O. Reg. 70/10: GENERAL


Published: 2010-03-16

Subscribe to a Global-Regulation Premium Membership Today!

Key Benefits:

Get a Day Pass for only USD$19.99.
 

ontario regulation 70/10

made under the

taxation act, 2007

Made: March 10, 2010
Filed: March 16, 2010
Published on e-Laws: March 17, 2010
Printed in The Ontario Gazette: April 3, 2010


Amending O. Reg. 37/09

(General)

1. Ontario Regulation 37/09 is amended by adding the following Part:

Part 0.i
General

Application

0.1 This Regulation applies in respect of taxation years ending after December 31, 2008, except as otherwise provided in this or any other regulation.

2. Section 1 of the Regulation is revoked and the following substituted:

Carryforward amount re tax credit for minimum tax

1. (1) For the purposes of clause 15 (1) (b) of the Taxation Act, 2007, an individual’s carryforward amount for a taxation year in respect of minimum tax is the amount calculated using the formula,

A × B × C

in which,

  “A” is the amount deducted under section 120.2 of the Federal Act for the year,

  “B” is the amount determined by dividing “D” by “E” where,

“D” is the lowest tax rate for the year, and

“E” is the appropriate percentage for the year under the Federal Act, and

  “C” is the Ontario allocation factor in respect of the individual for the year.

(2) For the purposes of subsection (1), the result obtained by dividing “D” by “E” shall be rounded to the nearest one-thousandth or, if the result obtained by that division is equidistant from two consecutive thousandths, to the higher thousandth.

3. Subsection 24 (2) of the Regulation is revoked and the following substituted:

(2) For the purposes of the definition of “eligible computer animation and special effects activities” in subsection (1),

“eligible animation or visual effects” means,

(a) if the animation or visual effects are completed before March 27, 2009, animation or visual effects created primarily with digital technologies, but does not include,

(i) audio effects,

(ii) in camera effects,

(iii) credit rolls,

(iv) subtitles,

(v) animation or visual effects all or substantially all of which are created by editing activities, or

(vi) animation or visual effects for use in promotional material for a film or television production, and

(b) if the animation or visual effects are completed after March 26, 2009, animation or visual effects created using digital technologies, but does not include,

(i) audio effects,

(ii) in camera effects,

(iii) credit rolls,

(iv) subtitles,

(v) animation or visual effects all or substantially all of which are created by editing activities, or

(vi) animation or visual effects for use in promotional material for a film or television production.

4. (1) Subsection 25 (1) of the Regulation is amended by striking out “and” at the end of clause (a) and by revoking clause (b) and substituting the following:

(b) for expenditures incurred before March 27, 2009, 50 per cent of the qualifying remuneration amount of the corporation, as described in subsection (3), of the qualifying corporation for the year with respect to the eligible production; and

(c) for expenditures incurred after March 26, 2009, the qualifying remuneration amount of the corporation, as described in subsection (3), of the qualifying corporation for the year with respect to the eligible production.

(2) Subsection 25 (2) of the Regulation is amended by striking out “Subject to subsection (6)” in the portion before clause (a) and substituting “Subject to subsections (2.1) and (6)”.

(3) Section 25 of the Regulation is amended by adding the following subsection:

(2.1) If the qualifying corporation is a taxable Canadian corporation described in paragraph 4 of subsection (4), the qualifying wage amount of the qualifying corporation does not include an amount that,

(a) is incurred by the corporation after March 26, 2009; and

(b) is paid to an employee of the corporation in connection with eligible computer animation and special effects activities undertaken by the corporation on behalf of another qualifying corporation.

(4) Subsection 25 (4) of the Regulation is amended by adding the following paragraph:

4. If the expenditure is incurred after March 26, 2009, a taxable Canadian corporation for services rendered personally by an individual if,

i. all of the issued and outstanding shares of the capital stock of the taxable Canadian corporation (other than directors’ qualifying shares) belong to the individual,

ii. the individual deals at arm’s length with the qualifying corporation, and

iii. the activities of the taxable Canadian corporation consist principally of the provision of the individual’s services.

(5) Paragraph 4 of subsection 25 (6) of the Regulation is revoked and the following substituted:

4. In the case of the qualifying remuneration amount, the expenditure is paid for activities undertaken at a permanent establishment in Ontario of the qualifying corporation or of an individual, eligible partnership or corporation described in paragraph 1, 2, 3 or 4 of subsection (4).

5. Paragraph 3 of subsection 27 (3) of the Regulation is amended by striking out “the amount of income from the production” in the portion before subparagraph i and substituting “the amount of profits or revenue from the production”.

6. (1) Clause (a) of the definition of “B” in subsection 33 (1) of the Regulation is amended by adding “as defined in subsection 92 (13) of the Act” after “relevant assistance” in the portion before subclause (i).

(2) Subsection 33 (4) of the Regulation is revoked and the following substituted:

(4) The prescribed conditions for the purpose of the definition of “relevant assistance” in subsection 92 (13) of the Act are as follows:

1. The amount is assistance in respect of a production under subsection 125.5 of the Federal Act.

2. The amount is not assistance provided, or deemed by the Federal Act to be provided, under subsection 127 (5) or (6) or section 125.4 of the Federal Act.

