ALBERTA CORPORATE TAX ACT

Chapter A‑15

Table of Contents

                1       Interpretation

                2       Application of federal Act

                3       Income Tax Convention or Treaty

                4       Application of federal Act

             4.1       Application of Parts 9 and 10

Part 1
Liability for Income Tax

                5       Liability for income tax

Part 2
Computation of Income

                6       Income for taxation year

             6.1       Cost amount of property

             6.2       Rules for depreciable property

                7       Income or loss

Division 1
Income or Loss from a Business or Property

                8       Income or loss

             8.3       Application of federal Act

             8.4       Federal transfer pricing rules

Division 2
Taxable Capital Gains and Allowable Capital Losses

                9       Capital gains and capital losses

Division 3
Other Sources of Income

              10       Other sources of income

Division 4
Deductions in Computing Income

              11       Deductions

Division 5
Rules Relating to Computation of Income

              12       Computation of income rules

           12.1       Reimbursement of Crown charges

Division 6
Corporations and Corporate Shareholders

              14       Computation of income of corporations

           14.1       Transfer of property to a corporation

           14.2       Transfer of property from a partnership

           14.3       Filing of election form

              15       Shareholders of non‑resident corporations

Division 7
Partnerships

              16       Partnership

           16.1       Transfer of property to a partnership

           16.2       Filing of election form

Division 8
Trusts

              17       Trusts

Division 9
Non‑Residents

           17.1       Taxable income of non‑resident corporation

Part 3
Computation of Taxable Income

              18       Taxable income of corporation

Part 4
Computation of Amount Taxable in Alberta

Division 1
Alberta Allocation Factor

              19       Alberta allocation factor

Division 2
Amount Taxable in Alberta

           19.1       Amount taxable in Alberta

Division 3
Royalty Tax Deduction

              20       Royalty tax deduction

           20.1       Special definition for s20

Part 5
Computation of Income Tax Payable

              21       Tax payable by corporation

Division 1
Small Business Deduction

              22       Small business deduction

           22.2       Manufacturing and processing profits deduction

Division 2
Foreign Investment Income

              23       Foreign investment income

Division 3
Political Contributions Tax Credit

              24       Political contributions tax credit

           24.1       Transitional

Division 4
Alberta Rental Investment Tax Credit

              25       Rental investment tax credit

Part 6
Refundable Tax Credits

Division 1
Royalty Tax Credit

              26       Interpretation

           26.1       Royalty tax credit

           26.4       Royalty tax credit instalment

        26.41       Application of royalty tax credits

Division 2
Extended Alberta Rental Investment Tax Credit

           26.5       Rental investment tax credit

Part 7
Special Rules Applicable in Certain Circumstances

              27       Bankrupt corporations

           27.1       Changes in residence

              28       Investment corporations

              29       Mortgage investment corporations

              30       Mutual fund corporations

        30.01       Amounts designated by mutual fund trust

           30.1       Mutual funds - qualifying exchange

           30.2       Communal organizations

              31       Patronage

           31.1       Agricultural cooperatives

              32       Credit unions

              33       Deposit insurance corporations

              34       Insurance corporations

        34.01       Financial institutions

      34.011       Conversion of foreign bank affiliate to branch

        34.02       Cost of tax shelter investments

           34.1       Interest

              35       Exemptions

Part 8
General

Division 1
Returns

              36       Return to be filed

           36.1       Electronic filing of return

           36.2       Duty to file new information

              37       Penalty for failure to file return

           37.1       Penalty for false statement

              38       Payment on account

           38.1       Excess refund

              39       Interest

           39.1       Repayment of excess tax

           39.2       Offset of refund and arrears interest

           39.3       Period where interest not payable

Division 2
Assessment

              41       Assessment of tax

              42       Notice of assessment

              43       Assessment, reassessment, etc.

           43.1       Federal‑based s72.1 assessments

              44       Reassessment re loss carry‑backs

           44.1       Reassessment re: election on proceeds

           44.2       Reassessment re: excessive capital cost allowance

              45       Assessment deemed valid and binding

              46       Payment of balance

              47       Overpayment of tax

           47.1       Small amounts owing

              48       Notice of objection to assessment

           48.1       Extension of time by Provincial Minister

           48.2       Extension of time by court

