as a non-Crown royalty, that is

  (i)    levied under a law of a province,

  (ii)    imposed specifically on persons who hold a non-Crown royalty on mining operations in the province, and

  (iii)    paid or payable to the province or to an agent or mandatary of Her Majesty in right of the province.

s. 143R5; O.C. 1981-80, s. 143R5; R.R.Q., 1981, c. I-3, r. 1, s. 143R5; O.C. 1116-2007, s. 18; O.C. 134-2009, s. 1.

CHAPTER  III
DEDUCTION IN RESPECT OF RESOURCE PROFITS

c. III; O.C. 1981-80, title X, c. III; R.R.Q., 1981, c. I-3, r. 1, title X, c. III; O.C. 134-2009, s. 1.

145R1.  For the purpose of computing the income of a taxpayer for a taxation year that begins before 1 January 2007, the amount to which the first paragraph of section 145 of the Act refers is the amount determined by the formula

[0.25 × (A – B)] – C.

In the formula in the first paragraph,

  (a)      A is the taxpayer’s adjusted resource profits for the year;

  (b)      B is the aggregate of all amounts each of which is a Canadian exploration and development overhead expense, within the meaning given to that expression by section 360R2, made or incurred by the taxpayer in the year, other than an amount included therein because of section 181 or 182 of the Act; and

  (c)      C is the amount by which the aggregate that would be determined under subparagraph b of the second paragraph of section 360R42 in computing the taxpayer’s earned depletion base at the end of the year, other than any portion of that aggregate determined under subparagraph v of that paragraph as a consequence of a disposition in the year of property in circumstances to which section 360R18 applies, exceeds the aggregate that would be determined under subparagraph a of the second paragraph of section 360R42 in computing the taxpayer’s earned depletion base at the end of the year.

s. 145R1; O.C. 1981-80, s. 145R1; R.R.Q., 1981, c. I-3, r. 1, s. 145R1; O.C. 2962-82, s. 24; O.C. 500-83, s. 24; O.C. 2509-85, s. 4; O.C. 91-94, s. 4; O.C. 35-96, s. 8; O.C. 1466-98, s. 28; O.C. 1249-2005, s. 11; O.C. 134-2009, s. 1.

145R2.  For the purposes of this chapter, “adjusted resource profits” of a taxpayer for a taxation year means the amount, which may be positive or negative, determined by the formula

A + B – C.

In the formula in the first paragraph,

  (a)      A is the aggregate of the taxpayer’s resource profits for the year in respect of a mining business, within the meaning of section 360R24, and the taxpayer’s resource profits for the year in respect of an oil business, within the meaning of section 360R27, computed as if

  (i)    the amount determined under paragraph a of sections 360R21 and 360R25 were equal to zero,

  (ii)    section 360R21 were read without reference to subparagraph iii of paragraph b thereof,

  (iii)    the first paragraph in section 360R3 were read without reference to subparagraph e thereof,

  (iv)    the following amounts were not deducted in computing the taxpayer’s gross resource profits and resource profits for the year in respect of a mining business or oil business, determined in accordance with sections 360R21 to 360R27:

  (1)    each amount deducted in computing the taxpayer’s income for the year in respect of a rental or royalty paid or payable by the taxpayer, other than an amount prescribed in section 91R1, an amount paid or payable in respect of a specified royalty, within the meaning given to that expression by section 360R2, or an amount that is a production royalty within the meaning given to that expression by section 360R2, computed by reference to the amount or value of petroleum, natural gas or related hydrocarbons produced from a natural accumulation, other than a resource within the meaning given to that expression by section 360R2, of petroleum or natural gas in Canada or an oil or gas well in Canada, or produced from a resource, within the meaning given to that expression by section 360R2, that is a bituminous sands deposit, oil sands deposit or oil shale deposit,

  (2)    each amount deducted in computing the taxpayer’s income for the year under any of sections 147, 176, 176.4, 176.6 and 179 of the Act, or as, on account of or in lieu of, interest in respect of a debt owed by the taxpayer, and

  (3)    each amount deducted under section 145 or Chapter X of Title VI of Book III of Part I of the Act or under section 88.4 of the Act respecting the application of the Taxation Act (chapter I-4),

  (v)    each amount that is the taxpayer’s share of the income or loss of a partnership from any source were not taken into account, and

  (vi)    sections 360R21 to 360R27 provided for the computation of negative amounts where the amounts subtracted in computing gross resource profits and resource profits in respect of a mining business or in respect of an oil business exceed the amounts added in computing those amounts;

  (b)      B is the aggregate of all amounts each of which is the taxpayer’s share of the adjusted resource profits of a partnership for the year, determined in accordance with sections 145R3 and 145R4; and

