4.1. The CCV of any Direct and Indirect Transaction shall be determined by the Net Selling Price Method or the Cost Aggregate Method.
4.1.1. Net Selling Price Method: A product which bears a substantiated selling price may have its CCV determined as follows:
4.1.1.1. the Net Selling Price is that total selling price of the product, less the applicable customs duties, excise taxes and applicable GST, HST and all provincial sales taxes; and
4.1.1.2. the CCV is the Net Selling Price less any costs incurred as set out in Clause 4.2.
4.1.2. Cost Aggregate Method: for any product, service or activity which cannot be assigned a substantiated selling price, the CCV shall be the aggregate of the following:
4.1.2.1. the cost of parts produced in Canada, and the cost of materials to the extent that they are of Canadian origin, that are incorporated in the equipment in the factory of the manufacturer in Canada, including parts or materials to the extent that the IRB Authority can verify that they are of Canadian origin and have been exported from Canada and subsequently imported into Canada as parts or finished goods;
4.1.2.2. transportation costs, including insurance charges incurred in transporting parts and materials from a Canadian supplier or frontier port of entry to the factory of the manufacturer in Canada for incorporation in the equipment, to the extent that such costs are not included in the foregoing paragraph; and
4.1.2.3. such part of the following costs, exclusive of GST, HST, all provincial sales taxes, excise taxes, royalties and license fees paid outside of Canada, as are reasonably attributable to the production or implementation of the equipment, service or activity:
4.1.2.3.1. wages and salaries paid for direct and indirect production and non-production labour in Canada paid to Canadians or to permanent residents as defined in the Immigration and Refugee Protection Act 2001, c.27;
4.1.2.3.2. materials used in the Work but not incorporated in the final products;
4.1.2.3.3. light, heat, power and water;
4.1.2.3.4. workers compensation, employment insurance and group insurance premiums, pension contributions and similar expenses incurred with respect to labour referred to above in sub-paragraph 4.1.2.3.1;
4.1.2.3.5. taxes on land and buildings in Canada;
4.1.2.3.6. fire and other insurance premiums relative to production inventories and the production plant and its equipment, paid to a company authorized by the laws of Canada or any province to carry on business in Canada or such province;
4.1.2.3.7. insurance purchased specifically from a company authorized by the laws of Canada or any province to carry on business in Canada or such province;
4.1.2.3.8. rent of factory or office premises paid to a registered owner in Canada;
4.1.2.3.9. maintenance and repairs to buildings, machinery and equipment used for production purposes that is executed in Canada;
4.1.2.3.10. tools, dies, jigs, fixtures and other similar plant equipment items of a non-permanent nature that have been designed, developed or manufactured in Canada;
4.1.2.3.11. engineering and professional services, experimental work and product or process development work executed and completed in Canada;
4.1.2.3.12. pertinent miscellaneous factory and office expenses, such as administrative and general expenses, including profits earned in Canada, depreciation with respect to production machinery and permanent plant equipment and the installation costs of such machinery and equipment; and a capital allowance not exceeding five per cent of the total capital outlay incurred for buildings in Canada owned by the producer of the work;
4.1.2.3.13. fees paid for services not elsewhere specified; and,
4.1.2.3.14. pre-tax net profit upon which Canadian taxes are paid or are payable.
4.2. Costs or Business Activities that are ineligible for IRB Credit:
4.2.1. the value of materials, labour and services imported into Canada;
4.2.2. in the case of Indirect IRB, the value of raw materials and semi-processed goods exported from Canada;
4.2.3. the value of any living, relocation costs and remuneration paid to non-Canadians for work on the Project;
4.2.4. the amount of all Canadian Excise Taxes, Import Duties, Federal and Provincial Sales Taxes, Goods and Services Taxes, Harmonized Sales Taxes and other Canadian duties;
4.2.5. the value of goods and services with respect to which credit has been received or is being claimed by the Contractor or its Eligible Parties as an IRB to Canada under any other IRB agreement;
4.2.6. any proposal or bid preparations costs;
4.2.7. all transportation costs not covered under Clause 4.1.2.2;
4.2.8. obligations of the Federal Government e.g. government furnished equipment;
4.2.9. license fees paid by the Canadian IRB recipient and any on-going royalty payments;
4.2.10. IRB Transactions claimed by a Contractor that pertain to its influence or that of one of its Eligible Parties over their own country's Purchasing Agent/Department or the Purchasing Agent/Department of another country;
4.2.11. interest costs associated with Letters of Credit or other financial instruments to support IRB Investments;
4.2.12. fees paid to Lobbyists (as defined by the Lobbying Act); and
4.2.13. fees paid to third-party consultants or agents for work related to gaining IRB Credit against this Contract. This includes, but is not limited to, providing advice on the IRB Policy, preparation of IRB transactions and/or reports, representing the interests of the Contractor to the IRB Authority, and/or searching for potential recipient firms.
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