Capital gains

Similar to the treat-
ment of dividends, 5% of the capital gain is treated as a non-de-
ductible business expense. Costs incurred in connection with
the sale reduce the net amount of the capital gain and are thus
not separately deductible as business expenses, but do reduce
the base on which deemed non-deductible business expenses
are calculated. Losses on the sale of shares and write-downs
due to impaired value are likewise not tax-deductible.

If the shareholder of the corporation is a partnership, the capital
gains are taxed for corporate or income tax purposes at the level
of the partners and not at the level of the partnership.