Budget Implementation Act, 2003 (S.C. 2003, c. 15)
Full Document:
- HTMLFull Document: Budget Implementation Act, 2003 (Accessibility Buttons available) |
- PDFFull Document: Budget Implementation Act, 2003 [668 KB]
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
84. (1) Paragraphs (g) to (j) of the definition “money purchase limit” in subsection 147.1(1) of the Act are replaced by the following:
(g) for years after 1995 and before 2003, $13,500,
(h) for 2003, $15,500,
(i) for 2004, $16,500,
(j) for 2005, $18,000,
(k) for each year after 2005, the greater of
(i) the product (rounded to the nearest multiple of $10, or, if that product is equidistant from two such consecutive multiples, to the higher multiple) of
(A) $18,000, and
(B) the quotient obtained when the average wage for the year is divided by the average wage for 2005, and
(ii) the money purchase limit for the preceding year;
(2) Subsection (1) applies after 2002. However, for the purpose of determining a pension credit of an individual for the 2002 calendar year under section 8308.1 or 8308.3 of the Income Tax Regulations or an amount prescribed in respect of an individual under section 8308.2 or 8309 of the Income Tax Regulations for the 2003 calendar year, the money purchase limit for 2002 is deemed to be $14,500.
85. (1) Subsection 181.1(1) of the Act is replaced by the following:
Marginal note:Tax payable
181.1 (1) Every corporation shall pay a tax under this Part for each taxation year equal to the amount obtained by multiplying the corporation’s specified percentage for the taxation year by the amount, if any, by which
(a) its taxable capital employed in Canada for the year
exceeds
(b) its capital deduction for the year.
Marginal note:Specified percentage
(1.1) For the purpose of subsection (1), the specified percentage of a corporation for a taxation year that ends after 2003 is the total of
(a) that proportion of 0.225% that the number of days in the taxation year that are before 2004 is of the number of days in the taxation year,
(b) that proportion of 0.200% that the number of days in the taxation year that are in 2004 is of the number of days in the taxation year,
(c) that proportion of 0.175% that the number of days in the taxation year that are in 2005 is of the number of days in the taxation year,
(d) that proportion of 0.125% that the number of days in the taxation year that are in 2006 is of the number of days in the taxation year, and
(e) that proportion of 0.0625% that the number of days in the taxation year that are in 2007 is of the number of days in the taxation year.
Marginal note:Exceptions
(1.2) Notwithstanding subsection (1.1), for the purposes of applying subsection 125(5.1) and the definitions “unused surtax credit” in subsections (6) and 190.1(5), the amount of tax in respect of a corporation under subsection (1) for a taxation year is to be determined as if the specified percentage of the corporation for the taxation year were 0.225%.
(2) Subsection (1) applies to the 2004 and subsequent taxation years.
86. (1) Subsections 181.5(1) to (3) of the Act are replaced by the following:
Marginal note:Capital deduction
181.5 (1) Subject to subsection (1.1), the capital deduction of a corporation for a taxation year is $50 million unless the corporation is related to another corporation at any time in the taxation year, in which case, subject to subsection (4), its capital deduction for the year is nil.
Marginal note:Exceptions
(1.1) For the purposes of applying subsection 125(5.1), the definitions “unused surtax credit” in subsections 181.1(6) and 190.1(5), and subsection 225.1(8), the amount of tax in respect of a corporation under subsection 181.1(1) for a taxation year is to be determined as if the reference to “$50 million” in subsection (1) were a reference to “$10 million”.
Marginal note:Related corporations
(2) Subject to subsection (4.1), a corporation that is related to any other corporation at any time in a taxation year of the corporation that ends in a calendar year may file with the Minister in prescribed form an agreement on behalf of the related group of which the corporation is a member under which an amount that does not exceed $50 million is allocated among all corporations that are members of the related group for each taxation year of each such corporation ending in the calendar year and at a time when it was a member of the related group.
