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ALBERTA INCOME TAX ACT

Chapter A‑26

Table of Contents

1 Interpretation

1.1 Application

1.2 Limitations Act

Part 1
Income Tax

Division A
Liability for Tax

2 Tax payable by individuals

Division B ‑
Computation of Tax

Individual Income Tax

3 Amount of individual tax

3.01 Tax payable

3.02 Basic tax

3.03 Surtax

3.04 Flat rate tax

3.1 Amount deemed paid on account of tax

4 Selective tax reduction

Division C ‑
Special Cases

6 Averaging of farm or fishing income

7 Persons exempt

Mutual Fund Trusts

8 Refund to mutual fund trust

Royalty Tax Rebates and Credits

11 Royalty tax rebates

Political Contributions

13 Political contributions

Family Employment Tax Credit

13.2 Definitions

13.21 Application of sections 13.3 to 13.8

13.3 Family employment tax credit

13.4 Application of federal Act

13.5 Cohabiting spouse

13.6 Payment of refund

13.7 Protection for refund

13.8 Regulations

13.81 Overpayment arising 1997 and later

Alberta Energy Tax Refund

14.1 Energy Tax Refund

14.2 Debtor in arrears

14.3 General

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

Interpretation

1(1) In this Act,

(a) “agreeing province” means a province that has entered into an agreement with the Government of Canada under which the Government of Canada will collect taxes payable under that province’s income tax statute and will make payments to that province in respect of the taxes so collected;

(a.1), (b), (b.1) repealed 1998 c40 s3;

(d) repealed 1998 c40 s3;

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

(f) repealed 2006 c23 s9;

(g)-(i) repealed 1998 c40 s3;

(j) “federal Act” means the Income Tax Act (Canada);

(k) “federal regulations” means the regulations made pursuant to the federal Act;

(l) repealed 1998 c40 s3;

(m) “income tax statute” means, with reference to an agreeing province, the law of that province that imposes a tax similar to the tax imposed under this Act;

(n) “individual” means a person other than a corporation and includes a trust or estate as defined in subsection 104(1) of the federal Act;

(o) “loss” means a loss as determined in accordance with and for the purposes of the federal Act, unless any provision of this Act provides otherwise;

(p) “Minister” means the Minister of National Revenue for Canada, but in any provision of the federal Act that is incorporated by reference in this Act, unless a collection agreement is entered into, a reference to the Minister shall be read and construed for the purposes of this Act as a reference to the Provincial Minister;

(p.1) “new Act” means the Alberta Corporate Tax Act;

(q), (r) repealed 1998 c40 s3;

(s) “prescribed”, in the case of a form or the information to be given on a form, means prescribed by order of the Provincial Minister, and, in any other case, means prescribed by regulation;

(t) repealed by Revision;

(u) “Provincial Minister” means the Minister determined under section 16 of the Government Organization Act as the Minister responsible for this Act or, if a collection agreement is entered into, means

(i) in relation to the remittance of any amount as or on account of tax payable under this Act, the Receiver General of Canada, and

(ii) in relation to any other matter, the Minister;

(v) “Receiver General of Canada” means the Receiver General of Canada, but in any provision of the federal Act that is incorporated by reference in this Act, unless a collection agreement is entered into, a reference to the Receiver General of Canada shall be read and construed for the purposes of this Act as a reference to the Provincial Minister;

(v.1) “refundable tax credit” means a tax credit to which an individual is entitled under section 12 or 12.1;

(w) “regulation” means a regulation made by the Lieutenant Governor in Council under this Act;

(x) “taxable income” means

(i) in the case of a taxpayer, other than a corporation to which subclause (ii) applies, taxable income as determined in accordance with and for the purposes of the federal Act, and

(ii) in the case of a corporation to which the new Act applies, taxable income as determined in accordance with and for the purposes of the federal Act except that, in applying section 111 of the federal Act to the calculation of taxable income of a corporation for a taxation year to which this Act applies, where the amounts that the corporation desires to deduct pursuant to section 111 of the federal Act are non‑capital losses, net capital losses, restricted farm losses or farm losses determined for the 1983 and subsequent taxation years of the corporation, section 111 of the federal Act shall be read as entitling the corporation to deduct only its non‑capital losses, net capital losses, restricted farm losses and farm losses determined for the 1983 and subsequent taxation years as determined under the new Act and not as determined under the federal Act;

(y) “taxation year” means a taxation year as defined in section 249 of the federal Act and, in the case of an estate or trust arising on death, means a taxation year as defined in subsection 104(23) of the federal Act.

