2016 BILL 49

	49


First Session, 48th General Assembly 65 Elizabeth II, 2016
BILL 49
AN ACT TO AMEND THE INCOME TAX ACT, 2000 NO. 6
Received and Read the First Time.................................................................................................
Second Reading.................................................................................................................................
Committee..........................................................................................................................................
Third Reading.....................................................................................................................................
Royal Assent......................................................................................................................................
HONOURABLE CATHY BENNETT Minister of Finance and President of Treasury Board
Ordered to be printed by the Honourable House of Assembly

EXPLANATORY NOTES

This Bill would amend the Income Tax Act, 2000 to

· require that the adoption expenses tax credit, child care tax credit and volunteer firefighters' tax credit be fully utilized before determining the amount to be carried forward under those sections;

· exclude search and rescue volunteer service hours from the 200 hours of service required to be eligible to claim the volunteer firefighters' tax credit;

· include a reference to the provincial child care tax credit in the part-time residents, tax payable by non-residents and credits in year of bankruptcy sections of the Act;

· clarify that the small business income tax rate of 4% only applies to taxation years beginning on or after April 1, 2010 and before July 1, 2014 and prorate the reduction in the small business corporate income tax rate for taxation years that include July 1, 2014;

· deem, for the purpose of the foreign tax deduction, interest income received by a taxpayer from a non-resident of Canada as income from a source in that other country;

· reference "eligible amount" rather than "amount" in the political contribution deduction section of the Act and have subsections 248(31), 248(32) and 248(33) of the federal Act apply with respect to determining the eligible amount;

· allow the imposition of a penalty in cases where a person knowingly provides false statements or documents to obtain provincial benefits he or she may not be eligible or entitled to receive;

· include by reference new provisions in section 164 of the federal Act respecting refunds of instalment payments, withholding of refunds for outstanding returns and realization of deceased employees' options; and

· include in the definition of "capital" the amount of any provision for the redemption of preferred shares when computing shareholder's equity.

A BILL

AN ACT TO AMEND THE INCOME
TAX ACT, 2000 NO. 6

Analysis

1. S.2 Amdt.
Interpretation

2. S.5 Amdt.
Definitions

3. S.15 Amdt.
Unused tuition and education amounts

4. S.17.3 R&S
Volunteer firefighters' tax credit

5. S.18 Amdt.
Tax credit transfer

6. S.22 R&S
Part-year residents

        7.   Ss.25 & 26 R&S
25. Tax payable by
        non-resident
26. Credits in year of
        bankruptcy

8. S.33 Amdt.
Foreign tax deduction

9. S.40 Amdt.
Corporation tax

10. S.47 Amdt.
Political contribution deduction

11. S.58 Amdt.
Repeated failures

12. S.60 Amdt.
Refunds

13. S.66.1 Amdt.
Interpretation

14. Commencement

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

SNL2000 c.I-1.1
as amended

1. Section 2 of the Income Tax Act, 2000 is amended by adding immediately after subsection (7) the following:

(7.1) Subsections 248(31), 248(32) and 248(33) of the federal Act apply for the purpose of this Act.

2. Section 5 of the Act is amended by adding immediately after paragraph (a) the following:

(a.1) "eligible volunteer firefighting services" means eligible volunteer firefighting services as defined in subsection 118.06(1) of the federal Act.

3. (1) Paragraph 15(1)(b) of the Act is repealed and the following substituted:

(b) amount that would be the individuals tax payable under this Part for the year if no amount were deductible under this Part, other than an amount deductible under this section and section 9, 12, 17, 17.1 or 17.2.

(2) Paragraph 15(1)(b) of the Act is repealed and the following substituted:

(3) The paragraph referring to the value of C in subsection 15(2) of the Act is repealed and the following substituted:

C is the lesser of the value of B and the amount that would be the individuals tax payable under this Part for the year if no amount were deductible under this Part, other than an amount deductible under this section and section 9, 12, 17, 17.1 or 17.2;

(4) The paragraph referring to the value of C in subsection 15(2) of the Act is repealed and the following substituted:

4. Section 17.3 of the Act is repealed and the following substituted:

Volunteer
firefighters' tax credit

17.3 For the purpose of computing the tax payable under this Part for a taxation year by an individual who performs eligible volunteer firefighting services in the year, there may be deducted the amount determined by multiplying $3,000 by the appropriate percentage for the year if the individual

(a) performs in the year not less than 200 hours of services each of which is an hour of eligible volunteer firefighting service for a fire department; and

(b) provides the certificate referred to in subsection 118.06(3) of the federal Act when requested by the Minister of National Revenue.

5. (1) Paragraph 18(1)(a) of the Act is repealed and the following substituted:

(a) the amount that would be the spouses or common law partners tax payable under this Part for the year, or that would be so payable under this Part for the year if the spouse or common law partner were liable under section 6 to pay tax for the year, if no amount were deductible under this Part, other than an amount deductible under paragraph 9(1)(c) and sections 15, 17 and 17.2;

(2) Paragraph 18(1)(a) of the Act is repealed and the following substituted:

(3) Subparagraph 18(1)(b)(ii) of the Act is repealed and the following substituted:

(ii) the amount that would be the spouses or common law partners tax payable under this Part for the year, or that would be so payable under this Part for the year if the spouse or common law partner were liable under section 6 to pay tax for the year, if no amount were deductible under this Part other than an amount deductible under sections 9, 12, 15, 17 and 17.2.

