Taxation Amendment Act, 2012 Duncan, Hon. Dwight Minister of Finance — Bill 114 (40th Parliament, 1st Session)

Bill 114, 40-1

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Bill 114, Taxation Amendment Act, 2012

Duncan, Hon. Dwight Minister of Finance

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Royal Assent

[40] Bill 114 Royal Assent (PDF)

Bill 114 2012

Act to amend the Taxation Act, 2007

Note:

This Act amends the Taxation

Act, 2007 . For the legislative history of the Act, see the Table

of Consolidated Public Statutes – Detailed Legislative History at

www.e-Laws.gov.on.ca.

Her

Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

(1) The

definition of "highest tax rate" in subsection 3 (1) of the Taxation Act, 2007

is repealed and the following substituted:

"highest tax rate" means,

(a) 12.16

per cent in respect of taxation years ending after December 31, 2011 and before

January 1, 2013, and

(b) 13.16

per cent in respect of taxation years ending after December 31, 2012; ("taux

d'imposition le plus élevé")

(2) Subsection 3 (1) of the Act is amended by adding the

following definition:

"upper middle tax rate" means 11.16 per cent. ("taux d'imposition moyen

supérieur")

2. Subsection

6 (1) of the Act is repealed and the following substituted:

Basic

personal income tax, 2012 and subsequent years

(1) The basic personal income tax for a taxation year of

an individual ending after December 31, 2011 is the amount determined under the

following rules:

1. If

the individual's tax base for the year does not exceed $39,020, the amount of

tax payable by the individual is calculated by multiplying the individual's tax

base for the year by the lowest tax rate for the year.

2. If

the individual's tax base for the year exceeds $39,020, but does not exceed

$78,043, the amount of tax payable by the individual is calculated using the

formula,

+ B

in which,

"A" is the amount calculated by multiplying $39,020 by the

lowest tax rate for the year, and

"B" is the amount calculated by multiplying the amount by

which the individual's tax base for the year exceeds $39,020 by the middle tax

rate for the year.

3. If

the individual's tax base for the year exceeds $78,043, but does not exceed $500,000,

the amount of tax payable by the individual is calculated using the formula,

+ C + D

in which,

"A" is the amount calculated by multiplying $39,020 by the lowest

tax rate for the year,

"C" is the amount calculated by multiplying $39,023 by the

middle tax rate for the year, and

"D" is the amount calculated by multiplying the amount by

which the individual's tax base for the year exceeds $78,043 by the upper middle

tax rate for the year.

4. If

the individual's tax base for the year exceeds $500,000, the amount of tax

payable by the individual is calculated using the formula,

+ C + E + F

in which,

"A" is the amount calculated by multiplying $39,020 by the lowest

tax rate for the year,

"C" is the amount calculated by multiplying $39,023 by the

middle tax rate for the year,

"E" is the amount calculated by multiplying $421,957 by the

upper middle tax rate for the year, and

"F" is the amount calculated by multiplying the amount by

which the individual's tax base for the year exceeds $500,000 by the highest

tax rate for the year.

3. The

definition of "II" in subsection 9 (21) of the Act is repealed and the

following substituted:

"II" is 11.16 per cent, and

4. The

definition of "A" in

section 14 of the Act is repealed and the following

substituted:

"A" is 11.16 per cent,

5. Paragraph

1 of subsection 23 (1) of the Act is repealed and the following substituted:

1. Subsection

6 (1) with respect to taxation years ending after December 31, 2012.

6. Clauses

29 (2) (c), (

d) and (

e) of the Act are repealed and the following substituted:

(c) 11.5

per cent multiplied by the ratio of the number of days in the taxation year

that are after June 30, 2011 to the total number of days in the taxation year.

7. Clauses

31 (4) (c), (

d) and (

e) of the Act are repealed and the following substituted:

(c) 7

per cent multiplied by the ratio of the number of days in the taxation year

that are after June 30, 2011 to the total number of days in the taxation year.

8. (1) Subsection

33 (1) of the Act is amended by striking out "ending before July 1, 2013" in

the portion before the formula.

(2) Clauses (

b) and (

c) of the definition of "X" in

subsection 33 (1) of the Act are repealed and the following substituted:

(b) 0.015

multiplied by the ratio of the number of days in the taxation year that are

after June 30, 2011 to the total number of days in the taxation year.

Commencement

(1) Subject

to subsections (2) and (3), this Act comes into force on the day it receives

Royal Assent.

(2) Sections 1, 2, 3, 4 and 5 are deemed to have come into

force on January 1, 2012.

(3) Sections 6, 7 and 8 come into force on July 1, 2012.

Short

title

10. The

short title of this Act is the Taxation Amendment Act, 2012 .

EXPLANATORY NOTE

This Explanatory Note was written as a

reader's aid to Bill 114 and does not form part of the law. Bill 114 has been

enacted as

Chapter 9 of the Statutes of Ontario, 2012.

The

Bill amends the Taxation

Act, 2007 to implement a new personal income tax rate, to make

changes to the basic rate of corporate income tax and to make related

consequential amendments.

Personal

income tax rate

individual's basic personal income tax for a taxation year is determined under

section 6 of the Act. Currently, the "highest tax rate" is 11.16 per cent and

it applies to an individual's taxable income that exceeds $73,698 (subject to

adjustment for inflation under

section 23). Subsection 6 (1) is re-enacted to

provide for a new tax rate that applies to an individual's taxable income that

exceeds $500,000. The new tax rate is 12.16 per cent for taxation years ending

in 2012 and 13.16 per cent for taxation years ending after 2012. To accomplish

this, a new definition of "upper middle tax rate" is added to subsection 3

(1) and the definition of "highest tax rate" in that subsection is amended. The

changes to the definition of "highest tax rate" also affect the tax rate that

applies to inter vivos trusts under subsection 7 (1), the tax rate that applies

to split income under

section 12 and the Ontario capital gains refund for

mutual fund trusts under

section 105.

amendment is made to subsection 9 (21) of the Act to provide that the tax

credit for charitable donations over $200 continues to be calculated after

December 31, 2011 at the rate of 11.16 per cent. A similar amendment is made

section 14 in connection with the overseas employment tax credit.

Section

23 of the Act is amended to provide that the dollar amounts referred to in

subsection 6 (1) as re-enacted, including the new $500,000 threshold, are

adjusted for inflation for taxation years ending after 2012.

Corporate

income tax rate

corporation's basic rate of income tax is set out in subsection 29 (2) of the

Act. Currently, the basic rate of corporate tax is 11.5 per cent for the days

in a taxation year after June 30, 2011 and before July 1, 2012, 11 per cent for

the days in a taxation year after June 30, 2012 and before July 1, 2013, and 10

per cent for the days in a taxation year after June 30, 2013. Amendments are

made to change the basic rate of corporate income tax to 11.5 per cent for the

days in a taxation year after June 30, 2011.

Consequential

amendments are made to

section 31 of the Act with respect to the Ontario small business deduction and to

section 33 with respect to the tax credit for

manufacturing, processing and other activities.

Date Bill stage Activity Committee

June 20, 2012

Royal Assent

Royal Assent received

June 20, 2012

Third Reading

Carried on division

June 20, 2012

Ordered for Third Reading pursuant to the Order of the House

June 20, 2012

Second Reading

Carried on division

June 20, 2012

Ordered for Second Reading pursuant to the Order of the House

June 20, 2012

First Reading

Carried on division

May 31, 2012

Motion to arrange proceedings

Debates and Progress

First Reading

Motion to Arrange Proceedings

May 31, 2012

June 20, 2012

Carried on recorded division. Ordered for second reading pursuant to the Order of the House dated May 31, 2012.

Committee

Second Reading

June 20, 2012

Carried on recorded division. Ordered for third reading pursuant to the Order of the House dated May 31, 2012.

Committee

Third Reading

June 20, 2012

Carried on recorded division.

Royal Assent

6/20/2012

Acts affected - Bill 114

Most Ontario public acts are available electronically; to view copies of the Acts to be amended by this bill visit e-laws

Taxation Act, 2007

Legislative Assembly of Ontario

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Document details

Collection	Ontario — Bills
Citation	Bill 114, 40-1
Type	bill
Volume / chapter	p40 s1 bill 114 html
Language	en
Format	html
Source	PROVINCIAL
Identifier	11c6cbf0056f0d5d75958e140b41ffedc9b4d4ed

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