Income Tax Amendments Act, 2000 (S.C. 2001, c. 17)
Full Document:
Assented to 2001-06-14
111. (1) Paragraph 123.2(a) of the Act is replaced by the following:
(a) the tax payable under this Part by the corporation for the year determined without reference to this section, sections 123.3, 123.4 and 125 to 126 and subsections 127(3), (5), (27) to (31), (34) and (35) and 137(3) and as if subsection 124(1) did not contain the words “in a province”
(2) Subsection (1) applies to the 2001 and subsequent taxation years.
112. (1) The Act is amended by adding the following after section 123.3:
Corporation Tax Reductions
Marginal note:Definitions
123.4 (1) The definitions in this subsection apply in this section.
“CCPC rate reduction percentage”
« pourcentage de réduction du taux des SPCC »
“CCPC rate reduction percentage” of a Canadian-controlled private corporation for a taxation year is that proportion of 7% that the number of days in the year that are after 2000 is of the number of days in the year.
“full rate taxable income”
« revenu imposable au taux complet »
“full rate taxable income” of a corporation for a taxation year is
(a) if the corporation is not a corporation described in paragraph (b) or (c) for the year, the amount by which the corporation’s taxable income for the year exceeds the total of
(i) if an amount is deducted under subsection 125.1(1) from the corporation’s tax otherwise payable under this Part for the year, 100/7 of the amount deducted,
(ii) if an amount is deducted under subsection 125.1(2) from the corporation’s tax otherwise payable under this Part for the year, the amount determined, in respect of the deduction, by the formula in that subsection,
(iii) three times the total of all amounts each of which is deducted under paragraph 20(1)(v.1) in computing the corporation’s income from a business or property for the year, and
(iv) if the corporation is a credit union throughout the year, 100/16 of the amount, if any, deducted under subsection 137(3) from the corporation’s tax otherwise payable under this Part for the year;
(b) if the corporation is a Canadian-controlled private corporation throughout the year, the amount by which the corporation’s taxable income for the year exceeds the total of
(i) the amounts that would, if paragraph (a) applied to the corporation, be determined under subparagraphs (a)(i) to (iv) in respect of the corporation for the year,
(ii) 100/16 of the amount, if any, deducted under subsection 125(1) from the corporation’s tax otherwise payable under this Part for the year,
(iii) the corporation’s aggregate investment income for the year, within the meaning assigned by subsection 129(4), and
(iv) 100/7 of the amount, if any, deducted under subsection (3) from the corporation’s tax otherwise payable under this Part for the year; and
(c) if the corporation is throughout the year an investment corporation, a mortgage investment corporation, a mutual fund corporation, or a non-resident-owned investment corporation, nil.
“general rate reduction percentage”
« pourcentage de réduction du taux général »
“general rate reduction percentage” of a corporation for a taxation year is the total of
(a) that proportion of 1% that the number of days in the year that are in 2001 is of the number of days in the year;
(b) that proportion of 3% that the number of days in the year that are in 2002 is of the number of days in the year;
(c) that proportion of 5% that the number of days in the year that are in 2003 is of the number of days in the year; and
(d) that proportion of 7% that the number of days in the year that are after 2003 is of the number of days in the year.
Marginal note:General deduction from tax
(2) There may be deducted from a corporation’s tax otherwise payable under this Part for a taxation year the product obtained by multiplying the corporation’s general rate reduction percentage for the year by the corporation’s full-rate taxable income for the year.
Marginal note:CCPC deduction
(3) There may be deducted from the tax otherwise payable under this Part for a taxation year by a Canadian-controlled private corporation the product obtained by multiplying the corporation’s CCPC rate reduction percentage for the year by the amount by which the least of
(a) 3/2 of the corporation’s business limit for the year, as determined under section 125 for the purpose of paragraph 125(1)(c),
(b) the amount that would be determined under paragraph 125(1)(a) in respect of the corporation for the year if the references in the description of M in the definition “specified partnership income” in subsection 125(7) to “$200,000” and “$548” were read as references to “$300,000” and “$822”, respectively, and
(c) the amount by which
(i) the amount that would, if subsection 126(1) did not apply in respect of any amount included in the corporation’s aggregate investment income for the year (determined under subsection 129(4)), be determined under paragraph 125(1)(b) in respect of the corporation for the year
exceeds
(ii) the corporation’s aggregate investment income for the year,
exceeds the total of
(d) the amounts that would, if paragraph (a) of the definition “full-rate taxable income” in subsection (1) applied to the corporation for the year, be determined under subparagraphs (a)(i) to (iv) of that definition in respect of the corporation for the year, and
(e) 100/16 of the amount, if any, deducted under subsection 125(1) from the corporation’s tax otherwise payable under this Part for the year.
(2) Subsection (1) applies to the 2001 and subsequent taxation years except that, in its application to a taxation year that begins before 2001, the amount determined under subparagraph (b)(iv) of the definition “full rate taxable income” in subsection 123.4(1) of the Act, as enacted by subsection (1), is deemed to be the amount otherwise so determined multiplied by the number obtained by dividing the number of days in the year by the number of days in the year that are after 2000.
113. (1) The portion of paragraph 125(1)(b) of the Act before subparagraph (iii) is replaced by the following:
(b) the amount, if any, by which the corporation’s taxable income for the year exceeds the total of
(i) 10/3 of the total of the amounts that would be deductible under subsection 126(1) from the tax for the year otherwise payable under this Part by it if those amounts were determined without reference to sections 123.3 and 123.4,
(ii) 10/4 of the total of the amounts that would be deductible under subsection 126(2) from the tax for the year otherwise payable under this Part by it if those amounts were determined without reference to section 123.4, and
(2) The definition “Canadian-controlled private corporation” in subsection 125(7) of the Act is replaced by the following:
“Canadian-controlled private corporation”
« société privée sous contrôle canadien »
“Canadian-controlled private corporation” means a private corporation that is a Canadian corporation other than
(a) a corporation controlled, directly or indirectly in any manner whatever, by one or more non-resident persons, by one or more public corporations (other than a prescribed venture capital corporation), by one or more corporations described in paragraph (c), or by any combination of them,
(b) a corporation that would, if each share of the capital stock of a corporation that is owned by a non-resident person, by a public corporation (other than a prescribed venture capital corporation), or by a corporation described in paragraph (c) were owned by a particular person, be controlled by the particular person, or
(c) a corporation a class of the shares of the capital stock of which is listed on a prescribed stock exchange;
(3) Subsection (1) applies to the 2001 and subsequent taxation years.
(4) Subsection (2) applies to taxation years that begin after 1999.
114. (1) Subparagraph 125.1(1)(b)(ii) of the Act is replaced by the following:
(ii) 10/4 of the total of the amounts that would be deductible under subsection 126(2) from the tax for the year otherwise payable under this Part by the corporation if those amounts were determined without reference to section 123.4, and
(2) The portion of subsection 125.1(2) of the Act before the formula is replaced by the following:
Marginal note:Electrical energy and steam
(2) A corporation that generates electrical energy for sale, or produces steam for sale, in a taxation year may deduct from its tax otherwise payable under this Part for the year 7% of the amount determined by the formula
(3) Paragraphs 125.1(5)(a) and (b) of the Act are replaced by the following:
(a) electrical energy and steam are deemed to be goods; and
(b) the generation of electrical energy for sale, and the production of steam for sale, are deemed to be, subject to paragraph (l) of the definition “manufacturing or processing” in subsection (3), manufacturing or processing.
(4) Subsection (1) applies to the 2001 and subsequent taxation years.
(5) Subsections (2) and (3) apply to taxation years that end after 1999 except that, in its application to such a taxation year that begins before 2002, the reference to “7%” in subsection 125.1(2) of the Act, as enacted by subsection (2), shall be read as a reference to the total of
(a) 0% multiplied by the number of days in the year that are before 1999,
(b) in the case of a corporation that in 1999 generated electrical energy for sale, or produced steam for use in the generation of electrical energy for sale, that proportion of 1% that the number of days in the taxation year that are in the 1999 calendar year is of the number of days in the taxation year,
(c) in the case of a corporation to which paragraph (b) does not apply, 0% multiplied by the number of days in the taxation year that are in the 1999 calendar year,
(d) that proportion of 3% that the number of days in the taxation year that are in the 2000 calendar year is of the number of days in the taxation year,
(e) that proportion of 5% that the number of days in the taxation year that are in the 2001 calendar year is of the number of days in the taxation year,
(f) that proportion of 7% that the number of days in the taxation year that are in the 2002 calendar year is of the number of days in the taxation year, and
(g) that proportion of 7% that the number of days in the taxation year that are in the 2003 calendar year is of the number of days in the taxation year.
- Date modified: