and Revenue Administration
Corporate Tax Act
Special Notice Vol. 5 No. 38
||July 30, 2013
||Alberta Treasury Board and Finance, Tax and
|For more information:
5 No. 38 / July 2013
SPECIAL NOTICE - TAX STATUTES AMENDMENT ACT, 2013
NOTE: This special notice is intended to provide advance information on legislation expected to be introduced in fall 2013. Every effort has been made to ensure the contents reflect the intended legislation. However, if a discrepancy should occur in interpretation between this special notice and the legislation, the legislation will take precedence.
Bill 23, Tax Statutes Amendment Act, 2013, received Royal Assent on May 27, 2013. Bill 23 includes the following changes to the Alberta Corporate Tax Act.
Collection of Assessed Amounts and Amounts in Controversy
Changes have been made to parallel the federal policy on collection of amounts from large corporations within the meaning assigned by subsection 225.1(8) of the federal Income Tax Act:
- Collection action may be taken to collect one half of the amount assessed on or before 90 days after the date of mailing of the notice of assessment.
- After 90 days from the date of mailing of the notice of assessment, collection action may be taken to collect the assessed amount that exceeds the total of:
- all amounts collected before that time on the assessment, and
- one half of the amount in controversy at that time.
- These changes are effective for taxation years ending after May 27, 2013.
Alberta Scientific Research and Development (SR&ED) Tax Credit
The Alberta proxy rates used in the calculation of the Alberta proxy amount when determining eligible expenditures for the Alberta SR&ED tax credit have been changed. The Alberta proxy rate will parallel the federal prescribed proxy rate that may be claimed for overhead expenses. The Alberta proxy amount is the total of the following amounts:
- 65 per cent of applicable salaries and wages for the proportion of the number of days in the taxation year that were before 2013 to the total number of days in the taxation year.
- 60 per cent of applicable salaries and wages for the proportion of the number of days in the taxation year in 2013 to the total number of days in the taxation year.
- 55 per cent of applicable salaries and wages for the proportion of the number of days in the taxation year after 2013 to the total number of days in the taxation year.
- These changes apply to taxation years ending after December 31, 2012.
Capital Gains Reserves
The Alberta corporate income tax calculation of taxable income generally parallels the federal calculation. Previously Alberta corporations had the discretion to claim a different amount than what was claimed federally for capital gains reserves when some portion of the proceeds on the disposition of a capital asset was receivable in another taxation year.
Effective for taxation years ending after May 27, 2013 a corporation must claim the same amount of capital gains reserves for Alberta and federally.
Political Contributions Tax Credit
Effective May 27, 2013 a subsection has been added to clarify that a corporation’s tax reduction from the political contributions tax credit cannot exceed the amount of the corporation’s tax payable after claiming the small business deduction and the Alberta foreign investment income tax credit.