Bill 104 (Legislature 12, Session 1)

L12 S1 6772

Alberta — Bills

, Bill No. 104 of 1953 A BILL TO AMEND THE ALBERTA CORPORATION INCOME TAX ACT, 1949 NOTE This Bill amends The Alberta Corporation Income Tax Act, 1949, being

chapter 6 of the Statutes of Alberta, 1949. This Act and the corresponding Dominion Act are being jointly administered. The changes contained in this Bill are based on corresponding changes made to the corresponding Dominion Act and are designed to maintain uniformity between the Dominion and Provincial legislation relating to this subject. Subsection (2) of

section 7, which relates to loans to shareholders, is struck out and a new subsection substituted. This subsection is applicable to the 1952 taxation year.

Section 10 dealing with deductions allowed in computing income is amended by adding a new clause (fa) to sub s,ection (1) - This clause is applieable to' the 1952 taxation year. Subsection (3) and (3a) of

section 11 are struck out and a new subsection (3) substituted. This subsection deals with dedlJctions allowed to corporations whose princi pal business is mining or exploring for minerals. This subsection is applicable in respect of expenditures incurred in the calendar ye1ar

Section 13 is struck out and a new

section substituted. The new

section 13 deals with the determining of a corpora tion's chief source of income and is applkable to the 1952 taxation year.

Section 16 is amended. Subsection (3a) is struck out and a new subs,ection (3a) is substituted in its ste'ad. Sub sections (5) and (6) are also struck out and new sub sections (5) to (8) inclusive are substituted in their stead. These subse,ctions relate to the :computing of a corporatiO'n's income for a taxation year and are applicable to the 1952 taxation year.

Section 22 is amended. A new clause (

e) is added to sub section (1). Subsection (1) deals with dividends from ex empted corporations. Subsection (3) is struck out an~ a new subsection is substituted in its stead. This subsectIon deals with losses not deductible for trading stock. These amendments are applicable to the 1952 taxation year.

Section 27 is amended by renumbering the

section as subsection (1) and by substituting a new clause (

a) for the present clause (a). A new subsection (2) is added. This

section relates to deductions from income outside Canada. The amendments are applicable to the 1952 taxation year.

ii A new

section 29a is added to the Act which permits a corporation to elect to pay as tax for the year under this Act certain amounts that would be payable with respect to its income in lieu of the 'amount that would otherwise be pay able. This

section is applicabl~ to the 1951 and 1952 taxa tion years but when applied to the year 1951 certain changes are required to be taken into consideration.

Section 44 which relates to personal corporations is amended by adding a new subsection (11). This sub

section is applicable to the 1952 taxation year.

Section 47 dealing with foreign business corporations is amended by striking out subclause (

i) of clause (

c) of subsection (2) and by substituting a new subclause. This amendment is applicable to the 1952 taxation year.

Section 52 is amended by adding a new subsection (2) . . This

section relates to the employer's payment to a pension plan. Subsection (1) of

section 53 is struck out and a new sub

section substituted. This subsection determines what shall not be included in computing the income of a mining cor poration. This subsection is applicable to the 1952 taxation year. New subsections (4) and (5) are added to

section 59. These subsections relate to the service of garnishee sum mons.

Section 71 is amended by striking out subsection (12) and by substituting a new subsection (12). This subsection re lates to proof of documents. Clause (at) of subsection (1) of

section 73 is struck out and a new clause substituted therefor. This clause de fines "farming" and is applicable to the 1952 taxation year.

Section 17 of this amending Bill declares that clause (

s) of

section 41 of The

Interpretation Act applies to the in terpretation of the term "one person" as it relates to cer certain portions of sections 19 and 19a of The Alberta Cor poration Income Tax Act, 1949. It is further provided that nothing in this

section applies in respect of any matter in respect of which an appeal is pending before a court when this Bill comes into force. This Bill comes into force upon assent. J. W. RYAN, Acting Legislative Counsel. (This note does not form any part of the Bill but is offered in explanation of its provisions.)

