New: Note the new Tax Rates listed below. Also, a Schedule G - Calculation of Capital Tax Payable must now be filed by all financial corporations who are required to file a Return.

The return must be filed by a financial corporation subject to the CCT with a permanent establishment in British Columbia and Net Paid Up Capital equal to or greater than the threshold amount.

The threshold amount is $10,000,000 for taxation years ending after March 31, 2003.

A financial corporation, as defined in the Corporation Capital Tax Act ("Act"), is:

1. a bank (including an authorized foreign bank), trust company or credit union, and
2. the agent, assignee, trustee, liquidator, receiver or other official in whose hands, or under whose control, all or any part of the property of a bank, trust company or credit union is placed.

If a financial corporation is a member of an associated group of financial corporations, the Net Paid Up Capital of the member financial corporations must be added together to determine if the Net Paid Up Capital of the group is above the threshold amount.

Effective April 1, 2008, the Corporation Capital Tax Act is amended to phase out the existing corporation capital tax over the next three years by reducing the rates by one-third each year. The rate reductions will be pro-rated for taxation years that straddle April 1. The following table shows the scheduled rate reductions.

Corporation Capital Tax Rates

*Financial institutions with paid up capital under $1 billion or that have a head office in BC

If an associated group of financial corporations is subject to CCT, a separate return must be filed by each member corporation.

If a financial corporation or an associated group of financial corporations determines that it is not taxable, and the total assets of the financial corporation or the associated group of financial corporations exceed the threshold amount, the Income Taxation Branch (the Branch) recommends that the financial corporation or each member of the associated group files a return as instructed below. The Branch will then have all the information necessary to determine that the financial corporation or the associated group of financial corporations is not taxable and will not send out a demand to file.

A signed copy of the return must be filed within 184 days of the financial corporation's taxation year-end and delivered to the Minister of Finance:

1. by mailing to P.O. Box 9444 Stn Prov Govt, Victoria BC V8W 9W8; or,

2. by courier to 1st Floor, 1802 Douglas Street, Victoria, BC V8T 4K6

The postmark date or the date the courier delivers the return is the filing date.

The following items must accompany the CCT return:

• where there is a balance of tax owing, a cheque made payable to the Minister of Finance;
• the financial corporation's complete set of non-consolidated financial statements, prepared in accordance with Canadian generally accepted accounting principles (GAAP), other than the equity method of accounting, and presented to the shareholders of the financial corporation;
• any applicable schedules (e.g. Schedule A and Schedules E to J);
• a copy of the financial corporation's federal income tax return (T2) and supporting schedules for the relevant taxation period; and
• in the case of an authorized foreign bank, Schedule J and capital adequacy reports required to be filed with the Office of the Superintendent of Financial Institutions (Canada).

A financial corporation with estimated taxes payable for the taxation period in excess of $3,000 must pay installments. Estimated taxes payable must be determined by using either of the following methods:

• by annualizing the preceding year's taxes payable; or,
• by estimating the amount.

(Caution: If the second method is used and the estimate is less than the actual tax for the year and the preceding year's annualized tax, penalties and interest will be levied.)

Installments must be paid by the 15th day of the 4th, 7th, 10th and 13th months from the beginning of the financial corporation's current taxation year.

For example, if the taxation year begins on January 1, installments are due on April 15, July 15, October 15 and January 15 (of the following year). If the taxation year begins on September 27, installments are due on December 15, March 15, June 15 and September 15.

A confirmation of the installment amounts paid is mailed out 75 days after the financial corporation's taxation year-end.

The final balance of tax owing, net of any installments paid, must be remitted by the financial corporation on or before the due date of the return; i.e. within 184 days of the financial corporation's taxation year-end.

The legislation imposes a penalty of 10% of the amount of unpaid tax for late-filed returns or for late or deficient tax payments. In addition, interest on any overdue tax amounts will be charged at prescribed rates.

Letters from taxpayers requesting acknowledgement for receipt of the return, or installments, will not be responded to. After the return is assessed, a Notice of Assessment will be issued.

The account number is preprinted on the return that is mailed out by the Branch. If using a generic form or software generated form, enter the account number in the space provided.

If this is the financial corporation's first year of filing a return, or if this is the first return of an amalgamated financial corporation, contact the Branch to obtain the new account number. Complete the return as instructed and attach a copy of the certificate of incorporation or a copy of the amalgamation certificate, as applicable.

Do not use a photocopy of a return that has been preprinted for another corporation or for another taxation year.

