Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
ISSUE SHEET
TAXATION OF CROWN CORPORATIONS
ISSUE
The 24(1) published a story concerning the tax status of Crown corporations. The article maintained that corporations such as 24(1) are exempt from tax.
Response
MOST COMMERCIAL CROWN CORPORATIONS, INCLUDING 24(1) ARE TAXABLE. OTHER CROWN CORPORATIONS ARE EXEMPT FROM INCOME TAX UNDER A SPECIFIC PROVISION OF THE INCOME TAX ACT.
Background
24(1)
Paragraph 149(1)(d) generally exempts federal and provincial Crown corporations from federal income tax. However, subsection 27(2) excludes from the exemption prescribed federal Crown corporations 24(1) is prescribed for this purpose.
Federal Crown corporations which are exempt from provincial tax because they are agents of the federal Crown are not eligible for the corporate tax abatement for provincial taxes; subsection 124(3).
Whether or not provincial Crown corporations are constitutionally exempt from federal income tax does not have to be addressed because 149(1)(d) exempts them in any case.
The corporate capital tax mentioned in the article is a provincial tax.
| For Further Information: |
Approved by ADM_______ |
Name: Rick MundellPhone #: 957-2139November 2, 1990
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