Application Details

Income tax holiday

A qualified corporation, for a taxation year, may deduct in calculating its taxable income, for such taxation year, an amount, in respect of the new tax holiday, not exceeding its adjusted taxable income for the taxation year.

The determination of the amount of the income tax holiday must take into account whether the corporation or partnership has:

• claimed all of its discretionary deductions (e.g., capital cost allowance);
• applied its remaining non-capital losses.

Holiday from the employer contribution to the Health Services Fund

The holiday from the employer contribution applies with respect to wages paid or deemed to be paid to an employee by the eligible corporation or partnership, as the case may be, for a pay period included in the corporation’s or partnership’s tax-free period.

However, wages paid or deemed to be paid by the corporation or partnership to an employee whose duties consist in building, expanding or modernizing the site where the large investment project is to be carried out will not qualify for the holiday from employer contribution to the Health Services Fund (HSF).

In addition, the amount of salary paid or deemed to be paid to an employee that will be exempt from the employer contribution to the HSF will not include the portion of such amount attributable to:

• director’s fees;
• bonuses;
• performance bonus;
• taxable benefits;
• commissions.