For the LNG income tax, an amalgamated corporation is treated as a new corporation with a first taxation year that begins at the time of amalgamation. However, there are circumstances where certain tax attributes may flow-through from a predecessor corporation to an amalgamated corporation.
Your amalgamation may qualify for a flow-through of tax attributes if all of the following requirements are met:
- The amalgamation is effected under specific rules in the B.C. Business Corporations Act or the Canada Business Corporations Act or similar provisions of a Canadian federal or provincial law.
- Two or more of the predecessor corporations are LNG taxpayers in respect of liquefaction activities at an LNG facility.
- All predecessor corporations are continued in the amalgamated corporation.
- All of the property, rights and interests of the predecessor corporations become the property, rights and interests of the amalgamated corporation.
- All of the liabilities of the predecessor corporations become the liabilities of the amalgamated corporation.
A new corporation that is a result of an amalgamation doesn’t qualify for first taxation year elections.