20 January 2005 External T.I. 2004-0104921E5 F - RPDB et déficit cumulé -- summary under Profit Sharing Plan

Regarding whether a profit sharing plan can be registered as a DPSP when the corporation has an accumulated deficit, CRA indicated, yes, s. 147 does not require the corporation to have retained earnings to be approved as a profit-sharing plans, and went on to state:

[T]he amounts to be paid by the employer are normally computed by reference to profits (e.g. 5% of the profits) as defined in the plan. They may be computed in another way, provided that the amounts come from profits.

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d7 import status
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