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Budget Implementation Act, 2019, No. 1 (S.C. 2019, c. 29)

Assented to 2019-06-21

PART 1Income Tax Act and Other Legislation (continued)

C.R.C., c. 945Income Tax Regulations

  •  (1) Paragraph 1100(1)(a) of the Income Tax Regulations is amended by striking out “and” at the end of subparagraph (xxxviii) and by adding the following after subparagraph (xxxix):

    • (xl) of Class 54, 30 per cent, and

    • (xli) of Class 55, 40 per cent,

  • (2) Subparagraph 1100(1)(b)(i) of the Regulations is replaced by the following:

    • (i) if the capital cost of the property was incurred in the taxation year and after November 12, 1981,

      • (A) if the property is an accelerated investment incentive property and the capital cost of the property was incurred before 2024, the lesser of

        • (I) 150 per cent of the amount for the year calculated in accordance with Schedule III, and

        • (II) the amount determined for paragraph 1(b) of Schedule III, and

      • (B) if the property is not an accelerated investment incentive property and is not described in any of subparagraphs (b)(iii) to (v) of the description of F in subsection (2), 50 per cent of the amount for the year calculated in accordance with Schedule III, and

  • (3) Subparagraph 1100(1)(c)(i) of the Regulations is replaced by the following:

    • (i) the total of

      • (A) the aggregate of the amounts for the year obtained by apportioning the capital cost to the taxpayer of each property over the life of the property remaining at the time the cost was incurred, and

      • (B) if the property is accelerated investment incentive property, the portion of the amount determined under clause (A) that is in respect of the property multiplied by

        • (I) 0.5, if the property becomes available for use in the year and before 2024, and

        • (II) 0.25, if the property becomes available for use in the year and after 2023, and

  • (4) Subparagraph 1100(1)(ta)(v) of the Regulations is replaced by the following:

    • (v) property described in any of subparagraphs (b)(iii) to (v) of the description of F in subsection (2),

  • (5) Subparagraph 1100(1)(v)(iv) of the Regulations is replaced by the following:

    • (iv) the capital cost of the property to the taxpayer multiplied by

      • (A) 50 per cent, in the case of an accelerated investment incentive property acquired in the year and before 2024,

      • (B) 16 2/3 per cent, in the case of property acquired in the year, other than

        • (I) accelerated investment incentive property, and

        • (II) property described in any of subparagraphs (b)(iii) to (v) of the description of F in subsection (2), and

      • (C) 33 1/3 per cent, in any other case, and

  • (6) Subsection 1100(2) of the Regulations is replaced by the following:

    • (2) The amount that a taxpayer may deduct for a taxation year under subsection (1) in respect of property of a class in Schedule II is to be determined as if the undepreciated capital cost to the taxpayer at the end of the taxation year (before making any deduction under subsection (1) for the taxation year) of property of the class were adjusted by adding the positive or negative amount determined by the formula

      A(B) − 0.5(C)

      where

      A
      is, in respect of property of the class that became available for use by the taxpayer in the taxation year and that is accelerated investment incentive property or property included in Class 54 or 55,
      • (a) if the property is not included in paragraph (1)(v) or in any of Classes 12, 13, 14, 15, 43.1, 43.2, 53, 54 and 55 or in Class 43 in the circumstances described in paragraph (d),

        • (i) 1/2, for property that became available for use by the taxpayer before 2024, and

        • (ii) nil, for property that became available for use by the taxpayer after 2023,

      • (b) if the class is Class 43.1,

        • (i) 2 1/3, for property that became available for use by the taxpayer before 2024,

        • (ii) 1 1/2, for property that became available for use by the taxpayer in 2024 or 2025, and

        • (iii) 5/6, for property that became available for use by the taxpayer after 2025,

      • (c) if the class is Class 43.2,

        • (i) 1, for property that became available for use by the taxpayer before 2024,

        • (ii) 1/2, for property that became available for use by the taxpayer in 2024, and

        • (iii) nil, in any other case,

      • (d) if the property is included in Class 53 or — for property acquired after 2025 — is included in Class 43 and would have been included in Class 53 if it had been acquired in 2025,

        • (i) 1, for property that became available for use by the taxpayer before 2024,

        • (ii) 1/2, for property that became available for use by the taxpayer in 2024 or 2025, and

        • (iii) 5/6, for property that became available for use by the taxpayer after 2025,

      • (e) if the class is Class 54,

        • (i) 2 1/3, for property that became available for use by the taxpayer before 2024,

        • (ii) 1 1/2, for property that became available for use by the taxpayer in 2024 or 2025, and

        • (iii) 5/6, for property that became available for use by the taxpayer after 2025,

      • (f) if the class is Class 55,

        • (i) 1 1/2, for property that became available for use by the taxpayer before 2024,

        • (ii) 7/8, for property that became available for use by the taxpayer in 2024 or 2025, and

        • (iii) 3/8, for property that became available for use by the taxpayer after 2025, and

      • (g) in any other case, nil;