  (c)      C is the amount by which the aggregate of the following amounts exceeds the amount determined in accordance with the third paragraph:

  (i)    the aggregate of all amounts, each of which is an amount included in the taxpayer’s gross resource profits for the year in respect of a mining business or oil business, determined in accordance with section 360R21 or 360R25, as the case may be, as a rental or royalty, other than a specified royalty within the meaning given to that expression by section 360R2 or a production royalty within the meaning given to that expression by section 360R2, computed by reference to the amount or value of petroleum, natural gas or related hydrocarbons produced from a natural accumulation, other than a resource within the meaning given to that expression by section 360R2, of petroleum or natural gas in Canada or an oil or gas well in Canada, or produced from a resource, within the meaning given to that expression by section 360R2, that is a bituminous sands deposit or oil shale deposit, and

  (ii)    50% of the amounts included in the taxpayer’s gross resource profits for the year in respect of a mining business or oil business, determined in accordance with section 360R21 or 360R25, as the case may be, in respect of specified royalties.

The amount referred to in subparagraph c of the second paragraph is equal to the total, where the taxation year ends after 6 March 1996, of all outlays and expenses that were made or incurred in respect of the aggregate described in subparagraph i of subparagraph c of the second paragraph, to the extent that the outlays and expenses were deducted in computing the taxpayer’s gross resource profits in respect of a mining business or oil business for the year.

s. 145R1.1; O.C. 2509-85, s. 4; O.C. 91-94, s. 5; O.C. 35-96, s. 9; O.C. 1466-98, s. 28; O.C. 1451-2000, s. 5; O.C. 1470-2002, s. 29; O.C. 134-2009, s. 1.

145R3.  Where a taxpayer is a member of a partnership in a fiscal period of the partnership that ends in a taxation year of the taxpayer, the taxpayer’s share of the partnership’s adjusted resource profits for the year is equal to

  (a)      zero, where the fiscal period of the partnership began before 21 December 1991; and

  (b)      in any other case, the amount, which may be positive or negative, that could, but for this section, reasonably be considered to represent the taxpayer’s share of the partnership’s adjusted resource profits for the fiscal period, each partnership being, in that respect, deemed to be a taxpayer the fiscal period of which is a taxation year.

s. 145R2; O.C. 1981-80, s. 145R2; R.R.Q., 1981, c. I-3, r. 1, s. 145R2; O.C. 1707-97, s. 98; O.C. 1466-98, s. 28; O.C. 134-2009, s. 1.

145R4.  Despite section 145R3, where a taxpayer is a member of an exempt partnership, within the meaning given to that expression by section 360R2, in a fiscal period of the partnership that begins before 1 January 2000 and ends in a taxation year of the taxpayer, and the taxpayer’s share of the partnership’s adjusted resource profits for the year would, but for this section, be a negative amount, the taxpayer’s share of the partnership’s adjusted resource profits for the year is deemed to be equal to the product obtained, which may be positive or negative, when the particular amount is multiplied

  (a)      by zero, where the partnership is an exempt partnership, within the meaning given to that expression by section 360R2, in respect of the taxpayer at the end of the fiscal period and, at that time, all or substantially all of the assets of the partnership were held in connection with one or more working interests the production from which began in reasonable commercial quantities before 21 December 1991 or the production from which was to begin in reasonable commercial quantities after 20 December 1991 in accordance with an agreement in writing made before 21 December 1991; or

  (b)      in any other case, by the lesser of one and the fraction that the amount that would be the partnership’s adjusted resource profits for the fiscal period if the partnership did not have any working interest described in paragraph a, is of the partnership’s adjusted resource profits for the fiscal period.

s. 145R3; O.C. 1466-98, s. 29; O.C. 1116-2007, s. 20; O.C. 134-2009, s. 1.

CHAPTER  IV
ALLOWANCES

c. IV; O.C. 1981-80, title X, c. IV; O.C. 3926-80, s. 4; R.R.Q., 1981, c. I-3, r. 1, title X, c. IV; O.C. 134-2009, s. 1.

