Income Tax Act

Marginal note:Definitions

• 125.2 (1) The following definitions apply in this section.

  adjusted business income

  adjusted business income, of a corporation for a taxation year, has the same meaning as in Part LII of the Income Tax Regulations. (revenu rajusté tiré d’une entreprise)

  cost of capital

  cost of capital, of a corporation for a taxation year, has the same meaning as in Part LII of the Income Tax Regulations. (coût en capital)

  cost of labour

  cost of labour, of a corporation for a taxation year, has the same meaning as in Part LII of the Income Tax Regulations. (coût en main-d’oeuvre)

  zero-emission technology manufacturing profits

  zero-emission technology manufacturing profits, of a corporation for a taxation year, means the amount determined by the formula

  A × B × C

  where

  A

  is the corporation’s adjusted business income for the taxation year;

  B

  is the fraction determined by the formula

  D ÷ E

  where

  D

  is the total of the corporation’s ZETM cost of capital and ZETM cost of labour for the taxation year, and

  E

  is the total of the corporation’s cost of capital and cost of labour for the taxation year; and

  C

  is

  • (a) if the fraction determined for B is at least 0.9, the fraction determined by the formula

    F ÷ G

    where

    F

    is the amount determined for E, and

    G

    is the amount determined for D; and

  • (b) 1, in any other case. (bénéfices de fabrication de technologies à zéro émission)

  ZETM cost of capital

  ZETM cost of capital, of a corporation for a taxation year, has the same meaning as in Part LII of the Income Tax Regulations. (coût en capital de FTZE)

  ZETM cost of labour

  ZETM cost of labour, of a corporation for a taxation year, has the same meaning as in Part LII of the Income Tax Regulations. (coût en main-d’œuvre de FTZE)

• Marginal note:Zero-emission technology manufacturing

  (2) There may be deducted from the tax otherwise payable under this Part by a corporation for a taxation year the amount determined by the formula

  (A × B) + (C × D)

  where

  A

  is

  • (a) 0.075, if the taxation year begins after 2021 and before 2032,

  • (b) 0.05625, if the taxation year begins after 2031 and before 2033,

  • (c) 0.0375, if the taxation year begins after 2032 and before 2034,

  • (d) 0.01875, if the taxation year begins after 2033 and before 2035, and

  • (e) nil, in any other case;

  B

  is the least of

  • (a) the corporation’s zero-emission technology manufacturing profits for the taxation year,

  • (b) the amount of the corporation’s adjusted business income for the taxation year (determined without reference to section 5203 of the Income Tax Regulations) less

    • (i) if the corporation was a Canadian-controlled private corporation throughout the taxation year, the least of the amounts, if any, determined under paragraphs 125(1)(a) to (c) in respect of the corporation for the taxation year, and

    • (ii) in any other case, nil, and

  • (c) the amount, if any, by which the corporation’s taxable income for the taxation year exceeds the total of

    • (i) if the corporation was a Canadian-controlled private corporation throughout the taxation year, the least of the amounts, if any, determined under paragraphs 125(1)(a) to (c) in respect of the corporation for the taxation year,

    • (ii) the corporation’s aggregate investment income (as defined in subsection 129(4)) for the taxation year, and

    • (iii) the amount determined by multiplying the total of the amounts deducted under subsection 126(2) from its tax for the taxation year otherwise payable under this Part, by the relevant factor for the taxation year;

  C

  is

  • (a) 0.045, if the taxation year begins after 2021 and before 2032,

  • (b) 0.03375, if the taxation year begins after 2031 and before 2033,

  • (c) 0.0225, if the taxation year begins after 2032 and before 2034,

  • (d) 0.01125, if the taxation year begins after 2033 and before 2035, and

  • (e) nil, in any other case; and

  D

  is

  • (a) if the corporation was a Canadian-controlled private corporation throughout the taxation year, the lesser of

    • (i) the least of the amounts, if any, determined under paragraphs 125(1)(a) to (c) in respect of the corporation for the taxation year, and

    • (ii) the amount determined by the formula

      E − F

      where

      E

      is the corporation’s zero-emission technology manufacturing profits for the taxation year, and

      F

      is the amount determined for B, and

  • (b) nil, in any other case.