Bill 43 (Legislature 11, Session 5)

L11 S5 6840

Alberta — Bills

Bill No. 43 of 1952. A BILL TO AMEND THE ALBERTA CORPORATION INCOME TAX ACT, 1949. NOTE. This Bill amends The Alberta Corporation InCOl1W Tax Act, 19.~9, being

chapter 6 of the Statutes of Alberta, 1949. The provisions of the above Act are applicable to the 1949 and subsequent taxation years for the duration of the Dominion-Provincial tax agreement. Under the agreement this. A,ct and the corresponding Dominion Act are being jointly administered. The changes contained in this Bill are based on corresponding changes made to the Dominion Act and are designed to maintain uniformity between the Dominion and the Provincial legislation relating to this subject. A new

section 8 is added immediately after

section 7. This new

section deals with certain reserves which are to be included in computing the income of a bank.

Section 8 is applicable to the 1949 and subsequent taxation years.

Section 10 which deals with deductions allowed in comput ing income is amended. A new clause (ca) is added to sub section (1) and the present clause (n of subsection (1) is struck out and a new clause (

f) substituted in its stead. Two new subsections are also added. Subsection (5) pro vides that one-half the fees paid to an investment counsel may be deducted from the corporation's income. The new subsection (6) defines the term "investment counsel". Sub sections (5) and (6) are applicable to the 1949 and sub sequent taxation years and subject to this the

section is applicable to the 1951 and subsequent taxation years. A new subsection (4b) is added to

section 11 which deals with deductions allowed to corporations in petroleum or natural gas business. Two new subsections are added to

section 13. The new subsection (3) deals with the case where the chief source of income is not farming. The new subsection (4) defines the term "farming loss" for the purposes of subsection (3). This

section is applicable to the 1949 and subsequent taxa tion years.

Section 18 is amended by the addition of a new subsection. This

section deals with interest on overdue loans and the ~ew subsection provides that subsection (1) shall not apply In certain cases. This

section is applicable to the 1951 and subsequent taxation years.

Section 22 which deals with dividends from exempted corporations is amended by striking out clause (

d) of sub section (1) and by substituting a nQ,W clause. The new clause (

d) is applicable to the 1951 and subsequent taxation years.

Section 26, subsection (1) which deals with averaging for farmers and fishermen is amended.

Section 28 which deals with deductions of oil companies for testing or for deep test wells is amended by the addition of a new subsection (3). A new subsection (40;), applicable to the 1950 and sub sequent taxation years, is added to

section 32 relating to rules of assessment.

Section 34 is amended by striking out subsection (2) and by substituting a new subsection. This

section is applicable to the 1951 and subsequent taxation years.

Section 37 which provides for the payment of interest on unpaid taxes is amended by striking out subsection (3) and substituting a new subsection (3). This se~tion is applic able to the 1951 and subsequent taxation years.

Section 39 dealing with refunds of overpayments is amended by striking out subsections (1) and (3) and by substituting new subsections in their stead. These amend ments apply in respect of applications for refunds made after the 1st of May, 1951. The new subsection (1) of

section 39 is applicable 11udatis rnutand1~s to applications for re funds made under The Alberta Corporation Income Tax Act after the 1st of May, 1951, and the new subsection (3) applies in respect of overpayments of tax for the 1950 and subsequent taxation years.

Section 43 which deals with exemptions for personal corporations is amended by striking clause (cb) of sub section (1), clause (

b) of subsection (3) and substituting new clauses in their stead and by adding a new subsection (4). This

section is applicable to the 1950 and subsequent taxation years.

Section 47 relating to foreign business corporations is amended by adding a new subsection (4). This

section is applicable to the 1949 and subsequent taxation years. ·Sectio~ 54. is amended by striking out subsection (1) and by substItutIng a new subsection in its stead. The effect of the amendment is that consolidated returns must be filed before December 1st, 1951. Two new subsections are also added to

section 54. The new subsections (12) and (13) apply to the 1952 and subsequent taxation years. .

