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Second
Session, 50th General Assembly 1 Charles III, 2023 |
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AN ACT TO AMEND THE
INCOME TAX ACT, 2000 |
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Received and Read the First Time................................................................ |
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Second
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Committee..................................................................................................... |
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Third
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Royal Assent................................................................................................. |
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HONOURABLE SIOBHAN COADY Minister of Finance and President of Treasury Board |
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Ordered to be printed by
the Honourable House of Assembly |
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EXPLANATORY NOTES This Bill would amend the Income Tax Act, 2000 to reduce the small business corporate tax rate to 2.5 per cent beginning in the 2024 taxation year. A BILL AN ACT TO AMEND THE INCOME TAX ACT, 2000 Analysis 1.
S.40 R&S 2. Commencement Be it enacted by the Lieutenant-Governor and House of Assembly in Legislative Session convened, as follows: SNL2000 cI-1.1 1. Section 40 of the Income Tax Act, 2000 is repealed and the following substituted: Corporation tax 40. (1) The tax payable by a corporation for a taxation year is 15% of the corporation's taxable income earned in the year in the province. (2) For the purpose of
this section and sections 41 and 44, "taxable income earned in the year in the
province" means the taxable income earned in the year in the province by a
corporation as determined in accordance with federal regulations made for the
purpose of the definition "taxable income earned in the year in a
province" in subsection 124(4) of the federal Act. (3) Notwithstanding
subsection (1), where in a taxation year a corporation is eligible for a
deduction under section 125 of the federal Act, the tax payable by that
corporation under this Act for a taxation year is equal to the total of (a) 2.5% of an amount
calculated by allocating to the province, on the same basis as set out in the
regulations made for the purpose of the definition "taxable income earned
in the year in a province" in subsection 124(4) of the federal Act, a
portion of the amount that is the least of the amounts calculated under
paragraphs 125(1)(a), (b) and (c) of the federal Act and allowed for the
purpose of subsection 125(1) of the federal Act in respect of the corporation
for the year; and (b) 15% of an amount
calculated by deducting from the corporation's taxable income earned in the
year in the province the amount allocated to the province under paragraph (a)
in respect of the corporation for the year. (4) Notwithstanding
subsection (3), if a corporation's taxation year includes January 1, 2024, and
where in a taxation year a corporation is eligible for a deduction under
section 125 of the federal Act, the tax payable by that corporation under this
Act for a taxation year is equal to the total of (a) that proportion of
3% that the number of days in the taxation year that are before January 1, 2024
is of the number of days in the taxation year of an amount calculated by
allocating to the province, on the same basis as set out in the regulations
made for the purpose of the definition "taxable income earned in the year
in a province" in subsection 124(4) of the federal Act, a portion of the
amount that is the least of the amounts calculated under paragraphs 125(1)(a),
(b) and (c) of the federal Act and allowed for the purpose of subsection 125(1)
of the federal Act in respect of the corporation for the year; and (b) that proportion of
2.5% that the number of days in the taxation year that are after December 31,
2023 is of the number of days in the taxation year of an amount calculated by
allocating to the province, on the same basis as set out in the regulations
made for the purpose of the definition "taxable income earned in the year
in a province" in subsection 124(4) of the federal Act, a portion of the
amount that is the least of the amounts calculated under paragraphs 125(1)(a),
(b) and (c) of the federal Act and allowed for the purpose of subsection 125(1)
of the federal Act in respect of the corporation for the year. Commencement 2. This Act is considered to have come into force on January 1, 2024. ŠKing's Printer |