(z) repealed 1998 c40 s3.

(2) The expression “last day of the taxation year” is, in the case of an individual who resided in Canada at any time in the taxation year but ceased to reside in Canada before the last day of the taxation year, deemed to be a reference to the last day in the taxation year on which the individual resided in Canada.

(3) The tax payable by a taxpayer under this Act or under Part I of the federal Act means the tax payable by the taxpayer as fixed by assessment or reassessment subject to variation on objection or on appeal, if any, in accordance with this Act, or Part I of the federal Act, as the case may be.

(3.1) Subsection 248(11) of the federal Act applies for the purposes of this Act.

(4) For the purposes of this Act, except where they are at variance with the definitions contained in this section, the definitions and interpretations contained in or made by regulation under the federal Act apply.

(5) In any case of doubt, the provisions of this Act shall be applied and interpreted in a manner consistent with similar provisions of the federal Act.

(6) If the Provincial Minister or the Minister is entitled under this Act or the federal Act to reassess or make an additional assessment or assess tax, interest or penalties, the Provincial Minister or the Minister, may also determine the entitlement to and the amount, if any, of refundable tax credits as the circumstances require and any limitations on that reassessment, additional assessment or assessment apply to the determination.

(7) When a provision 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,

(a) and reference is made in that provision 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;

(a.1) and reference is made in that provision to section 122.6 or 122.61 of the federal Act,

(i) a reference to section 122.6 of the federal Act is deemed to be a reference to section 13.2 of this Act, and

(ii) a reference to section 122.61 of the federal Act is deemed to be a reference to section 13.3 of this Act;

(b) and reference is made in that provision 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;

(c) a reference in that provision to tax under Part I of the federal Act shall be read as a reference to tax under this Act;

(d) where that provision contains a reference to tax under any of Parts I.1 to XIV of the federal Act, it shall be read without reference to tax under any of those Parts and without reference to any portion of the provision that applies only to or in respect of tax under any of those Parts;

(e) where that provision contains a reference to any of Parts I.1 to XIV of the federal Act or to a provision in any of those Parts, it shall be read

(i) without reference to that Part or provision, as the case may be, and

(ii) without reference to any portion of it that applies only because of the application of any of those Parts or a provision in any of those Parts;

(f) a reference in that provision to a federal regulation that applies for the purposes of this Act shall be read as a reference to the regulation as it applies for the purposes of this Act.

(8) If a provision of the federal Act that is made applicable by this Act refers to an assessment, reassessment, determination or decision, the assessment, reassessment, determination or decision may be made by the Provincial Minister in respect of a matter under this Act.

(9) If a provision of 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.

(10) If a provision of the federal Act that is made applicable by this Act refers to an application’s being made to the Federal Court, the application shall be made to the Court of Queen’s Bench in respect of a matter under this Act.

(11) If in a provision of 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.

(12) In this Act, a reference to the federal Act shall be construed as a reference to the federal Act as amended from time to time, before or after the commencement of the provision of this Act in which the reference occurs.

RSA 2000 cA‑26 s1;2006 c23 s9

Application

1.1 Notwithstanding any other provision of this Act, this Act does not apply to the 2001 taxation year or any subsequent taxation year of an individual.

RSA 2000 cA‑30 s89

Limitations Act

1.2 The Limitations Act does not apply to the Crown with respect to any matter arising under this Act.

2001 c13 s2

Part 1
Income Tax

Division A ‑
Liability For Tax

Tax payable by individuals

2(1) An income tax shall be paid as hereinafter required for each taxation year by every individual,

(a) who was resident in Alberta on the last day of the taxation year, or

(b) who, not being resident in Alberta on the last day of the taxation year, had income earned in the taxation year in Alberta as defined in section 3(4)(a).

(2), (3) Repealed 2000 c7 s3.

RSA 1980 cA‑31 s2;2000 c7 s3

Division B ‑
Computation of Tax

Individual Income Tax

Amount of individual tax

3(1) to (3) Repealed by Revision.

