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Income Tax Amendments Act, 2000 (S.C. 2001, c. 17)

Assented to 2001-06-14

  •  (1) Subparagraph 127(5)(a)(i) of the Act is replaced by the following:

    • (i) the taxpayer’s investment tax credit at the end of the year in respect of property acquired before the end of the year, of the taxpayer’s flow-through mining expenditure for the year or a preceding taxation year or of the taxpayer’s SR & ED qualified expenditure pool at the end of the year or of a preceding taxation year, and

  • (2) Clause 127(5)(a)(ii)(A) of the Act is replaced by the following:

    • (A) the taxpayer’s investment tax credit at the end of the year in respect of property acquired in a subsequent taxation year, of the taxpayer’s flow-through mining expenditure for a subsequent taxation year or of the taxpayer’s SR & ED qualified expenditure pool at the end of a subsequent taxation year to the extent that an investment tax credit was not deductible under this subsection for the subsequent year, and

  • (3) Paragraph 127(5)(b) of the Act is replaced by the following:

    • (b) where Division E.1 applies to the taxpayer for the year, the amount, if any, by which

      • (i) the taxpayer’s tax otherwise payable under this Part for the year

      exceeds

      • (ii) the taxpayer’s minimum amount for the year determined under section 127.51.

  • (4) Paragraph (a.1) of the definition “investment tax credit” in subsection 127(9) of the Act is replaced by the following:

    • (a.1) 20% of the amount by which the taxpayer’s SR & ED qualified expenditure pool at the end of the year exceeds the total of all amounts each of which is the super-allowance benefit amount for the year in respect of the taxpayer in respect of a province,

    • (a.2) where the taxpayer is an individual (other than a trust), 15% of the taxpayer’s flow-through mining expenditures for the year,

  • (5) Paragraph (c) of the definition “investment tax credit” in subsection 127(9) of the Act is replaced by the following:

    • (c) the total of all amounts each of which is an amount determined under paragraph (a), (a.1), (a.2) or (b) in respect of the taxpayer for any of the 10 taxation years immediately preceding or the 3 taxation years immediately following the year,

  • (6) Paragraph (l) of the definition “investment tax credit” in subsection 127(9) of the Act is replaced by the following:

    • (l) any of the income is exempt income or is exempt from tax under this Part,

  • (7) Subsection 127(9) of the Act is amended by adding the following in alphabetical order:

    “flow-through mining expenditure”

    « dépense minière déterminée »

    “flow-through mining expenditure” of a taxpayer for a taxation year means an expense deemed by subsection 66(12.61) (or by subsection 66(18) as a consequence of the application of subsection 66(12.61) to the partnership, referred to in paragraph (c) of this definition, of which the taxpayer is a member) to be incurred by the taxpayer in the year

    • (a) that is a Canadian exploration expense incurred after October 17, 2000 and before 2004 by a corporation in conducting mining exploration activity from or above the surface of the earth for the purpose of determining the existence, location, extent or quality of a mineral resource described in paragraph (a) or (d) of the definition “mineral resource” in subsection 248(1),

    • (b) that

      • (i) is an expense described in paragraph (f) of the definition “Canadian exploration expense” in subsection 66.1(6), and

      • (ii) is not an expense in respect of

        • (A) trenching, if one of the purposes of the trenching is to carry out preliminary sampling (other than specified sampling),

        • (B) digging test pits (other than digging test pits for the purpose of carrying out specified sampling), and

        • (C) preliminary sampling (other than specified sampling),

    • (c) an amount in respect of which is renounced in accordance with subsection 66(12.6) by the corporation to the taxpayer (or a partnership of which the taxpayer is a member) under an agreement described in that subsection and made after October 17, 2000,

    • (d) that is not an expense that was renounced under subsection 66(12.6) to the corporation (or a partnership of which the corporation is a member), unless that renunciation was under an agreement described in that subsection and made after October 17, 2000, and

