Bill 25 (Legislature 17, Session 4)

L17 S4 5426

Alberta — Bills

1975 Bill 25 Fourth Session, 17th Legislature, 24 EIizaoeth"II THE LEGISLATIVE ASSEMBLY OF ALBE~.A BILL 25 THE ALBERTA INCOME TAX AMENDMENT ACT, 1975 THE PROVINCIAL TREASURER First Reading ............................. . Second Reading ...... . Third Reading Printed by the Queen's Printer for the Province of Alberta. EDMONTON

Bill 25 BILL 25 1975 THE ALBERTA INCOME TAX AMENDMENT ACT, 1975 (Assented to , 1975) HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Alberta, enacts as follows: 1. The Alberta Income Tax Act is hereby a1nended.

Section 4, 8Ub~ection (3) is arnended by striking out clause (

b) and by substituting the following: (b) 36 per cent in respect of the 1972, 1973 and 1974 taxation years; (c) 26 per cent in respect of the 1975 and subsequent taxation years. 3. The following

section is added after

section 4: 4.1 The tax payable by an individual and computed under

section 4 for the 1975 or any subsequent taxation year shall be reduced by an amount equal to the lesser of (

a) the tax computed under

section 4 for the taxation year, or (b) $80 minus 2 per cent of the individual's taxable income for that year. 4. The following heading and sections are added after

section 8.3: Royalty Tax Rebates and Credib 8.4

(1) In this section, (a) "attributed Canadian royalty income" of a corpora tion in a taxation year means (

i) the aggregate of the amounts that are included in the corporation's income for the taxation year by reason of the operation of

section 12, subsection (1), paragraph (0) and

section 69,

Explanatory Notes I. This Bill will amend

chapter 182 of the Revised Statutes of Alberta 1970.

Section 4, subsection (3) presently reads:

(3) For the purposes of this section, the percentage of the tax payable un.der the federal Act to be used for co'Uput~ng the tax pay.-.~ble unlier thIs

section Is (a) 33 per cent in respect of the 1970 and the 1971 taxation years' (b) 36 per cent in respect of the 1972 and subsequent taxation yea~. 3. Selective tax reduction for individuals having a taxable in come of $4000 or less. 4. 8.4 Royalty tail[ reba·tes to be applied against income tax payable under The Alberta Income Tax Act.

Section 12 (1) (0) of the federal Act, as proposed in Bill C-49 presently before the federal Parliament, includes in a taxpayer's income the amount of royalties, rentals etc. receivable by the Crown or a Crown agency under, among other things, petroleum, natural gas and oil sands leases.

Section 8.4 is aimed at offsetting the effect of Bill C-49 in respect of the income .so attributed to corporations, by rebating a proportionate amount against Alberta income tax payable by those corporations.

less· subsections (6) and (7) of the federal Act and that relate to petroleum, natural gas or related hydrocarbons (except coal) or bituminous sands or oil sands (ii) the aggregate of the amounts referred to in

section 66.2, subsection (5), paragraph (a), subparagraph (iv) of the federal Act that are incurred by the corporation in the same tax ation year; (b) "royalty tax rebate" means a rebate to which a corporation is entitled under this section.

(2) A corporation is entitled, subject to this

section and the regulations, to a royalty tax rebate in respect of a taxation year in an amount equal to 11 per cent of that proportion of its attributed Canadian royalty income for the taxation year that (

a) its taxable income earned in Alberta for that year determined in accordance with

Part IV of the federal regulat~.ons bears to (

b) its taxable income for that year.

(3) A royalty tax rebate to which a corporation is en titled under this

section for any taxation year shall be used only to reduce the tax payable under this Act by the cor poration in respect of that taxation year but if no tax is payable for that year or jf the tax payable for the year is less than the royalty tax rebate for the year, the excess shall be used to reduce the tax payable by that corporation under this Act for any subsequent taxation year.

(4) A corporation is not entitled to a royalty tax rebate in respect of a taxation year unless (

a) appHcation is made therefor to the Provincial Treasurer, and (

b) the corporation had a permanent establishment in Alberta at any time during the taxation year. 8.5

(1) In this section, (a) "associated corporations" means corporations that are associated for the purposes of the federal Act; (b) "attributed Alberta royalty income" of a corpora tion in a taxation year means the aggregate of the amounts of royalty (

i) that are receivable in the taxation year by the Crown in right of Alberta under a lease, licence, reservation or permit granting petroleum rights, natural gas rights or petroleum and natural gas rights, and 2

8.5 The proposed

section 8.5 will implement point (3) of the Alberta Petroleum Exploration Plan - December 1974 entitled "A Tax Credit Plan for Smaller Explorers".