(4) For the purposes of this section and sections 3.02 and 3.04,

(a) “income earned in the taxation year in Alberta” means the income earned in the taxation year in Alberta as determined in accordance with regulations made under paragraph 120(4)(a) of the federal Act;

(b) “income earned in the taxation year outside Alberta” means income for the year minus income earned in the taxation year in Alberta;

(i) in the case of an individual resident in Canada during part only of the taxation year in respect of whom section 114 of the federal Act applies, the aggregate of

(A) the individual’s income for the period or periods in the year referred to in paragraph 114(a) of the federal Act as determined in accordance with and for the purposes of the federal Act, and

(B) the individual’s income for the portion of that year that is not included in the period or periods referred to in paragraph (A), computed under paragraphs 115(1)(a), (b) and (c) of the federal Act as though that portion of the year were the whole taxation year,

(ii) in the case of an individual not resident in Canada at any time in the taxation year, the individual’s income for the year as computed under paragraphs 115(1)(a), (b) and (c) of the federal Act, and

(iii) in the case of any other individual, the individual’s income for the year as determined in accordance with and for the purposes of the federal Act;

(d) “tax payable under the federal Act” means the amount of the tax payable by an individual in respect of a taxation year and determined under paragraph 120(4)(c) of the federal Act for the year in respect of that individual.

(5) Repealed 1988 c5 s2.

(6) An individual who was resident in Alberta on the last day of a calendar year and had income for the year that included income earned in a country other than Canada in respect of which non‑business‑income tax was paid by the individual to the government of a country other than Canada may deduct from the tax payable by the individual under this Act for that taxation year the amount, if any, equal to the lesser of

(a) the amount, if any, by which the non‑business‑income tax paid by the individual for the year to the government of the country other than Canada exceeds,

(i) where section 127.5 of the federal Act does not apply to the individual for the taxation year, all amounts claimed by the individual as deductions from tax under that Act for the year under subsection 126(1) or 180.1(1.1) of that Act, or

(ii) where section 127.5 of the federal Act applies to the individual for the year, the aggregate of

(A) the individual’s special foreign tax credit for the year determined under section 127.54 of that Act, and

(B) the amount claimed by the individual as a deduction from tax under that Act for the year under subsection 180.1(1.1) of that Act,

and

(b) that proportion of the tax otherwise payable under this Act for that taxation year that

(i) the aggregate of the individual’s income from sources in that country, excluding any portion of the income that was deductible by the individual for the year under subparagraph 110(1)(f)(i) of the federal Act or in respect of which an amount was deducted by the individual under section 110.6 of the federal Act

(A) for that year, if section 114 of the federal Act is not applicable, or

(B) if section 114 of the federal Act is applicable, for the period or periods in the year referred to in paragraph (a) of that section,

on the assumption that

(D) no amount was deducted under subsection 91(5) of the federal Act in computing the individual’s income for the year, and

(E) if the individual deducted an amount under subsection 122.3(1) of the federal Act from the individual’s tax otherwise payable under Part I of the federal Act, the individual’s income from employment in that country was not from a source in that country to the extent of the lesser of the amounts determined in respect of the individual’s income under paragraphs 122.3(1)(c) and (d) of the federal Act for the year,

is of

(ii) the amount, if any, by which

(A) if section 114 of the federal Act is not applicable to the individual in respect of the year, the aggregate of the individual’s income for the year and the amounts, if any, included under subsection 110.4(2) of the federal Act in computing the individual’s taxable income under that Act for the year, or

(B) if section 114 of the federal Act is applicable to the individual in respect of the year, the individual’s income under that Act for the period or periods in the year referred to in paragraph (a) of that section,

exceeds

(I) deducted by the individual under paragraph 111(1)(b) or section 110.6 of the federal Act, or

(II) deductible by the individual under paragraph 110(1)(d), (d.1), (d.2), (d.3), (f) or (j) of the federal Act

for the year or in respect of the period or periods referred to in paragraph (B), as the case may be.

(6.1) For the purposes of subsection (6), “tax payable” and “tax otherwise payable” mean the amounts that would, but for sections 120.3, 121 and 122.3 of the federal Act, be the tax payable under this Act.