    • (e) that is an expense that would be incurred by the corporation before 2004 if this Act were read without reference to subsection 66(12.66);

    “specified sampling”

    « échantillonnage déterminé »

    “specified sampling” means the collecting and testing of samples in respect of a mineral resource except that specified sampling does not include

    • (a) the collecting or testing of a sample that, at the time the sample is collected, weighs more than 15 tonnes, and

    • (b) the collecting or testing of a sample collected at any time in a calendar year in respect of any one mineral resource if the total weight of all such samples collected (by any person or partnership or any combination of persons and partnerships) in the period in the calendar year that is before that time (other than samples each of which weighs less than one tonne) exceeds 1,000 tonnes;

    “super-allowance benefit amount”

    « avantage relatif à la superdéduction »

    “super-allowance benefit amount” for a particular taxation year in respect of a corporation in respect of a province means the amount determined by the formula

    (A – B) × C

    where

    A 
    is the total of all amounts each of which is an amount that is or may become deductible by the corporation, in computing income or taxable income relevant in calculating an income tax payable by the corporation under a law of the province for any taxation year, in respect of an expenditure on scientific research and experimental development incurred in the particular year,
    B 
    is the amount by which the amount of the expenditure exceeds the total of all amounts that would be required by subsections (18) to (20) to reduce the corporation's qualified expenditures otherwise determined under this section if the definitions “government assistance” and “non-government assistance” did not apply to assistance provided under that law, and
    C 
    is,
    • (a) where the corporation’s expenditure limit for the particular year is nil, the maximum rate of the province’s income tax that applies for that year to active business income earned in the province by a corporation, and

    • (b) in any other case, the rate of the province’s income tax for that year that would apply to the corporation if

      • (i) it were not associated with any other corporation in the year,

      • (ii) its taxable income for the year were less than $200,000, and

      • (iii) its taxable income for the year were earned in the province in respect of an active business carried on in the province.

  • (8) Paragraph 127(10.1)(b) of the Act is replaced by the following:

    • (b) the amount by which the corporation’s SR & ED qualified expenditure pool at the end of the year exceeds the total of all amounts each of which is the super-allowance benefit amount for the year in respect of the corporation in respect of a province; and

  • (9) Subsection 127(11.1) of the Act is amended by striking out the word “and” at the end of paragraph (c.1) and adding the following paragraph after paragraph (c.1):

    • (c.2) the amount of a taxpayer’s flow-through mining expenditure for a taxation year is deemed to be the amount of the taxpayer’s flow-through mining expenditure for the year as otherwise determined less the amount of any government assistance or non-government assistance in respect of expenses included in determining the taxpayer’s flow-through mining expenditure for the year that, at the time of the filing of the taxpayer’s return of income for the year, the taxpayer has received, is entitled to receive or can reasonably be expected to receive; and

  • (10) Subsections (1), (2) and (9) apply to the 2000 and subsequent taxation years, except that, for the 2000 taxation year, clause 127(5)(a)(ii)(A) of the Act, as enacted by subsection (2), shall be read as follows:

    • (A) the taxpayer’s investment tax credit at the end of the year in respect of property acquired in a subsequent taxation year, of the taxpayer’s flow-through mining expenditure for a subsequent taxation year or of the taxpayer’s SR & ED qualified expenditure pool at the end of a subsequent taxation year to the extent that an investment tax credit was not deductible under this subsection or subsection 180.1(1.2) for the subsequent year, and

  • (11) Subsection (3) applies to the 2001 and subsequent taxation years.

  • (12) Paragraph (a.1) of the definition “investment tax credit” in subsection 127(9) of the Act, as enacted by subsection (4), the definition “super-allowance benefit amount” in subsection 127(9) of the Act, as enacted by subsection (7), and subsection (8) apply to taxation years that begin after February 2000 except that, if a corporation’s first taxation year that begins after February 2000 ends before 2001, those provisions apply to the corporation’s taxation years that begin after 2000.

