Subsection 402(3)
See Also
International Harvester Co. of Canada, Ltd. v. Provincial Tax Commission, [1949] A.C. 36 (PC)
The taxpayer manufactured agricultural implements outside Saskatchewan and had sales branches in Saskatchewan. The Saskatchewan Provincial Tax...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 115 - Subsection 115(1) - Paragraph 115(1)(a) - Subparagraph 115(1)(a)(ii) | apportionment between manufacturing and selling | 84 |
Commissioners of Taxation v. Kirk, [1900] A.C. 588 (PC)
Two mining companies that mined crude ore in New South Wales and (for the most part) also processed the crude ore there, but made contracts for...
Administrative Policy
Income Tax Folio S4-F3-C2, Provincial Income Allocation, 30 January 2024
Interpretation of gross revenue, and examples
2.22 … By virtue of section 16 of the Interpretation Act, this definition of gross revenue [in s....
1 September 2015 Internal T.I. 2013-0507381I7 - Transfer pricing adjustments and gross revenue
In the first scenario, a Canadian resident purchases a good (or service) from a non-resident at an amount in excess of an arm’s length price,...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 247 - New - Subsection 247(2) | [s. 247(2) increases to gross revenues] | 43 |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Gross Revenue | sales (but not purchases) transfer pricing adjustments to gross revenue | 45 |
31 March 2014 Internal T.I. 2013-0514921I7 - Meaning of "gross revenue" follow-up
Should amounts received or receivable as volume discounts should be included in a corporation's "gross revenue" for purposes of Reg. 402(3)? After...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Gross Revenue | cost reductions not included | 266 |
19 February 2014 Internal T.I. 2013-0508121I7 - Provincial Income Allocation among Joint Venturers
Are joint venture participants permitted, for purposes of provincial income allocation, to include their pro-rata share of the wages and salaries...
11 March 2014 Internal T.I. 2013-0506801I7 - Salary and Wages, Part IV of the Regulations
Respecting the application of the definition of "salary or wages" in s. 248(1), CRA stated that "subsection 402(3) of the Regulations contemplates...
19 November 2013 External T.I. 2012-0455731E5 F - Interprovincial income allocation
A corporation engaged in a franchising business which had a permanent establishment only in Quebec and which derived royalties from franchisees in...
15 March 2011 Internal T.I. 2011-0394091I7 F - Rev imp. gagné dans une province par une société
The corporate Taxpayer, which had an October 16 taxation year had only a permanent establishment in Quebec excepting a partnership (the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Regulations - Regulation 402 - Subsection 402(6) | if first taxation year of partnership ends after the taxpayer’s year, no immediate impact of the partnership’s PEs on taxpayer’s taxable income allocation | 205 |
21 March 1996 Internal T.I. 9605927 - INTEREST ON OVERPAYMENT AND ADJUSTED BUSINESS INCOME
Interest arising under s. 164(3) due to a refund of an overpayment resulting from a court-ordered reassessment, would not qualify as "gross revenue".
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 125.1 - Subsection 125.1(3) - Canadian Manufacturing and Processing Profits | 91 |
19 May 1994 External T.I. 9405515 - GROSS REVENUE & RECAPTURED DEPRECIATION
Recapture of depreciation does not constitute "gross revenue" for purposes of Regulation 402(3).
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Gross Revenue | 14 |
15 February 1994 CTF Roundtable, 9335466 - OIL PRODUCT SWAP
Where an oil and gas company does not have inventory readily available at a specific location and, in order to avoid transportation costs, borrows...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Gross Revenue | 73 |
16 March 1993 T.I. (Tax Window, No. 30, p. 21, ¶2505)
A capital gain from the disposition of property would not be included in a taxpayer's "gross revenue" whose definition in s. 248(1) specifically...