(7) For the purposes of subsection (6), the non‑business‑income tax paid by an individual to the government of a country other than Canada in respect of the individual’s income for a year is the non‑business‑income tax that the individual paid to the government of that country as defined in subsection 126(7) of the federal Act for the purposes of that Act.

RSA 2000 cA‑26 s3;2001 c2 s2

Tax payable

3.01 The tax payable under this Act for the 1987 and subsequent taxation years by an individual is the aggregate of the amounts determined under sections 3.02, 3.03 and 3.04.

1987 c36 s31

Basic tax

3.02(1) The basic tax payable under this Act for a taxation year by an individual who resided in Alberta on the last day of the taxation year and had no income earned in the taxation year outside Alberta is the percentage of the tax payable under the federal Act for that year specified in subsection (3).

(2) The basic tax payable under this Act for a taxation year by an individual

(a) who resided in Alberta on the last day of the taxation year but had income earned in the taxation year outside Alberta, or

(b) who did not reside in Alberta on the last day of the taxation year but had income earned in the taxation year in Alberta,

is the amount that bears the same relationship to the percentage of the tax payable under the federal Act for that year specified in subsection (3) that the taxpayer’s income earned in the taxation year in Alberta bears to the taxpayer’s income for the year.

(3) For the purposes of this section, the percentage of the tax payable under the federal Act to be used for computing the basic tax payable under this section is

(a) 46.5% in respect of the 1987, 1988, 1989, 1990 and 1991 taxation years;

(b) 46% in respect of the 1992 taxation year;

(d) 44% in respect of the 1998 and subsequent taxation years.

1987 c36 s31;1992 c3 s2;1998 c40 s3

Surtax

3.03(1) The surtax payable under this Act for a taxation year by an individual is an amount equal to 8% of the amount, if any, by which the basic tax payable under section 3.02 for the taxation year exceeds $3500.

(2) For the purposes of subsection (1), the basic tax payable shall be computed without any addition or deduction being made under section 120.1 of the federal Act.

(3) This section applies to the 1987 and subsequent taxation years, up to and including the 1999 taxation year.

1987 c36 s31;2000 c7 s5

Flat rate tax

3.04(1) The flat rate tax payable under this Act for a taxation year by an individual who resided in Alberta on the last day of the taxation year and had no income earned in the taxation year outside Alberta is an amount equal to

(a) for the 1987 taxation year, 1%, and

(b) for the 1988 to 2000 taxation years, 0.5%

of the taxable income of the individual.

(2) The flat rate tax payable under this Act for a taxation year by an individual

(a) who resided in Alberta on the last day of the taxation year but had income earned in the taxation year outside Alberta, or

(b) who did not reside in Alberta on the last day of the taxation year but had income earned in the taxation year in Alberta

is an amount equal to

(d) for the 1988 to 2000 taxation years, 0.5%

of the taxable income of the individual earned in the taxation year in Alberta.

(3) In subsection (2), “taxable income of the individual earned in the taxation year in Alberta” is the proportion of the taxable income of the individual in that taxation year that the individual’s income earned in the taxation year in Alberta bears to the individual’s income for the year.

RSA 2000 cA‑26 s3.04;RSA 2000 cA‑30 s89

Amount deemed paid on account of tax

3.1 An individual to whom section 2 is applicable for a taxation year is deemed to have paid on account of the individual’s tax for the year an amount equal to the product of

(a) an amount that bears the same relation to the excess determined under subsection 120.1(4) of the federal Act for the year that the individual’s income earned in the taxation year in Alberta bears to the individual’s income for the year

multiplied by

(b) the percentage specified in section 3(3) or 3.02(3) for the year.

1983 c68 s3;1987 c36 s32

Selective tax reduction

4(1) In this section, “tax otherwise payable” means the amount that would, but for section 120.1 of the federal Act, be the tax otherwise payable under section 3(1), (2), (2.1) or (2.2) or section 3.01 less any royalty tax rebate claimed by an individual under section 11 for the taxation year.

(2) The tax payable under section 3.01 by an individual resident in Alberta on the last day of a taxation year shall be reduced for the 1996 and subsequent taxation years by an amount equal to the lesser of

(a) the tax otherwise payable for the taxation year, and

(b) the amount, if any, by which $430 exceeds 1/2 of the tax otherwise payable for the taxation year.

