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.
Dear Sirs:
Re: Ontario Superallowance for Scientific Research and Development and Ontario Current Cost Adjustment
This is in reply to your letter of March 11, 1991 concerning the Ontario Superallowance for Scientific Research and Development ("Superallowance") and the Ontario Current Cost Adjustment ("OCCA")
The Superallowance and OCCA, sections 12a and 12b, respectively, of the Ontario Corporation Tax Act provide that for the purpose of computing Ontario taxable income, the taxpayer may deduct an amount in excess of the actual costs incurred.
You understand Revenue Canada's interpretation is that neither the Superallowance nor OCCA is considered an inducement, subsidy, deduction from tax, allowance, contribution or any form of assistance for the cost of the asset acquired or expense incurred by the taxpayer. Consequently, the amount of the Superallowance or OCCA is not "government assistance" as defined in subsection 127(9) and the following provisions of the Income Tax Act will not be applied solely as a result of a taxpayer claiming the resulting deduction in calculating Ontario taxable income:
- paragraph 12(1)(x);
- subsection 13(7.1);
- paragraph 37(1)(d); and
- paragraph 53(2)(K).
Furthermore, since paragraph 12(1)(x) does not apply the election under subsection 13(7.4) will not be available.
We agree that the above comments reflect the Department's position on these issues.
We trust these comments will be of assistance.
for DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch
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© Her Majesty the Queen in Right of Canada, 1991
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© Sa Majesté la Reine du Chef du Canada, 1991
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