OMIF - Technical

• One corporation is associated with another in a taxation year if, at any time in the year:

  • One of the corporations controlled, directly or indirectly in any manner whatever, the other;
  • Both of the corporations were controlled, directly or indirectly in any manner whatever, by the same person or group of persons;
  • Each of the corporations was controlled, directly or indirectly in any manner whatever, by a person and the person who so controlled one of the corporations was related to the person who so controlled the other, and either of those persons owned, in respect of each corporation, not less than 25% of the issued shares of any class, other than a specified class, of the capital stock thereof;
  • One of the corporations was controlled, directly or indirectly in any manner whatever, by a person and that person was related to each member of a group of persons that so controlled the other corporation, and that person owned, in respect of the other corporation, not less than 25% of the issued shares of any class, other than a specified class, of the capital stock thereof; or
  • Each of the corporations was controlled, directly or indirectly in any manner whatever, by a related group and each of the members of one of the related groups was related to all of the members of the other related group, and one or more persons were members of both related groups, either alone or together, owned, in respect of each corporation, not less than 25% of the issued shares of any class, other than a specified class of the capital stock thereof.

  [This definition is quoted directly from Subsection 256(1) of the Income Tax Act (Canada)].