RSA 1980 cA‑31 s4;1983 c68 s4;1987 c36 s33;1988 c5 s4;
1996 c37 s1

5 Repealed 2000 c7 s6.

Division C ‑
Special Cases

Averaging of farm or fishing income

6(1) If an individual whose chief source of income has been farming or fishing during a taxation year (in this section referred to as the “year of averaging”) has filed an election in accordance with subsection 119(1) of the federal Act for the year of averaging, the tax payable under this Part for the year of averaging is an amount determined by the following rules:

(a) determine the amount (in this section referred to as the “average tax”) for each year in the averaging period (which, in this section, has the meaning given to that expression under section 119 of the federal Act) equal to the tax that would be payable under the federal Act, within the meaning of section 3 of this Act, if the taxable income for the year were the average net income for the year within the meaning of paragraph 119(1)(c) of the federal Act;

(b) determine the amount (in this section referred to as the “provincial tax”) for each year in the averaging period equal to the tax that would be payable under this Part for the year if the tax that would be payable under the federal Act for the year, within the meaning of section 3 of this Act, were the average tax for the year and the individual’s taxable income for the year were the average net income for the year within the meaning of paragraph 119(1)(c) of the federal Act;

(c) deduct from the aggregate of the provincial taxes as determined under clause (b) for the years in the averaging period the aggregate of the taxes payable under this Part for the preceding years (which, in this section, has the meaning given to that expression under section 119 of the federal Act);

and the remainder obtained under clause (c) is the tax payable under this Part for the year of averaging.

(2) Subsection (1) applies only in the case of an individual whose chief source of income throughout the averaging period was from farming or fishing.

(3) For the purposes of this Act, if the tax payable by an individual under this Part for the year of averaging would, but for subsection (2), be an amount determined under subsection (1), the tax that would have been payable by the individual under the federal Act for the year of averaging, within the meaning of section 3 of this Act, had no election been made by the individual under section 119 of the federal Act for that year, is deemed to be the tax payable under the federal Act by the individual for the year of averaging.

(4) When this section, except subsection (3), is applicable to the computation of a taxpayer’s tax for a taxation year and the aggregate of the taxes payable under this Part for the preceding years exceeds the aggregate of the provincial taxes as determined under subsection (1)(b) for the years in the averaging period, the excess is deemed to be an overpayment made when the notice of assessment for the year of averaging was mailed.

(5) The provisions of this Part relating to the assessment of tax, interest and penalties apply, with all necessary modifications, to an assessment whereby, for the purposes of this section, it is determined by the Provincial Minister that no tax is payable under this Part for the year of averaging or that an overpayment has been made as described in subsection (4).

(6) If an election for a year of averaging filed under subsection 119(1) of the federal Act has been revoked by the taxpayer in accordance with subsection 119(5) of the federal Act, subsection (1) of this section is not applicable in determining the tax payable under this Part for the year of averaging.

RSA 2000 cA‑26 s6;2006 c23 s9

Persons exempt

7 No tax is payable under this Act by any person for a period when that person

(a) was exempt from tax by virtue of subsection 149(1) of the federal Act, or

(b) was a non‑resident‑owned investment corporation,

and any definition or description in the federal Act applying to any such person applies, with all necessary modifications, for the purposes of this Act unless otherwise provided.

RSA 1980 cA‑31 s7

Mutual Fund Trusts

Refund to mutual fund trust

8(1) When an amount is to be refunded to a mutual fund trust in respect of a taxation year pursuant to section 132 of the federal Act, the Provincial Minister shall, subject to subsection (2), at the time and in the manner provided in section 132 of the federal Act, refund to the mutual fund trust an amount, hereinafter referred to in this section as its “capital gains refund” for the year, equal to the aggregate of the amounts determined under subsections (1.1), (1.2) and (1.3).

(1.1) The amount in respect of the basic tax to be refunded to a mutual fund trust for a taxation year is equal to the proportion of the amount to be refunded for the year pursuant to section 132 of the federal Act that

(a) the percentage obtained by multiplying the percentage referred to in section 3(3) or 3.02(3) of this Act for the year by the percentage referred to in subsection 122(1) of the federal Act for the year,

is of

(b) the percentage referred to in subparagraph 132(4)(b)(i) of the federal Act for the year.

(1.2) The amount in respect of the surtax to be refunded to a mutual fund trust for a taxation year is equal to the product obtained when the amount determined under subsection (1.1) for the year is multiplied by the rate specified in section 3.03 for the year.

(1.3) The amount in respect of the flat rate tax to be refunded to a mutual fund trust for a taxation year is equal to the lesser of

(a) the trust’s refundable flat rate capital gains tax on hand at the end of the year, and

(b) for the 1988 and subsequent taxation years, 0.25% of the trust’s flat rate capital gains redemptions for the year.

(2) For the purpose of computing the capital gains refund under subsection (1) for a mutual fund trust in respect of a taxation year, when the mutual fund trust had income earned in the taxation year outside Alberta, the refund shall be that proportion of the capital gains refund for the year, otherwise determined under subsection (1), that the trust’s income earned in the taxation year in Alberta is of its income for the year.

(3) Instead of making a refund that might otherwise be made under subsection (1), the Provincial Minister may, when the mutual fund trust is liable or about to become liable to make any payment under this Act, apply the amount that would otherwise be refunded to that other liability and notify the trust of that action.

(4) In this section,

(a) “flat rate capital gains redemptions” of a mutual fund trust for a taxation year means that proportion of

(i) the aggregate of

(A) the product obtained when, for the 1988 and subsequent taxation years, 100/0.25 is multiplied by the trust’s refundable flat rate capital gains tax on hand at the end of the year, and

(B) the amount, if any, by which the aggregate of the fair market value at the end of the year of all of the issued units of the trust and all amounts each of which is the amount of any debt owing by the trust, or of any other obligation of the trust to pay an amount, that was outstanding at that time exceeds the aggregate of the cost amounts to it at that time of all of its properties and the amount of any money of the trust on hand at that time,

that

(ii) the aggregate of amounts paid by it in the year on the redemption of units of the trust,

is of

(iii) the aggregate of the fair market value at the end of the year of all of the issued units of the trust and the amount determined under subclause (ii) in respect of the trust for the year;

(b) “income earned in the taxation year in Alberta” has the same meaning as in section 3;

(d) “income for the year” has the same meaning as in section 3;

(e) “mutual fund trust” has the same meaning as in section 132 of the federal Act;

(f) “refundable flat rate capital gains tax on hand” of a mutual fund trust at the end of a taxation year means the amount, if any, by which

(i) the aggregate of amounts each of which is an amount in respect of that or any previous taxation year throughout which it was a mutual fund trust, equal to, for the 1988 and subsequent taxation years, the lesser of 0.5% of its taxable income for the year and 0.5% of its taxed capital gains for the year,

exceeds

(ii) the aggregate of amounts each of which is an amount in respect of any previous taxation year throughout which it was a mutual fund trust, equal to its flat rate tax refund determined under subsection (1.3) for the year;

(g) “taxed capital gains” has the same meaning as in section 132 of the federal Act.

RSA 2000 cA‑26 s8;2006 c23 s9

9 Repealed 2000 c7 s8.

10 Repealed 2000 c7 s9.

Royalty Tax Rebates and Credits

Royalty tax rebates

11(1) In this section,

(a) “attributed Canadian royalty income” of a taxpayer for a taxation year means the aggregate of

(i) the amounts required to be included in computing the taxpayer’s income for the year by virtue of paragraph 12(1)(o) of the federal Act, when those amounts relate to the production from oil or gas wells or bituminous sands deposits, oil sands deposits or coal deposits or to any right, licence or privilege to explore for, drill for or recover petroleum or natural gas or to explore for, mine, quarry, remove, treat or process bituminous sands or oil sands or to win or work mines, seams or beds of coal,

(ii) the amounts in respect of which no deduction is allowed in computing the taxpayer’s income for the year by virtue of paragraph 18(1)(m) of the federal Act, other than an amount described in paragraph 66.2(5)(a) or 66.4(5)(a) of the federal Act, when those amounts relate to the production from oil or gas wells or bituminous sands deposits, oil sands deposits or coal deposits or to any right, licence or privilege to explore for, drill for or recover petroleum or natural gas or to explore for, mine, quarry, remove, treat or process bituminous sands or oil sands or to win or work mines, seams or beds of coal,

