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.
910469
24(1) C.R. Brown
(613) 957-2135 19(1)
May 9, 1991
Dear Sir:
Re: Subsection 127(9)
This is in reply to your letter of February 12, 1991 concerning the Province of Ontario Research and Development Super Allowance and the Ontario Current Cost Adjustment. These programs allow corporations subject to Ontario income tax to claim special deductions in computing taxable income. If the corporation qualifies for the Super Allowance deductions are allowed for expenditures on scientific research and experimental development carried out in Ontario. The Current Cost Adjustment is a deduction allowed for new manufacturing and processing capital machinery and equipment purchased after 1988 for use in Ontario.
The Super Allowance, the Current Cost Adjustment and the related provincial tax savings are not considered "government assistance" as that term is defined in paragraph 127(9) of the (Canadian) Income Tax Act (the "Act"). In addition, these amounts are not government assistance for the purposes of paragraph 37(1)(d), 12(1)(x) and subsection 13(7.1) of the Act.
We trust that these comments will be of assistance.
for Director Business and General Division Rulings Directorate Legislative and Intergovernmental Affairs Branch
.../cont'd
000162
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