DETERMINATION OF INCOME - categories are aggregated in...

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DETERMINATION OF INCOME * Each of the primary entities is required to pay a rate of tax on its taxable income in each taxation year * Income for tax purposes included the following: o Each entity subject to tax determines its taxable income on the basis of a taxation year. o Income for each entity includes and is restricted to the world income generated from ±ve general categories. Each category of income is determined in accordance with its own brief set of fundamental principles. o The net incomes (revenues minus expenses) for each of the ±ve
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Unformatted text preview: categories are aggregated in accordance with a strict formula, the sum of which is referred to as net income for tax purposes o The sum of the ±ve categories of income is then reduced by a limited number of speci±c items. Such items differ for the two primary entities. The total is referred to as taxable income and is the base to which the rate of tax is applied. * Taxable income for a taxation year of an entity subject to tax in Canada can be expressed as: TI = Net income - Special reductions...
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