(iii) any amounts by which the fair market value (as determined under subsection 69(8) of the federal Act) of petroleum, natural gas or coal disposed of under dispositions referred to in subsection 69(6) of the federal Act, exceeds the proceeds of disposition, if any, actually received by the taxpayer in respect of the petroleum, natural gas or coal so disposed of, and

(iv) any amounts by which the amount referred to in subsection 69(7) of the federal Act in respect of acquisitions of petroleum, natural gas or coal referred to in that subsection exceeds the fair market value (as determined under subsection 69(9) of the federal Act) of the petroleum, natural gas or coal so acquired,

less the aggregate of

(v) the amount allowed to the taxpayer for the year under paragraph 20(1)(v.1) of the federal Act in respect of oil or gas wells or bituminous sands deposits, oil sands deposits or coal deposits, and

(vi) the amount of any reimbursement received by the taxpayer under the terms of a contract, when the reimbursement was for an amount paid or payable by the taxpayer that is required to be included in computing the taxpayer’s income or denied as a deduction in computing the taxpayer’s income by virtue of paragraph 12(1)(o) or 18(1)(m) of the federal Act in respect of oil or gas wells or bituminous sands deposits, oil sands deposits or coal deposits;

(b) “federal basic tax rate” of a taxpayer for a taxation year means

(i) in a taxation year when the taxpayer’s tax payable under the federal Act is the tax payable under section 127.5 of the federal Act for the year determined without reference to section 120.1 of the federal Act, the proportion that that tax payable is of the taxpayer’s adjusted taxable income determined under section 127.52 of the federal Act for the year less the taxpayer’s basic exemption determined under section 127.53 of the federal Act, expressed as a percentage, or

(ii) in a taxation year that is not referred to in subclause (i), the proportion that the taxpayer’s tax payable under the federal Act for the year determined without reference to section 120.1 of the federal Act is of the taxpayer’s taxable income for the year, expressed as a percentage;

(c) “resource income” means income reasonably attributable to production from oil and gas wells or bituminous sands deposits, oil sands deposits or coal deposits or to any right, licence or privilege to explore for, drill for or recover petroleum or natural gas or to explore for, mine, quarry, remove, treat or process bituminous sands or oil sands or to win or work mines, seams or beds of coal;

(d) “royalty tax rebate” means a rebate to which a taxpayer is entitled under this section;

(e) repealed by Revision;

(f) “tax otherwise payable under this Act”, or any similar expression, means, with respect to 1987 and subsequent taxation years, the amount that would, but for section 120.1 of the federal Act, be the tax payable by an individual under section 3.01 for the taxation year;

(g) “tax payable under the federal Act” means the amount that would, but for section 120.1 of the federal Act, be the tax otherwise payable by an individual in respect of a taxation year determined under section 3(4)(d) for the year in respect of that individual.

(1.1) Repealed 1988 c5 s6.

(1.2) If an individual disposes of property to a corporation in a transaction referred to in section 20(5) of the Alberta Corporate Tax Act, the individual shall not use any of the attributed Canadian royalty income included by the corporation in the amount referred to in section 20(5)(a) of that Act in determining the individual’s royalty tax rebate for a taxation year subsequent to the taxation year in which the individual disposed of the property to the corporation.

(2) Repealed by Revision.

(3) Repealed by Revision.

(3.1) Repealed by Revision.

(3.2) For the 1987 and subsequent taxation years, an individual is entitled, subject to this section and the regulations, to a royalty tax rebate in respect of a taxation year in an amount equal to the lesser of

(a) the aggregate of

(i) the product obtained when the proportion of the sum of the individual’s attributed Canadian royalty income for the year and the individual’s attributed Canadian royalty income carry forward from the immediately preceding taxation year that

(A) the individual’s resource income earned in Alberta for the year as determined in accordance with Part XXVI of the federal regulations

is of

(B) the individual’s total resource income for the year

is multiplied by

(D) for the 1996 and subsequent taxation years, 45.5% of the individual’s federal basic tax rate,

(ii) the amount, if any, by which

(A) the amount determined under section 3.03

exceeds