There are exemptions for passive income that would otherwise be included in CFC income, which, in general terms, apply where a CFC’s passive income is closely linked to an active business of another non-resident corporation in which the Canadian taxpayer has a significant interest. In order to qualify for one of these exemptions, the link between the passive income and the active business must be one of those described in the CFC legislation (and meet additional legislated conditions). Notably, these include passive income of the CFC that is directly related to active business activities of the other corporation, and passive income that derives from certain payments (e.g., interest) that are deductible in computing the active business income of the other corporation.