              49       Legal representatives

           49.1       Liability in respect of transfers by insolvent corporations

Division 3
Appeals

              50       Appeal

           50.1       Extension of time to appeal

              51       Reply to notice of appeal

              52       Powers of court on appeal

              53       Practice and procedure

              54       Variation of assessment

Division 4
Administration and Enforcement

              55       Provincial Minister administers Act

        55.01       Collection agreement

           55.1       Waiver or cancellation of penalties or interest

              56       Regulations

              57       Taxes, etc. debt due to Crown

           57.1       Limitations Act

              58       Certification of amount payable

              60       Powers of Provincial Minister

           60.1       Restrictions on collection

           60.2       Amounts in jeopardy

              61       Records and books of account

              62       Definitions

              63       Inspection, audit and examination of books, etc.

              64       Notice to provide information, etc.

              65       Warrant to search and seize

           65.1       Court order to provide information

              66       Provincial Minister may authorize inquiry

              67       Copies of seized documents

              68       Hindrance an offence

              69       Representation by counsel

              70       Application of federal Act

              71       Information return

              72       Return, etc. to be signed

Division 4.1
Tax Avoidance

           72.1       General anti‑avoidance rules

        72.11       Limitation

Division 5
Offences and Penalties

           73.1       Penalty for late or deficient instalments

              74       Evasion of tax by corporation

              75       Evasion of tax

              76       Offences

              77       Communication of information

           77.1       Communication of information ordered by judge

              79       General offence and penalty

              80       Liability of officers of corporation

Division 6
Procedure and Evidence

              81       Procedure re information and complaint

              82       Procedures

              83       Documents deemed signed

              84       Notices of assessment and forms

Division 7
Transitional

              85       Transitional

Part 9
Insurance Corporations Tax

              86       Definitions

              87       Tax payable

              88       Exemptions

              89       Return

              90       Penalty

              91       Interest

              92       Application of other Parts

Part 10
Financial Institutions Capital Tax

              93       Interpretation

              94       Liability for tax

              95       Calculation of adjusted taxable capital

              96       Calculation of taxable capital employed in Canada

              97       Tax payable by resident financial institution

           97.1       Tax payable by non‑resident financial institution

            101       Time for payment

            102       Filing return

            103       Penalty for failure to file return

            104       Interest

            105       Application of other Parts

        105.1       Coming into force

        105.2       Application of Part

Part 11
Royalty Credit and Tax Refunds for Individuals

Division 1
Alberta Royalty Credit

            106       Interpretation

            107       Application

            108       Entitlement to royalty credit

            110       Time for application

            111       Time limit

            112       Royalty credit instalment

            113       Repayment of instalment

            114       Penalty

            115       Interest

Division 2
Resource Allowance Tax Refund

        115.1       Definitions

        115.2       Additional resource allowance deduction

        115.3       Resource allowance refund calculation

Division 3
Refund of Income Tax on Royalty Credit

        115.4       Refund of income tax on royalty credit

Division 4
Assessment

        115.5       Application for refunds

            106       Interpretation

            107       Application

            108       Entitlement to royalty credit

            110       Time for application

            111       Time limit

            112       Royalty credit instalment

            113       Repayment of instalment

            114       Penalty

            115       Interest

            116       Repayment

            117       Repayment of interest

            118       Assessment and determination on application

            119       Assessment, reassessment, etc.

            120       Refund of net credit

            121       Application of other Parts

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Alberta, enacts as follows:

Interpretation

1(1)  In this Act and in the application of the provisions of the federal Act and the regulations made under that Act that are by this Act made applicable, each of the provisions of Part XVII of the federal Act apply for the purposes of this Act, except for those terms defined in subsection (2)(b.1), (f), (g), (h.1), (i), (j) and (k) of this Act and the definition of “regulation” contained in subsection 248(1) of the federal Act.