  • (13) Paragraph (a.2) of the definition “investment tax credit” in subsection 127(9) of the Act, as enacted by subsection (4), subsection (5) and the definitions “flow-through mining expenditure” and “specified sampling” in subsection 127(9) of the Act, as enacted by subsection (7), apply after October 17, 2000.

  • (14) Subsection (6) applies to all taxation years.

  •  (1) Paragraph 127.52(1)(d) of the Act is replaced by the following:

    • (d) except in respect of dispositions of property occurring before 1986 or to which section 79 applies,

      • (i) the references to the fraction applicable to the individual for the year in each of paragraphs 38(a), (b) and (c) and section 41 were read as a reference to “4/5”, other than in the case of a capital gain from a disposition that is the making of a gift of property to a qualified donee, and

      • (ii) each amount (other than an amount to which subsection 104(21.4) applies) that is designated by a trust for a particular year of the trust in respect of the individual and deemed by subsection 104(21) to be a taxable capital gain for the year of the individual were equal to the amount obtained by the formula

        4/5(A × 1/B)

        where

        A 
        is the amount so deemed to be a taxable capital gain for the year of the individual, and
        B 
        is the fraction in paragraph 38(a) applicable to the trust for the particular year of the trust for which the designation is made;
  • (2) The portion of paragraph 127.52(1)(e) of the Act before subparagraph (i) is replaced by the following:

    • (e) the total of all amounts deductible under section 65, 66, 66.1, 66.2, 66.21 or 66.4 or under subsection 29(10) or (12) of the Income Tax Application Rules in computing the individual’s income for the year were the lesser of the amounts otherwise so deductible by the individual for the year and the total of

  • (3) Subparagraph 127.52(1)(e.1)(ii) of the Act is replaced by the following:

    • (ii) the total of all amounts each of which is an amount deductible under section 65, 66, 66.1, 66.2, 66.21 or 66.4 or under subsection 29(10) or (12) of the Income Tax Application Rules in computing the individual’s income for the year;

  • (4) The portion of subparagraph 127.52(1)(g)(ii) of the Act before clause (A) is replaced by the following:

    • (ii) the total of all amounts each of which is 3/5 of

  • (5) Paragraph 127.52(1)(h) of the Act is replaced by the following:

    • (h) the only amounts deductible under sections 110 to 110.7 in computing the individual’s taxable income for the year or taxable income earned in Canada for the year, as the case may be, were

      • (i) the amounts deducted under any of subsections 110(2), 110.6(2), (2.1), (3) and (12) and 110.7(1),

      • (ii) the amount deducted under paragraph 110(1)(d), not exceeding the total of

        • (A) twice the amount deducted under paragraph 110(1)(d.01), and

        • (B) 2/5 of the amount, if any, by which

          • (I) the amount deducted under paragraph 110(1)(d)

          exceeds

          • (II) the amount determined under clause (A),

      • (iii) the amount deducted under paragraph 110(1)(d.01),

      • (iv) 2/5 of the amounts deducted under any of paragraphs 110(1)(d.1) to (d.3), and

      • (v) the amount that would be deductible under paragraph 110(1)(f) if paragraph (d) were applicable in computing the individual’s income for the year;

  • (6) Subsections (1), (4) and (5) apply to the 2000 and subsequent taxation years except that, for the 2000 taxation year, clause 127.52(1)(h)(ii)(A) of the Act, as enacted by subsection (5), shall be read as follows:

    • (A) the total of

      • (I) twice the amount deducted under paragraph 110(1)(d.01) in respect of benefits that the individual is deemed by paragraph 7(1)(a) to have received in the year as a result of transactions, events or circumstances that occur after October 17, 2000, and

      • (II) the amount deducted under paragraph 110(1)(d.01) in respect of benefits that the individual is deemed by paragraph 7(1)(a) to have received in the year as a result of transactions, events or circumstances that occur before October 18, 2000, and

  • (7) Subsections (2) and (3) apply to taxation years that begin after 2000.

 
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