As a result of the entering into of an agreement with a US corporation to purchase its shares, a CCPC ceased to be a CCPC pursuant to s. 251(5)(b), which had an adverse effect on its SR& ED claims for the taxation year that ended pursuant to s. 249(4).
The Directorate indicated that the corporation’s request to be granted a taxation year end immediately before the loss of its CCPC status should be refused, since this request was prompted by a desire for tax benefits, the credit was “reserved for corporations that maintain their CCPC status throughout their taxation year” and the change would have had retroactive effect.