Schedule 23
Code 1901
Protected B
when completed
Agreement Among Associated Canadian-Controlled Private Corporations
to Allocate the Business Limit (2019 and later tax years)
•
For use by a Canadian-controlled private corporation (CCPC) to identify all associated corporations and to assign a percentage for each associated
corporation. This percentage will be used to allocate the business limit for the small business deduction. Information from this schedule will
also be used to determine the date the balance of tax is due and to calculate the reduction to the business limit.
•
An associated CCPC that has more than one tax year ending in a calendar year must file an agreement for each tax year ending in that
calendar year.
Column 1: Enter the legal name of each of the corporations in the associated group, including those deemed to be associated under subsection 256(2) of
the Income Tax Act.
Column 2: Provide the business number for each corporation (if a corporation is not registered, enter "NR").
Column 3: Enter the association code from the list below that applies to each corporation:
1 – Associated for purposes of allocating the business limit (unless association code 5 applies)
2 – CCPC that is a third corporation as referred to in subsection 256(2) and has filed Schedule 28, Election not to be an Associated
Corporation Through a Third Corporation
3 – Non-CCPC that is a third corporation
4 – Associated non-CCPC
5 – Associated CCPC to which association code 1 does not apply because a third corporation has filed Schedule 28
Column 4: Enter the business limit for the year of each corporation in the associated group. Enter "0" if the corporation has association code 2, 3 or 4 in
column 3.
Column 5: Assign a percentage to allocate the business limit to each corporation that has association code 1 in column 3. The total of all
percentages in column 5 cannot exceed 100%.
Column 6: Enter the business limit allocated to each corporation by multiplying the amount in column 4 by the percentage in column 5. Add all business
limits allocated in column 6 and enter the total at line A.
Ensure that the total at line A does not exceed $500,000.
Allocating the business limit
025
Date filed (do not use this area) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Year Month Day
050
Enter the calendar year the agreement applies to . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Year
075
Is this an amended agreement for the above calendar year that is intended to replace
an agreement previously filed by any of the associated corporations listed below? . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Yes No
100
1
Name of associated corporations
200
2
Business number of
associated corporations
300
3
Association
code
4
Business limit for the
year before the
allocation
$
350
5
Percentage of the
business limit
%
400
6
Business limit
allocated *
$
ATotal
Business limit reduction under subsection 125(5.1) of the Act
The business limit reduction is calculated in the small business deduction area of the T2 return. One of the factors used in this calculation is the "large
corporation amount" at line 415 of the T2 return. The amount at line 415 is determined using the formula 0.225% x (C – $10,000,000). Another factor is the
"adjusted aggregate investment income" from lines 744 and 745 of Schedule 7, Aggregate Investment Income and Income Eligible for the Small Business
Deduction. Details of these formulas and variable C are in subsection 125(5.1) of the Act.
* Each corporation will enter on line 410 of the T2 return, the amount allocated to it in column 6. However, if the corporation's tax year is less than 51 weeks,
prorate the amount in column 6 by the number of days in the tax year divided by 365, and enter the result on line 410 of the T2 return.
Special rules for business limit
Special rules apply under subsection 125(5) if a CCPC has more than one tax year ending in the same calendar year and it is associated in more than one of
those tax years with another CCPC that has a tax year ending in that calendar year. The business limit for the second or later tax year will be equal to the
lesser of: the business limit determined for the first tax year ending in the calendar year or the business limit determined for the second or later tax year
ending in the same calendar year.
T2 SCH 23 E (19) (Ce formulaire est disponible en français.)