(4) Subparagraph 18(1)(b)(ii) of the Act is repealed and the following substituted:

(5) The paragraph referring to the value of B in subsection 18(3) of the Act is repealed and the following substituted:

B is the amount that would be the persons tax payable under this Part for the year if no amount were deductible under this Part other than an amount deductible under sections 9, 12, 15, 17 and 17.2; and

(6) The paragraph referring to the value of B in subsection 18(3) of the Act is repealed and the following substituted:

6. Section 22 of the Act is repealed and the following substituted:

Part-year residents

22. Section 118.91 of the federal Act applies for the purpose of this Act and shall be read to include a reference to section 17.2 of this Act.

7. Sections 25 and 26 of the Act are repealed and the following substituted:

Tax payable by non-resident

25. Section 118.94 of the federal Act applies for the purpose of this Act and shall be read to include a reference to section 17.2 of this Act.

Credits in year of bankruptcy

26. Section 118.95 of the federal Act applies for the purpose of this Act and shall be read to include a reference to sections 16.1 and 17.2 of this Act.

8. Subsection 33(4) of the Act is amended by deleting the word "and" at the end of paragraph (a), by deleting the period at the end of paragraph (b) and substituting a semi-colon and the word "and", and by adding immediately after that paragraph the following:

(c) if, in computing a taxpayers income for a taxation year from a business carried on by the taxpayer in Canada, an amount is included in respect of interest paid or payable to the taxpayer by a person resident in a country other than Canada, and the taxpayer has paid to the government of that other country a non-business income tax for the year with respect to the amount, the amount is, in applying the definition "qualifying incomes" in subsection (5) for the purpose of subsection (1), deemed to be income from a source in that other country.

9. Subsection 40(4) of the Act is repealed and the following substituted:

(4) Notwithstanding subsections (1) and (3), for the purpose of a corporation whose taxation year began on or after April 1, 2010 and before July 1, 2014, the rate prescribed in paragraph (3)(a) shall be 4%.

(5) Notwithstanding subsections (3) and (4), if a corporation's taxation year includes July 1, 2014, 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 4% that the number of days in the taxation year that are before July 1, 2014 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 3% that the number of days in the taxation year that are after June 30, 2014 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.

10. Subsection 47(2) of the Act is repealed and the following substituted:

(2) There may be deducted from the tax otherwise payable under this Act by a taxpayer who is an individual or a corporation for a taxation year in respect of the total of all amounts, each of which is the eligible amount of a contribution of money made by the taxpayer in a year to a registered political party or a candidate,

(a) 75% of the total if the total does not exceed $100;

(b) $75 plus 50% of the amount by which the total exceeds $100 if the total exceeds $100 and does not exceed $550; or

if each contribution that is included in the total is proven by filing with the minister a receipt signed by the chief financial officer of the registered political party or candidate.

11. Subsection 58(1) of the Act is repealed and the following substituted:

Repeated failures

58. (1) Subsections 163(1) and (1.1), paragraphs 163(2)(a) and (c) and subsections 163(2.1), (3) and (4) of the federal Act apply for the purpose of this Act.

12. (1) Subsection 60(1) of the Act is repealed and the following substituted:

Refunds

60. (1) Subsections 164(1), (1.1), (1.2), (1.3), (1.31), (1.5), (2), (2.01), (2.1), (2.2), (2.3), (3), (3.1), (3.2), (4), (4.1), (5), (5.1), (6) and (7) of the federal Act apply for the purpose of this Act.

(2) Subsection 60(1) of the Act is repealed and the following substituted:

Refunds

60. (1) Subsections 164(1), (1.1), (1.2), (1.3), (1.31), (1.5), (1.51), (1.52), (1.53), (2), (2.01), (2.1), (2.2), (2.3), (3), (3.1), (3.2), (4), (4.1), (5), (5.1), (6) and (7) of the federal Act apply for the purpose of this Act.

(3) Subsection 60(1) of the Act is repealed and the following substituted:

Refunds

60. (1) Subsections 164(1), (1.1), (1.2), (1.3), (1.31), (1.5), (1.51), (1.52), (1.53), (2), (2.01), (2.1), (2.2), (2.3), (3), (3.1), (3.2), (4), (4.1), (5), (5.1), (6), (6.1) and (7) of the federal Act apply for the purpose of this Act.

13. Paragraph 66.1(1)(c) of the Act is repealed and the following substituted:

(c) "capital", in the case of a financial institution other than an authorized foreign bank, means its capital for a taxation year that is the amount, if any, by which the total at the end of the year of

(i) the amount of its long-term debt,

(ii) the amount of its capital stock or, in the case of an institution incorporated without share capital, the amount of its members' contributions,

(iii) retained earnings, contributed surplus and other surpluses, and

(iv) the amount of its reserves for the year except to the extent that the reserves were deducted in computing its income under Part I of the federal Act for the year,

exceeds the total at the end of the year of

(v) the amount of any deficit deducted in computing its shareholders' equity, including for this purpose, the amount of any provision for the redemption of preferred shares, and

(vi) the amount of its deferred tax debit balance;

Commencement

14. (1) Sections 1, 8 and 10 of this Act are considered to have come into force on February 27, 2004.

(2) Subsection 12(1) of this Act is considered to have come into force on April 1, 2007.

(3) Section 13 of this Act is considered to have come into force for taxation years that began after October 31, 2008.

(4) Section 9 of this Act is considered to have come into force on April 1, 2010.

(5) Subsections 3(1), 3(3), 5(1), 5(3) and 5(5) and sections 6 and 7 of this Act are considered to have come into force on January 1, 2011.

(6) Subsection 12(2) of this Act is considered to have come into force on June 26, 2013.

(7) Subsections 3(2), 3(4), 5(2), 5(4) and 5(6) of this Act are considered to have come into force on January 1, 2014.

(8) Sections 2 and 4 and subsection 12(3) of this Act are considered to have come into force on January 1, 2016.