Completing your T2 schedules and elections – Functional currency

Convert fixed amounts on the schedules to functional currency.

Schedule 23, Agreement Among Associated Canadian-Controlled Private Corporations to Allocate the Business Limit, Schedule 49, Agreement Among Associated Canadian-Controlled Private Corporations to Allocate the Expenditure Limit, and provincial and territorial tax calculation schedules are examples of schedules that contain fixed amounts (such as the business limit).

The taxable capital employed in Canada amount of $10,000,000 on Schedule 33, Taxable Capital Employed in Canada – Large Corporations, is another example of a fixed amount that needs to be converted.

Each amount referenced in the Income Tax Act or Income Tax Regulations (other than penalty or fine), that is described as a particular number of Canadian dollars is to be converted to functional currency using the exchange rate on the first day of the tax year [(paragraph 261(5)(b)].

Note

Use the Bank of Canada daily exchange rate, to 4 decimal places, of the particular day to convert the net amount of tax owing. If no rate is quoted, use the rate from the closest preceding day for which a rate is quoted.

When a corporation files an agreement in functional currency, the entire schedule must be completed in functional currency. The associated or related corporations must also each file the same schedule in Canadian currency or the currency in which they have elected to file.

Corporations filing an election in functional currency must indicate on line 079 of the T2 Return the functional currency being used.

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Date modified:: 2025-05-26

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Completing your T2 schedules and elections – Functional currency

Note

Forms and publications

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