Indicate if the financial corporation is filing a Taxpayer Requested Adjustment to the return.

If the corporation receives a preprinted return and the name and/or address of the financial corporation differs from the preprinted return, complete the change of address information in the Change of Address Box provided. If the corporation does not receive a preprinted return, put the current name and address in the space provided below the Account No. Box. Also, if the corporation's name has changed put a mark in the small box noted inside the Change of Address Box and attach a Schedule I.

The Branch will only mail information to the address on the return.

Enter the start and end date of the financial corporation's taxation year. This should coincide with the financial corporation's taxation year for federal income tax purposes.

Indicate if this is the financial corporation's first year of filing a return; if not, indicate the taxation year-end of the last return filed.

First-time filers should indicate the date of incorporation.

If this is the first return of an amalgamated financial corporation, enter the date of amalgamation, complete Schedule I and include a copy of the amalgamation certificate.

Indicate if this is a final return. If yes, state the reason in the space provided.

Indicate if the financial corporation is exempt and provide the reason in accordance with Section 4 of the CCT Act.

Exempt financial corporations include:

• corporations, other than certain federal crown corporations, that are exempt from federal income tax pursuant to Section 149(1) or 149.1 of the Income Tax Act (Canada);
• the Central 1 Credit Union (formerly Credit Union Central of British Columbia);
• the Stabilization Central Credit Union of British Columbia; and
• bankrupt financial corporations from the date of their bankruptcy and for as long as they remain bankrupt.

Indicate if the financial corporation ceases or begins to have a permanent establishment during the taxation year and complete Schedule I . The permanent establishment criteria are stated on the back of Schedule I.

Indicate if the financial corporation is:

1. based in British Columbia with head office in British Columbia;
2. an authorized foreign bank; or
3. none of the above.

Indicate if the financial corporation is filing Schedule H.

The Branch will not discuss your return nor release information to your representative unless this form is completed.

If the return is prepared using a computer software program, a preprinted return will not be mailed to the taxpayer for the subsequent year. All computer software forms must be approved by the Branch.

Enter the financial corporation's federal business number.

Indicate if the financial corporation is a member of an associated group of financial corporations as defined in Section 256 of the Income Tax Act (Canada).

Associated financial corporations must complete Schedule F and Boxes A and B as indicated.

For more details, see instructions for completing Schedule F.

This section summarizes the financial corporation's capital tax liability and payments for the respective taxation year. If the financial corporation has a short taxation year, the amount of the tax payable is prorated.

Box 1B: Number of Days in Tax Year

The number of days in the taxation year should normally coincide with the number of days in the taxation year for federal income tax purposes.

Box 1C: Number of Days in Year

Enter the number of days in the calendar year: either 365 or 366 in a leap year.

Box 1F: Application of Prior Years' Overpayments

Enter the amount of the prior years' overpayment (if any) which is to be applied to the current year's tax liability.

Box 1H: Balance

Enter the balance of tax owing or refundable after subtracting previous payments (Box 1G) from the amount of liability calculated (Box 1D). If there is an amount refundable, enter as a negative.

Box 1I: If Payment Due

If there is a balance of tax owing (Box 1H is positive), enter the amount of the cheque attached to the return.

If the cheque has been sent under separate cover or is postdated, enter NIL.

Box 1J: If Overpayment

If there is a refund of tax owing (Box 1H is negative), indicate if this amount is to be refunded to the financial corporation or applied to the financial corporation's subsequent taxation year.

If neither box is completed, the overpayment will be refunded.

Certification

The certification box must be signed and dated by a duly authorized signing officer of the financial corporation.

The calculation of Net Paid Up Capital is the basis for determining if a financial corporation is subject to tax.

Net Paid Up Capital of a financial corporation is determined by deducting the investment allowance, if applicable (Box 2L), from the total paid up capital (Box 2H).

If claiming an investment allowance, the financial corporation must complete Schedule A.

Authorized foreign banks are to only complete Boxes 2G through 2M (inclusive).

Box 2A: Capital Stock

Enter the amount of all classes of share capital as disclosed on the balance sheet. The capital stock of a financial corporation means all shares in the financial corporation, including preferred shares reported as liabilities.

Box 2B: Non-equity Share of Credit Unions

Applicable for credit unions only. For the purposes of the Act, the capital stock of a credit union does not include its non-equity shares. Therefore, for credit unions only, if the amount in Box 2A includes an amount for non-equity shares, enter the non-equity shares amount in Box 2B.