Section 59 dealing with garnishment is amended by strik ~ng out subsection (1) and substituting a new subsection in Its stead.

iii Subsection (1) of

section 71 is struck out and replaced by a new subsection (1) dealing with the laying of an in formation or a complaint.

Section 73 which is the

interpretation

section for

Part IV of the Act is amended by striking out clause (aa) and by substituting a new :clause (aa) defining the terms "sub sidiary wholly-owned corporation" and "subsidiary con trolled corporation". This

section is applicable to the 1949 and subsequent taxation years. Two new subsections (3) and (4) are added to

section 74 relating to references to The Alberta Co'rpora,tion Income Tax Act and The Alberta Corporation Income Tax Act, 19J,.9. This amendment is retroactive to the 30th of June,

Section 80 is amended. This amendment is for the purpose of curing a defect in form. The amendment has the effect of making the- Act applicable to the 1951 portion of taxation years ending in 1952 and provides for the continuation of the Act after January 1st of 1952 for all purposes, includ ing the collection of outstanding tax arrears. Except where special provision has been made as to the coming into force of the amendments contained in this Bill they ,come into force upon assent. J. W. RYAN, Acting Legislative Counsel. (This note does not form any part of the Bill but is offet'ed in explanation of its provisions.)

BILL No. 43 of 1952.

An Act to amend The Alberta Corporation Income Tax Act, 1949. (Assented to , 1952.) HER MAJESTY, by and with the advice and consent of the Legislative Assembly of the Province of Alberta, enacts as follows: 1. The Alberta Corporation Inc01ne Tax Act, 1[).~9, being

chapter 6 of the Statutes of Alberta, 1949, is hereby amended. 2.

(1) The following new

section 8 is added immediately Ner 8 after

section 7: sec IOn "8.

There shall be included, in computing the income for Certain a taxation year of a bank to which 'The Bank Act' or 'Quebec I~~l~rx:~ in Savings Bank Act' applies, the amount by which the aggre- r~~~~:ing gate of the amounts that, at the end of the year, are set aside or reserved by way of write-down of the value of assets or appropriation to contingency reserves or conting- ent accounts for the purpose of meeting losses on loans, bad or doubtful debts, depreciation in the value of assets other than bank premises, or other contingencies, is, in the opinion of the Provincial Treasurer, having regard to all the circum- stances, in excess of the reasonable requirements of the bank.".

(2) This

section is applicable to the 1949 and subsequent Application taxation years. 3.

(1) Section 10 is amended,- ~~{:;~d~ctO (

a) by adding immediately after clause (

c) of subsec- tion (1) the following new ,clause: " (ca) such part of a payment, "(

i) repaying borrowed money used for the purpose DeductiollS . . b . t allowed of earnIng Income from a USlness or proper Y (other than property the income from which would be exempt), or "(ii) for property acquired for the purpose of gain ing or producing income therefrom or for the purpose of gaining or producing income from a business (other than property the income from which would be exempt), . made by the corporation in the year as i.s by sectlOn 6 required to be included in computIng the re cipient's income for a taxation year;";

Employer's contribution to pension funds One-half fees paid to investment counsel "investment counsel" Application Sectio)l 11 amended

Section 13 amended If chief source of income not farming, etc. - 2 (

b) by striking out clause (/) of subsection (1) and by substituting the following: "(

I) an amount not exceeding nine hundred dollars paid by the corporation in the year Or within sixty days from the end of the year to or under an approved superannuation fund or plan in respect of services rendered by each employee, officer or director of the corporation in the year plus such amount as may be de ducted as a special contribution under

section 52;"; (

c) by adding immediately after subsection ( 4) the following new subsections: "

(5) N otwithstandingclauses (

a) and (

b) of subsection (1) of

section 12, there may be deducted, in computing a corporation's income from shares or securities for a taxation year, one-half the fees paid by it in the year to an investment counsel for advice as to the advisability of purchasing or selling specific shares or securities. "

(6) For the purpose of subsection (5), 'invest ment counsel' means a person whose principal business is advising others as to the advisability of purcbasing or selling specific shares or securities.".

