Taxpayer Dividend Act, 2000 Eves, Hon. Ernie Minister of Finance — Bill 72 (37th Parliament, 1st Session)

Bill 72, 37-1

Ontario — Bills

role="main" class="main-container container js-quickedit-main-content" id="main-content">

Bill 72, Taxpayer Dividend Act, 2000

Eves, Hon. Ernie Minister of Finance

Please select

View bill

Status

Debates

Original

As Amended by Standing Committee

Royal Assent

[37] Bill 72 Royal Assent (PDF)

Bill 72

Bill 722000

An Act to pay a dividend

to Ontario taxpayers, cut taxes,

create jobs and implement the Budget

Her Majesty, by and with the advice and consent of the Legislative

Assembly of the Province of Ontario, enacts as follows:

Part I

Corporations Tax Act

1.(1)Subsection 11 (5) of the Corporations Tax Act , as

re-enacted by the Statutes of Ontario, 1998,

chapter 34,

section 28, is

repealed and the following substituted:

Add-back of certain amounts paid to non-residents

(5)Every corporation shall include in its income from a business or

property for a taxation year the amount calculated using the formula,

A B

in which, "

A"is the designated fraction of the corporation for the taxation year, as

determined under subsection (8.1), and "

B"is the total of the amounts described in subsection (5.1) deducted by

the corporation in computing its income for the taxation year, each of which

is paid or payable to,

(a)a non-resident person who, at any time in the corporation's taxation

year, did not deal at arm's length with the corporation, or

(b)a non-resident owned investment corporation which, at any time in the

corporation's taxation year, did not deal at arm's length with the

corporation.

(2)Subsection 11 (5.4) of the Act, as enacted by the Statutes of

Ontario, 1998,

chapter 34,

section 28, is repealed and the following

substituted:

Adjustment for unpaid amounts

(5.4)In computing its income for a taxation year, a corporation may deduct

the amount calculated using the formula,

A B

in which, "

A"is the designated fraction of the corporation for the taxation year, as

determined under subsection (8.1), and "

B"is any amount required to be included in the corporation's income for

the taxation year under

section 78 of the Income Tax Act (Canada),

if the amount is included in the calculation of an amount included in the

corporation's taxable income under subsection (5) or (6) for the taxation

year or a prior taxation year.

(3)Subsection 11 (6) of the Act is repealed and the following

substituted:

Certain payments to non-resident persons

(6)Subsection (6.1) applies,

(a)if an amount to which subsection (5) would have applied in a taxation

year if it had been paid or payable to a non-resident person is paid or

payable by a corporation (the "payer") to a related person (the "payee")

resident in Canada but not in Ontario, and

(b)if the payee is related to another person not resident in Canada that

controls the payer.

Same

(6.1)In the circumstances described in subsection (6), the corporation

that is the payer shall include in computing its income from a business or

property for the taxation year the amount calculated using the formula,

A B

in which, "

A"is the designated fraction of the corporation that is the payer, as

determined under subsection (8.1), and "

B"is the amount referred to in subsection (6) for the taxation year.

(4)Section 11 of the Act, as amended by the Statutes of Ontario,

1992,

chapter 3,

section 2, 1994,

chapter 14,

section 4, 1996,

chapter 29,

section 37, 1997,

chapter 43,

Schedule A,

section 5, 1998,

chapter 34,

section 28 and 1999,

chapter 9,

section 75, is further amended by adding the

following subsections:

Designated fraction of a corporation

(8.1)The designated fraction of a corporation for a taxation year is the

total of,

(a)5/15.5 multiplied by the ratio of the number of days in the taxation

year before May 2, 2000 to the total number of days in the taxation year;

(b)5/14.5 multiplied by the ratio of the number of days in the taxation

year after May 1, 2000 and before January 1, 2001 to the total number of days

in the taxation year; and

(c)5/14 multiplied by the ratio of the number of days in the taxation year

after December 31, 2000 to the total number of days in the taxation year.

. . . . .

Application provision, 2000 Budget

(28)Subsections (5), (5.4), (6), (6.1) and (8.1), as they are enacted or

re-enacted, as the case may be, by the Taxpayer Dividend Act, 2000 ,

apply with respect to taxation years ending after May 1, 2000.

2.Sections 38 and 39 of the Act are repealed and the following

substituted:

Amount of tax payable

38. (1)The tax payable by a corporation for a taxation

year under this Part on its taxable income or on its taxable income earned in

Canada, as the case may be, is the amount determined by multiplying such

amount by the specified basic rate of the corporation for the taxation

year.

Specified basic rate

(2)The specified basic rate of a corporation for a taxation year is the

total of,

(a)15.5 per cent multiplied by the ratio of the number of days in the

taxation year that are before May 2, 2000 to the number of days in the

taxation year;

(b)14.5 per cent multiplied by the ratio of the number of days in the

taxation year that are after May 1, 2000 and before January 1, 2001 to the

total number of days in the taxation year; and

(c)14 per cent multiplied by the ratio of the number of days in the

taxation year that are after December 31, 2000 to the total number of days in

the taxation year.

Application provision, 2000 Budget

(3)This section, as it is re-enacted by the Taxpayer Dividend Act,

2000 , applies with respect to taxation years ending after May 1,

Deduction from income tax

39. (1)There may be deducted from the tax otherwise

payable under this Part for a taxation year by a corporation an amount

calculated using the formula,

A B

in which, "

A"is the specified basic rate of the corporation for the taxation year, as

determined under subsection 38 (2), and "

B"is that portion of the taxable income or the taxable income earned in

Canada, as the case may be, of the corporation which is earned in the

taxation year in each jurisdiction other than Ontario, determined under rules

prescribed by the regulations.

