Budget Implementation Act, 2003 (S.C. 2003, c. 15)
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Assented to 2003-06-19
PART 10AMENDMENTS TO THE INCOME TAX ACT AND ANOTHER ACT AS A CONSEQUENCE
R.S., c. 1 (5th Supp.)Income Tax Act
76. (1) Paragraph 118.6(3)(b) of the English version of the Act is amended by adding the following after subparagraph (i):
(i.1) a speech impairment, by a medical doctor or a speech-language pathologist,
(2) Paragraph 118.6(3)(b) of the French version of the Act is amended by adding the following after subparagraph (ii):
(ii.1) s’il s’agit d’un trouble de la parole, un médecin en titre ou un orthophoniste,
(3) Subparagraph 118.6(3)(b)(iii) of the English version of the Act is replaced by the following:
(iii) an impairment with respect to the individual’s ability in feeding or dressing themself, or in walking, by a medical doctor or an occupational therapist, or
(4) Subparagraph 118.6(3)(b)(iv) of the French version of the Act is replaced by the following:
(iv) s’il s’agit d’une déficience quant à la capacité de marcher, de s’alimenter ou de s’habiller, un médecin en titre ou un ergothérapeute,
(5) Subsections (1) and (2) apply in respect of certifications made after October 17, 2000.
(6) Subsections (3) and (4) apply to the 2003 and subsequent taxation years.
77. (1) The first formula in subsection 122.61(1) of the Act is replaced by the following:
1/12[(A - B) + C + M]
(2) Subsection 122.61(1) of the Act is amended by striking out the word “and” at the end of the description of B and by replacing paragraphs (a) and (b) of the description of F in the description of C with the following:
(a) only one qualified dependant, $1,463, and
(b) two or more qualified dependants, the total of
(i) $1,463 for the first qualified dependant,
(ii) $1,254 for the second qualified dependant, and
(iii) $1,176 for each of the third and subsequent qualified dependants,
(3) The descriptions of G and H in the description of C in subsection 122.61(1) of the Act are replaced by the following:
- G
- is the amount determined by the formula
J - [K - (L/0.122)]
where
- J
- is the person’s adjusted income for the year,
- K
- is the amount referred to in paragraph (b) of the description of B, and
- L
- is the amount referred to in paragraph (a) of the description of F, and
- H
- is
(a) if the person is an eligible individual in respect of only one qualified dependant, 12.2%, and
(b) if the person is an eligible individual in respect of two or more qualified dependants, the fraction (expressed as a percentage rounded to the nearest one-tenth of one per cent) of which
(i) the numerator is the total that would be determined under the description of F in respect of the eligible individual if that description were applied without reference to the fourth and subsequent qualified dependants in respect of whom the person is an eligible individual, and
(ii) the denominator is the amount referred to in paragraph (a) of the description of F, divided by 0.122; and
(4) Subsection 122.61(1) of the Act is amended by adding the following after the description of C:
- M
- is the amount determined by the formula
N - (O x P)
where
- N
- is the product obtained by multiplying $1,600 by the number of qualified dependants in respect of whom both
(a) an amount may be deducted under section 118.3 for the taxation year that includes the month, and
(b) the person is an eligible individual at the beginning of the month,
- O
- is the amount determined by the formula
J - [F/H + (K - L/0.122)]
where the descriptions of J, F, H, K, and L are described in the description of C, and
- P
- is the amount that would be determined for the description of H if the person were an eligible individual in respect of only the number of qualified dependants included in the description of N.
(5) Subsection 122.61(6) of the Act is replaced by the following:
Marginal note:Additions to NCB supplement — July 2005 and 2006
(6) Each amount referred to in the description of F in subsection (1) that is to be used for the purpose of determining the amount deemed to be an overpayment arising during months that are
(a) after June 2005 and before July 2006, is to be replaced with the amount that is the total of $185 and the amount otherwise determined under subsection (5) for those months; and
(b) after June 2006 and before July 2007, is to be replaced with the amount that is the total of $185 and the amount otherwise determined, for those months, by applying subsection (5) to the amount determined under paragraph (a).
(6) Subsections (1) to (5) apply in respect of overpayments deemed to arise during months that are after June 2003 except that, for overpayments deemed to arise during those months that are before July 2004, the following applies:
(a) the description of G in subsection 122.61(1) of the Act, as enacted by subsection (3), is to be read as follows:
- G
- is the amount, if any, by which the person’s adjusted income for the year exceeds $21,529, and
(b) subparagraph (b)(ii) in the description of H in subsection 122.61(1) of the Act, as enacted by subsection (3), is to be read as follows:
(ii) the denominator is the amount by which the amount referred to in paragraph (b) of the description of B exceeds $21,529.
(c) the description of O in subsection 122.61(1) of the Act, as enacted by subsection (4), is to be read as follows:
- O
- is the amount determined by the formula
(a) “J - $33,487”, if the person is an eligible individual in respect of three or fewer qualified dependants, and
(b) “J - (F/H + $21,529)”, if the person is an eligible individual in respect of more than three qualified dependants,
where the descriptions of J, F and H are described in the description of C, and
78. (1) The definition “CCPC rate reduction percentage” in subsection 123.4(1) of the Act is repealed.
