OPSTC

• To qualify as an eligible tangible property expenditure, an expenditure must meet all of the conditions set out in subsection 92(5.7) of the Taxation Act, 2007. This includes the condition that the expenditure must be paid to a person or partnership that is ordinarily engaged in the business of selling or leasing tangible property of the type of tangible property acquired or leased by the corporation. Whether a person or partnership is “ordinarily engaged in the business” is determined on an objective basis by weighing all of the facts and circumstances of the particular business. The person or partnership selling or leasing the tangible property must be ordinarily engaged in the business of selling or leasing the particular property and the use of an agent or broker by the corporation claiming the tax credit or by the person or partnership selling or leasing the property is not relevant in making this determination.

  
  

  In the case of eligible tangible property expenditures incurred after November 14, 2022, in respect of real property leased by the qualifying corporation from a person or partnership not ordinarily engaged in the business of leasing the type of real property in question, the expenditures must be paid to a person or partnership that deals at arm’s length with the qualifying corporation; in the case of an individual who is not an employee of the qualifying corporation, and in the case of a partnership who members are not employees of the qualifying corporation.