Calculating instalments of Part XII.1 tax

Part XII.1 applies to the income from carved-out property acquired after July 19, 1985 [section 209]. Carved-out property includes Canadian resource property when certain conditions are met. The tax rate is 45% of this income.

Arrears and refund interest apply to Part XII.1.

Reporting Part XII.1 tax

Report the Part XII.1 tax you owe on Form T2096, Part XII.1 Tax Return – Tax on Carved-out Income. We should receive the return within six months of the end of your tax year.

Calculating instalments of Part XII.1 tax

You have to make instalment payments equal to one-twelfth of the tax payable under Part XII.1 each month in the tax year. The remaining tax, if any, is due on or before your balance-due day.

Unlike some other taxes, you do have to make instalment payments even if your Part XII.1 tax is $3,000 or less in the current or previous year.

Forms and publications

• Guide T7B-CORP, Corporation Instalment Guide
• Form T2096, Part XII.1 Tax Return – Tax on Carved-Out Income

Date modified:

2017-02-07