BILL No. 104 of 1953

An Act to amend The Alberta Corporation Income Tax Act, 1949 ( Assented to ,1959) HER MAJESTY, by and with the advice and consent of the Legislative Assemhly -of the Province of Alberta, enacts as follows: 1. The Alberta Corporation Income Tax Act, 1949, being

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

(1) Section 7 is amended by striking out subsection Sectiodn d 7 (2) and by substituting the following: amen e "

(2) Where a corporation has, in a taxation year, made Loan to a loan to a shareholder, the amount thereof shall be deemed ~~iJ:; to have been received by the shareholder as a dividend in the year unless " (

a) the loan was made in the ordinary course of its business and the lending of the money was part of its ordinary business and bona fide arrangements were made at the time the loan was made for repay ment thereof within a rea'sonable time, or " (

b) the loan was repaid within one year from the end of the taxation year of the corporation in which it was made and it is established, by subsequent events or otherwise, that the repayment was not made as a part of a series of loans and repay ments.".

(2) This

section is applicable to the 1952 taxation year. ftE~lica-

Section 10, subsection (1) is amended by adding im-

Section 10 mediately after clause (

f) the following new clause: amended " (fa) where an approved superannuation fund or plan contains a provision under which the corporation may provide superannuation or pension benefits for an employee, officer or director of the cor poration by making a lump sum payment to or under the fund or plan in the year in which the em ployee, officer or director ret~res from the empl?y ment or office, an amount paId by the corporatIOn in the year or within sixty days from the end of the year pursuant thereto as the lump sum in re-

Applica tion

Section 11 amended Mining or ex ploring for minerals Applica tion

Section 13 amended 2 spect of an employee, officer or director who re tired in the year (except to the extent that it is de ductible under clause (I) ) ;".

(2) This

section is applicaable to the 1952 taxation year. 4.

(1) Section 11 is amended by striking out subsec tions (3) and (3a) and by substituting the following: "

(3) A corporation whose principal business is mining or exploring for minerals may deduct, in computing its income for the purpose of this Act for a taxation year, the lesser of "(

a) the aggregate of the prospecting, exploration and development expenses incurred by it, directly or in dir'ectly, in searching for minerals in Canada, "(

i) during the taxation year, and "(ii) during previous taxation years, to the extent that they were not deductible in com puting income for a previous taxation year, or " (

b) of that aggregate an amount equal to its income fo~ the -taxation year " (

i) if no deduction were allowed under clause (

b) of subsection (1) of

section 10 of this Act, and "(ii) if no deduction were allowed under this sub section, minus the deduction allowed by

section 22 of this Act, if the corporation has filed ,certified statements of such expenditures and has satisfied the Provincial Treasurer that it has been actively engaged in prospecting and ex ploring for minerals in Canada by means of qualified persons and has incurred the expenditure for such pur poses." .

(2) This

section is applicable in respect of expendi tures incurred in -the calendar year 1952. 5.

(1) Section 13 is struck out and the following is sub stituted: ~fhii~CO~rce "13.

(1) Where a corporation's chief source of income , for a taxation year is neither farming nor a combination of farming and some other source of income, its income for the year shall be deemed to be not less than its income from all sources other than farming minus the lesser of Provincial Treasurer may determine "'(

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

b) five thousand dollars. -"

(2) For the purpose of this section, the Provincial Treasurer may determine that a corporation's chief source of income for a taxation year is neither farming nor a combination of farming and some other source of income.

3 "

(3) For the purpose of this. section, a 'farming loss' is "fa~~ing '. a loss from farming computed by applying the provisions loss of this Act respecting computation of income from a busi- ness mutatis mutandis except that no deduction may be made under clause (

a) of subsection (1) of

section 10.".

(2) This

section is applicable to the 1952 taxation year. ~g~lica- 6.

