Bill 38 (Legislature 10, Session 5)

L10 S5 7284

Alberta — Bills

Bin- No. 38 of 1948. A BiILL'TO AM,END THE'ALBERTA CORPORATION INCOME TAX ,ACT NOTE. This Bill amends The Alberta Corporation Income-Tax 'Act. ,'The Act was passed in 1947 at the .request of the :Dominion ·G<wernment pursuant to arrangements: negotiated Jbetween the Governments,of Canada i and: ·AJber.ta with,respect1tQxhe suspension of the levying. of certain taxes,by theProvinee. All provinces which 'completed tax agreements with the Dominion Government 'passed similar Acts in 1947. \ All 'these(' p,rovinces are now requested ,to enaet similar amendinglActs.

The. amendm,ents are. pra,ctically. all of a minor nature, beip.g mainly ,correction of errors in spelling or punctuation, or. amendments required in connection with the administra tion of the Act. f This Bill·ismade Tetro-active to th~ first day ofl January, 1947. W. S. GRAY, L~gislative Counsel. (This note does not form any part of the Bill but is olfered in explanation of its provisions.)

BILL N.o. 38 of 1948.

An Act to amend The Alberta Corporation Income Tax Act. (Assented to , 1948.) HIS MAJESTY, by and with the advice and consent .of the the Legislative Assembly of the Province of Alberta, ena'cts as follows: 1.. The Alberta Corporation Income Tax Act, being chap ter 3 of the Statutes of Alberta, 1947, is hereby amended as to

section 3 by adding immediately at the end thereof the f.ollowing new subsections: "

(3) Where a corporati.on has, on or after the first day of January, 1947, received a security or other right wholly or partially as or in lieu of payment of or otherwise in satis faction of an interest, declared dividend or .other debt the amount of which W.ould be included in computing its income if paid, the value of the security or other right or the applicable portion thereof shall, notwithstanding the form or legal effect .of the transaction, be included in computing its income for the taxation year in whi'ch it was received and a payment in redempti.on of the security or in satis faction of the right shall not be deemed. to be income of the recipient in the year of payment .. "

(4) Certifi'ootes evidencing indebtedness or stock or shares issued to a corporation in 'respect .of an allocation in :proportion to patronage, as defined in subsecti'On (5) of

section 5 of this Act, shall be deemed to be income received by the corporation to which they are issued in the year in which they are issued of an amount equal to the amount of the allocation in proportion to patr'Onage in respect of which they are issued and payment thereunder or redemption thereof shall not be deemed to be income in the year of payment or redemption.". 2. The said Act is further amended as to

section 4, (

a) by striking out paragraph (

l) thereof and by sub stituting therefor the following: "(

l) Dividends paid to a corporation by a corpora tion incorporated in Canada any part of the profits of which ha ve been taxed under the Income War Tax A'ct (Canada) or 'Of the class described by paragraph (r) .of this section, except as provided in sections 18 and 24 of this Act;" ;

2 (

b) by striking out the wODds "this A,ct" , where the same occur in paragraph (

m) thereof, and by sub stituting therefor the wDrds "the Income War Tax A'ct (Canada)"; (

c) by -adding the word "and" immediately at the end Df clause (

v) of paragraph (

n) thereDf; (

d) by striking out dause (vi) .of paragraph (

n) thereof; (

e) by renumbering clause (vii) Df paragraph (

n) thereof as clause (vi) ; (

f) by striking out the words "base metals", where the saine oc-cur in line six of paragraph (

q) thereof, and by substituting therefor the words "base metal". 3. The said Act is further amended as to

section 5,- (

a) by striking out the wDrds "this Act", where the same .occur in clause (

i) Df paragraph (

g) of sub section (1) thereof, and by substituting therefor the words "the Income War Tax Act (Canada)"; (

b) by striking out paragraph (

i) of subsection (1) thereof and by substituting therefor the following: " (

i) Such amount as the Lieutenant Governor in CDuncil may by regulation allow fDr amDunts paid in respect of taxes imposed .on the inc.ome or any part thereof by the legislature .of any province by way .of tax .on inc-Gme derived from mining operatiGns or incDme derived from logging Gperations in that province but in the 'case of the 1947 taxatiDn year, no. amDunt may be deducted greater than that proportiGn of the total amount of such taxes paid by the corpora tiGn in respe,ct .of the income for the said taxa tiGn year which the number of days of the said taxation year after the thirty-first day of De cember, 1946, is of the total number of days in the said taxation year."; (

c) by adding immediately after the wGrds "during the taxation year", where the same occur in line seven of subsection (2) thereDf, the words "Dr within twelve months thereafter"; (

d) by striking out the words "of his section", where the same occur in subsection (4) thereof, and by substituting therefor the wGrds ".of this section"; (

e) by striking out the quotation mark, where the same occurs after the words ".of any taxation year" in paragraph (d) .of subsection (5) thereof, and by inserting the quotation mark after the words "done with members Df the 'corporation" where the same Dc-cur in line two thereof; (

f) by striking out paragraphs (e~ a~d (

f) of sub section (5) thereof and by substItutIng therefor the following:

" (e) " (f) 3 'payment' in,cludes the issue of certificates evidencing indebtedness or stock or shares of the taxpayer or of a corporation that owns all the share capital (except directors' qualifying shares) .of the taxpayer, only if the taxpayer or that ·corporation has, in the taxation year or within twelve months thereafter, disbursed an amount of money equal to the face value of the said certifi'cates, stock or shares in redeeming or pUI'chasing certifi'ootes evidencing indebted ness or stock or shares of the taxpayer or that ,corporation, previously issued; and 'm,ember' of a taxpayer means a person who is entitled as a member or shareholder to full voting rights in the conduct of the affairs of the taxpayer or of a corporation that owns all the share capital (except directors' qualifying shares) of the taxpayer.". 4.

The said Act is further amended as to

section 6,- (

a) by striking out the words "in respect of any such period" where the same occur in paragraph (

g) of subsection (1) thereof; (

b) by striking out the words "this A'ct" , where the same oceur in paragraph (

g) of subsection (1) thereof, and by substituting therefor the words "the Income War Tax Act (Canada)"; (

c) by adding immediately after the provis'o to para graph (

i) of subsection (1) thereof the following new proviso: "Provided further that the provisions of this paragraph shall not apply in determining the ineome of 'personal corporations' taxable against their shareholders." ; (

d) by striking out the words "the depreciation cost", where the same occur in the second proviso to paragraph (

k) of subsection (1) thereof, and by substituting therefor the words "the depreciated 'cost" ; (

e) by striking out paragraph (

l) of subsection (1) thereof and by substituting therefor the following: "(

l) any 'corporation tax, as defined by regulation made by the Lieutenant Governor in Council, paid to the government of a provinee or to a municipality." (

f) by striking out subsection (4) thereof; (

g) by renumbering subsection (5) thereof as sub section (4). 5. The said Act is further amended as to

section 7, (

a) b~ st:iking out subsection (1) thereof and by sub stItutIng theref.or the following:

4 "7.-

(1) A corporation resident in Canada may deduct from the tax otherwise payable under this Act one-sixth of the amount paid to the United Kingdom of Great Britain and Northern Ireland, to any of His Majesty's self-governing dominions (other than Canada) or dependencies or to a foreign country for income t;;tx in respect of the income of the corporation derived from sources therein, but such deductions shall not at any time exceed the amount of the tax that would otherwise be payable under this A,c.t in respect of the said income derived fr~m the said sources."; (

b) by striking out the first twelve lines of subse'ction (3) thereof and by substituting therefor the following: "

(3) A corporation incorporated in Canada may deduct from the tax otherwise payable under this Act an amount equal to one-sixth of the income tax deemed to have been paid to the United Kingdom of Great Britain and Northern Ireland, to any of His lVlajesty's self-governing dominions (other than Canada) or dependencies or to any foreign country on the income out of which dividends (other than dividends that are not liable to taxation by virtue of paragraph (

p) of

section 4 of this Act) are paid to it by a subsidiary companY,not resident in Canada (more than fifty per cent of the capital sto;ck of whkh having full voting rights under all circum stances is owned by it), calculated in accordance with the following rules:" ; (

c) by striking out subsection (4) thereof and by sub stituting therefor the following new subsections: " ( 4) Where a corporation resident in Canada owns all the shares (less directors' qualifying shares) of a non-resident holding company, the corporation resident in Canada may deduct from its taxes under this Act, for any taxation year, one sixth of an -amount equal to that proportion of the dividends received by the corporation resident in Canada from the non-resident holding company in that taxation year that is the same as the proportion that the aggregate of the income tax paid by the non-resident subsidiary ,companies of the holding company to the government of a country other than Canada in respect of income of the year preceding the year in whkh the dividends were received by the corporation resident in Canada is of the total income of the said subsidiaries in that year but su~h deduc tion shall not at any time ex'ceed the amount of the tax that would otherwise be payable under this Act in respect of such dividends.

"

(5) In subsection ( 4) of this

section 'non resident holding company' means a non-resident

5 ,company that in the taxation year in which the dividends are received by the ,corporation resident in Canada derived more than seventy-five per cent of its income from dividends received from sub sidiary non-resident companies the majority of whose shares, having full voting rights under all circumstances, were owned by it. "

(6) For the purposes of subsections (3) and ( 4) of this section, the Provincial Treasurer may fix an amount that shall be deemed to be the income in any taxation year of a subsidiary company or a holding company therein mentioned and may de termine the amount of the income tax paid by the non-resident subsidiary companies therein men tioned. "

(7) A Icompany entitled to lllilke deductions from its taxes as provided in subsection (4) of this

section shall not be entitled to make a deduction from its taxes und~r subsection (3) of this section."; (

d) by renumbering subsection (5) thereof as sub section (8). 6. The said A~t is further amended as to

section 8,- (

a) by striking .out subsection (1) thereof and by sub stituting theref.or the following: "8.-

(1) A ,corporation whose principal business is the production, refining or marketing of petro leum or petroleum products is entitled to deduct from the tax under this Act payable by it in respect of any taxation year an amount equal to,- "(

a) four and four-ninths per ,cent in the case of a corporation substantially all of whose income is subject to depletion under this Act; or "(

b) six and two-thirds per cent in the case of any other corporation; of the aggregate of drilling and explorati.on costs, including all general geological IRnd geophysical ex penses, incurred by it directly or indirectly on oil wells spudded in during the period from the first day of January, 1943, to the thirty-first day of December, 1946, and abandoned within six months after com pletion of drilling: "Provided however that a 'corporation may not deduc.t from the taxes payable in respe~t of any taxatIOn year more than one-sixth of the amount deducted from the taxes payable in respect of that ye~r. under the Incom,e War Tax Act (CanadlR) for drIllIng and exploratIon C.osts incurred during the said period."; (

b) by adding immediately after subsection (2) thereof the following new subsection:

6 "

(3) A cQrporation formed fQr the purpose Qf exploring and drilling fO'r Qil is entitled to deduct from the tax under this A,ct, payable by it in respect of any taxatiQn year, four and fQur-ninths per cent of explO'ration and drilling expenses in ,curred during the period frQm the first day of January, 1943, to the thirty-first day of December, 1946: "Provided however that a cQrporation may not deduct from the taxes payable in respect of any taxation year moOre than .one-sixth Qf the amount deducted frQm the taxes payable in respect of that year under the IncQme War Tax Alct (Canada) for exploration and drilling expenses incurred during the said period." ; (IC) by renumbering subsectiQns (3), (4), (5), (6), (7) and (8) thereof as subsectiQns (4), (5), (6), (7), (8) and (9) respectively; (

d) by striking out the words "subsectiQn (6) of this section", wherever the same oC,cur in subsectiQn (7), nQW renumbered as subsection (8) thereof, and by substituting therefor the words "subsectiQn (7) .of this section". 7. The said Act is further amended as to

section 13 by striking .out the period immediately after the word "in directly", where the same Qocurs in the seventh line thereof, and by substituting therefor a CQm:ma and dash. 8.. The said A'ct is further amended as to

section 16 by striking out the same and by substituting therefor the following: "16. Where a corporation redeems any of its shares at a premium, the premium received prior to the thirty-first day O'f May, 1947, shall be deemed to be a dividend and to be incQme received by the shareholder and the premium re ceived .on .or after the said thirty-first day Qf May shall, fQr the purpQses of this Act, be included in cQmputing the incQme of the recipient of the fiscal year in which the premium is received." H. The said .Act is further amended as to

section 28 by adding the following proviso immediately at the end O'f the first paragraph thereof: "Provided that where the earliest fiscal year of any Qf the constituent 'companies ,commences prior to the first day Qf January, 1948, the election may be made at any time befQre the said date.". 10. The said Act is further amended as to

section 40 by adding immediately at the end of subsection (3) thereof the fQIIQwing new subsections:

7 "( 4) Where a corporation fails t~ pay all or any 'pa~t of the am.ounts required under subsectIons (2) or (3) wIthIn the times prescribed, it shall pay interest on all unpaid amounts at the rate of four per cent per annum from the due date of payment until one m.onth from the day of mail ing of the notice o.f assessment and thereafter at seven per cent per annum until the day of payment. "

(5) Notwithstanding anything co.ntained in this section, where a ,c.orporation that has held forth the prospect that it will make allO'cations in proportio.n to' patronage to its customers of a taxation year, as des1cribed in subsections (3), (4), (5) and (6) of sectiO'n 5 of this Act, and where the am-ount of its income .of that year is estimated by it to' be three tho.usand dO'llars or less, the corporation is not required to' pay instalments in respect of its tax on its said income under subsection (1) of this sectio.n but shall pay the am.ount of its said tax as estimated by it at the time when it is required under this Act to make a return of its income for such taxation year and if, after examination of the corporation's return under this A-ct,- " (

a) it is established that the amount of the income of the -corporation is three thousand d.ollars or less but that the amount so paid is less than the tax payable by it, the corporation shall f.orthwith after no.tke of assessment is sent to it under this Act pay the unpaid am.ount thereof together with in terest thereon at four per cent per annum from the day on or bef.ore which it is required to. make pay ment of its tax as estimated by it until one month after the date of mailing of the notice of assessment and thereafter at seven per cent per annum until the date of payment; or " (

b) it is established that the amount .of income o.f the corporation is more than three thousand dollars, the corporation shall, forthwith after notice of assessment is sent to it under this Act, pay interest on the am.ount of its tax at four per cent per annum in respect of the period from the end of its fis1cal year to the day on or before which it is required to make payment of its tax as estimated by it and if the amount of the said payment is less than the tax pa~able by it shall forthwith after re~eiving the notIce of assessment pay the unpaid amount thereof together with interest thereon at four per cent per annum from the time when it made payment of its tax as estimated by it until one month after the date of mailing of the notice of assessment and thereafter at seven per cent per annum until the date of payment.

"

(6) No interest is payable prior to the first day of January, 1948.".

8 11. The said Act is further amended as to

section 47,- (

a) by striking out the word and figures "section 35", where the same oc'cur in subsection (1) thereof, and by substituting therefor the words and figures "sub section (1) of

section 44" ; (

b) by adding im'mediately after the words "such DoUce", where the same oc'cur in subsection (4) thereof, the words "shall be in Form A in the Second 8chedule and". 12. The said Act is further amended as to

section 48, (

a) b'y adding immediately after the words "in dupli .cate", where the same oc,cnr in subsection (1) there of, the words "in Form B in the Second Schedule" ; (

b) by striking out the words "preceedings shall there upon become a cause in the Trial Division of the Supreme Court", where the same occur in subseetion (4) thereof, and by substituting therefor the words "proceedings shall thereupon become a cause in the Trial Division of the Supreme Court, and the Court" ; (