Marginal note:Allocation by Minister
(3) Subject to subsection (4.1), the Minister may request a corporation that is related to any other corporation at the end of a taxation year to file with the Minister an agreement referred to in subsection (2) and, if the corporation does not file such an agreement within 30 days after receiving the request, the Minister may allocate an amount among the members of the related group of which the corporation is a member for the taxation year not exceeding $50 million.
(2) Section 181.5 of the Act is amended by adding the following after subsection (4):
Marginal note:Exceptions
(4.1) For the purposes of applying subsection 125(5.1), the definitions “unused surtax credit” in subsections 181.1(6) and 190.1(5), and subsection 225.1(8), subsections (2) to (4) are to be read as if the amount determined under subsection (2) or (3), as the case may be, in respect of the corporation for the taxation year were that proportion of $10 million that the amount otherwise determined in respect of the corporation for the taxation year under that subsection is of $50 million.
(3) Subsections (1) and (2) apply to the 2004 and subsequent taxation years.
87. (1) The definition “tax shelter” in subsection 237.1(1) of the Act is replaced by the following:
“tax shelter”
« abri fiscal »
“tax shelter” means
(a) a gifting arrangement described by paragraph (b) of the definition “gifting arrangement”; and
(b) a gifting arrangement described by paragraph (a) of the definition “gifting arrangement”, or a property (including any right to income) other than a flow-through share or a prescribed property, in respect of which it can reasonably be considered, having regard to statements or representations made or proposed to be made in connection with the gifting arrangement or the property, that, if a person were to enter into the gifting arrangement or acquire an interest in the property, at the end of a particular taxation year that ends within four years after the day on which the gifting arrangement is entered into or the interest is acquired,
(i) the total of all amounts each of which is
(A) an amount, or a loss in the case of a partnership interest, represented to be deductible in computing the person’s income for the particular year or any preceding taxation year in respect of the gifting arrangement or the interest in the property (including, if the property is a right to income, an amount or loss in respect of that right that is stated or represented to be so deductible), or
(B) any other amount stated or represented to be deemed under this Act to be paid on account of the person’s tax payable, or to be deductible in computing the person’s income, taxable income or tax payable under this Act, for the particular year or any preceding taxation year in respect of the gifting arrangement or the interest in the property, other than an amount so stated or represented that is included in computing a loss described in clause (A),
would equal or exceed
(ii) the amount, if any, by which
(A) the cost to the person of the property acquired under the gifting arrangement, or of the interest in the property at the end of the particular year, determined without reference to section 143.2,
would exceed
(B) the total of all amounts each of which is the amount of any prescribed benefit that is expected to be received or enjoyed, directly or indirectly, in respect of the property acquired under the gifting arrangement, or of the interest in the property, by the person or another person with whom the person does not deal at arm’s length.
(2) Subsection 237.1(1) of the Act is amended by adding the following in alphabetical order:
“gifting arrangement”
« arrangement de don »
“gifting arrangement” means any arrangement under which it may reasonably be considered, having regard to statements or representations made or proposed to be made in connection with the arrangement, that if a person were to enter into the arrangement, the person would
(a) make a gift to a qualified donee, or a contribution referred to in subsection 127(4.1), of property acquired by the person under the arrangement; or
(b) incur a limited-recourse amount that can reasonably be considered to relate to a gift to a qualified donee or a contribution referred to in subsection 127(4.1).
(3) The portion of the definition “tax shelter” in subsection 237.1(1) of the Act before paragraph (a), as enacted by subsection (1), and the portion of the definition “gifting arrangement” in subsection 237.1(1) of the Act before paragraph (a), as enacted by subsection (2), apply after February 18, 2003.
(4) Paragraph (a) of the definition “tax shelter” in subsection 237.1(1) of the Act, as enacted by subsection (1), and paragraph (b) of the definition “gifting arrangement” in subsection 237.1(1) of the Act, as enacted by subsection (2) apply in respect of property acquired, and gifts, contributions, statements and representations made, after February 18, 2003.
