Line 355 - Section 110.5 additions or subparagraph 115(1)(a)(vii) additions
Line 355 - Section 110.5 additions or subparagraph 115(1)(a)(vii) additions
You can use foreign tax deductions to reduce Part I tax that you would otherwise have to pay. Under section 110.5 and subparagraph 115(1)(a)(vii), a corporation that cannot deduct its foreign income tax deductions (for example, if it has no Part I tax payable for the year) can choose to add an amount to its taxable income. In this way, the corporation can use these otherwise non-deductible foreign tax deductions.
The amount you add to income for this purpose forms part of the non-capital loss. See page 67 for details.
However, you cannot add an amount under section 110.5 if that addition increases any of the following deductible amounts:
-
the small business deduction
-
the manufacturing and processing profits deduction
-
the federal logging tax credit
-
the investment tax credit (ITC)
-
the share-purchase tax credit
-
the SR&ED investment tax credit
If the corporation is an authorized foreign bank, you cannot add an amount under subparagraph 115(1)(a)(vii) if that addition increases any of the following deductible amounts:
-
the federal logging tax credit
-
the ITC
On line 355, enter the amount you added to income under section 110.5 or subparagraph 115(1)(a)(vii).
|
|
|