(2)  In this Act and in the application of the provisions of the federal Act and the regulations made under that Act that are by this Act made applicable for the purposes of this Act,

                                 (a)    “Alberta allocation factor” means the Alberta allocation factor determined in accordance with Division 1 of Part 4;

                                 (b)    “amount taxable in Alberta” means the amount taxable determined in accordance with Part 4;

                              (b.1)    “balance‑due day” of a corporation for a taxation year means the day on or before which the corporation is required under section 38 to pay the remainder of its tax payable under Part 5 for the year or would be so required if such a remainder were payable;

                                 (c)    “court” means the Court of Queen’s Bench;

                                 (d)    “federal Act” means the Income Tax Act (Canada) and includes any rules of application that are contained in any Act of the Parliament of Canada that amends the Income Tax Act (Canada);

                              (d.1)    “federal assessment action” means any of the following actions taken by the Minister of National Revenue under the federal Act:

                                           (i)    an assessment, reassessment or additional assessment of tax, interest or penalties;

                                          (ii)    a determination or redetermination of a loss or an amount;

                                         (iii)    a confirmation of an assessment, reassessment or additional assessment of tax, interest or penalties or of a determination or redetermination of a loss or an amount;

                                 (e)    “federal regulation” means a regulation, as amended from time to time, made under the federal Act;

                              (e.1)    “jurisdiction” means a province of Canada or a country or political subdivision of a country;

                              (e.2)    repealed RSA 2000 cA‑30 s88;

                                  (f)    “permanent establishment” means a fixed place of business of the corporation, including an office, a branch, a mine, an oil well, a farm, a timber land, a factory, a workshop or a warehouse, and

                                           (i)    if the corporation does not have any fixed place of business it means the principal place in which the corporation’s business is conducted,

                                          (ii)    if a corporation carries on business through an employee or agent, established in a particular place, who has general authority to contract for the employee’s or agent’s employer or principal or who has a stock of merchandise owned by the employee’s or agent’s employer or principal from which the employee or agent regularly fills orders that the employee or agent receives, the corporation is deemed to have a permanent establishment in that place,

                                         (iii)    an insurance corporation is deemed to have a permanent establishment in each province and country in which the corporation is registered or licensed to do business,

                                         (iv)    if a corporation, otherwise having a permanent establishment in Canada, owns land in a province, that land is deemed to be a permanent establishment,

                                          (v)    if a corporation uses substantial machinery or equipment in a particular place at any time in a taxation year it is deemed to have a permanent establishment in that place,

                                         (vi)    the fact that a corporation has business dealings through a commission agent, broker or other independent agent or maintains an office solely for the purchase of merchandise shall not of itself be held to mean that the corporation has a permanent establishment,

                                        (vii)    the fact that a corporation has a subsidiary controlled corporation in a place or a subsidiary controlled corporation engaged in trade or business in a place shall not of itself be held to mean that the corporation is operating a permanent establishment in that place, and

                                       (viii)    if a corporation resident in Canada does not otherwise have a permanent establishment in Canada, the corporation is deemed to have a permanent establishment in the place where it has its registered office or in a place designated in its articles, charter or by-laws as its office or registered office;

                                 (g)    “prescribed” means

                                           (i)    with respect to a form, the information to be given on a form or the manner of filing a form, authorized by the Provincial Minister,

                                        (i.1)    with respect to the manner of making or filing an election, authorized by the Provincial Minister, or

                                          (ii)    in any other case, prescribed by regulation;

                            (g.01)    “Provincial Minister” means the Minister determined under section 16 of the Government Organization Act as the Minister responsible for this Act;