c) by striking out the word "apeal", where the same occurs in subsection (7) thereof, and by substituting therefor the word "appeal". 13. The said Act is further amended as to

section 50 by striking out the word "panalties", where the same occurs therein, and by substituting therefor the word "penalties", 14. The said A'ct is further amended as to

section 56 by striking out the same and by substituting therefor the following: "56. For the purpose of carrying out the provisions of this Act according to their true intent and of supplying any defi'ciency therein, the Lieutenant Governor in Council may make regulations not inconsistent with the spirit of the Act, which shall have the same force and effect as if incorporated herein, and in particular, without limiting the generality of the foregoing, may make regulations,- " (

a) prescribing the evidencerequ,ired to establish facts relevant to assessments under this Act; and " (

b) requiring any class of persons to make information returns respecting any class of information required in connection with assessments under this Act, and any return required by regulation under this seetion shall be deemed to be a return required by

section 35 of this A'ct.". 15. The said Act is further amended as to

section 60 by striking out the word "panalty", where the same o,ccurs in subsection (1) thereof, and by substituting therefor the word "penalty".

9 16. The said A,ct is further amended as to. the First

Schedule thereto by striking out the word "establisment", where the same oc,curs in subse.ction (3) of Rule 7 thereof, and by substituting therefor the word "establishment". 17. The said Aet is further amended by adding im mediately after the First

Schedule thereof, the following new Schedule: "SECOND

SCHEDULE "FORM A. "Notice of Appeal to Provincial Treasurer. "In re The Alberta Corporation Income Tax Act, and (Name of corporatio.n.) of the.......... . . of. . . . . . . . . . . . . . . . . .. .. ....... .in the Province of Alberta, Appellant. "No.tice of appeal is hereby given from the assessment bearing date the.......... . ... day of .............. .. A.D. 19 ........ wherein a tax in the sum of ...................... dollars was levied in respect of income for the taxation yoor A.D. 19 ........ "

(1) The following is a statement of the facts -relevant to the said assessment: "

(2) The following is a statement of the Appellant's reasons for appeal: "Dated this ........... day of ... .. ..... .. .. . A.D. 19 ........ . (Signature) "FORM B. "Notice of Appeal. "In the Supreme Court of Alberta (Trial Division) "J udicial District of....... ............. .. ............ . "In re The Alberta Corporation Income Tax Act, and (Name of corporation.) of the........ .. ............. of........ .. ......... .in the Province of Alberta, Appellant.

"Notice of appeal is hereby given from the decision of the Provincial Treasurer confirming an assessment bea-ring date the ................ day of ............................ A.D. 19 ........ wherein a tax in the sum of ........................... dollars was levied in respect of the Appellant's income for the taxation year A.D. 19 ........

10 "

(1) The f.oll.owing is a statement .of the facts relevant to the said assessment: "

(2) The f.ollowing is a statement of the Appellant's reasons for appeal: "Dated this .............. day of ................................ A.D. 19 ........ . (Signature) "To the elerk of the Supreme C.ourt of Alberta, Judicial District .of ........................................ " 18.- ":This Act shall come into force on the day upon which it is assented to, and upon so c.oming into force shall be deemed to have been in force at all times since the first day of January, 1947.

FIFTH SESSION TENTH LEGISLATURE 12 GEORGE VI 1948 BILL

An Act to amend The Alberta Gerporation Income Tax Act. Received and read the First time .. Second time . Third time ...................................... . HON. MR. MANNING. EDMONTON: A. Shnltka, King's Printer 1948 Title: 1948 (10th, 5th) Bill 38,

An Act to amend The Alberta Corporation Income Tax Act

Document details

Collection	Alberta — Bills
Citation	L10 S5 7284
Type	bill
Volume / chapter	L10 S5 7284
Language	en
Format	json
Source	PROVINCIAL
Identifier	e60313eb485d7635f12b513b64db2095728f110d

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