3. The amount is not assistance provided under section 90, 92, 94 or 95 of the Act or section 43.7, 43.8, 43.10 or 43.12 of the Corporations Tax Act.

7. (1) Subsection 35 (1) of the Regulation is amended by striking out “and” at the end of clause (a) and by revoking clause (b) and substituting the following:

(b) for expenditures incurred before March 27, 2009, if the eligible product is not a specified product, 50 per cent of the qualifying remuneration amount of the qualifying corporation or qualifying predecessor corporation for the year with respect to the eligible product; and

(c) for expenditures incurred after March 26, 2009, the qualifying remuneration amount of the qualifying corporation or qualifying predecessor corporation for the year with respect to the eligible product.

(2) Paragraph 4 of subsection 35 (3) of the Regulation is revoked and the following substituted:

4. For expenditures incurred before March 27, 2009 in respect of an eligible product and for expenditures incurred after March 26, 2009 in respect of an eligible product that is not a digital game, as referred to in paragraph 2 of subsection 93.1 (9) of the Act, a taxable Canadian corporation that deals at arm’s length with the qualifying corporation or qualifying predecessor corporation for services rendered by employees of the taxable Canadian corporation, to the extent that the expenditure does not exceed the salaries and wages of those employees for personally rendering those services.

(3) Subsection 35 (6) of the Regulation is amended by striking out “For the purposes of paragraph 5 of subsection (4)” in the portion before clause (a) and substituting “For the purposes of paragraph 5 of subsection (3)”.

8. The Regulation is amended by adding the following sections:

Interactive digital media product of a qualifying digital game corporation

35.1 (1) For the purposes of paragraph 1 of subsection 93.1 (9) of the Act, a product is an interactive digital media product if the product is an interactive digital media product as defined in subsection 34 (1).

(2) For the purposes of section 93.1 of the Act, the Ontario labour expenditure of a qualifying digital game corporation for a taxation year for an eligible digital game is the amount that would be determined under subsections 35 (1) to (6) in respect of the game if,

(a) all references to “qualifying corporation” were read as “qualifying digital game corporation”;

(b) all references to “eligible product” were read as “eligible digital game”; and

(c) those subsections were read without reference to clause 35 (1) (b) and paragraph 4 of subsection 35 (3).

Interactive digital media product of a specialized digital game corporation

35.2 (1) For the purposes of paragraph 1 of subsection 93.2 (11) of the Act, a product is an interactive digital media product if the product is an interactive digital media product as defined in subsection 34 (1).

(2) For the purposes of section 93.2 of the Act, the Ontario labour expenditure of a specialized digital game corporation for a taxation year for an eligible digital game is the amount that would be determined under subsections 35 (1) to (6) in respect of the game if,

(a) all references to “qualifying corporation” were read as “specialized digital game corporation”;

(b) all references to “eligible product” were read as “eligible digital game”;

(c) those subsections were read without reference to clause 35 (1) (b) and paragraph 4 of subsection 35 (3); and

(d) those subsections were read without reference to any qualifying predecessor corporations.

9. (1) Subparagraph 6 i of subsection 36 (4) of the Regulation is revoked and the following substituted:

i. the corporation implemented a plan for the distribution of at least one sound recording, and

(2) Subsection 36 (5) of the Regulation is revoked and the following substituted:

(5) An amalgamated corporation is deemed to satisfy,

(a) the condition described in paragraph 2 of subsection (4) for a taxation year if, throughout the 12-month period ending immediately before the taxation year, the amalgamated corporation and any of its predecessor corporations carried on a sound recording business;

(b) the condition described in paragraph 4 of subsection (4) for its first taxation year after amalgamation or merger if the Ontario allocation factor of its predecessor corporations would be at least one-half for their last taxation years ending before the amalgamation or merger if that Ontario allocation factor were determined as if the predecessor corporations were a single corporation; and

(c) the condition described in paragraph 6 of subsection (4) for its first taxation year after amalgamation or merger if the plan for distribution described in that paragraph is implemented by at least one of its predecessor corporations.

(3) Clause 36 (6) (c) of the Regulation is amended by striking out “if the winding up occurred in the taxation year”.

10. (1) Paragraph 3 of subsection 38 (2) of the Regulation is revoked and the following substituted:

3. An expenditure made under an eligible contract to an eligible research institute that is prescribed by subsection (7) and is not a hospital research institute referred to in clause (8) (a), unless teaching staff, students or research fellows of an eligible research institute referred to in clause (a) of the definition of “eligible research institute” in subsection 97 (27) of the Act or a hospital research institute described in clause (8) (a) are significantly involved in carrying out the scientific research and experimental development activities required under the contract.

(2) Subsection 38 (12) of the Regulation is amended by striking out “under subsection (12)” and substituting “under subsection (11)”.

(3) Subsection 38 (13) of the Regulation is amended by striking out “under subsection (12)” and substituting “under subsection (11)”.

(4) Subsection 38 (15) of the Regulation is amended by adding “under subsection (7) or (8)” at the end.

11. (1) Subject to subsections (2) and (3), this Regulation comes into force on the day it is filed.

(2) Section 6 comes into force on July 1, 2010.

(3) The following provisions are deemed to have come into force on January 29, 2009:

1. Sections 2 and 5.

2. Subsection 7 (3).

3. Sections 9 and 10.

 

 

 

Related Laws