(1) Section 16 is amended

Section 16 amended (

a) by striking out subsection (3a) and by substituting the following: "(3a) Where a non-resident p'erson has paid or Inad!'lquate d t t . . . ' consldera-agree 0 pay 0 a corporatIon carrYIng on bUSIness tions in Canada with whom it was not dealing at arms length as price, rental, royalty or other payment for use or reproduction of any property, or as con sideration for the carriage of goods or passengers or for other services, an amount less than the amount (hereinafter referred to as 'the reasonable amount') that would have been reasonable in the circumstances if the non-resident person and the corporation had been dealing at arms length the reasonable amount shall, for the purpose of com- puting the corporation's income from'the business, be deemed to have been the amount that was paid or is payable therefor."; (

b) by striking out subsections (5) and (6) and by substituting the' following: "

(5) Where a corporation carrying on business Idem in Canada has paid, or agreed to pay, to a non resident person with whom it was not dealing at arms length as price, rental, royalty or other pay ment for use or reproduction of any property, or as consideration for the carriage of goods or pas sengers or for· other services, an amount greater than the amount (hereinafter referred to as 'the reasonable amount') that would have been reason- able in the circumstances if the non-resident person and the corporation had been dealing at arms length, the reasonable amount shall, for the purposes of computing the corporation's income from the busi ness, be deemed to' have been the amount that was paid or is payable therefor. u

(6) Where property of a corporation has been Idem appropriated in any manner whatsoever to, or for the benefit of, a shareholder, for no consideration or for a consideration below the fair market value, if the sale thereof at the fair market value would have increased the corporation's income for a taxa- tion year, for the purpose O'f determining the cor poration's income for the year, it shall be deemed to' have SO'ld the prO'perty during the year and to have received therefor the fair market value there- of.

Idem Idem Applica tion

Section 22 amended Losses not deductible for trading stock Applica tion 4 "

(7) Where property of a corporation has been appropriated in any manner whatsoever to, or for the benefit of, a shareholder, on the winding up of the corporation, if the sale thereof at the fair mar ket value immediately prior to the winding up would have increased the corporation's income for a taxa tion year, for the purpose of determining the cor poration's income for the year, it shall be deemed to have sold the property during the year and to have received therefor the fair market value thereof. u

(8) Where depreciable property of a corpora tion as defined for the purpose of

section 19 has been disposed of under such circumstances that sub section (2) of

section 19 is applicable to deter mine, for the purpose of clause (

a) of subsection (1) of

section 10, the capital cost of the property to the person by whom the property was acquired, subsections (4), (6) and (7) are not applicable in respeCt of the disposition.".

(2) This

section is applicable to the 1952 taxation year. 7 . ( 1 )

Section 22 is amended (

a) by striking out the word "or", where it occurs at the end of clause (

c) of subsection (1) ; (

b) by adding at the end of clause (

d) of subsection ( 1) the word "or"; (

c) by adding immediately after clause (

d) the follow ing new cIa use: "(

e) was a foreign business 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.". (

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

(3) Where a corporation has, in its return of income under this Act for a ,taxation year, de ducted under this

section an amount in respect of a dividend, no loss arising from transactions with reference to the share in respect of which the dividend was received shall be allowed to re duce the income of the corporation for that or a subsequent taxation year unless it is estab- • Hshed by the corporation that " (

a) the corporation owned the share three hundred and sixty-five days or longer before the loss was sustained, and " (

b) the corporation did not, at the time the divid end was received, own more than five per cent of the issued share capital of the corporation from which the dividend was received.".

(2) This

section is applicable to the 1952 taxation year.

