Income Tax Regulations

5201 For the purposes of paragraph 125.1(3)(a) of the Act, “Canadian manufacturing and processing profits” of a corporation for a taxation year are hereby prescribed to be equal to the corporation’s adjusted business income for the year where

• (a) the activities of the corporation during the year were primarily manufacturing or processing in Canada of goods for sale or lease;

• (b) the aggregate of

  • (i) the aggregate of all amounts each of which is the income of the corporation for the year from an active business minus the aggregate of all amounts each of which is the loss of the corporation for the year from an active business, and

  • (ii) if the corporation is associated in the year with a Canadian corporation, the aggregate of all amounts each of which is the income of the latter corporation from an active business for its taxation year coinciding with or ending in the year,

  did not exceed $200,000;

• (c) the corporation was not engaged in any of the activities listed in subparagraphs 125.1(3)(b)(i) to (ix) of the Act at any time during the year;

• (c.1) the corporation was not engaged in the processing of ore (other than iron ore or tar sands) from a mineral resource located outside Canada to any stage that is not beyond the prime metal stage or its equivalent;

• (c.2) the corporation was not engaged in the processing of iron ore from a mineral resource located outside Canada to any stage that is not beyond the pellet stage or its equivalent;

• (c.3) the corporation was not engaged in the processing of tar sands located outside Canada to any stage that is not beyond the crude oil stage or its equivalent; and

• (d) the corporation did not carry on any active business outside Canada at any time during the year.