Box 2D: Retained Earnings (Deficit)

Enter the amount of retained earnings (or deficit) as disclosed on the financial corporation's non-consolidated financial statements.

If this amount includes earnings or losses from investments reported on the equity basis, the financial corporation must complete Schedule A. Enter the amount from Box 1E of Schedule A (retained earnings) in Box 2D.

Box 2E: Contributed Surplus

Include all amounts reported as contributed surplus on the balance sheet.

Box 2F: Total Paid Up Capital for Financial Corporations other than Authorized Foreign Banks

Enter the sum of boxes C to E in Box 2F to arrive at total paid up capital for all financial corporations excluding authorized foreign banks.

Box 2G: Total Paid Up Capital for Authorized Foreign Banks ONLY

This box is to be used by authorized foreign banks only. Authorized foreign banks must first complete Schedule J in order to calculate total paid up capital. Subsequently, enter total paid up capital from Box 2E of Schedule J in Box 2G of the return.

Box 2L: Investment Allowance

For taxation years starting on or after September 1, 2002, all financial corporations are eligible for the investment allowance. Complete Section 2 of Schedule A to determine total assets. Subsequently, enter the amount from Box 2H (total assets) of Schedule A in Box 2J of the return.

Complete Section 4 of the return to arrive at total investments in Box 2I.

To arrive at the investment allowance deduction (Box 2L), divide Box 2J into Box 2I and multiply the quotient by total paid up capital (Box 2K).

The amount of the investment allowance deduction (Box 2L) cannot exceed the carrying value of the eligible investments (Box 2I). Therefore, enter the lower of the calculated investment allowance and the carrying value of the eligible investments in Box 2L.

Box 2M: Net Paid Up Capital

1. If the financial corporation is not associated with any other financial corporation and its Net Paid Up Capital is less than the threshold amount, the financial corporation is not subject to capital tax.
2. If the financial corporation is a member of an associated group of financial corporations and the Net Paid Up Capital of the associated group of financial corporations is less than the threshold amount, the financial corporation is not subject to capital tax.

If the financial corporation is not subject to capital tax, go to Section 1 and complete the return as instructed. If the financial corporation is subject to capital tax, go to Section 3.

BC Paid Up Capital is calculated by multiplying the financial corporation's Net Paid Up Capital (Box 3A) by its allocated percentage to British Columbia.

Complete Schedule E to determine the allocated percentage and enter the amount from Item H of Schedule E in Box 3B of the return.

If the amount in Box 3A (Net Paid Up Capital) is greater than $1 billion, go to Part 1 of Schedule G.

If the amount in Box 3A (Net Paid Up Capital) is equal to or less than $1 billion and the corporation is not a member of an associated group of financial corporations, go to Part 2 of Schedule G.

If the amount in Box 3A (Net Paid Up Capital) is equal to or less than $1 billion and the corporation is a member of an associated group of financial corporations, go to Part 3 of Schedule G.

In Box 4A, enter the carrying value of all eligible shares and report this amount in Box 2I of the return.

Eligible investments are shares of another financial corporation with a permanent establishment in British Columbia whose taxation year ends on the same date and that is not exempt under section 4(3) of the Act. Exempt financial corporations include the Central 1 Credit Union (formerly Credit Union Central of British Columbia), the Stabilization Central Credit Union of British Columbia and a bankrupt financial corporation from the date of its bankruptcy for as long as it remains bankrupt.

In the case of an authorized foreign bank, the carrying value of eligible investments is the total of all amounts, before the application of risk weights, in respect of the eligible investments held by the bank at the end of its taxation year in respect of its Canadian banking business.

Schedule A must be completed by a financial corporation:

1. with financial statements prepared using the equity method of accounting; or,
2. that is claiming an investment allowance on the return.

Section 1: Calculation of Retained Earnings (Deficit)

Section 1 adjusts the financial corporation's retained earnings (deficit) disclosed on its balance sheet by excluding earnings or losses from investments that have been included in retained earnings (deficit) under the equity method of accounting.

Box 1B: Equity Share of Earnings (Losses) of Other Corporations

The financial corporation's equity share of earnings from another corporation must be deducted from the financial corporation's retained earnings (deficit). Similarly, the financial corporation's equity share of losses must be added back to the financial corporation's retained earnings (deficit).

Box 1D: Dividends Received (Receivable) from Corporations included in Box 1C above

The actual amount of dividends received (receivable) must be added to retained earnings (to adjust from the equity method to the cost method of accounting).

Section 2: Summary of Total Assets

The total assets calculation is required in order to compute the investment allowance deduction. This schedule adjusts the carrying value of the assets reported on the financial corporation's balance sheet.

Total Assets per Balance Sheet - Box 2A

For authorized foreign banks, the value of total assets is the amount of balance sheet assets before the application of risk weights that would be reported under the risk-weighting guidelines of the Superintendent of Financial Institutions and only includes those assets held by the bank at the end of its taxation year in respect of its Canadian banking business.

Liabilities Deducted From Assets - Box 2B

Liabilities such as loans or payables that are netted against the carrying value of the assets and are not required to be netted in accordance with GAAP must be added back to calculate total assets.

Deferred Credits Deducted From Assets - Box 2C

Deferred credits netted against the carrying value of the assets must be added back to calculate total assets. Deferred credits include such amounts as government assistance and investment tax credits.

Investments in Other Corporations - Box 2E and 2G

If the financial corporation has investments in other corporations, which are reported on the equity basis, it must deduct the equity value of these investments and add back the carrying value of such investments to the financial corporation's total assets.

This schedule must be completed by a financial corporation that operates in more than one jurisdiction.

Banks (including authorized foreign banks) and credit unions must complete the allocation calculation in Part 1. Trust companies must complete the allocation calculation in Part 2 (on reverse of the form). The allocation calculations are in accordance with sections 4 and 5 of the CCT regulations (B.C. Reg. 199/2002). Note: B.C. Reg. 199/2002 replaced the former CCT regulation (B.C. Reg. 79/96) on September 1, 2002.

If permanent establishment in British Columbia started or ended during the taxation year, complete Schedule I.

PART 1 - Allocation calculation for a bank or credit union

Note: authorized foreign banks must not allocate to jurisdictions outside of Canada.

• Using the columns on the left hand side of the table, indicate whether a permanent establishment was maintained in each of the jurisdictions listed.
• Under column A, enter total salaries and wages paid in each jurisdiction with a permanent establishment. Enter the sum of total salaries and wages paid in all jurisdictions with permanent establishments in Box F.
• Under column B, divide the respective salaries and wages paid for each jurisdiction with a permanent establishment by the amount in Box F.
• Under column C, enter the amount of loans and deposits in each jurisdiction with a permanent establishment. Enter the sum of loans and deposits paid in all jurisdictions with permanent establishment in Box G.
• Under column D, divide the respective loans and deposits for each jurisdiction with a permanent establishment by the amount in Box G.
• Under column E, perform the specified calculation for each jurisdiction with a permanent establishment. Report the amount in item H (percentage allocation to British Columbia) in Box 3B of the return.

PART 2 - Allocation calculation for a trust company

• Using the columns on the left hand side of the table, indicate whether a permanent establishment was maintained in each of the jurisdictions listed.
• Under column A, enter gross revenues attributable to each jurisdiction with a permanent establishment. Enter the sum of gross revenues for all jurisdictions with permanent establishment in Box C. This total in Box C should agree to the gross revenue amounts reported in the financial statements.
• Under column B, divide the respective gross revenue amounts for each jurisdiction by the amount in Box C. Report the amount in item D (percentage allocation to British Columbia) in Box 3B of the return.

A financial corporation that is a member of an associated group of financial corporations, as defined in Section 256 of the Income Tax Act (Canada), must complete Schedule F.

Indicate all financial corporations that are members of the associated group, including the reporting financial corporation.

If any financial corporation in the associated group has a permanent establishment in British Columbia, provide the CCT account number and the taxation year-end of each financial corporation.

The financial corporation must provide the Net Paid Up Capital and the BC Paid Up Capital of each associated financial corporation. In determining these amounts, use the taxation year for each of the associated financial corporations ending in the same calendar year.

If the BC Paid Up Capital is negative, for any member in the group, do not include the negative amount; instead, enter nil.

If the relevant amounts are not available at the time of filing the CCT return for the reporting financial corporation, provide an estimate based on the prior years' figures. When the actual amounts are known and they would cause a different CCT amount, the reporting financial corporation must file a Taxpayer Requested Adjustment including a revised Schedule F showing the actual amounts.

Schedule G calculates Net Capital Tax Payable for all financial corporations.

Complete Part 1 if the financial corporation has net paid up capital greater than $1 billion.

Complete Part 2 if the financial corporation has net paid up capital of $1 billion or less, and is not a member of an associated group of financial corporations.

Complete Part 3 if the financial corporation has net paid up capital of $1 billion or less, and is a member of an associated group of financial corporations.

All financial corporations must complete Part 4 to calculate the deduction from Capital Tax Payable.

PART 1 - Large Financial Corporations

Section 1: Capital Tax Calculation (Part 1)

Box 1A: BC Paid Up Capital

Enter the amount from Box 3C of the Special Return (BC Paid Up Capital) in Box 1A.

Box 1B: Tax Rate

This is the rate that applies to large financial corporations with net paid up capital greater than $1 billion. Note that the rate is 1% if the financial corporation has its Head Office in British Columbia; otherwise, it is 3% for all other financial corporations.

Box 1C:

Multiply the amount in Box 1A by the amount in Box 1B to arrive at the Capital Tax Payable Before Deduction in Box 1C. Enter the amount from Box 1C in Part 4, Box 2A.

PART 2 - Net paid up capital of $1 billion or less and not a member of an associated group of financial corporations.

Section 1: General (Part 2)

Box 1A: Net Paid Up Capital

Enter the amount from Box 3A of the Special Return (Net Paid Up Capital) in Box 1A.

Box 1B: BC Paid Up Capital

Enter the amount from Box 3C of the Special Return (BC Paid Up Capital) in Box 1B.

Net Paid Up Capital less than $10,000,000 (Threshold Amount)

If the amount in Box 1A (Net Paid Up Capital) is less than $10,000,000 (threshold amount), capital tax payable is nil: ignore the remaining sections of the schedule and complete Section 1 of the Special Return as instructed.

Net Paid Up Capital greater than or equal to $10,000,000 (Threshold Amount)

If the amount in Box 1A (Net Paid Up Capital) is greater than $10,000,000 (threshold amount), the financial corporation is taxable and must complete the applicable tax calculation as indicated in the following table. The financial corporation will pay a lower tax amount if the amount in Box 1B (BC Paid Up Capital) is greater than or equal to $1,500,000 but less than $10,000,000 (Reduced Tax Calculation). A lower tax amount also applies if the amount in Box 1B (BC Paid Up Capital) is greater than or equal to $10,000,000 but less than $10,250,000 (notch amount).

Section 2: Reduced Tax Calculation (Part 2)

Section 2 is applicable to a financial corporation with BC Paid Up Capital greater than or equal to $1,500,000 and less than $10,000,000. The tax calculation and capital tax payable for the financial corporation is:

[ (BC Paid Up Capital (Box 1B) - $ 1.5 million) x 1% tax rate ] + $500

Section 3: Notch Calculation (Part 2)

Section 3 is applicable to a financial corporation with BC Paid Up Capital greater than or equal to $10,000,000 and less than $10,250,000. The tax calculation and capital tax payable for the financial corporation is:

[ (BC Paid Up Capital (Box 1B) x 1% tax rate)] - [($10,250,000 - BC Paid Up Capital (Box 1B)) x 1.6%]

Section 4: Basic Tax Calculation (Part 2)

Section 4 is applicable to a financial corporation with BC Paid Up Capital greater than or equal to the $10,250,000. The tax calculation and capital tax payable for the financial corporation is:

[BC Paid Up Capital (Box 1B) x 1% tax rate ]

If this section is applicable, complete the section as instructed. Do not complete Section 2 or 3.

Section 5: Capital Tax Payable Before Deduction (Part 2)

Enter the amount from the tax calculation from either Section 1, Box 2F of Section 2 (reduced tax calculation), Box 3L of Section 3 (notch calculation), or from Box 4C of Section 4.

PART 3 - Net paid up capital of $1 billion or less and a member of an associated group of financial corporations

Complete this section if a financial corporation is member of an associated group of financial corporations.

Section 1: General (Part 3)

Box 1A: Net Paid Up Capital

Enter the amount from Box 3A of the Special Return (Net Paid Up Capital) in Box 1A.

Box 1B: BC Paid Up Capital

Enter the amount from Box 3C of the Special Return (BC Paid Up Capital) in Box 1B.

Box 1C: Net Paid Up Capital of Associated Group

Enter the Net Paid Up Capital of the associated group of financial corporations as determined on Schedule F.

Box 1D: BC Paid Up Capital of Associated Group

Enter the BC Paid Up Capital of the associated group of financial corporations as determined on Schedule F.

Net Paid Up Capital of Associated Group less than Threshold Amount

If the amount in Box 1C (Net Paid Up Capital of Associated Group) is less than $10,000,000 (threshold amount), capital tax payable is nil; ignore the remaining sections of the schedule and complete Section 1 of the return as instructed.

Net Paid Up Capital of Associated Group greater than or equal to Threshold Amount

If the amount in Box 1C (Net Paid Up Capital of Associated Group) is greater than $10,000,000 (threshold amount), the financial corporation is taxable and must complete the applicable tax calculation as indicated in the following table. The financial corporation will pay a lower tax amount if the amount in Box 1D (BC Paid Up Capital of Associated Group) is greater than or equal to $1,500,000 but less than $10,000,000 (Reduced Tax Calculation). A lower tax amount also applies if the amount in Box 1D (BC Paid Up Capital of Associated Group) is greater than or equal to $10,000,000 but less than $10,250,000 (notch amount).

Section 2: Reduced Tax Calculation (Part 3)

Section 2 is applicable to a financial corporation that is a member of an associated group of financial corporations with group BC Paid Up Capital greater than or equal to $1,500,000 and less than $10,000,000 (threshold amount). The tax calculation is:

[ (BC Paid Up Capital of Associated Group (Box 1D) - $ 1.5 million) x 1% tax rate ] + $500

If this section is applicable, complete the section as instructed and then go to section 5. Do not complete Section 3 or 4.

Section 3: Notch Calculation (Part 3)

Section 3 is applicable to a financial corporation that is a member of an associated group of financial corporations with group BC Paid Up Capital greater than or equal to $10,000,000 and less than $10,250,000 (threshold and the notch amount). The tax calculation is:

[(BC Paid Up Capital of Associated Group (Box 1D) x 1% tax rate] - [$10,250,000- (BC Paid Up Capital of Associated Group (Box 1D) x 1.6%]

If this section is applicable, complete the section as instructed and then go to section 5. Do not complete Section 2 or 4.

Section 4: Basic Tax Calculation (Part 3)

Section 4 is applicable to a financial corporation that is a member of an associated group of financial corporations with group BC Paid Up Capital greater than or equal to $10,250,000 (notch amount) . The tax calculation and capital tax payable for the financial corporation is:

[BC Paid Up Capital (Box 1B) x 1% tax rate]

If this section is applicable, complete the section as instructed. Do not complete Section 2 or 3.

Section 5: Capital Tax Payable Before Deduction (Part 3)

Enter the amount from the tax calculation from either Section 1, Box 2F of Section 2 (reduced tax calculation), or Box 3L of Section 3 (notch calculation) in Box 5A. If Section 4 was used then enter the amount from Box 4C in Box 5D.

PART 4 - Calculation of Net Capital Tax Payable

Beginning April 1, 2008, the corporation capital tax will be phased out over the next three years by reducing the rates by one-third each year. The rates are pro-rated for taxation years that straddle April 1. The current rates and the phase-out schedule are shown under General Information at the beginning of this Guide.

Section 1: Days In Taxation Year (Part 4)

Calculate the number of days in the financial corporation's tax year for each of the periods noted. Enter the amount in Box 1E (Days in Taxation Year) and in Box 1B (No. of Days in Tax Year) of the Special Return for the taxation year. The amounts in Boxes 1B , 1C, 1D and 1E are entered in Section 3 (see below), as applicable.

Section 2: Capital Tax Payable (Part 4)

Enter the amount applicable from either Part 1 Box 1C, Part 2 Box 5A, or Part 3 Box 5D.

Section 3: Deduction From Capital Tax Payable (Part 4)

This section determines the Net Tax Payable after deducting the appropriate amounts related to the phase out discussed above. The deductions are pro-rated for the number of days in the taxation year before or after April 1, 2008, 2009 or 2010, as the case may be.

For example, for a corporation with a taxation year that ends on December 31, 2009, there would be a 1/3 reduction for the number of days in the taxation year before April 1, 2009 and a 2/3 reduction for the number of days in the taxation years after March 31, 2009.

There is no deduction from Capital Tax Payable for the period in the taxation year before April 1, 2008.

For the period after March 31, 2008 and before April 1, 2009, enter the applicable amounts from Boxes 2A , 1B and 1E on the first line. Calculate the deduction for this period of the taxation year and enter it in Box 3D.

For the period after March 31, 2009 and before April 1, 2010, enter the applicable amounts from Boxes 2A , 1C and 1E on the second line. Calculate the deduction for this period of the taxation year and enter it in Box 3H.

For the period after March 31, 2010, enter the applicable amounts from Boxes 2A , 1D and 1E on the third line. Calculate the deduction for this period of the taxation year and enter it in Box 3L.