Author: P. Dunn
April 13,1992
PRAIRIE TAX CONFERENCE
DRAFT/EBAUCHE
May 19 & 20, 1992
Question 22
Assume a corporation has a minority interest in a joint venture. Is the corporation required to include its pro-rata share of a joint venture liability in its taxable capital for purposes of the large corporation tax provided for in Part I.3 of the Income Tax Act?
Department's Position
The Department considers that a joint venture, not being a legal entity, does not itself own any property nor does it have its own liabilities. The liabilities are those of the corporate joint venturers and they may or may not be jointly liable for any particular liability related to the carrying on of the joint venture operations. Accordingly, each joint venturer must determine the proportion of each liability for which it is liable and include that amount in its taxable capital to the extent that the amount is otherwise required to be included. This proportion may not, in all cases, be equal to the joint venturer's allocated share of the revenue of the joint venture.
April 13, 1992