Application provision, 2000 Budget

(2)This section, as it is re-enacted by the Taxpayer Dividend Act,

2000 , applies with respect to taxation years ending after May 1,

3.(1)Clause 40 (1) (

e) of the Act is repealed and the following

substituted:

(e)the amount calculated using the formula,

A B C

in which, "

A"is the amount of the foreign investment income, "

B"is the specified basic rate of the corporation for the taxation year, as

determined under subsection 38 (2), and "

C"is the corporation's Ontario allocation factor for the taxation

year.

(2)Section 40 of the Act, as amended by the Statutes of Ontario,

1994,

chapter 14,

section 13, is further amended by adding the following

subsection:

Application provision, 2000 Budget

(6)Clause (1) (e), as it is re-enacted by the Taxpayer Dividend Act,

2000 , applies with respect to taxation years ending after May 1,

4.(1)Clauses 41 (1.1) (d), (e), (f), (g), (h), (

i) and (

j) of the

Act, as enacted by the Statutes of Ontario, 1998,

chapter 5,

section 10, are

repealed and the following substituted:

(d)7.5 per cent, in respect of a taxation year that ends after December

31, 1999 and before January 1, 2002;

(e)8 per cent, in respect of a taxation year that ends after December 31,

2001 and before January 1, 2003;

(f)8.5 per cent, in respect of a taxation year that ends after December

31, 2002 and before January 1, 2004;

(g)9 per cent, in respect of a taxation year that ends after December 31,

2003 and before January 1, 2005;

(h)10 per cent, in respect of a taxation year that ends after December 31,

(2)Subsection 41 (1.4) of the Act, as enacted by the Statutes of

Ontario, 1998,

chapter 5,

section 10, is amended by striking out "Despite

clauses (1.1) (

d) to (j)" and substituting "Despite clauses (1.1) (

d) to

(h)".

(3)Subsection 41 (2) of the Act is repealed and the following

substituted:

Same

(2)For the purpose of subsection (1), the amount determined under this

subsection is the amount calculated using the formula,

A B

in which, "

A"is the least of the amounts determined under paragraphs 125 (1) (a), (

b) and (

c) of the Income Tax Act (Canada) for the taxation year and not

exceeding the total of the amounts described in clauses (3.2) (

a) to (f), and

B"is the Ontario small business allocation factor for the taxation

year.

(4)Section 41 of the Act, as amended by the Statutes of Ontario,

1996,

chapter 1,

Schedule B,

section 5 and 1998,

chapter 5,

section 10, is

further amended by adding the following subsections:

Application of certain federal provisions

(3.2)In applying subsections 125 (2) and (3) of the Income Tax

Act (Canada) to determine a corporation's business limit under paragraph

125 (1) (

c) of that Act for the purposes of this

section and sections 43 and

51 of this Act for a taxation year, any reference to $200,000 shall be read

as a reference to the total of,

(a)$200,000 multiplied by the ratio of the number of days in the taxation

year that are before January 1, 2001 to the total number of days in the

taxation year;

(b)$240,000 multiplied by the ratio of the number of days in the taxation

year that are after December 31, 2000 and before January 1, 2002 to the total

number of days in the taxation year;

(c)$280,000 multiplied by the ratio of the number of days in the taxation

year that are after December 31, 2001 and before January 1, 2003 to the total

number of days in the taxation year;

(d)$320,000 multiplied by the ratio of the number of days in the taxation

year that are after December 31, 2002 and before January 1, 2004 to the total

number of days in the taxation year;

(e)$360,000 multiplied by the ratio of the number of days in the taxation

year that are after December 31, 2003 and before January 1, 2005 to the total

number of days in the taxation year; and

(f)$400,000 multiplied by the ratio of the number of days in the taxation

year that are after December 31, 2004 to the total number of days in the

taxation year.

. . . . .

Application provision, 2000 Budget

(6)Clauses (1.1) (

d) to (

h) and subsections (1.4), (2) and (3.2), as they

are enacted, re-enacted or amended, as the case may be, by the Taxpayer

Dividend Act, 2000 , apply with respect to taxation years ending after

May 1, 2000.

5.(1)Clause 41.1 (1) (

b) of the Act, as re-enacted by the Statutes

of Ontario, 1994,

chapter 14,

section 15, is repealed and the following

substituted:

(b)the amount calculated using the formula,

A B C / D

in which, "

A"is the specified rate of the corporation for the taxation year, as

determined under subsection (3), "

B"is the amount, if any, by which "X" plus "Y" exceeds "Z", where "X" is

the taxable income of the corporation for the taxation year, "Y" is the

taxable income of each corporation ("associated corporation") with which the

corporation was associated at any time during the taxation year, for the last

taxation year of the associated corporation that ended on or before the last

day of the taxation year of the corporation, and "Z" is the total of the

amounts described in clauses 41 (3.2) (

a) to (f), "

C"is the amount determined by the corporation for the taxation year under

subsection 41 (2), and "

D"is the total of the amounts described in clauses 41 (3.2) (

a) to

(f).

(2)Subsection 41.1 (3) of the Act, as re-enacted by the Statutes

of Ontario, 1998,

chapter 5,

section 11, is repealed and the following

substituted:

Specified rate

(3)For the purposes of this section, the specified rate of a corporation

for a taxation year ending after May 4, 1998 is the total of,

(a)4 per cent multiplied by the ratio of the number of days in the

taxation year that are after April 30, 1992 and before May 5, 1998 to the

total number of days in the taxation year;

(b)4.33 per

Document details

Collection	Ontario — Bills
Citation	Bill 72, 37-1
Type	bill
Volume / chapter	p37 s1 bill 72 html
Language	en
Format	html
Source	PROVINCIAL
Identifier	6d9f63d8d608ae6555cdd56a2b558461cc625369

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