                              (g.1)    “refundable tax credit” means a tax credit to which a corporation is entitled under Part 6;

                              (g.2)    “royalty tax credit” means a tax credit to which a corporation is entitled under section 26.1;

                              (g.3)    repealed 2001 c1 s2;

                                 (h)    “royalty tax deduction” means the royalty tax deduction determined in accordance with section 20(2);

                              (h.1)    “specified future tax consequence” for a taxation year means specified future tax consequence as defined in subsection 248(1) of the federal Act, except that the following replaces paragraph (a) of that definition:

                                          (a)    the consequence of the deduction or exclusion of an amount referred to in section 39(3)(a) of the Alberta Corporate Tax Act, and;

                                  (i)    “tax payable” with respect to a corporation, means the tax payable by that corporation as fixed by assessment or reassessment and subject to variation or objection or on appeal;

                                  (j)    “taxable income” means the income of a corporation calculated in accordance with Part 3;

                                 (k)    “taxable income earned in Canada” means a corporation’s taxable income earned in Canada determined in accordance with section 17.1, except that in no case may a corporation’s taxable income earned in Canada be less than nil.

(2.1)  For the purposes of this Act, a reference to the Minister of National Revenue, the Minister or the Deputy Minister of National Revenue is to be read as including a reference to the Commissioner of the Canada Customs and Revenue Agency established under the Canada Customs and Revenue Agency Act (Canada).

(3)  If at any time an amount payable to a corporation by the Provincial Minister under this Act is applied by the Provincial Minister to reduce a liability of the corporation under this Act, the amount is an amount paid at that time on account of the liability of the corporation.

(4)  Interest at a prescribed rate under this Act shall be computed and compounded daily.

(5)  If interest is payable under a particular section and is not paid or applied on the day it would, but for this subsection, have ceased to be computed, interest at a prescribed rate under this Act shall be computed and compounded daily on the interest that is not paid or applied from that day to the day on which it is paid or applied.

(6)  Repealed 2002 c28 s2.

RSA 2000 cA‑15 s1;RSA 2000 cA‑30 s88;2001 c1 s2;
2002 c28 ss2,34;2003 c34 s2

Application of federal Act

2(1)  When a section of the federal Act or a regulation made under the federal Act has, by this Act, been made applicable for the purposes of this Act and reference is made in that section to another provision of the federal Act and this Act provides that the other provision is inapplicable for the purposes of this Act, then that section shall be read as if the reference to the other provision had been struck out.

(2)  When a section of the federal Act or a regulation made under the federal Act has, by this Act, been made applicable for the purposes of this Act and reference is made in that section to another provision of the federal Act and that other provision does not apply for the purposes of this Act because a provision of this Act applies instead of it, then the reference to the other provision is deemed to be a reference to the provision of this Act that applies instead of it.

(3)  When a section of the federal Act or a regulation made under the federal Act has, by this Act, been made applicable for the purposes of this Act and reference is made in that section to another provision of the federal Act and that other provision applies in a different manner for the purposes of the federal Act than it does for the purposes of this Act, then the reference is deemed to be a reference to the other provision as it applies for the purposes of this Act.

(4)  Repealed 1981 c8 s3.

(5)  In the application of a section of the federal Act that, by this Act, is made applicable for the purposes of this Act, a reference to

                                 (a)    a return required to be filed under section 150 of that Act is deemed to be a reference to a return required to be filed under section 36 of this Act, and

                                 (b)    an assessment required to be made under section 152 of that Act is deemed to be a reference to an assessment required to be made under section 41 of this Act.

(5.1)  If a provision of the federal Act or a regulation made under the federal Act that is made applicable by this Act refers to giving a notice or making an application to the Minister of National Revenue, the notice or application may be given or made to the Provincial Minister in respect of a matter under this Act.

(5.2)  If in a provision of the federal Act or a regulation made under the federal Act that is made applicable by this Act something may be done by the Minister of National Revenue, it may be done by the Provincial Minister.

(6)  Subject to sections 14.1, 14.2, 14.3, 16.1, 16.2 and 34.011(2), an election or designation by a corporation that may be made under the federal Act may be filed with the Provincial Minister and if so filed the rules respecting that election or designation in the federal Act apply but, in the event that the election or designation is not filed with the Provincial Minister, the Provincial Minister shall accept an election or designation made under the federal Act and the provisions of the federal Act imposing penalties for late filing of elections or designations are not applicable for the purposes of this Act.

(7)  Repealed 1992 c2 s3.

(8)  If a provision of the federal Act is made applicable for the purposes of this Act that provision shall apply only insofar as it applies to corporations.

(9)  Repealed 1990 c4 s4.

(10)  Subsections 248(7) and (11) of the federal Act do not apply for the purposes of this Act.

RSA 2000 cA‑15 s2;2001 c1 s3;2002 c28 ss3,34

Income Tax Convention or Treaty

3   If Canada has entered into an Income Tax Convention or Treaty with another jurisdiction and that Convention or Treaty is inconsistent with the federal Act and if by reason of any other Act of the Parliament of Canada that Convention or Treaty prevails to the extent of that inconsistency, that Convention or Treaty is, to the extent of the inconsistency, deemed to apply for the purposes of this Act in the same manner as it applies for the purposes of the federal Act.

RSA 1980 cA‑17 s3

Application of federal Act

4   The sections of the federal Act and the regulations made under it that are by this Act made applicable for the purposes of this Act, are, unless otherwise provided in this Act, deemed to apply as amended or re‑enacted from time to time and those amendments or re‑enactments shall apply for the purposes of this Act in the same manner as they apply for the purposes of the federal Act.

RSA 1980 cA‑17 s4

Application of Parts 9 and 10

4.1(1)  Subject to subsection (2), Parts 9 and 10 do not apply for the purposes of Parts 1 to 8.

(2)  A liability of a corporation that may be reduced by the application of an amount to the liability by the Provincial Minister under section 26.4 or 47 includes a liability under Part 9 or 10.

RSA 2000 cA‑15 s4.1;2002 c28 s34

Part 1
Liability for Income Tax

Liability for income tax

5(1)  A corporation that has a permanent establishment in Alberta at any time in a taxation year shall pay an income tax as required by Part 5 of this Act on its amount taxable in Alberta, computed in accordance with Part 4, for that taxation year.

(2)  The income of a corporation for a taxation year shall be determined in accordance with Part 2.

(3)  The taxable income of a corporation for a taxation year shall be determined in accordance with Part 3.

(3.1)  Notwithstanding subsections (2) and (3), a corporation not resident in Canada shall compute its taxable income earned in Canada in accordance with section 17.1.

(4)  The amount taxable in Alberta of a corporation for a taxation year is to be determined in accordance with Part 4.

RSA 2000 cA‑15 s5;2002 c28 s4

Part 2
Computation of Income

Income for taxation year

6   Subject to sections 6.1 and 6.2, the income of a corporation for a taxation year is its income for the year determined by the following rules:

                                 (a)    determine the aggregate of amounts each of which is the corporation’s income for the year (other than a taxable capital gain from the disposition of a property) from a source inside or outside Canada, including, without restricting the generality of the foregoing, its income for the year from each business and property;

                                 (b)    determine the amount, if any, by which

                                           (i)    the aggregate of its taxable capital gains for the year from dispositions of property other than listed personal property, and its taxable net gain for the year from dispositions of listed personal property,

                                          exceeds

                                          (ii)    the amount, if any, by which its allowable capital losses for the year from dispositions of property other than listed personal property exceed its allowable business investment losses for the year;

                                 (c)    determine the amount, if any, by which the aggregate determined under clause (a) plus the amount determined under clause (b) exceeds the aggregate of the deductions permitted by Division 4 of this Part in computing the corporation’s income for the year (excep