(5) Paragraph (b) of the definition “tax shelter” in subsection 237.1(1) of the Act, as enacted by subsection (1), and paragraph (a) of the definition “gifting arrangement” in subsection 237.1(1) of the Act, as enacted by subsection (2), apply in respect of property acquired, and statements and representations made, after February 18, 2003.
88. (1) The definition automobile in subsection 248(1) of the French version of the Act is amended by adding the following after paragraph (a):
a.1) les véhicules d’intervention d’urgence clairement identifiés qui sont utilisés dans le cadre de la charge ou de l’emploi d’un particulier au sein d’un service des incendies ou de la police;
(2) The definition “automobile” in subsection 248(1) of the English version of the Act is amended by adding the following after paragraph (b):
(b.1) a clearly marked emergency-response vehicle that is used in connection with or in the course of an individual’s office or employment with a fire department or the police;
(3) Paragraph (d) of the definition automobile in subsection 248(1) of the French version of the Act is replaced by the following:
d) les véhicules à moteur suivants :
(i) les véhicules de type fourgonnette ou camionnette, ou d’un type analogue, comptant au maximum trois places assises, y compris celle du conducteur, et qui, au cours de l’année d’imposition où ils sont acquis ou loués, sont utilisés principalement pour le transport de marchandises ou de matériel en vue de gagner un revenu,
(ii) les véhicules de type fourgonnette ou camionnette, ou d’un type analogue, dont la totalité ou la presque totalité de l’utilisation au cours de l’année d’imposition où ils sont acquis ou loués est pour le transport de marchandises, de matériel ou de passagers en vue de gagner un revenu,
(iii) les véhicules de type camionnette qui sont utilisés, au cours de l’année d’imposition où ils sont acquis ou loués, principalement pour le transport de marchandises, de matériel ou de passagers en vue de gagner un revenu à un ou plusieurs endroits au Canada qui sont, à la fois :
(A) visés, pour ce qui est d’un ou de plusieurs des occupants du véhicule, aux sous-alinéas 6(6) a)(i) ou (ii),
(B) situés à au moins 30 kilomètres du point le plus rapproché de la limite de la plus proche région urbaine, au sens du dernier dictionnaire du recensement publié par Statistique Canada avant l’année en question, qui compte une population d’au moins 40 000 personnes selon le dernier recensement publié par Statistique Canada avant cette même année.
(4) Paragraph (e) of the definition “automobile” in subsection 248(1) of the English version of the Act is replaced by the following:
(e) a motor vehicle
(i) of a type commonly called a van or pick-up truck, or a similar vehicle, that has a seating capacity for not more than the driver and two passengers and that, in the taxation year in which it is acquired or leased, is used primarily for the transportation of goods or equipment in the course of gaining or producing income,
(ii) of a type commonly called a van or pick-up truck, or a similar vehicle, the use of which, in the taxation year in which it is acquired or leased, is all or substantially all for the transportation of goods, equipment or passengers in the course of gaining or producing income, or
(iii) of a type commonly called a pick-up truck that is used in the taxation year in which it is acquired or leased primarily for the transportation of goods, equipment or passengers in the course of earning or producing income at one or more locations in Canada that are
(A) described, in respect of any of the occupants of the vehicle, in subparagraph 6(6)(a)(i) or (ii), and
(B) at least 30 kilometres outside the nearest point on the boundary of the nearest urban area, as defined by the last census dictionary published by Statistics Canada before the year, that has a population of at least 40,000 individuals as determined in the last census published by Statistics Canada before the year.
(5) Subsection 248(1) of the Act is amended by adding the following in alphabetical order:
“limited-recourse amount”
« montant à recours limité »
“limited-recourse amount” means an amount that is a limited-recourse amount under section 143.2.
(6) Subsections (1) and (2) apply to the 2003 and subsequent taxation years.
(7) Subsections (3) and (4) apply to taxation years that begin after 2002.
(8) Subsection (5) applies after February 18, 2003.
- Date modified: