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Statutes of Newfoundland and Labrador 2016


CHAPTER 16

AN ACT TO AMEND THE INCOME TAX ACT, 2000 NO. 3

(Assented to June 7, 2016)

Analysis


        1.   S.40 Amdt.
Corporation tax

        2.   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 (1) Subsection 40(1) of the Income Tax Act, 2000 is repealed and the following substituted: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.

         (1.1)  Notwithstanding subsection (1), if a corporation's taxation year includes January 1, 2016, the tax payable by that corporation for the taxation year is the amount determined when the corporation's taxable income earned in the year in the province is multiplied by the total of

             (a)  that proportion of 14% that the number of days in the taxation year that are before January 1, 2016 is of the number of days in the taxation year; and

             (b)  that proportion of 15% that the number of days in the taxation year that are after December 31, 2015 is of the number of days in the taxation year.

             (2)  Paragraph 40(3)(b) of the Act is repealed and the following substituted:

             (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.

             (3)  Section 40 of the Act is amended by adding immediately after subsection (3) the following:

         (3.1)  Notwithstanding subsections (1), (1.1) and (3), if a corporation’s taxation year includes January 1, 2016, and the corporation is eligible for a deduction under section 125 of the federal Act, the tax payable by that corporation under this Act for the taxation year is

             (a)  3% 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)  the amount determined when the corporation’s taxable income earned in the year in the province less the amount allocated to the province under paragraph (a) in respect of the corporation for the year is multiplied by the total of

                      (i)  that proportion of 14% that the number of days in the taxation year that are before January 1, 2016 is of the number of days in the taxation year, and

                     (ii)  that proportion of 15% that the number of days in the taxation year that are after December 31, 2015 is of the number of days in the taxation year.

Commencement

        2. This Act is considered to have come into force on January 1, 2016.