Second

Session, 50th General Assembly

Charles III, 2023

BILL 35

AN ACT TO AMEND THE

INCOME TAX ACT, 2000

Received

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

Second

Reading ............................................................................................

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

Third

Reading ...............................................................................................

Royal

Assent .................................................................................................

HONOURABLE SIOBHAN

COADY

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 reduce the small

business corporate tax rate to 2.5 per cent beginning in the 2024 taxation

year.

A BILL

AN ACT TO AMEND THE INCOME TAX ACT, 2000

Analysis

S.40 R&S

Corporation tax

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Section 40 of the Income Tax Act, 2000 is repealed and the following substituted:

Corporation tax

(1) The tax payable by a corporation for a taxation year

is 15% of the corporation's taxable income earned in the year in the province.

(2) For the purpose of

this

section and sections 41 and 44 , "taxable income earned in the year in the

province" means the taxable income earned in the year in the province by a

corporation as determined in accordance with federal 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.

(3) Notwithstanding

subsection (1), where in a taxation year a corporation is eligible for a

deduction under

section 125 of the federal Act, the tax payable by that

corporation under this Act for a taxation year is equal to the total of

(a) 2.5 % 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

(b) 15% of an amount

calculated by deducting from the corporation's taxable income earned in the

year in the province the amount allocated to the province under paragraph (

a) in respect of the corporation for the year.

(4) Notwithstanding

subsection (3), if a corporation's taxation year includes January 1, 2024, and

where in a taxation year a corporation is eligible for a deduction under

section 125 of the federal Act, the tax payable by that corporation under this

Act for a taxation year is equal to the total of

(

a) that proportion of

3% that the number of days in the taxation year that are before January 1, 2024

is of the number of days in the taxation year 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

(

b) that proportion of

2.5% that the number of days in the taxation year that are after December 31,

2023 is of the number of days in the taxation year 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.

Commencement

2. This Act is considered to have come into force

on January 1, 2024.

King's Printer