5 8. ( 1)

Section 27 is amended (

a) by renumbering the

section as subsection (1) ; (

b) by striking out clause (

a) of subsection (1) and by substituting the following: "(

a) that proportion of the tax paid by it to the gov ernment of a country other than Canada on that part of its income from sources therein for the year upon which it is subject to tax under this Act for the year that the tax otherwise pay able by the corporation under this Act is of the tax payable by the corporation under The In come Tax Act (Canada) for the same taxation year before making any deduction from tax un der subsection (1) of

section 38 thereof;" ; (

c) by adding immediately after subsection (1) the fol lowing new subsection: "

(2) Where a corporation's income for a taxa tion year is in whole or in part from sources in more than one country other than Canada, " (a) subsection (1) shall be read as providing for a separate deduction in respect of each of the countries other than Canada, and "(

b) the expression in subsection (1) 'amounts that are deductible for the year under clause (

d) of subsection (1) of

section 22, shall read as referring, in the :case of the computation of the deduction under subsection (1) in respect of each country, to the amounts that are de ductible under the said clause (

d) by reason of dividends received from that country.".

SeCtion 27 amended

(2) This

section is applicable to the 1952 taxation year. At·PPlica-IOn 9.

(1) The following new

section is added immediately ~ew

section after

section 29 : a "29a.

(1) Where an amount is included in computing a Election corporation's income for a taxation year by virtue of sec- tion 19, the corporation may elect to pay, as tax for the year under this Act, in lieu of the amount that would otherwise be payable, an amount equal to the aggregate of " (

a) the tax that would be payable by the corporation for the year under this Act if no amount were in cluded in computing the corporation's income for the year by virtue of

section 19, and " (

b) the aggregate of the amounts by which the cor poration's taxes under this Act would have been increased if one-third of the amount so included by virtue of

section 19 had been included in computing the corporation's income for each of the three im mediately preceding taxation years. "(2) Subsection (1) does not apply where the corpora- N~?-apPli tion did not carryon business in Canada in each of the ca on years referred to in clause (

b) of subsection (1).

6 Application

(2) Section 29a as enacted by subsection (1) is applic- able to the 1952 taxation year. Application

(3) The said

section 29a is applicable to.the taxation year 1951 but when so applied for the year 1951 shaH read as though the fraction "one-half" were substituted for the fraction "one-third" where it appears therein and the word "two" were substituted for the word "three" where it ap pears therein.

Section H amended 10.

(1) Section 44 is amended· by adding immediately after subsection (10) the following new subsection: If personal "

(11) Where it has been determined for the purpose of ~:~r~hie~ subsection (1) of

section 13 that a corporation's chief ~~:~en~ft~~; source of income for a taxation year is neither farming nor farming nQr a combination of farming and some other source of income, ~~~b~f.a;tc. its, farming business shall be deemed, for the purpose of clause (

c) of subsection (8), not to have been during the Application

Section .7 amended Appliea.tion SectiQn 52 amended Application of subsection

(1) Section 53 amended year an active financial, commercial or industrial business.".

(2) This

section is appJicable to the 1952 taxation year. 11.

(1) Section 47, subsection (2), clause (

c) is amend ed by striking out subclause (

i) and by substituting the fol lowing: "(

i) its business operations were of an industrial, mining, commercial, public utility or pubHc service nature and were carried on entirely outside Canada (except for management and the designing, purch asing and transportation of goods if the goods were not acquired for resale in the course of' trad ing and were acquired for the operations so car ried on outside Canada) either directly or through ownership of shares in or control of subsidiary or affiliated corporations, and its property, except securities and bank deposits, was situate entirely outside Canada ;". (-2) This

section is applicable to the 1952 taxation year.

Section 52 is amended (

a) by renumbering the

section as subsection (1) ; (

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

(2) For greater certainty, and without restrict- • ing the generality of subsection (1), it is hereby declared that subsection (1) is applicable where the the resources of a fund or plan are required to be augmented by reason of an increase in the super annuation or pension benefits payable out of or under the fund or plan.". 13.

(1) Section 53 is amended by striking out subsec tion (1) and by substituting the following:

7 "53.

