| J.M. Legault | Technical Review |
| Director | Publications Division |
| Returns Processing Division | S. Parnanzone |
| 957-9232 | |
| Attention: B. Gillrie | File No. 90M03008 |
| Subject: Calculation of Part I.3 Tax Credit New Form to be Issued |
This is in reply to the request per T782 of January 19, 1990 to review the above-noted draft form. As a revised draft was received on February 26, 1990, we reviewed this draft instead of the earlier one.
Our review was based on the provisions of the Income Tax Act as proposed to be amended by Bill C-28 (as passed by the House of Commons on December 20, 1989) and the Department of Finance release 90-016 dated February 1, 1990.
Our only comment applies to the note referenced "*" (Area A) which deals with the computation of the Canadian surtax payable. The second sentence is not in accordance with the draft regulations released by the Department of Finance on February 1, 1990. While section 8601 of the draft regulations provides for an allocation based on taxable capital employed in Canada, the form incorrectly refers to taxable income earned in Canada.
Bernhard BuetowChiefTechnical Review SectionPublications DivisionLegislative Affairs Directorate