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NEWFOUNDLAND AND LABRADOR
REGULATION 12/10

Capital Tax Regulations
under the
Income Tax Act, 2000
(O.C. 2010-070)

(Filed March 10, 2010 )

Under the authority of section 66.6 of the Income Tax Act , 2000, the Lieutenant-Governor in Council makes the following regulations.

Dated at St. John’s , March 3, 2010 .

Gary Norris
Clerk of the Executive Council

REGULATIONS

Analysis


       
1.   Short title

       
2.   Formulae described

       
3.   Repeal


Short title

        1. These regulations may be cited as the Capital Tax Regulations.

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Formulae described

        2. (1) The non-provincial amount taxable of a loan corporation, a trust corporation or a trust and loan corporation is computed in accordance with the following formula:

              A  = B x C/D

             (2)  The non-provincial amount taxable of a bank is computed in accordance with the following formula:

              A  = B x 1/3 (E/F + G/H)

             (3)  For the purpose of the formulae set out in subsections (1) and (2)

             (a)  "A" means the non-provincial amount taxable;

             (b)  "B" means the capital of the corporation for the taxation year that exceeds its capital deduction for the year;

             (c)  "C" means the gross revenue of the corporation's permanent establishments in jurisdictions outside the province and is equal to the aggregate of the corporation's gross revenue for the taxation year arising from

                      (i)  loans secured by real property situated outside the province,

                     (ii)  loans not secured by real property and made to persons residing outside the province,

                    (iii)  loans administered by the permanent establishments in jurisdictions outside the province made to persons residing in a jurisdiction in which the corporation has no permanent establishment, but not including loans secured by real property situated in a jurisdiction in which the corporation has a permanent establishment, and

                    (iv)  business conducted at the corporation's permanent establishments in jurisdictions outside the province other than revenue arising from loans;

             (d)  "D" means the total gross revenues of the corporation in all jurisdictions for the taxation year;

             (e)  "E" means the aggregate of the salaries and wages paid in the taxation year by the corporation to employees of its permanent establishments in jurisdictions outside the province;

              (f)  "F" means the aggregate of the salaries and wages paid in the taxation year by the corporation to its employees in all jurisdictions;

             (g)  "G" means 2 times the aggregate amount of loans made by, and the amount of deposits with, the permanent establishments of the bank in jurisdictions outside the province in the taxation year;

             (h)  "H" means the aggregate amount of loans made by, and the amount of deposits with, the bank in all jurisdictions for the taxation year;

              (i)  "aggregate amount of loans" means the aggregate of the amounts outstanding on loans made by the bank, as determined at the close of business on the last day of each month in the taxation year, divided by 12;

              (j)  "amount of deposits" means the aggregate of amounts on deposit with the bank, as determined at the close of business on the last day of each month in the taxation year, divided by 12;

             (k)  "deposits" does not include bonds, stocks, debentures, items in transit and deposits in favour of the Crown in right of Canada ;

              (l)  "loans" does not include bonds, stocks, debentures, items in transit and deposits in favour of the Crown in right of Canada; and

            (m)  "non-provincial amount taxable" means the portion of the corporation's amount taxable that is used by the corporation in jurisdictions outside the province, as determined in accordance with these regulations.

             (4)  Where

             (a)  "F" equals 0 for the taxation year, the formula in subsection (2) is A=B x ˝ (G/H); and

             (b)  "H" equals 0 for the taxation year, the formula in subsection (2) is A=B x (E/F).

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Repeal

        3. The Financial Corporations Capital Tax Regulations, Consolidated Newfoundland and Labrador Regulation 1118/96, is repealed.