      B
      is the amount determined, in respect of the class, by the formula

      D − E

      where

      D
      is the total of all amounts, if any, each of which is an amount included in the description of A in the definition undepreciated capital cost in subsection 13(21) of the Act in respect of property of the class that became available for use by the taxpayer in the taxation year and that is accelerated investment incentive property or property included in Class 54 or 55, as the case may be, and
      E
      is the amount, if any, by which the amount determined for G exceeds the amount determined for F in the description of C; and
      C
      is the amount determined, in respect of the class, by the formula

      F − G

      where

      F
      is the total of all amounts each of which
      • (a) is an amount added to the undepreciated capital cost to the taxpayer of property of the class

        • (i) because of element A in the definition undepreciated capital cost in subsection 13(21) of the Act in respect of property (other than accelerated investment incentive property) that was acquired, or became available for use, by the taxpayer in the taxation year, or

        • (ii) because of element C or D in the definition undepreciated capital cost in subsection 13(21) of the Act in respect of an amount that was repaid in the taxation year, and

      • (b) is not in respect of

        • (i) property included in paragraph (1)(v), in paragraph (w) of Class 10 or in any of paragraphs (a) to (c), (e) to (i), (k), (l) and (p) to (s) of Class 12,

        • (ii) property included in any of Classes 13, 14, 15, 23, 24, 27, 29, 34, 52, 54 and 55,

        • (iii) where the taxpayer was a corporation described in subsection (16) throughout the taxation year, property that was specified leasing property of the taxpayer at that time,

        • (iv) property that was deemed to have been acquired by the taxpayer in a preceding taxation year by reason of the application of paragraph 16.1(1)(b) of the Act in respect of a lease to which the property was subject immediately before the time at which the taxpayer last acquired the property, or

        • (v) property considered to have become available for use by the taxpayer in the taxation year by reason of paragraph 13(27)(b) or (28)(c) of the Act, and

      G
      is the total of all amounts each of which is an amount deducted from the undepreciated capital cost to the taxpayer of property of the class
      • (a) because of element F or G in the definition undepreciated capital cost in subsection 13(21) of the Act in respect of property disposed of in the taxation year, or

      • (b) because of element J in the definition undepreciated capital cost in subsection 13(21) of the Act in respect of an amount the taxpayer received or was entitled to receive in the taxation year.

    • Marginal note:Straddle years

      (2.01) For the purposes of subsection (2),

      • (a) if a taxation year begins in 2023 and ends in 2024, the factor determined for A in subsection (2) is to be replaced by the factor determined by the formula

        (A(B) + C(D))/(B + D)

        where

        A
        is the factor otherwise determined for A in subsection (2) for 2023,
        B
        is the amount that would be determined for D in subsection (2) if the only property that became available for use by the taxpayer in the taxation year were property that became available for use by the taxpayer in 2023,
        C
        is the factor otherwise determined for A in subsection (2) for 2024, and
        D
        is the amount that would be determined for D in subsection (2) if the only property that became available for use by the taxpayer in the taxation were property that became available for use by the taxpayer in 2024; and
      • (b) if a taxation year begins in 2025 and ends in 2026, the factor determined for A in subsection (2) is to be replaced by the factor determined by the formula

        (A(B) + C(D))/(B + D)

        where

        A
        is the factor otherwise determined for A in subsection (2) for 2025,
        B
        is the amount that would be determined for D in subsection (2) if the only property that became available for use by the taxpayer in the taxation year were property that became available for use by the taxpayer in 2025,
        C
        is the factor otherwise determined for A in subsection (2) for 2026, and
        D
        is the amount that would be determined for D in subsection (2) if the only property that became available for use by the taxpayer in the taxation year were property that became available for use by the taxpayer in 2026.
    • Marginal note:Expenditures before November 21, 2018

      (2.02) For the purposes of subsection (2), in respect of property of a class in Schedule II that is accelerated investment incentive property of a taxpayer solely because of subparagraph 1104(4)(b)(i),

      • (a) no amount is to be included in respect of the property in determining the amount for D in subsection (2) in respect of the class to the extent that the amount includes expenditures incurred by any person or partnership before November 21, 2018, unless the person or partnership from which the taxpayer acquired the property dealt at arm’s length with the taxpayer and held the property as inventory; and

      • (b) any amount excluded from the amount determined for D in subsection (2) in respect of the class because of paragraph (a) is to be included in determining the amount for F in subsection (2) in respect of the class, unless no amount in respect of the property would be so included if the property were not accelerated investment incentive property of the taxpayer.

  • (7) Paragraph 1100(2.2)(h) of the Regulations is replaced by the following:

    • (h) no amount shall be included in determining an amount for F in subsection (2) in respect of the property;

  • (8) Paragraph 1100(2.2)(k) of the Regulations is replaced by the following:

    • (k) if the property is a property described in paragraph (1)(v), its subparagraph (iv) shall be read, in respect of the property, as “33 1/3 per cent of the capital cost of the property to the taxpayer, and”.

  • (9) Subsection 1100(2.3) of the Regulations is replaced by the following:

    • (2.3) If a taxpayer has disposed of a property and, because of paragraph (2.2)(h), no amount is required to be included in determining an amount for F in subsection (2) in respect of the property by the person that acquired the property, no amount shall be included by the taxpayer in determining an amount for G in subsection (2) in respect of the disposition of the property.

 

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