Principal Issues: Whether a predecessor or subsidiary corporation’s eligible loss for Ontario Corporate Minimum Tax purposes can be carried over to its successor or parent corporation following a vertical amalgamation or wind-up completed after March 21, 2007.
Position: No, subject to the conditions in ss. 58(4.1) or ss. 58(5) of the Taxation Act, 2007.
Reasons: Where a vertical amalgamation to which subsection 87(1) of the ITA applies occurs after March 21, 2007, the carryover of a predecessor corporation’s eligible losses to the successor corporation for CMT purposes is not permitted under the Taxation Act, 2007, in certain circumstances. For winding-ups completed after March 21, 2007 that are subject to the rules in subsection 88(1) of the ITA, eligible losses of a subsidiary are not permitted to be carried-over for CMT purposes to its parent under the Taxation Act, 2007.