152R1.  In this chapter,

“claim liability” of an insurer at the end of a taxation year means

  (a)      in respect of a claim made to the insurer before that time under an insurance policy, an amount equal to the amount by which the present value at that time, computed using a rate of interest that is reasonable in the circumstances, of a reasonable estimate, determined in accordance with accepted actuarial practice, of the insurer’s future payments and claim adjustment expenses in respect of the claim exceeds the present value at that time, computed using a rate of interest that is reasonable in the circumstances, of a reasonable estimate, determined in accordance with accepted actuarial practice, of the amounts that the insurer will recover after that time in respect of the claim because of salvage, subrogation or any other reason; or

  (b)      in respect of the possibility that there are claims under an insurance policy incurred before that time that have not been made to the insurer before that time, an amount equal to the amount by which the present value at that time, computed using a rate of interest that is reasonable in the circumstances, of a reasonable estimate, determined in accordance with accepted actuarial practice, of the insurer’s payments and claim adjustment expenses in respect of those claims exceeds the present value at that time, computed using a rate of interest that is reasonable in the circumstances, of a reasonable estimate, determined in accordance with accepted actuarial practice, of the amounts that the insurer will recover in respect of those claims because of salvage, subrogation or any other reason;

“deposit accounting insurance policy” has the meaning assigned by subparagraph p of the first paragraph of section 835 of the Act;

“extended motor vehicle warranty” means an agreement, in this definition referred to as the “extended warranty”, under which a person agrees to provide property or render services in respect of the repair or maintenance of a motor vehicle manufactured by the person or a corporation related to the person where

  (a)      the extended warranty is in addition to a basic or limited warranty in respect of the vehicle;

  (b)      the basic or limited warranty has a term of 3 or more years, although it may expire before the end of such term on the vehicle’s odometer registering a specified number of kilometres or miles;

  (c)      more than 50% of the expenses to be incurred under the extended warranty are reasonably expected to be incurred after the expiry of the basic or limited warranty; and

  (d)      the person’s risk under the extended warranty is insured by an insurer that is subject to the supervision of the Superintendent of Financial Institutions;

“non-cancellable or guaranteed renewable accident and sickness policy” has the meaning assigned by section 840R1;

“policy liability” has the meaning assigned by section 840R1;

“post-1995 non-cancellable or guaranteed renewable accident and sickness policy” has the meaning assigned by section 840R1;

“pre-1996 non-cancellable or guaranteed renewable accident and sickness policy” has the meaning assigned by sections 840R1 and 840R5;

“reinsurance commission”, in respect of a policy, means

  (a)      where the risk under the policy is fully reinsured, the amount by which the amount of the premium paid by the policyholder in respect of the policy exceeds the amount of the consideration payable by the insurer in respect of the reinsurance of the risk; or

  (b)      where only a portion of the risk under the policy is reinsured, the amount by which the portion of the amount of the premium paid by the policyholder in respect of the policy that may reasonably be considered to be in respect of the portion of the risk that is reinsured with a reinsurer exceeds the amount of the consideration payable by the insurer to the reinsurer in respect of the reinsurance of that portion of the risk;

“reinsurance recoverable amount” has the meaning assigned by section 840R1;

“reported reserve” has the meaning assigned by section 840R1;

“Superintendent of Financial Institutions” has the meaning assigned by section 840R1.

s. 152R1; O.C. 1981-80, s. 152R1; O.C. 3926-80, s. 4; R.R.Q., 1981, c. I-3, r. 1, s. 152R1; O.C. 91-94, s. 6; O.C. 1454-99, s. 21; O.C. 1463-2001, s. 45; O.C. 1155-2004, s. 17; O.C. 134-2009, s. 1; O.C. 701-2013, s. 9.

152R2.  For the purposes of this chapter, the following rules apply:

  (a)      a reference to a premium paid by the policyholder is, depending on the method regularly followed by the insurer in computing its income, to be read as a reference to a premium paid or payable by the policyholder;

  (b)      in determining the premium paid by a policyholder for a policy, the insurer may deduct the portion of the premium that

  (i)    may reasonably be considered, at the time the policy is issued, to be a deposit that, pursuant to the terms of the policy or the by-laws of the insurer, will be returned to the policyholder, or credited to the account of the policyholder, by the insurer on the termination of the policy, and

  (ii)    was not otherwise deducted under section 832 of the Act; and

  (c)      any rider that is attached to a policy and that provides for additional non-cancellable or guaranteed renewable accident or sickness insurance, as the case may be, is a separate non-cancellable or guaranteed renewable accident and sickness policy.

s. 152R1.2; O.C. 1463-2001, s. 47; O.C. 134-2009, s. 1.

152R3.  For the purposes of the second paragraph of section 152 of the Act, the amount prescribed in respect of an insurer for a taxation year is

  (a)      the amount determined under section 152R5 in respect of the insurer for the year, where that amount is greater than nil; and

  (b)      nil, in any other case.

s. 152R2; O.C. 1981-80, s. 152R2; O.C. 3926-80, s. 4; R.R.Q., 1981, c. I-3, r. 1, s. 152R2; O.C. 1463-2001, s. 48; O.C. 134-2009, s. 1.