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Consolidated Newfoundland Regulation 1996
Income Tax Remission Order
Under the authority of section 19 of the Financial Administration Act and the Subordinate Legislation Revision and Consolidation Act, the Lieutenant‑Governor in Council makes the following Order.
1. Short title
4. Incremental taxable income
5. Conditions on remission
1. This Order may be cited as the Corporate Income Tax Remission Order Hibernia Development Project.
2. (1) In this Order
(a) "Accord Act" means the Canada‑Newfoundland Atlantic Accord Implementation Newfoundland Act;
(b) "applicable rate" means the rate expressed as a percentage of taxable income that is applied to determine the tax payable by a large corporation under a provincial tax Act in respect of taxable income derived from an active business;
(c) "applicant" means an eligible corporation that makes an application to the minister for a remission of taxes payable under the Newfoundland Act;
(d) "board" means the Canada‑Newfoundland Offshore Petroleum Board established by the Accord Act;
(e) "Corporate Income Tax Agreement" means the agreement entitled Hibernia Development Project Corporate Income Tax Agreement entered into by the province and the project owners providing for the allocation of taxable income derived by the project owners from the project, as amended;
(f) "development plan" means the Hibernia Development Plan as approved by the board in its decision 86‑01 including all conditions and sub‑plans provided for and orders made by the board including all amendments;
(g) "eligible corporation" means a corporation that has entered into the Corporate Income Tax Agreement and whose obligations and liabilities under the Corporate Income Tax Agreement have not terminated, whether in accordance with the agreement, by default or otherwise;
(h) "federal tax Act" means the Income Tax Act (
(i) "joint account" means the account showing the charges paid and credits received as a result of operations conducted for the project and which are shared by the project owners in accordance with their working interests in the project;
(j) "large corporation" means a corporation other than a Canadian‑controlled private corporation;
(k) "minister" means the minister appointed under the Executive Council Act to administer the Accord Act;
(l) "national average rate" for a taxation year means the arithmetic mean of the provincial rates for the year;
(m) "Newfoundland Act" means the Income Tax Act (
(n) "offshore area" has the meaning assigned by section 2 of the Accord Act;
(o) "production licence" means the production licence dated March 21, 1990 numbered 1001 and issued by the board to the project owners, and includes all replacements of, substitutions for and amendments and successors to that licence;
(p) "project" means the Resource Project and the Tanker Project collectively;
(q) "project owner" means a person who has a working interest in the production licence;
(r) "provincial rate" for a taxation year means the applicable rate for the taxation year under a provincial tax Act, and, where more than one rate applied under a provincial tax Act during the taxation year, the provincial rate shall be the aggregate of the proportions of each rate that applied during the taxation year that the number of days during which each rate applied is to the number of days in the taxation year;
(s) "provincial tax Act" means all or any of the following as the context requires:
(i) in the case of
(ii) in the case of
(iii) in the case of
(iv) in the case of
(v) in the case of
(vi) in the case of
(vii) in the case of
(viii) in the case of
(ix) in the case of
(x) in the case of
(xi) in the case of a province admitted into
(t) "resource project" means that portion of the development project described in the development plan involved in the production of oil to the point, but not beyond, where oil is loaded into marine tankers;
(u) "tanker project" means that portion of the development project described in the development plan involved in the transportation of oil from where oil is loaded for transport into a marine tanker to where the marine tanker is moored to discharge oil;
(v) "taxable income earned in the year in the province" means the taxable income earned in the province for the purposes of the Newfoundland Act; and
(w) "working interest" has the meaning assigned by section 162 of the Accord Act.
(2) A reference in this order to a provision of a provincial tax Act, the Newfoundland Act or the federal tax Act for the purpose of making a calculation under this Order shall be taken to be a reference to that provision, as it reads at the time for making that calculation.
(3) All words and expressions in this Order shall have the same meaning as in the federal tax Act.
3. (1) Remission is granted to an applicant in
respect of a taxation year ending after
(2) The amount of the remission shall be the amount by which the tax payable by the applicant under the Newfoundland Act in respect of its incremental taxable income for the year exceeds the tax that would be payable by the applicant under the Newfoundland Act in respect of its incremental taxable income for the year, if the provincial rate for the year under the Newfoundland Act was the national average rate.
Incremental taxable income
4. For the purpose of section 3, the incremental taxable income of an applicant for a taxation year is the amount by which the applicant's taxable income earned in the year in the province exceeds the amount that would be the applicant's taxable income earned in the year in the province if
(a) the gross revenue of the applicant derived from the sale of oil produced from the project was not attributable to a permanent establishment in the province;
(b) the salaries and wages of the employees of the applicant that are charged to the joint account were not salaries and wages of employees of a permanent establishment of the applicant in the province; and
(c) no part of the taxable income of the applicant that might reasonably be considered to have arisen from that part of the business of the applicant that is in respect of the tanker project was included in the applicant's taxable income earned in the year in the province.
Conditions on remission
5. (1) The remission of tax under this Order is subject to the following conditions:
(a) an applicant is not entitled to a remission of tax under this Order in respect of a taxation year unless an application for remission is made in writing to the minister within 90 days of the date of mailing of a notice of assessment of the tax payable by the applicant for the year under the Newfoundland Act;
(b) each application for remission of tax under this Order shall be made in writing to the minister and shall be accompanied by a copy of the applicant's return of income under the federal tax Act and a copy of the assessment of taxes payable by the applicant for the year;
(c) an applicant that is in default of its obligations to the province under the Corporate Income Tax Agreement in respect of a taxation year will not be entitled to a remission of tax under this Order for a year;
(d) if, as a result of a reassessment under the Newfoundland Act in respect of a taxation year or for another reason it is determined that the amount paid to an applicant exceeds the amount to which the applicant is entitled under this Order, the applicant shall immediately pay to the province the amount of the excess plus interest from the date of the determination of the overpayment until the date of payment, calculated in the manner and at the rate determined in accordance with section 19 of the Newfoundland Act.
(2) Subsection (1) applies notwithstanding section 3.
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