(1) Where a corporation establishes that a mine ~~~ni8S was " (

a) a metalliferous mine, or " (

b) an industrial mineral mine certified by the Pro vincial Treasurer to have been operating on mineral deposits (other than bedded deposits except sylvite), that came into production of ore during the calendar years Three-Bear 1946 to 1952, inclusive, income derived from the operation exemp on of the mine during the period of thirty-six months com- mencing with the day on which the mine came into produc- duction (other than any portion thereof in the year 1946) shall, subject to prescribed conditions, not be included in computing the income of the corporation.". (-2) This

section is applicable to the 1952 taxation year. Application 14. 8ection 59 is amended by adding immediately after ~:!~Od~j9 subsection (3) the following new subsections: u ( 4) Where the person who is or is about to become in- Service of d bt d 1· bl . b' d garnishee e e or la e carrIes on uSlness un er a name or style other than his own name, the registered or other letter under subsection (1) m,ay be addressed to the name or style under which he carries on business and, in the case of personal service, shall be deemed to have been validly served if it has been left with an adult person employed at the place of business of the addressee. "

(5) Where the- persons who are or are about to become Idem indebted or liable carryon business in partnership, the registered or other letter under subsection (1) may be ad dressed to the partnership name and, in the case of personal service, shall be deemed to have been validly served if it has been served on one of the partners or left with an adult person employed at the place of business of the partner ship.".

Section 71 is amended by striking out subsection

Section 71 (12) and by substituting the following: amended "

(12) Every document purporting to be an order, direct- Proof of t · ddt' rt'f' t . 4- d .. documents lOn, eman, no Ice, ce I lea e, reqUliremen", eClslon, assessment, discharge of mortgage or other document pur- porting to have been executed under, or in the course of administration or enforcement of this Act over the name in writing of the Provindal Treasurer, the Deputy Provincial Treasurer, or an officer authorized by regula- tion to exercise powers or perform duties of the Provincial Treasurer under this Act, shaH be deemed to be a document signed, made and issued by the Povincial Treasurer, the Deputy Provincial Treasurer or the officer unless it has been called in question by the Provincial Treasurer or by some person acting for him or Her Majesty.". 16.

(1) Section 73, subsection (1) is amended by strik- secti'dn J3 ing out clause (a/) and by substituting the following: amen e

Application 8 ." (at) 'farming' includes tillage of the soil, livestock rais ing or exhibiting, maintaining of horses for racing, raising of poultry, fur farming, dairying, fruit growing and the keeping of bees but does not in clude an office or employment under a person en gaged in the business of farming;".

(2) This

section is applicable to the 1952 taxation year. Application 17. For greater certainty, it is, hereby declared that ~~el~~i~~~~t clause (8) of

section 41 of The

Interpretation Act is appli able to the interpre,tation of the expression "one person" where it appears in the part of subsection (2) of

section 19 of The Alberta Corporation Income Tax Act, 1949, preced ing clause (

a) thereof and where it appears in the part of subsection (3) of

section 19a of that Act preceding clause (

a) thereof; and the said expression is deleted and the ex pression "a person" is substituted therefor; but nothing in this

section is applicable in respect of any matter in re spect of which an appeal is pending before a court when this Act comes into force. Coming into force 18. This Act .comes into force on the day upon which it is assented to.

No. 104 FIRST SESSION TWELFTH LEGISLATURE 2 ELIZABETH II 1953 BILL

An Act to amend The Alberta Corporation Income Tax Act, 1949 Received and read the First time ......................................... . Second time ....................................... . Third time ......................................... . HON. MR. MANNING. Title: 1953 (12th, 1st)Bill 104,

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

Document details

Collection	Alberta — Bills
Citation	L12 S1 6772
Type	bill
Volume / chapter	L12 S1 6772
Language	en
Format	json
Source	PROVINCIAL
Identifier	91cff8217f90ae0026f82434c348630038ade7c5

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