Section 8.5 provides for the granting of credits against Alberta income tax of a portion of the amounts payable by corporations to the G,overnment of Alberta as oil and gas royalties which are, under the Federal Government's budgets of May 6, 1974 and November 18, 1974, attributed to the taxpayer as income. Subject to variation in respect of the taxation year ending after May 6, 1974, the maximum credit for a taxation year is $l,OO{),OOO for any corporation or any group of associated corporations. 2

(ii) that are included in the corporation's income for the taxation year by reason of the operation of

section 12, subsection (1), paragraph (0) or

section 69, subsection (6) or (7) of the federal Act; i (c) "royalty tax credit" means a credit to which a cor poration is entitled under this

section . .

(2) Subject to t~is

section and the regulations, a corpor ation that has attrIbuted Alberta royalty income in a tax ation year is entitled to a royalty tax credit for the taxation year in an amount equal to (a) 30 per cent of the corporation's attributed Alberta royalty income, in the case of the 1974 taxation year, (b) 28 per cent of the corporation's attributed Alberta royalty income, in the case of the 1975 taxation year, and (c) 25 per cent of the corporation's attributed Alberta royalty income, in the case of the 1976 taxation year and each subsequent taxation year, but not exceeding the maximum allowable credit for t:le taxation year.

(3) For the purposes of subsection (2), where a cor poration has a taxation year (in this subsection referred to as "the particular taxation year") part of which is before and part of which is after the commencement of the 1975 or 1976 calendar year (in this subsection referred to as "the particular calendar year"), the percentage referred to in subsection (2) for the particular taxation year shall be the percentage equal to the aggregate of (

a) that proportion of the percentage so referred to for the particular taxation year that the number of days in that portion of the particular taxation year that is in the particular calendar year is of the number of days after May 6, 1974 in the particular taxation year, and (

b) that proportion of the percentage so referred to for the taxation year immediately preceding the partic ular taxation year that the number of days after May 6, 1974 in that portion of the particular tax ation year that is in the calendar year immediately preceding the particular calendar year is of the number of days after May 6, 1974 in the particular taxation year.

(4) For the purposes of this section, the maximum allow able credit for a taxation year is $1,000,000 except that, in the case of the taxation year first ending after May 6,1974, the maximum allowable credit is that proportion of $1,000,- 000 that the number of days in the taxation year remaining 3

after May 6, 1974 bears to the total number of days in the taxation year.

(5) Where two or more associated corporations are each entitled to a royalty tax credit for the same taxation year but the aggregate alTIOunt of the royalty tax credits of those corporgtions for the taxation year exceeds the maximum allowable credit, the royalty tax credit for each of those corporations for that taxation year shall be (

a) that proportion of the maximum allowable credit allocated to the corporation by an agreement made between those corporations setting out the propor tions in which the maximum allowable credit is to be divided among them, if the agreement is filed with the Provincial Treasurer, or (

b) if no agreement is filed under clause (a), that pro portion of the maximum allowable credit that the attributed Alberta royalty income of the corporation for the taxation year bears to the aggregate an10unt of the attributed Alberta royalty income of those corporations for the same taxation year.

(6) Where the Provincial Treasurer is satisfied in any case that (

a) the attributed Alberta royalty income of a corpora tion for a taxation year is not in reasonable pro portion to the corporation's income in that taxation year derived from the production of petroleum and natural gas subject to the payment of royalty to the Crown in right of Alberta, or (

b) a corporation was a party to an agreement or arrangement with one or more other persons that had the effect of increasing the amount of the cor poration's attributed Alberta royalty income for the purpose of making the corporation eligible for a royalty tax credit for a taxation year in an amount greater than it would have been in the absence of the "agreement or arrangement, the Provincial Treasurer may refuse the application of the corporation for a royalty tax credit for the taxation year or may reduce the royalty tax credit to which it would otherwise be entitled to an amount which, in his opinion, would have been the royalty tax credit if the corporation's attributed Alberta royalty income for the taxation year was in reasonable proportion to its income in that taxation year derived from the production of petroleum and natural gas subject to the payment of royalty to the Crown in right of Alberta.

(7) Where a corporation is entitled to a royalty tax credit for a taxation year, the Provincial Treasurer (

a) may deduct the credit from any tax, interest or penalty otherwise owing by the corporation for that or any preceding taxation year under this Act, the income tax statute of an agreeing province or the federal Act, or 4

(

b) if the credit exceeds any deductions under clause (a), shall pay the amount of such excess to the cor poration from the taxes, interest and penalties col lected under this Act. "

(8) A corporation is not entitled to a royalty tax credit in respect of a taxation year unless application is made therefor to the Provincial Treasurer. 5. This Act comes into force on the day upon which it is assented to. I

5 Title: 1975 (17th, 4th) Bill 25, The Alberta Income Tax Amendment Act, 1975

Document details

Collection	Alberta — Bills
Citation	L17 S4 5426
Type	bill
Volume / chapter	L17 S4 5426
Language	en
Format	json
Source	PROVINCIAL
Identifier	88bd13df208df301e34c420cfb829cdbbcba6d8a

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