Concept
Excess Capacity
Chopp v. R., 98 DTC 6014, [1998] 1 CTC 407 (FCA) / CRA confirms that CUEC computed in the first (EIFEL) regime year using a 40% ratio must for carryforward purposes be recomputed using the 30% ratio
"Regarding the situation where one member of a pre-regime group had September 30 taxation year ends and significant excess capacity for EIFEL purposes compared to other members of the group, which had calendar taxation year ends, CRA essentially confirmed that the first member would need to determine its excess capacity for its first regime year (commencing on October 1. 2023) using the 40% ratio of permissible expenses, but that excess capacity carried forward to subsequent taxation years would be recalculated using the 30% ratio applicable to those years."
Related Ideas
- Excess CapacityDeyab v. Canada, 2020 FCA 222 · CRA confirms that CUEC computed in the first (EIFEL) regime year using a 40% ratio must for carryforward purposes be recomputed using the 30% ratio
- Quand Faut-ilGuide T2 – Déclaration de revenus des sociétés 2025 · Annexes de renseignements et formulaires