Income Tax Act

Version of section 125.2 from 2004-08-31 to 2013-06-25:

Marginal note:Deduction of Part VI tax
  •  (1) There may be deducted in computing the tax payable under this Part for a taxation year by a corporation that was throughout the year a financial institution (within the meaning assigned by section 190) an amount equal to such part as the corporation claims of its unused Part VI tax credits for any of its 7 immediately preceding taxation years ending before 1992, to the extent that that amount does not exceed the amount, if any, by which

    • (a) its tax payable under this Part (determined without reference to this section) for the year

    exceeds the total of

    • (b) the amount that would, but for subsection 190.1(3), be its tax payable under Part VI for the year, and

    • (c) the lesser of its Canadian surtax payable (within the meaning assigned by subsection 125.3(4)) for the year and the amount that would, but for subsection 181.1(4), be its tax payable under Part I.3 for the year.

  • Marginal note:Idem

    (2) For the purposes of this section,

    • (a) an amount may not be claimed under subsection 125.2(1) in computing a corporation’s tax payable under this Part for a particular taxation year in respect of its unused Part VI tax credit for another taxation year until its unused Part VI tax credits for taxation years preceding the other year that may be claimed for the particular year have been claimed; and

    • (b) an amount in respect of a corporation’s unused Part VI tax credit for a taxation year may be claimed under subsection 125.2(1) in computing its tax payable under this Part for another taxation year only to the extent that it exceeds the total of all amounts each of which is the amount claimed in respect of that unused Part VI tax credit in computing its tax payable under this Part for a taxation year preceding that other year.

  • Definition of unused Part VI tax credit

    (3) For the purposes of this section, unused Part VI tax credit of a corporation for a taxation year is the lesser of

    • (a) its tax payable under Part VI (determined without reference to subsections 190.1(1.1) and 190.1(3)) for the year, and

    • (b) the amount determined by the formula

      A - B

      where

      A
      is its tax payable under Part VI for the year (determined without reference to subsection 190.1(3)), and
      B
      is the amount, if any, by which
      • (i) the amount that would, but for this section, be its tax payable under this Part for the year

      exceeds

      • (ii) the lesser of its Canadian surtax payable (within the meaning assigned by subsection 125.3(4)) and the amount that would, but for subsection 181.1(4), be its tax payable under Part I.3 for the year.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. R.S., 1985, c. 1 (5th Supp.), s. 125.2;
  • 1994, c. 7, Sch. II, s. 102, Sch. VIII, s. 65, c. 21, s. 58.
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