Third

Session, 47th General Assembly

Elizabeth II, 2014

BILL 13

AN ACT TO AMEND THE

INCOME TAX ACT, 2000

Received and Read the First Time .................................................................................................

Second Reading .................................................................................................................................

Committee ..........................................................................................................................................

Third Reading .....................................................................................................................................

Royal Assent ......................................................................................................................................

HONOURABLE

CHARLENE JOHNSON

Minister

of Finance and President of Treasury Board

Ordered to be printed by the

Honourable House of Assembly

EXPLANATORY NOTES

This Bill would amend the Income Tax Act, 2000 to implement

changes announced in Budget 2014. The

Bill would

with respect to the dividend

tax credit, reduce the rate for non-eligible dividends to 4.1%, and reduce the

rate for eligible dividends to 5.4%;

with respect to the low income

tax reduction, increase the beginning phase-out income thresholds by $1,000 for

single individuals and by $2,000 for families; and

reduce the small business

corporate tax to 3%.

A BILL

AN ACT TO AMEND THE INCOME TAX ACT, 2000

Analysis

S.20 R&S

Dividend tax credit

S.21.1 Amdt.

Low income reduction

S.40 Amdt.

Corporation tax

4. Commencement

Be it enacted by the Lieutenant-Governor and

House of Assembly in Legislative Session convened, as follows:

SNL2000 cI-1.1

as amended

Section 20 of the Income Tax Act, 2000 is repealed and the following substituted:

Dividend tax

credit

(1) For

the purpose of computing the tax payable under this Part for a taxation year by

an individual who was resident in the province on the last day of the taxation

year, there may be deducted an amount equal to the total of

(a) 4.1% of the total of the amount required under

paragraph 82(1)(

a) and subparagraph 82(1)(b)(

i) of the federal Act to be

included in computing the individuals income for the year; and

(b) 5.4% of the total of the amount required under

paragraph 82(1)(a.1) and subparagraph 82(1)(b)(ii) of the federal Act to be

included in computing the individuals income for the year.

(2) Subsection (1) shall only apply to a dividend

received on or after the coming into force of this section.

2. Paragraphs 21.1(2)(

b) and (

c) of the Act are

repealed and the following substituted:

(b) $18,547; or

(

c) where the eligible individual has a qualified

relation for the year or claims an amount under paragraph 9(1)(

b) for the year,

$31,362,

3. Paragraph 40(3)(

a) of the Act is repealed and

the following substituted:

(a) 3% of an amount calculated by allocating to

the province, on the same basis as set out in the regulations made for the purpose

of the definition "taxable income earned in the year in a province"

in subsection 124(4) of the federal Act, a portion of the amount that is the

least of the amounts calculated under paragraphs 125(1)(a), (

b) and (

c) of the

federal Act and allowed for the purpose of subsection 125(1) of the federal Act

in respect of the corporation for the year; and

Commencement

(1) Sections 1 and 3 of this Act come into

force on July 1, 2014.

(2) Section 2 of this Act is considered to have

come into force on January 1, 2014.

Queen's Printer