First

Session, 48th General Assembly

Elizabeth II, 2016

BILL 15

AN ACT TO AMEND THE

INCOME TAX ACT, 2000 NO. 3

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

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

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

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

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

HONOURABLE

CATHY BENNETT

Minister of Finance and President of Treasury Board

Ordered

to be printed by the Honourable House of Assembly

EXPLANATORY NOTE

This Bill would amend the Income Tax Act, 2000 by increasing the

tax on corporations from 14% to 15%.

A BILL

AN ACT TO AMEND THE INCOME TAX ACT, 2000

NO. 3

Analysis

S.40 Amdt.

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

1. (1) Subsection 40(1) of the Income Tax Act, 2000 is repealed and the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.

(1.1) Notwithstanding subsection (1), if a

corporation's taxation year includes January 1, 2016, the tax payable by that

corporation for the taxation year is the amount determined when the

corporation's taxable income earned in the year in the province is multiplied

by the total of

(

a) that proportion of 14%

that the number of days in the taxation year that are before January 1, 2016 is

of the number of days in the taxation year; and

(

b) that proportion of 15% that the number of days

in the taxation year that are after December 31, 2015 is of the number of days

in the taxation year.

(2) Paragraph 40(3)(

b) of the Act is repealed and

the following substituted:

(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.

(3) Section 40 of the Act is amended by adding

immediately after subsection (3) the following:

(3.1) Notwithstanding subsections (1), (1.1) and (3), if a corporations taxation

year includes January 1, 2016, and the corporation is eligible for a deduction

under

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

this Act for the taxation year is

(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

(

b) the

amount determined when the corporations taxable income earned in the year in

the province less the amount allocated to the province under paragraph (

a) in

respect of the corporation for the year is multiplied by the total of

(

i) that proportion of 14% that the number of days in the taxation year

that are before January 1, 2016 is of the number of days in the taxation year,

and

(ii) that proportion of 15% that the number of days in the taxation year

that are after December 31, 2015 is of the number of days in the taxation year.

Commencement

2. This Act is considered to have come into force

on January 1, 2016.

Queen's Printer