(2) Subsectjons (5) and (6) of

section 10, as enacterl by clause (

c) of this section, are applicable to the 1949 and subseouent taxation years and, subject thereto. this

section is applicable to the 1951 and subsequent taxation years.

Section 11. is amended by adding immediately after subsection (40) the following new subsection: "( 4b) Subsection (4) is applicable mutatis mutandis, in resoect of expenditures made in ,connection with,- " (

a) the testing of a significant geological structure b~r a deep test oil well that was spudded in duril1g~ or the deepening of which was commenced in, 1952 and that proved unproductive; or "(

b) the testing of a significant stratigraphic trap by a group of test weIJs that were spudded in during 1952 and drilled to an aggregate depth of twenty five thousand feet and all of which wells proved un productive." . p.

(1) Section 13 is amended by adding immediat.ely after subsection (2) the following new subsections: "

(3) Where a corporation's chief source of in~ome for a !axation year is neither farming nor a combination of farm mg and some other source of income, its income for the year shall be deemed to be not less than its income from all ~ources ot?er than farming (after application of the rule In subsectIon (1) minus the lesser of,- "(

a) one-half its farming loss for the year ;or " (

b) five thousand dollars.

3 "

(4) For the purpose of subsection (3), a 'farming loss' is a loss from farming computed by applying the provisions of this Act respecting computation of income from a busi ness mutatis mutandis except t?at no dedu,ction may be made under clause (

a) of subsectIOn (1) of

section 10.".

(2) This

section is applicable to the 1949 and subsequent Application taxation years. 6.

(1) Section 18 is amended,- (

a) by renumbering the

section as subsection (1); (

b) by adding immediately after subsection (1) the following new subsection:

Section 18 amended "(2) Subsection (1) does not apply if the loan When was made to a subsidiary controlled corporation Clubseetion and. it is established that the money that was loaned ~~~l~~tble was used in the subsidiary corporation's business for the purpose of gaining or producing income.".

(2) This

section is applicable to the 1951 and subsequent Application taxation years.

Section 22, subsection (1) is amended by striking out

Section 22 clause (

d) and by substituting the following: n,mended "Cd) was a non-resident corporation more than twenty five per cent of the issued share capital of which (having full voting rights under all circumstances) belonged to the receiving corporation ;". (2) Subsection (1) is applicable to the 1951 and sub- Application sequent taxation years.

Section 26 is amended by striking out all that portion

Section 26 of subsection (1) preceding clause (

a) and by substItuting amended the following: "26.

(1) Where a corporation's chief source of income Av'?r l.glng has been farming or fishing during a taxation year (in this ford farmers

section referred to as the 'year of averaging') and the four ft~ht'rJl1en immediately preceding years (in this

section referred to as the 'preceding years') and the corporation has filed returns of income for the preceding years as required by this Act, if the corporation, on or before the day on or before which it was required to file its return of income for the year of averaging, files with the Provincial Treasurer an election in prescribed form, the tax payable under this Act for the year of averaging is an amount determined by the follow- ing rules,-".

Section 28 is amended by adding immediately after

Section .28 subsection (2) the following new subsection: amende<1 "(3) Subsection (1) is applicable mutatis mutandis, in respect of expenditures made in connection with,- " (

a) the testing of a significant geological structure by a deep test oil well that was spudded in during, or the deepening of which was conlmenced in, 1952 and that proved unproductive; or

S('diol1 32 amended Rules of assessn:flH Application ~,ec:tion 34 a;nended Special case Application

Section 37 amended Special case Application

Section 39 amended Refund of over payment "(b) 4 the testing of a significant stratigraphic trap by a group of test wells that were spudded in during 1952 and drilled to an aggregate depth of twenty five thousand feet and all of which wells proved un- d t · " . pro uc Ive .. 10.

