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Bill C-15

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SCHEDULE VI

AN ACT TO AMEND THE EXCISE TAX ACT AND THE INCOME TAX ACT

[1992, c. 29, assented to 23rd June, 1992]

R.S., c. 1 (5th Supp.)

Income Tax Act

2. (1) Subsection 12(1) of the Income Tax Act is amended by striking out the word ``and'' at the end of paragraph (x) and by adding the following after paragraph (x):

Fuel tax rebates

    (x.1) the total of all amounts each of which is

      (i) a fuel tax rebate received in the year by the taxpayer under subsection 68.4(3) of the Excise Tax Act, or

      (ii) the amount, if any, by which

        (A) 10 times the amount, if any, by which

          (I) the total of all fuel tax rebates under subsection 68.4(2) of that Act received in the year by the taxpayer

        exceeds

          (II) the total of all amounts, in respect of fuel tax rebates under subsection 68.4(2) of that Act received in the year by the taxpayer, repaid by the taxpayer under subsection 68.4(7) of that Act

      exceeds

        (B) the total of all amounts, in respect of fuel tax rebates under subsection 68.4(2) of that Act received in the year, deducted under subsection 111(10) in computing the taxpayer's non-capital loss for a year; and

(2) Subsection (1) applies to the 1992 and subsequent taxation years.

3. (1) Subsection 87(2) of the Act is amended by striking out the word ``and'' at the end of paragraph (ss), by adding the word ``and'' at the end of paragraph (tt) and by adding the following after paragraph (tt):

Fuel tax rebates

    (uu) for the purposes of paragraph 12(1)(x.1), the description of D.1 in the definition ``non-capital loss'' in subsection 111(8), clause 111(10)(a)(i)(B) and subsection 111(11), the new corporation shall be deemed to be the same corporation as, and a continuation of, each predecessor corporation.

(2) Subsection (1) applies to amalgamations occurring after 1991.

4. (1) The portion of paragraph 88(1)(e.2) of the Act before subparagraph (i) is replaced by the following:

    (e.2) paragraphs 87(2)(c), (d.1), (e.1), (g) to (l), (l.3) to (u), (x), (y.1), (z.1), (z.2), (cc), (ll), (nn), (pp), (rr), (tt) and (uu), subsection 87(6) and, subject to section 78, subsection 87(7) apply to the winding-up as if the references therein to

(2) Subsection (1) applies to windings-up beginning after 1991.

5. (1) The first formula in the definition ``non-capital loss'' in subsection 111(8) of the Act is replaced by the following:

(A + B) - (C + D + D.1)

(1.1) The definition ``non-capital loss'' in subsection 111(8) of the Act is amended by striking out the word ``and'' at the end of the description of C, by adding the word ``and'' at the end of the description of D and by adding the following after the description of D:

    D.1 is the total of all amounts deducted under subsection (10) in respect of the taxpayer for the year;

(2) Section 111 of the Act is amended by adding the following after subsection (9):

Fuel tax rebate loss abatement

(10) Where, in a particular taxation year, a taxpayer received an amount (in this subsection referred to as a ``rebate'') as a fuel tax rebate under subsection 68.4(2) of the Excise Tax Act, in computing the amount of the taxpayer's non-capital loss for a taxation year (in this subsection referred to as the ``loss year'') that is one of the 7 taxation years preceding the particular year, there shall be deducted the lesser of

    (a) the amount, if any, by which

      (i) 10 times the amount, if any, by which

        (A) the total of all rebates received by the taxpayer in the particular year

      exceeds

        (B) the total of all amounts, in respect of rebates received by the taxpayer in the particular year, repaid by the taxpayer under subsection 68.4(7) of that Act

    exceeds

      (ii) the total of all amounts, in respect of rebates received in the particular year, deducted under this subsection in computing the taxpayer's non-capital losses for other taxation years, and

    (b) such amount as the taxpayer claims, not exceeding the portion of the taxpayer's non-capital loss for the loss year (determined without reference to this subsection) that would be deductible in computing the taxpayer's taxable income for the particular year if the taxpayer had sufficient income for the particular year from businesses carried on by the taxpayer in the particular year.