(2) Paragraph (b) of the definition “full rate taxable income” in subsection 123.4(1) of the Act is amended by adding the word “and” at the end of subparagraph (ii) and by repealing subparagraph (iv).
(3) Paragraph (c) of the definition “full rate taxable income” in subsection 123.4(1) of the Act is replaced by the following:
(c) if the corporation is throughout the year an investment corporation, a mortgage investment corporation or a mutual fund corporation, nil.
(4) Paragraphs 123.4(3)(a) and (b) of the Act are replaced by the following:
(a) the amount determined by the formula
($300,000/A) x B
where
- A
- is the total of
(i) that proportion of $200,000 that the number of days in the taxation year that are before 2003 is of the number of days in the taxation year,
(ii) that proportion of $225,000 that the number of days in the taxation year that are in 2003 is of the number of days in the taxation year, and
(iii) that proportion of $250,000 that the number of days in the taxation year that are in 2004 is of the number of days in the taxation year, and
- B
- is the corporation’s business limit for the taxation 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 description of M in the definition “specified partnership income” in subsection 125(7) were read as it is to be read for fiscal periods that begin after 2005, and
(5) Subsection 123.4(3) of the Act is repealed.
(6) Subsections (1) to (3) and (5) apply to the 2005 and subsequent taxation years.
(7) Subsection (4) applies to the 2003 and 2004 taxation years.
79. (1) Subsections 125(2) to (4) of the Act are replaced by the following:
Marginal note:Interpretation of business limit
(2) For the purpose of this section, a corporation’s “business limit” for a taxation year is $300,000 unless the corporation is associated in the year with one or more other Canadian-controlled private corporations in which case, except as otherwise provided in this section, its business limit for the year is nil.
Marginal note:Associated corporations
(3) Notwithstanding subsection (2), if all the Canadian-controlled private corporations that are associated with each other in a taxation year file with the Minister in prescribed form an agreement that assigns for the purpose of this section a percentage to one or more of them for the year, the business limit for the year of each of the corporations is
(a) if the total of the percentages assigned in the agreement does not exceed 100%, $300,000 multiplied by the percentage assigned to that corporation in the agreement; and
(b) in any other case, nil.
Marginal note:Failure to file agreement
(4) If any of the Canadian-controlled private corporations that are associated with each other in a taxation year has failed to file with the Minister an agreement as contemplated by subsection (3) within 30 days after notice in writing by the Minister has been forwarded to any of them that such an agreement is required for the purpose of any assessment of tax under this Part, the Minister shall, for the purpose of this section, allocate an amount to one or more of them for the taxation year. The total amount so allocated must equal the least of the amounts that would, if none of the corporations were associated with any other corporation during the year and if this Act were read without reference to subsections (5) and (5.1), be the business limits of the corporations for the year.
(2) The description of M in the definition “specified partnership income” in subsection 125(7) of the Act is replaced by the following:
- M
- is the lesser of
(i) $300,000, and
(ii) the product obtained when $822 is multiplied by the total of all amounts each of which is the number of days in a fiscal period of the partnership that ends in the year, and
(3) Subsection (1) applies to the 2003 and subsequent taxation years except that for taxation years that begin before 2006
(a) the reference in subsection 125(2) of the Act, as enacted by subsection (1), to “$300,000” is to be read as a reference to the total of
(i) that proportion of $200,000 that the number of days in the taxation year that are before 2003 is of the number of days in the taxation year,
(ii) that proportion of $225,000 that the number of days in the taxation year that are in 2003 is of the number of days in the taxation year,
(iii) that proportion of $250,000 that the number of days in the taxation year that are in 2004 is of the number of days in the taxation year,
(iv) that proportion of $275,000 that the number of days in the taxation year that are in 2005 is of the number of days in the taxation year, and
(v) that proportion of $300,000 that the number of days in the taxation year that are after 2005 is of the number of days in the taxation year; and
(b) the reference in subsection 125(3) of the Act, as enacted by subsection (1), to “$300,000” is to be read as a reference to “the amount that would, if the corporation were not associated in the year with any other corporation, be its business limit for the year determined without reference to subsections (5) and (5.1),”.
(4) Subsection (2) applies to the 2003 and subsequent taxation years except that, for taxation years that begin before 2006, the references in the description of M in the definition “specified partnership income” in subsection 125(7) of the Act, as enacted by subsection (2), to “$300,000” and “$822”, are to be read,
(a) for fiscal periods of a partnership that end in a corporation’s 2003 taxation year, as “$225,000” and “$617”, respectively;
(b) for fiscal periods of a partnership that end in a corporation’s 2004 taxation year, as “$250,000” and “$685”, respectively; and
(c) for fiscal periods of a partnership that end in a corporation’s 2005 taxation year, as “$275,000” and “$754”, respectively.
- Date modified: