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Statutes of Newfoundland and Labrador 2007


CHAPTER 12

AN ACT TO AMEND THE INCOME TAX ACT, 2000

(Assented to June 14, 2007)

Analysis


††††††† 1. S.15 Amdt.
Unused tuition and education amounts

††††††† 2.†† S.20 R&S
Dividend tax credit

††††††† 3. S.21.1 Amdt.
Low income reduction

††††††† 4. S.23 Amdt.
Ordering of credits

††††††† 5. S.31.1 Amdt.
Pro-rating where income earned outside province

††††††† 6. S.42 Amdt.
Research and development tax credit

††††††† 7. S.44 Amdt.
Foreign tax credits

††††††† 8. S.89 Amdt.
Collection agreement

††††††† 9. Commencement


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

SNL2000 cI-1.1
as amended

††††††† 1. (1) Paragraph 15(1)(b) of the Income Tax Act, 2000 is amended by striking out the word and number "or 17" and by adding immediately after the number "12" a comma and the numbers and word "17 or 17.1".

†††††††††††† (2)Subsection 15(2) of the Act is amended by striking out the word and number "or 17" and by adding immediately after the number "12" a comma and the numbers and word "17 or 17.1".

 

††††††† 2. Section 20 of the Act is repealed and the following substituted:

Dividend tax credit

††††† 20. For the purpose of computing the tax payable under this Part for a taxation year by an individual who was resident in the province on the last day of the taxation year, there may be deducted an amount equal to the total of

†††††††††††† (a)25% of any amount required under subparagraph 82(1)(b)(i) of the federal Act to be included in computing the individualís income for the year; and

†††††††††††† (b)21.43% of any amount required under subparagraph 82(1)(b)(ii) of the federal Act to be included in computing the individualís income for the year.

 

††††††† 3. Paragraph 21.1(1)(a) of the Act is repealed and the following substituted:

†††††††††††† (a)"adjusted income" of an individual for a taxation year means the total of all amounts, each of which would be the income for the year of the individual and the individual's qualified relation for the year, if any, calculated as if no amount was included in respect of

††††††††††††††††††††† (i)a gain from a disposition of property to which section 79 of the federal Act applies in computing that income, or

†††††††††††††††††††† (ii)benefits under the Universal Child Care Benefit Act (Canada)

and the income of a person who is a non-resident of Canada at any time in a taxation year is considered to be equal to the amount that would, if the person were resident in Canada throughout the year, be the person's income for the year;

 

††††††† 4. (1) Paragraph 23(2)(a) of the Act is repealed and the following substituted:

†††††††††††† (a)subsections 9(1) and (2);

†††††††††††† (2)Paragraph 23(2)(b.1) of the Act is repealed and the following substituted:

††††††††† (b.1)subsection 9(3);

††††††††† (b.2)section 17.1;

 

††††††† 5. Section 31.1 of the Act is amended by adding immediately after the words, numbers and brackets "subsection 9(3) and sections" the number "17.1" and a comma.

 

††††††† 6. (1) Paragraph 42(1)(a) of the Act is repealed and the following substituted:

†††††††††††† (a)"eligible expenditure" means an expenditure in respect of scientific research carried out in the province made after 1995 by a taxpayer with a permanent establishment in the province that is a qualified expenditure under subsection 127(9) of the federal Act without reference to paragraph (d) of the definition of that term in that Act but, with respect to paragraph (h) of the definition of that term in that Act,

††††††††††††††††††††† (i)in the case of research and development tax credit claims filed under subsection 37(11) of the federal Act prior to December 1, 2005, eligible expenditures shall not be reduced by government assistance and contract payments,

†††††††††††††††††††† (ii)in the case of research and development tax credit claims filed under subsection 37(11) of the federal Act on or after December 1, 2005, eligible expenditures shall not be reduced by government assistance except with respect to Harmonized Sales Tax and Goods and Services Tax input tax credits, considered under subsection 248(16) of the federal Act to be assistance from a government, claimed after December 31, 2003, and

††††††††††††††††††† (iii)in the case of research and development tax credit claims filed under subsection 37(11) of the federal Act on or after December 1, 2005, eligible expenditures shall be reduced by contract payments received after December 31, 2003; and

†††††††††††† (2)Subsection 42(1.1) of the Act is amended by renumbering it as (1.2) and adding immediately before that subsection the following:

††††††††† (1.1)For the purpose of subparagraph (1)(a)(ii), reference to "Harmonized Sales Tax" means the harmonized sales tax defined in the Schedule to the Tax Agreement Act and reference to "Goods and Services Tax" means the tax imposed or levied under Part IX of the Excise Tax Act (Canada).

 

††††††† 7. (1) Subsection 44(1) of the Act is amended by striking out the words "has claimed a deduction" and substituting the words "may deduct an amount".

†††††††††††† (2)Subparagraph 44(1)(a)(ii) of the Act is repealed and the following substituted:

†††††††††††††††††††† (ii)that proportion that the corporation's taxable income earned in the year in the province is of the corporation's taxable income earned in the year; or

†††††††††††† (3)Paragraph 44(1)(b) of the Act is amended

†††††††††††† (a)by striking out the word "a" immediately following the words "the part of" and substituting the word "any"; and

†††††††††††† (b)by striking out the words, numbers and brackets "of the deduction claimed by the corporation under subsection 126(1) of the federal Act that" and substituting the words, numbers and brackets "deductible by the corporation under subsection 126(1) of the federal Act in respect of that country that".

 

††††††† 8. Subsection 89(5) of the Act is repealed and the following substituted:

†††††††††††† (5)The minister may negotiate and accept a settlement to relieve the effect of multiple taxation and, for the purposes of this section, multiple taxation occurs where

†††††††††††† (a)a person who is subject to income tax under section 6

††††††††††††††††††††† (i)is also subject to income tax in another province or territory, and

†††††††††††††††††††† (ii)as a result of a conflict of law or a disagreement between the province and another province or territory respecting an interpretation of law or fact, the aggregate of the person's income earned in the year in each province or territory as determined by the law of each province or territory exceeds the person's income earned in the year in a province; or

†††††††††††† (b)a corporation that is subject to tax under section 40

††††††††††††††††††††† (i)is also subject to tax in another province or territory, and

†††††††††††††††††††† (ii)as a result of a conflict of law or a disagreement between the province and another province or territory respecting an interpretation of law or fact, the aggregate of the corporation's taxable income earned in the year in each province or territory as determined by the law of each province or territory exceeds the corporation's taxable income earned in the year in a province.

Commencement

††††††† 9. (1) Sections 2 and 5 of this Act are considered to have come into force on January 1, 2006.

†††††††††††† (2)Section 3 of this Act is considered to have come into force on July 1, 2006.

†††††††††††† (3)Sections 4, 6 and 7 of this Act are considered to have come into force on January 1, 2004.