CRA carries forward many of its published policies on M&P profits

The determination of a corporation’s Canadian manufacturing and processing profits still is relevant for various provincial corporate income tax purposes. CRA’s new Folio on manufacturing and processing does not contain much that is new, carries forward many of the policies from IT-145R (e.g., various flexible approaches to determining the cost of capital or labour in ways that avoid double-counting) and drops some of the more detailed guidance in IT-145R, especially detailed industry-by-industry comments on the delineation of qualified and non-qualified activities.

Neal Armstrong. Summaries of Folio S4-F15-C1 Manufacturing and Processing under s. 125.1(3) – Canadian manufacturing and processing profits, s. 125.1(3) – manufacturing and processing, Reg. 5200, Reg. 5202- Cost of Labour, Rental Cost, Cost of Capital, Qualified Activities, Sched II, Class 29.