(1) Section 32 is amended by adding immediately after subsection (4) the following new subsection: "(4a) vVhere a corporation has filed the return of in come required by

section 30 for a taxation year and, within one year from the day on or before which it was required by

section 30 to file the return !o~ that year, .has filed ~n amended return for the year claImIng a deductIOn from In come under clause (

b) of

section 21 in respect of a business loss sustained in the taxation year immediately following that year, the Provincial Treasurer shall re-assess the corporation's tax for the year.".

(2) This

section is applicable to the 1950 and subsequent taxation years. 11.

(1) Section 34 is amended by striking out subsection (2) and by substituting the following: "

(2) Where a corporation has held forth the prospect that it will make allocations in proportion to patronage to its customers of a taxation year as des,cribed by

section 51 and its taxable income for the year is estimated by it to be not more than ten thousand dollars, it may, instead of paying the instalments required by subsection (1), pay to the .Pro vincial Treasurer, at the end of the twelve months' period referred to in subsection (1), the whole of the tax as estimated under

section 31.".

(2) This

section is applicable to the 1951 and subsequent taxation years. 12.

(1) Section 37 is amended by striking out subsection (3) and by substituting the following: "

(3) In addition to the interest payable under subsection (1), where a corporation that paid tax under subsection (2) of

section 34 had a taxable income for the taxation year of more than ten thousand dollars, it shall, forthwith after assessment, pay an amount equal to three per cent of the tax payable.".

(2) This

section is applicable to the 1951 and subsequent t~xation years. 13.

(1) Section 39 is amended,- (

a) by striking out subsection (1) and by substituting the following: "39.

(1) If the return of a corporation's income for a taxation year has been made within two years from the end of the year, the Provincial Treasurer,~

5 "(

a) may, upon mailing the notice of assessment for the year, refund, without application therefor, any overpayment made on account of the tax; and " (

b) shall make such a refund after mailing the notice of assessment if application therefor has been made in writing by the corporation within twelve months from the day on which the overpayment was made or the day on which the notice of assessment was sent."; (

b) by striking out subsection (3) and by substituting the following: "

(3) Where an amount in respect of an overpay- Interest on ment is refunded, or applied under this

section on ~~~~cnt other liability, interest at the rate of two per cent pel' annum shall be paid or applied thereon for the period commencing with the latest of,- " (

a) the day when the overpayment arose; "(

b) the day on or before which the return of the income in respect of which the tax was paid was required to be filed; or " (

c) the day when the return of inconle was actually filed; and ending with the day of refunding or application aforesaid, unless the amount of the interest so cal culated is less than one dollar, in which event no interest shall be paid or applied under this sub section." . (2) Subsection (1) is applicable in respe,ct of applica- Application tions for refunds made after the first day of May, 1951. (3) Subsection (1) of

section 39 of The Alberta CorpOl'a- Idem tion income Tax Act, 1949, as enacted by clause (

a) of sub section (1) is applicable mutatis mutandis to applications for refunds made under The Albel'ta COl'poratwn Income Tax Act, after the first day of May, 1951.

(4) Clause (

b) of subsection (1) is applicable in 1'e- Idem spect of overpayments of tax for the 1950 and subsequent taxation years. 14.

