1.24
Paragraph 18(1)(t) does not prohibit the deduction of provincial income tax. However, provincial income tax is not an expense made or incurred by a taxpayer for the purpose of gaining or producing income from a business or property and is therefore precluded from deduction by paragraph 18(1)(a). This position is consistent with the Exchequer Court of Canada's decision in Clinton W. Roenisch v. MNR , [1931] Ex. C.R. 1, 1 DTC 199….
Foreign income or profits tax
1.25
Paragraph 18(1)(t) does not prohibit a deduction for income or profits tax paid or payable to a foreign jurisdiction. However, a foreign income or profits tax is not an expense made or incurred by a taxpayer for the purpose of gaining or producing income from a business or property and is therefore precluded from deduction by paragraph 18(1)(a). This position is consistent with the Exchequer Court of Canada's decision in Quemont Mining Corporation… v. MNR , [1966] CTC 570, 66 DTC 5376.
1.26
An exception to the general limitation in paragraph 18(1)(a) applies to the deduction of certain foreign taxes under subsections 20(11), (12) and (12.1).