Idem - partnerships

(11) Where a taxpayer was a member of a partnership at any time in a fiscal period during which the partnership received a fuel tax rebate under subsection 68.4(2) or (3) of the Excise Tax Act, the taxpayer is deemed

    (a) to have received at that time as a rebate under subsection 68.4(2) or (3), as the case may be, of that Act an amount equal to that proportion of the amount of the rebate received by the partnership that the member's share of the partnership's income or loss for that fiscal period is of the whole of that income or loss, determined without reference to any rebate under section 68.4 of that Act; and

    (b) to have paid as a repayment under subsection 68.4(7) of that Act an amount equal to that proportion of all amounts repaid under subsection 68.4(7) of that Act in respect of the rebate that the member's share of the partnership's income or loss for that fiscal period is of the whole of that income or loss, determined without reference to any rebate under section 68.4 of that Act.

(3) Subsections (1), (1.1) and (2) apply to amounts received after 1991.

6. (1) The portion of subsection 156.1(1) of the Act before paragraph (a) is replaced by the following:

No instalment required

156.1 (1) Where the total of the taxes payable (before taking into consideration any amount referred to in any of subparagraphs 161(7)(a)(ii) to (v) or (viii) that was excluded or deducted, as the case may be) under this Part and Part I.1 by an individual for a particular taxation year or for the taxation year preceding that year is not more than the total of $1,000 and the amount, if any, determined in respect of the individual for that year under subsection 120(2),

(2) Subsection (1) applies to the 1992 and subsequent taxation years.

7. (1) Paragraph 157(2.1)(a) of the Act is replaced by the following:

    (a) the total of the taxes payable (before taking into consideration any amount referred to in any of subparagraphs 161(7)(a)(ii) to (viii) that was excluded or deducted, as the case may be) under this Part and Part VI.1 by a corporation for a taxation year, or

(2) Subsection (1) applies to the 1992 and subsequent taxation years.

8. (1) Paragraph 161(7)(a) of the Act is amended by striking out the word ``or'' at the end of subparagraph (vi), by adding the word ``or'' at the end of subparagraph (vii) and by adding the following after subparagraph (vii):

      (viii) any amount excluded from the amount determined under clause 12(1)(x.1)(ii)(A) because of subclause 12(1)(x.1)(ii)(A)(II) in respect of a fuel tax rebate repayment made in a subsequent taxation year,

(2) The portion of paragraph 161(7)(b) of the Act before subparagraph (i) is replaced by the following:

    (b) the amount by which the tax payable under this Part for the year is reduced because of the exclusion or deduction, as the case may be, of an amount described in any of subparagraphs (a)(ii) to (viii) of this subsection and subparagraph 161(7)(a)(i) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, is deemed to have been paid by the taxpayer on account of the taxpayer's tax payable for the year under this Part on the day that is the latest of

(3) Subsections (1) and (2) apply to the 1992 and subsequent taxation years.

9. (1) Subsection 164(5) of the Act is amended by adding the following before paragraph (b):

    (a) the deduction of an amount under subclause 12(1)(x.1)(ii)(A)(II) in respect of a fuel tax rebate repayment made in a subsequent taxation year,

(2) Subsection 164(5.1) of the Act is amended by adding the following before paragraph (b):

    (a) the deduction of an amount under subclause 12(1)(x.1)(ii)(A)(II) in respect of a fuel tax rebate repayment made in a subsequent taxation year,

(3) Subsections (1) and (2) apply to the 1992 and subsequent taxation years.

10. (1) Paragraph 212(1)(d) of the Act is amended by striking out the word ``or'' at the end of subparagraph (ix), by adding the word ``or'' at the end of subparagraph (x) and by adding the following after subparagraph (x):

      (xi) a payment made to a person with whom the payer is dealing at arm's length for the use of or the right to use property that is

        (A) an aircraft,

        (B) furniture, fittings or equipment attached to an aircraft, or

        (C) a spare part for property described in clause (A) or (B);

(2) Subsection (1) applies to payments made after December 6, 1991 under agreements entered into after 1990.

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