2 February 1993 Memorandum (Tax Window, No. 28, p. 13, ¶2417)
Amounts allocated to employees by the trustee of an employee profit sharing plan are not salaries and wages for purposes of Regulations 400 or 5202.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Salary or Wages | 25 |
Paragraph 402(3)(a)
Subparagraph 402(3)(a)(i)
Administrative Policy
16 January 2017 Internal T.I. 2016-0651411I7 - Reassessment period – transfer pricing
A s. 247(2) transfer-pricing adjustment (“TPA”) was reassessed by CRA within the three years after the normal reassessment period to increase...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 152 - Subsection 152(4) - Paragraph 152(4)(b) - Subparagraph 152(4)(b)(iii) | s. 152(4)(b)(iii) permits a reallocation of taxable income among provinces where a taxpayer’s sales revenue has been increased under s. 247(2) | 347 |
Subsection 402(4)
See Also
Westar Mining Ltd.v. The Queen, 92 DTC 6358, [1992] 2 CTC 11 (FCA)
Before going on to find that business interruption insurance proceeds were "income derived from the operation of a mine" for purposes of ITAR...
MNR v. Hollinger North Shore Exploration Co., 63 DTC 1031 (SCC)
In accepting the taxpayer's submission that royalties (calculated as apercentage of sales proceeds) received by it from the licensee of its...
Administrative Policy
15 March 1999 External T.I. 9829415 - PART IV OF THE INCOME TAX REGULATIONS
Description of criteria applied in determining the destination of a shipment of merchandise for purposes of Regulation 402(4)(a).
26 March 1997 External T.I. 9630645 - MEANING OF "DESTINATION" (REGULATION 402(4))
Where a corporation having a permanent establishment in two provinces ships a product that is manufactured at its permanent establishment in the...
30 March 1995 Internal T.I. 9506107 - PROVINCIAL ALLOCATION FORMULA
Discussion of Regulation 402(4)(d). For Regulation 402(4)(d) to apply, there is no requirement that there be a transfer of the title to the "some...
94 C.P.T.J. - Q. 7
Ontario's interpretation of the rules respecting the allocation of taxable income earned by oil and gas companies would suggest that the ultimate...
Paragraph 402(4)(b)
Administrative Policy
20 September 2012 External T.I. 2011-0430811E5 F - Attribution à un établissement stable
Corporation X Co mines and does initial ore processing in Province A, and further processes the ore and exports it in Province B. would the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Regulations - Regulation 402 - Subsection 402(4) - Paragraph 402(4)(c) - Subparagraph 402(4)(c)(ii) | application of Reg. 404(4)(c)(ii) to ore processed in two provinces | 204 |
Paragraph 402(4)(c)
Subparagraph 402(4)(c)(ii)
Administrative Policy
20 September 2012 External T.I. 2011-0430811E5 F - Attribution à un établissement stable
Corporation X mines and does initial ore processing in Province A, and further processes the ore and exports it in Province B. After quoting Reg....
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Regulations - Regulation 402 - Subsection 402(4) - Paragraph 402(4)(b) | as Reg. 404(4)(c)(ii) prevailed over Reg. 404(4)(b) re ore processed in two provinces, its application would not be affected by the negotiation of the export sales by personnel in the 2nd province | 117 |
Paragraph 402(4)(g)
Administrative Policy
Income Tax Folio S4-F3-C2, Provincial Income Allocation, 30 January 2024
Inclusion of ancillary revenues
2.48 In allocating gross revenue from services, a corporation must determine the place where those services were...
Paragraph 402(4)(j)
Administrative Policy
Income Tax Folio S4-F3-C2, Provincial Income Allocation, 30 January 2024
Revenue from operating leases allocated based on reasonable knowledge
2.52 [W]here the land is not used in connection with the corporation’s...
Subsection 402(4.1)
Administrative Policy
31 January 2013 Internal T.I. 2012-0470361I7 - PIA - Non-manufactured goods (ITR 402(4.1))
The Legislative Policy Directorate had addressed a situation where a taxpayer with permanent establishments in a province and in a country other...
Subsection 402(5)
Administrative Policy
Income Tax Folio S4-F3-C2, Provincial Income Allocation, 30 January 2024
CRA broad interpretation of Reg. 402(5) exclusion
2.23 Subsection 402(5) of the Regulations provides that for purposes of subsection 402(3), gross...
October 1989 Revenue Canada Round Table - Q.26 (Jan. 90 Access Letter, ¶1075)
The words "used in connection with the principal business operations of the corporation" relate solely to the words "rentals or royalties from...
Subsection 402(6)
See Also
Les Développements Iberville Ltée v. Agence du Revenu du Québec, 2018 QCCA 1886 (Quebec Court of Appeal)
Three affiliated Quebec corporations avoided (or so they thought) most of the Quebec tax on the sale of Quebec real estate at a gain of around...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) | abuse to use rollover provisions to avoid rather than defer tax | 683 |
| Tax Topics - Income Tax Act - Section 85 - Subsection 85(1) | abuse of Quebec equivalents of ss. 85(1) and 97(2) to avoid (rather than defer) tax | 420 |
| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Real Estate | property bifurcated between capital and income portion on acquisition | 98 |
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Expenditure v. Expense - Improvements v. Repairs or Running Expense | improvements to leased retail premises were not demonstrated to be made only at tenants’ requests | 106 |
| Tax Topics - Income Tax Act - Section 249.1 - Subsection 249.1(1) | no policy of permitting differing Quebec and federal year ends | 196 |
Administrative Policy
Income Tax Folio S4-F3-C2, Provincial Income Allocation, 30 January 2024
Allocation under Reg. 402(6) in accordance with income-sharing percentage
2.71 Each member of a partnership is considered to have a permanent...
2 February 2018 Internal T.I. 2017-0728331I7 - Central paymaster - partnership
The central paymaster rules in Reg. 402.1 of the Regulations allocate the salaries and wages paid by an employer for services provided to a...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Regulations - Regulation 402.1 - Subsection 402.1(5) | application of the paymaster rules to salaries paid by a partnership | 242 |
7 August 2013 External T.I. 2012-0460511E5 - Reg 402(6) and SIFT Partnerships
CRA stated that Reg. 402(6):
...provides that a corporation's proportionate share of a SIFT partnership's gross revenue and salaries and wages is...
15 March 2011 Internal T.I. 2011-0394091I7 F - Rev imp. gagné dans une province par une société
The corporate Taxpayer had an October 16 taxation year and had only a permanent establishment in Quebec excepting the Partnership, which had an...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Regulations - Regulation 402 - Subsection 402(3) | allocation of taxable income takes into account PEs of partnership in partnership year ending in taxpayer’s year | 194 |
20 October 2000 External T.I. 2000-0048685 - Allocation Taxable Income Between Provinces
Respecting a query as to a corporation which has a permanent establishment in a province and is also a limited partner in a limited partnership...
Subsection 402(7)
Cases
W.E. Roth Construction Ltd. v. Minister of Finance (2001), 141 OAC 366 (CA)
The taxpayer managed its Ontario properties through four Ontario employees, whereas its Alberta properties were managed by three corporations...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Other Legislation/Constitution - Ontario - Corporations Tax Act - Regulations - Regulation 302 - Subsection 302(7) | 104 |
See Also
W.E. Roth Construction Ltd. v. Minister of Finance (Ontario), 99 DTC 5791 (Ont. Sup. Ct. J.)
Coo J. accepted the interpretation in IT-145R that the reference in the Ontario equivalent (s.302(7) of Regulation 183) to work "normally - ......
Administrative Policy
Income Tax Folio S4-F3-C2, Provincial Income Allocation, 30 January 2024
Meaning of “normally”
2.63 The term normally is not defined for the purposes of subsection 402(7) of the Regulations. It is the CRA’s view...
S4-F15-C1 - Manufacturing and Processing
Application of "normally"
1.27 ... The term normally means commonly, usually, or under normal or ordinary conditions. It would apply in cases...
25 September 2013 External T.I. 2013-0477571E5 F - Partnership - fin. fees and mng fees
A partnership (P1), whose sole permanent establishment is in Province 1, is a member of two partnerships (P2 and P3) whose sole permanent...
23 October 1991 T.I. (Tax Window, No. 12, p. 22, ¶1550)
Regulation 402(7) may apply to fees paid to independent truckers.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Regulations - Regulation 409 | 25 |
Subsection 402(8)
See Also
Enterprise Foundry (N.B.) Ltd. v. MNR, 64 DTC 660 (TAB)
The taxpayer's business was the sale in Quebec through a Quebec sales force of stoves manufactured by an affiliated company whose manufacturing...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Regulations - Regulation 400 - Subsection 400(2) | employee with general authority to contract based on authorized prices and with authority over inventory in independent warehouse was PE | 289 |
Administrative Policy
Income Tax Folio S4-F3-C2, Provincial Income Allocation, 30 January 2024
Meaning of “commission”
2.64 Under subsection 402(8) of the Regulations, for the purposes of subsection 402(7), a fee does not include a...