(1) Section 43 is amended,-

Section 43 amended (

a) by striking out clause (cb) of subsection (1) and by substituting the following: "(cb) a corporation that was constituted exclusively Non-profit f h at bl t f h . corporations or carl a e purposes, no par 0 w ose In- come was payable to, or was otherwise avail- able for the personal benefit of, any proprietor, member or shareholder thereof, that has not since June 1, 1950, acquired control of any other corporation and that, during the period,- "(

i) did not carryon any business;

(

b) Wfts (c) 6 "(ii) had no debts incurred since June 1, 1950, other than obligations arising in respect of salaries, rents and other current ex penses; and " (iii) except in the case of a corporation that was, before January 1, 1940, constituted exclusively for charitable purposes, ex pended amounts each of which is,- "(

A) an expenditure in respect of charitable activities carried on by the corpora tion itself; "(

B) a gift to an organization in Canada the income of which for the period is ex empt from tax under this Part by virtue of clause (ca); or " (

C) a gift to a corporation resident in Canada the income of which for the period is exempt from tax under this Part by virtue of this clause; a~d the aggregate of which is not less than ninety per cent of the corporation's income for the period;"; by striking out clause (

b) of subsection (3) and by substituting the following: " (

b) there shall be included in computing a corpora tion's or trust's income all gifts received by the corporation or trust other than,- "(

i) a gift received subject to a trust or direc tion that the property given, or property substituted therefor, is to be held per manently by the corporation or trust for the purpose of gaining or producing in come therefrom; or "(ii) a gift or a portion of a gift in respect of which it is established that the donor has not been allowed a deduction under clause (

a) of

section 21 or a gift made by a per son who was not taxable under

section 2 for the taxation year in which the gift was made"; by adding immediately after subsection (3) the following new subsection: "

(4) In computing the income of a corporation for the purpose of determining whether it is de scribed by clause (cb) of subsection (1) for a taxation year,~ "(

a) there may be deducted an amount not exceed ing its income for the year preceding the taxa tion year computed without including or de ducting any amount under this subsection; and

7 " (

b) there shall be .in,cl uded any amount that has been deducted under this subsection for the immediately preceding taxation year.".

(2) This

section is applicable to the 1950 and subsequent Application taxation years. 15.

(1) Section 47 is .amended by adding immediately Sectiodn ~7 after subsection (3) the following new subsection: amen e "( 4) Where a corporation would have complied, during the whole of a taxation year, with the condition contained in subclause (

i) of clause (

c) of subsection (2) were it not that its business operations during the taxation year were carried on in

part in Canada through ownership of shares in or ,control of one or more subsidiary or affiliated corpora tions, the corporation shall be deemed to have complied with that condition if, during the whole of the taxation year,- "(

a) the business operations so carried on in Canada were of a mining nature; and "(

b) its main business operations were of an industrial, mining,commercial, public utility or public service nature and were, except for management and the designing, purchasing, and transportation of goods, carried on outside Canada.".

(2) This

section is applicable to the 1949 and subsequent Application taxation years. 16.

(1) Section 54 is amended,-

Section 54 ~mended (

a) by striking- out subsection (1) and by substituting the following: "54.

(1) A corporation that is resident in Can- ~l~ht to ada may elect in respect of taxation years endinO' consolidated b . h O return on or before December 31, 1951, y notIce to t e Provincial Treasurer in prescribed manner to file a return in which its taxable income is consolidated with the taxable income of all its subsidiary wholly owned corporations resident in Canada, carrying on the same general class of business as itself and hav- ing the same taxation year as itself."; (

b) by adding immediately after subsection (11) the following new subsections: "

(12) Where a loss sustained by a corporation in a taxation year has been included in computing the consolidated taxable income under this section, the amount thereof shall, for the purposes of clause (

b) of

section 21, be deemed to have been deducted under that clause in the year in which it was so in cluded. "

(13) Where a loss sustained by a corporation in Idem a taxation year has been included in computing the consolidated loss under this section, the amount thereof shall, for the purposes of clause (

b) of

section 21 be deemed to have been deducted under

Application

Section 59 amended Garnishment

Section 71 amended Informa tion or complaint

Section 73 amended "subsidiary wholly owned cOl'poratiou" "subsitliary wntrolled corporation" Application

Section 74 amended 8 that clause in the year in which it was so included to the extent that it may reasonably be regarded as having operated to reduce the consolidated taxable income for that or another year.". (2) Subsections (12) and (13) of

section 54 as enacted by clause (

b) of this

section are applicable to the 1952 and subsequent taxation years.

