17

 

 

First Session, 51st General Assembly

3 Charles III, 2026

BILL 17

AN ACT TO AMEND THE INCOME TAX ACT, 2000 NO. 2

Received and Read the First Time................................................................

Second Reading............................................................................................

Committee.....................................................................................................

Third Reading...............................................................................................

Royal Assent.................................................................................................

HONOURABLE CRAIG PARDY
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

ˇ         extend eligibility for the Newfoundland and Labrador Child Benefit in respect of a deceased child for 6 months after the death of the child;

ˇ         allow unused manufacturing and processing investment tax credits and unused green technology tax credits of an eligible corporation to be used by a new corporation created by the amalgamation of the eligible corporation with one or more other corporations;

ˇ         allow unused manufacturing and processing investment tax credits and unused green technology tax credits of an eligible corporation to be used by the eligible corporation's parent corporation where the eligible corporation is wound up;

ˇ         prescribe the green technology tax credit limit for associated corporations with more than one taxation year in a calendar year;

ˇ         prescribe the green technology tax credit limit for eligible corporations with taxation years that are less than 51 weeks; and

ˇ         require that a film or video industry tax credit that exceeds the tax payable by a corporation in a taxation year be refunded to the corporation.


A BILL

AN ACT TO AMEND THE INCOME TAX ACT, 2000  NO. 2

Analysis

        1.   S.38 Amdt.
Newfoundland and Labrador child tax benefit

        2.   S.41.1 Amdt.
Manufacturing and processing investment tax credit

        3.   S.41.2 Amdt.
Green technology tax credit

        4.   S.45 Amdt.
Film or video tax credit

        5.   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 38(5) of the Income Tax Act, 2000 is repealed and the following substituted:

             (5)  Subsection 122.61(2), paragraph 122.61(3)(a), subsection 122.61(3.1) and subsections 122.62(1), (2), (4), (5), (6), (9) and (10) of the federal Act apply for the purpose of this section.

             (2)  Notwithstanding subsection 3(3) of the Act, subsections 122.62(9) and (10) of the federal Act apply in respect of the death of a person that occurs on or after July 1, 2026.

 

        2. Section 41.1 of the Act is amended by adding immediately after subsection (7) the following:

             (8)  Where 2 or more corporations amalgamate within the meaning of subsection 87(1) of the federal Act and one or more of the corporations had a manufacturing and processing investment tax credit for any taxation year, any portion of which was not deducted by it in computing its tax otherwise payable under this Act for any taxation year, for the purpose of determining the manufacturing and processing investment tax credit of the new eligible corporation for a taxation year preceding any taxation year of the new eligible corporation, the new eligible corporation shall be considered to be the same corporation as, and a continuation of, each such predecessor eligible corporation.

             (9)  Where

             (a)  a subsidiary, within the meaning assigned by subsection 88(1) of the federal Act, is wound up and that subsection applies to the winding-up; and

             (b)  at the end of the last taxation year of the subsidiary it had a manufacturing and processing investment tax credit, any portion of which was not deducted in computing its tax otherwise payable under this Act by it for the year,

for the purpose of applying this section, the parent, within the meaning assigned by subsection 88(1) of the federal Act, shall be considered to be the same person as, and a continuation of, the subsidiary.

 

        3. (1) Subparagraph 41.2(1)(d)(ii) of the Act is repealed and the following substituted:

                     (ii)  the eligible corporation's tax credit limit for the taxation year;

             (2)  Section 41.2 of the Act is amended by adding immediately after subsection (2) the following:

         (2.1)  Notwithstanding subsection (2),

             (a)  where an eligible corporation, in this paragraph referred to as the "first eligible corporation", has more than one taxation year ending in the same calendar year and it is associated in 2 or more of those taxation years with another eligible corporation that has a taxation year ending in that calendar year, the first eligible corporation's tax credit limit for each taxation year ending in that calendar year in which it is associated with the other eligible corporation is, subject to the application of paragraph (b), an amount equal to the first eligible corporation's tax credit limit for the first such taxation year determined without reference to paragraph (b); and

             (b)  where an eligible corporation has a taxation year that is less than 51 weeks, the eligible corporation's tax credit limit for the taxation year is that proportion of the eligible corporation's tax credit limit determined without reference to this paragraph that the number of days in the taxation year is of 365.

             (3)  Section 41.2 of the Act is amended by adding immediately after subsection (8) the following:

             (9)  Where 2 or more corporations amalgamate within the meaning of subsection 87(1) of the federal Act and one or more of the corporations had a green technology tax credit for any taxation year, any portion of which was not deducted by it in computing its tax otherwise payable under this Act for any taxation year, for the purpose of determining the green technology tax credit of the new eligible corporation for a taxation year preceding any taxation year of the new eligible corporation, the new eligible corporation shall be considered to be the same corporation as, and a continuation of, each such predecessor eligible corporation.

          (10)  Where

             (a)  a subsidiary, within the meaning assigned by subsection 88(1) of the federal Act, is wound up and that subsection applies to the winding-up; and

             (b)  at the end of the last taxation year of the subsidiary it had a green technology tax credit, any portion of which was not deducted in computing its tax otherwise payable under this Act by it for the year,

for the purpose of applying this section, the parent, within the meaning assigned by subsection 88(1) of the federal Act, shall be considered to be the same person as, and a continuation of, the subsidiary.

 

        4. Subsection 45(4) of the Act is repealed and the following substituted:

             (4)  Where the tax credit calculated in accordance with subsection (2) exceeds the tax otherwise payable under this Act, the amount of the excess shall be refunded to the corporation.

Commencement

        5. Section 1 comes into force on July 1, 2026.

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