Bill C-36

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Royal Assent

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	the total of which is not less than 90% of the amount, if any, by which the corporation's gross revenue for the period exceeds the total of all amounts paid in the period by the corporation because of subsection (7.1);
	(4) Section 149 of the Act is amended by adding the following after subsection (6):
Time for filing	(7) A corporation the taxable income of which for a taxation year is exempt from tax under this Part because of paragraph (1)(j) shall file with the Minister a prescribed form containing prescribed information on or before its filing-due date for the year.
Penalty for failure to file on time	(7.1) Where a corporation fails to file the prescribed form as required by subsection (7) for a taxation year, it is liable to a penalty equal to the amount determined by the formula
	A x B
	where
	A is the greater of
	(a) $500, and
	(b) 2% of its taxable income for the year; and
	B is the lesser of
	(a) 12, and
	(b) the number of months in whole or in part that are in the period that begins on the day on or before which the prescribed form is required to be filed and ends on the day it is filed.
	(5) Paragraph 149(8)(b) of the Act is replaced by the following:
	(b) there shall be included in computing a corporation's income and in determining its gross revenue the amount of all gifts received by the corporation and all amounts contributed to the corporation to be used for scientific research and experimental development.
	(6) Subsection 149(9) of the Act is replaced by the following:
Rules for determining gross revenue	(9) In determining the gross revenue of a corporation for the purpose of determining whether it is described by paragraph (1)(j) for a taxation year,
	(a) there may be deducted an amount not exceeding its gross revenue for the year computed without including or deducting any amount under this subsection; and
	(b) there shall be included any amount that has been deducted under this subsection for the preceding taxation year.
	(7) Subsections (1), (3), (5) and (6) apply to taxation years that begin after June 1995.
	(8) Subsection (2) applies to taxation years that end after November 1991.
	(9) Subsection (4) applies to taxation years that end after February 27, 1995, except that a form referred to in subsection 149(7) of the Act, as enacted by subsection (4), that is filed with the Minister of National Revenue on or before the day that is 90 days after the day this Act is assented to is deemed to have been filed on a timely basis.
	38. (1) Paragraph 150(1)(b) of the Act is replaced by the following:
Deceased individuals	(b) in the case of an individual who dies after October of the year and on or before the day that would be the individual's filing due date for the year if the individual had not died, by the individual's legal representatives on or before the day that is the later of the day on or before which the return would otherwise be required to be filed and the day that is 6 months after the day of death;
	(2) Paragraph 150(1)(d) of the Act is replaced by the following:
Individuals	(d) in the case of any other person, on or before
	(i) the following April 30 by that person or, if the person is unable for any reason to file the return, by the person's guardian, committee or other legal representative (in this paragraph referred to as the person's ``guardian''),
	(ii) the following June 15 by that person or, if the person is unable for any reason to file the return, by the person's guardian where the person is
	(A) an individual who carried on a business in the year, unless the expenditures made in the course of carrying on the business were primarily the cost or capital cost of tax shelters (within the meaning assigned by subsection 237.1(1)), or
	(B) at any time in the year a cohabiting spouse (within the meaning assigned by section 122.6) of an individual to whom clause (A) applies, or
	(iii) where at any time in the year the person is a cohabiting spouse (within the meaning assigned by section 122.6) of an individual to whom paragraph (b) applies for the year, on or before the day that is the later of the day on or before which the person's return would otherwise be required to be filed and the day that is 6 months after the day of the individual's death; or
	(3) Subsections (1) and (2) apply to the 1995 and subsequent taxation years.
	39. (1) Paragraph 152(1)(b) of the Act is replaced by the following:
	(b) the amount of tax, if any, deemed by subsection 120(2), 120.1(4), 122.5(3), 125.4(3), 127.1(1), 127.41(3) or 210.2(3) or (4) to be paid on account of the taxpayer's tax payable under this Part for the year or deemed by subsection 119(2) to be an overpayment.
	(2) Subsection (1) applies to the 1995 and subsequent taxation years.
	40. Subsections 153(1.3) and (1.4) of the Act are repealed.
	40.1 (1) The description of A in the definition ``net tax owing'' in subsection 156.1(1) of the Act is replaced by the following:
	A is the total of the taxes payable under this Part and Parts I.1 and I.2 by the individual for the year,
	(2) The description of C in the definition ``net tax owing'' in subsection 156.1(1) of the Act is replaced by the following :
	C is the total of the taxes deducted or withheld under section 153 and Part I.2 on behalf of the individual for the year,
	(3) Subsections (1) and (2) apply to the 1996 and subsequent taxation years, except that, in its application to the 1996 taxation year, the description of A in the definition ``net tax owing'' in subsection 156.1(1) of the Act, as enacted by subsection (1), shall be read as follows:
	A is the total of
	(i) the taxes payable under this Part and Part I.1 by the individual for the year, and
	(ii) half the tax payable under Part I.2 by the individual for the year,
