|
|
To address this issue, the budget proposes to treat provincial deductions for scientific research and experimental development (SR&ED) that exceed the actual amount of the expenditure as government assistance for taxation years ending after February 2000. If a corporation is eligible for SR&ED ITCs at the enhanced rate of 35 per cent (i.e., it is a small Canadian-controlled private corporation), the value of the assistance will be determined at the relevant provincial small business corporate income tax rate that is applicable in that province multiplied by the amount by which the deduction for provincial income tax purposes exceeds the actual amount of the expenditure. For all other corporations, the value of the assistance will be determined as the maximum provincial corporate income tax rate applicable to active business income multiplied by the amount by which the deduction for provincial income tax purposes exceeds the actual amount of the expenditure.
|