Section 59 is amended by striking out subsection (1) and by substituting the following: "59.

(1) When the Provincial Treasurer has knowledge or suspects that a person is or is about to become indebted or liable to make any payment to a corporation liable to make a payment under this Act, he may. by registered letter or by a Jetter served personally, require him to pay the moneys otherwise payable to that corporation in whole or in part to the Provincial Treasurer on account of the liabil ity under this Act.".

Section 71 is amended by striking out subsection (1) and by substituting the following: "71.

(1) An information or complaint under this Art may be laid or made by any officer of the Department of the Provincial Treasurer, by a member of the Royal Canadian Mounted Police or by any person thereunto authodzed by the Provincial Treasurer and, where an information or complaint purports to have been laid or made under this Act, it shall be deemed to have been laid or made by a person thereunto authorized by the Provincial Treasurer and shall not be called in question for lack of authority of ·the informant or complainant except by the Provincial Treasurer or by some person acting for him or His Majesty.". 19.

(1) Section 73. subsection (1) is amended by strik ing out clause (aa) and by substituting the following: "(aa) 'subsidiary wholly-owned corporation' means a corporation all the issued share capital of which (except directors' qualifying shares) belong'S to the corporation to which it is subsidiary and 'subsidiary controlled corporation' means a corporation more than fifty per cent of the issued share capital of which (having full voting rights under all circum stances) belongs to the corporation to which it is subsidiary;".

(2) This

section is applicable to the 1949 and subsequent taxation years. 20.

(1) Section 74 is amended by adding immediately after subsection (2) the following new subsections:

9 "

(3) A reflert~nce indan y 0dther stattuhte Or in any rule, ~e~,!:nces order or regu a IOn rna e un er any 0 er statute to The Alberta Alberta porporation Inc~me .Tax Ac~, shall, a~ regards any f:i~g1~~a¥~; transactIOn, matter or thIng In a perIOd to whIch this Act is Act, applicable, be construed to be a reference to this Act. ~~f~~r~~~~t "

(4) A reference in any other statute or in any rule order or regulation made under any other statute to any provision in The Alberta Corporation Income Tax Act, shall, as regards any transaction, matter or thing in a period to which this Act is applicable, be construed to be,- " (

a) if there is a provision in this Act relating to the same subject-matter, a reference to that provision; and " (

b) in any other case, a reference to the provision in The Alberta Corporat'ion Income Tax Act, referred to.".

(2) This

section shall be deemed to have come into force Corning on January 1, 1949. into force 21.

(1) Section 80 is struck out and the following is

Section 80 substituted: amended "80. This Act is not applicable to a taxation year ending Expiration after the thirtieth day of December, 1952.". of Act

(2) The said Act shall be deemed not have expired on the first day of January, 1952, and shall be deemed to continue in force and to have continued in force at all times subsequent to the thirty-first day of December, 1951. 22. This Act shall come into force on the day upon which ~oming it is assented to. Jr,to force

No. 43. FIFTH SESSION ELEVENTH LEGISLATURE 1 Elizabeth II 1952 BILL

An Act to amend The Alberta Corporation Income Tax Act, 1949. Recei ved and read the First time ." Second time ..... . Third time ...... . RON. MR. MANNING. Title: 1952 (11th, 5th) Bill 43,

An Act to amend The Alberta Corporation Income Tax Act, 1949

Document details

Collection	Alberta — Bills
Citation	L11 S5 6840
Type	bill
Volume / chapter	L11 S5 6840
Language	en
Format	json
Source	PROVINCIAL
Identifier	0ebd498704a0291d9ece94a143d16e143eb0f1d2

Source file is stored in the law ingest library (json).