Federal Logging Tax Credit

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Who is eligible?

• Corporations resident in Canada at any time in the year
• Authorized foreign banks
• Corporations can use this schedule to claim a federal logging tax credit

Eligible expenses

• Provincial logging taxes paid for logging operations conducted in a province.

Ineligible Costs and Activities

• Income exempt from tax in Canada under an income tax treaty
• Dividends received from foreign affiliates
• Tax-exempt income as defined in subsection 126(7)

Eligible geographic areas

• Provinces in Canada where logging tax has been paid for logging operations performed in those provinces.

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• Open the downloaded PDF in Acrobat Reader 10 or later.
• Download and open the fillable PDF in Acrobat Reader 10 or later.
• Print the form and fill it out by hand, if preferred.
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• Enter the total deductible federal foreign non-business income tax credit, or a lesser amount, on line 632 of the T2 return.
• Enter the total deductible federal foreign business income tax credit, or a lesser amount, on line 636 of the T2 return.
• Enter line 580 or a lesser amount on line 640 of the T2 return.
• Enter amount 9J on the corresponding line in Part 2 of Schedule 5, Tax Calculation Supplementary – Corporations.
• For Ontario, if the corporation is not a life insurance corporation, also enter amount 9J on line 550 of Schedule 510, Ontario Corporate Minimum Tax.

• The credit calculation must be done separately for each province where logging operations occurred.
• The total logging tax credit for all provinces is limited to 6.6667% of taxable income, pursuant to federal tax rules.
• Specific lines on the tax return must be excluded when determining the taxable income applicable to this credit (lines 20800, 20805, 21000, 21400, 21500, 21900, and 22000).