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Statutes of Newfoundland 1993


CHAPTER 29

CHAPTER 29

AN ACT TO AMEND THE INCOME TAX ACT

(Assented to December 17, 1993)

Analysis

1. S.4 Amdt.
Individual tax

2. S.6 Amdt.
Corporation tax

3. S.6.1 Added
Manufacturing and processing profits deduction

4. S.8 Amdt.
Foreign tax credits

5. Commencement

Be it enacted by the Lieutenant-Governor and House of Assembly in Legislative Session convened, as follows:


RSN 1990 cI-1 as amended

1.Paragraph 4(8)(t) of the Income Tax Act is amended by deleting the number "66%" and substituting the number "69%".

2. (1) Subsection 6(1) of the Act is amended by deleting the number "17%" and substituting the number "16%".

(2) Subsection 6(4) of the Act is amended

(a) by deleting the number "10%" and substituting the number "5%" in paragraph (a); and

(b) by deleting the number "17%" and substituting the number "16%" and by deleting the number "10%" and substituting the number "5%" in paragraph (b).

3.The Act is amended by adding the following immediately after section 6:

Manufacturing and processing profits deduction

6.1 (1) Where a portion of taxable income of a corporation for a taxation year earned in the province is Canadian manufacturing and processing profits, within the meaning assigned by subsection 125.1(3) of the Federal Act, there may be deducted from the amount of tax otherwise payable under subsection 6(1) and paragraph 6(4)(b), 8.5% of the amount, if any, by which the manufacturing and processing profits exceed the amounts, if any, upon which the tax payable is calculated at the small business rate.

(2) For the purpose of subsection (1) the manufacturing and processing profits earned in the province for a year in respect of a corporation are the Canadian manufacturing and processing profits as determined under paragraph 125.1(3)(a) of the Federal Act multiplied by the proportion that the corporation's taxable income earned in the province bears to the corporation's taxable income earned in Canada.

(3) Where a corporation has a taxation year part of which is in 1992 and part of which is in 1993, for the purpose of this section the deduction from tax otherwise payable determined in subsection (1) shall be calculated as follows:

(a) by dividing the taxation year into 2 notional taxation years, the 1st ending on December 31, 1992 and the 2nd beginning on January 1, 1993; and

(b) by apportioning the amount deductible between the 2 notional taxation years proportionately according to the number of days in each,

and the amount determined under paragraph (b) that is attributable to the 2nd notional taxation year is the total amount deductible in respect of that taxation year.

4.Paragraph 8(1)(a) of the Act is amended by deleting the number "17%" and substituting the number "16%".

Commencement

5.This Act is considered to have come into force on January 1, 1993.

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