	41. (1) Paragraph 157(3)(e) of the Act is replaced by the following:
	(e) 1/12 of the total of all amounts each of which is an amount deemed by subsection 125.4(3) or 127.41(3) to have been paid on account of the corporation's tax payable under this Part for the year.
	(2) Subsection (1) applies to the 1995 and subsequent taxation years.
	42. (1) Paragraph 161(2.2)(d) of the Act is replaced by the following:
	(d) the amount of interest that would be payable under subsection 164(3) to the taxpayer in respect of the period on the amount that would be refunded to the taxpayer in respect of the year or applied to another liability if
	(i) no tax were payable by the taxpayer for the year,
	(ii) no amount had been remitted under section 153 to the Receiver General on account of the taxpayer's tax for the year,
	(iii) the rate of interest prescribed for the purpose of subsection (1) were prescribed for the purpose of subsection 164(3), and
	(iv) the latest of the days described in paragraphs 164(3)(a), (b) and (c) were the first day of the year.
	(2) Subsection (1) applies to interest that is calculated in respect of periods after June 1995.
	43. (1) Subsection 163(2) of the Act is amended by striking out the word ``and'' at the end of paragraph (d), by adding the word ``and'' at the end of paragraph (e) and by adding the following after paragraph (e):
	(f) the amount, if any, by which
	(i) the amount that would be deemed by subsection 125.4(3) to have been paid for the year by the person if that amount were calculated by reference to the information provided in the return filed for the year pursuant to that subsection
	exceeds
	(ii) the amount that is deemed by that subsection to be paid for the year by the person.
	(2) Subsection (1) applies to the 1995 and subsequent taxation years.
	44. (1) Paragraph 164(3)(a) of the Act is replaced by the following:
	(a) where the taxpayer is an individual, the day that is 45 days after the individual's balance-due day for the year,
	(2) Paragraph 164(3)(c) of the Act is replaced by the following:
	(c) where the taxpayer is
	(i) a corporation, the day on which its return of income for the year was filed under section 150, unless the return was filed on or before the corporation's filing-due date for the year, and
	(ii) an individual, the day that is 45 days after the day on which the individual's return of income for the year was filed under section 150,
	(3) Subsections (1) and (2) apply to the 1995 and subsequent taxation years.
	45. (1) Subparagraph 165(1)(a)(i) of the Act is replaced by the following:
	(i) the day that is one year after the taxpayer's filing-due date for the year, and
	(2) Subsection (1) applies to the 1995 and subsequent taxation years.
	46. (1) Part I.2 of the Act is replaced by the following:
	PART I.2
	TAX ON OLD AGE SECURITY BENEFITS
Definitions	180.2 (1) The definitions in this subsection apply in this Part.
``adjusted income'' « revenu modifié »	``adjusted income'' of an individual for a taxation year means the amount that would be the individual's income under Part I for the year if no amount were deductible under paragraph 60(w) nor included in respect of a gain from a disposition of property to which section 79 applies.
``base taxation year'' « année de base »	``base taxation year'', in relation to a month, means
	(a) where the month is any of the first 6 months of a calendar year, the taxation year that ended on December 31 of the second preceding calendar year, and
	(b) where the month is any of the last 6 months of a calendar year, the taxation year that ended on December 31 of the preceding calendar year.
``return of income'' « déclaration de revenu »	``return of income'' in respect of an individual for a taxation year means
	(a) where the individual was resident in Canada throughout the year, the individual's return of income (other than a return of income filed under subsection 70(2) or 104(23), paragraph 128(2)(e) or subsection 150(4)) that is filed or required to be filed under Part I for the year, and
	(b) in any other case, a prescribed form containing prescribed information.
Tax payable	(2) Every individual shall pay a tax under this Part for each taxation year equal to the amount determined by the formula
	A(1 - B)
	where
	A is the lesser of
	(a) the amount, if any, by which
	(i) the total of all amounts each of which is the amount of any pension, supplement or spouse's allowance under the Old Age Security Act included in computing the individual's income under Part I for the year
	exceeds
	(ii) the amount of any deduction allowed under subparagraph 60(n)(i) in computing the individual's income under Part I for the year, and
	(b) 15% of the amount, if any, by which the individual's adjusted income for the year exceeds $50,000; and
	B is the rate of tax payable by the individual under Part XIII on amounts described in paragraph (a) of the description of A.
Withholding	(3) Where at any time Her Majesty pays an amount described in paragraph (a) of the description of A in subsection (2) in respect of a month to an individual, there shall be deducted or withheld from that amount on account of the individual's tax payable under this Part for the year the amount determined under subsection (4) in respect of that amount.
Determi- nation of amount to be withheld	(4) The amount determined in respect of a particular amount described in subsection (3) is
	(a) where the individual has filed a return of income for the base taxation year in relation to the month in which the particular amount is paid, the lesser of
	(i) the amount by which the particular amount exceeds the amount of tax payable under Part XIII by the individual on the particular amount, and
	(ii) the amount determined by the formula
	(0.0125A - $625)(1 - B)
	where

Bill C-36

PART I.2

TAX ON OLD AGE SECURITY BENEFITS