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ALBERTA PERSONAL INCOME TAX ACT

Chapter A‑30

Table of Contents

1 Definitions

2 Application

Part 1
Income Tax

Division 1
Liability for Tax

3 Liability for tax

Division 2
Computation of Tax

4 Specified percentage

5 Taxable income

6 Amount of tax payable

Division 3
Tax Credits, Rebates and Other Deductions

7 Deductions

8 Personal credits

9 Age credit

10 Pension credit

11 Charitable and other gifts

12 Medical expense credit

13 Credit for mental or physical impairment

13.1 Child adoption credit

14 Nature of impairment

15 Tuition credit

16 Education credit

17 Unused tuition and education credits

18 Interest on student loan credit

19 EI and CPP contributions credit

20 Transfer of tax credits

21 Deduction for taxable dividends

22 Overseas employment tax credit

23 Foreign tax credit

24 Political contributions

25 Royalty tax rebates

26 Refund to mutual fund trust

27 Minimum tax carry over

Division 4
Family Employment Tax Credit

28 Interpretation

29 Application of Division

30 Family employment tax credit

31 Application of federal Act

32 Cohabiting spouse or common‑law partner

33 Payment of refund

34 Protection for refund

35 Regulations

Division 4.1
Alberta Resource Rebate

35.1 Alberta Resource Rebate

35.2 Overpayments

35.3 Debtor in arrears

35.4 General

Division 5
Restrictions on Credits

36 Trusts

36.1 Restriction on credit amounts for part‑year residents

37 Credits in year of bankruptcy

38 Business income outside Alberta

39 Business income in Alberta

40 Proration of credits for emigrants from Canada

41 Tax payable by non‑resident

Division 6
General

42 Ordering of credits

43 Credits in separate returns

44 Indexing

45 Bankrupt individuals

46 Lump sum payments

Division 7
Other Taxes Payable

47 Tax on split income

48 Minimum tax

Part 1.1
NHL Players Tax

Division 1
Interpretation and Application

48.1 Definitions

48.2 Application of Parts of Act

Division 2
Liability for Tax

48.3 Liability for tax

Division 3
Computation of Tax

48.4 Amount of tax payable

48.5 Regulations

48.6 Application

Part 2
Returns, Assessments and Appeals

49 Application of Part

50 Returns

51 Estimates, assessment and payment of tax

52 Computation of amount payable

53 Penalties

54 Refunds

55 Objections to assessments

56 Extension of time

57 Right of appeal

58 Reply to notice of appeal

59 Appeal a Court action

60 Application to Court

61 Procedure on appeal

Part 3
Collection of Tax

62 Tax collection agreement

63 Application of payments by Minister

64 Remissions not recoverable

65 Tax paid to other province or territory

66 Non‑agreeing provinces or territories

67 Reciprocal enforcement of judgments

Part 4
Administration and Enforcement

68 Application of Part

Administration and Enforcement

69 Administration and collection

70 Remission of tax

71 Taxes a debt

71.1 Limitations Act

72 Issue of warrant

73 Collecting debts

74 Payment over of money owed tax debtor

75 Individual leaving jurisdiction

76 Withholding taxes

77 Liability of directors

General

78 Books and records

79 Communication of information

80 Communication of information ordered by judge

81 Inspections, search and seizure

82 Regulations

83 Offences

84 Discretion of Minister

85 Information or complaint

Part 4.1
Tax Avoidance

85.01 Application of Part

85.1 Anti‑avoidance rules

Part 5
Transitional Provisions, Consequential Amendments and Coming into Force

Transitional Provisions

86 Tax collection agreement

87 Proceedings

Consequential Amendments

88‑92 Consequential amendments

Coming into Force

93 Coming into force

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

Definitions

1(1) In this Act,

(a) “agreeing province or territory” means a province or territory 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 or territory’s income tax statute and will make payments to that province or territory in respect of the taxes so collected;

(b) “Alberta regulation” means the regulations made by the Lieutenant Governor in Council under this Act;

(c) “business income in Alberta” means income for the taxation year from a business with a permanent establishment in Alberta as determined in accordance with section 2603 of the federal regulation;

(d) “business income outside Alberta” means income for the taxation year from a business with a permanent establishment outside Alberta as determined in accordance with section 2603 of the federal regulation;

(e) “Canada Customs and Revenue Agency” means the Canada Customs and Revenue Agency established under the Canada Customs and Revenue Agency Act (Canada);

(f) “Commissioner of Customs and Revenue” means the Commissioner of Customs and Revenue appointed under the Canada Customs and Revenue Agency Act (Canada);

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

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

(i) “federal regulation” means the Income Tax Regulations, C.R.C., c. 945, made under the federal Act;

(j) “income for the year” means

(i) in the case of an individual resident in Canada during only part of the taxation year in respect of whom section 114 of the federal Act applies, the amount determined under paragraph 114(a) of the federal Act in respect of the individual for the year,

(ii) in the case of an individual who at no time in the taxation year is resident in Canada, the individual’s income for the year as determined 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 Part I of the federal Act;

(k) “income tax statute” means, with reference to an agreeing province or territory, the law of that province or territory that imposes an income tax on individuals;

(l) “individual” means a person other than a corporation and includes a trust or estate;

(m) “Minister” means the Minister of National Revenue for Canada;

(n) “old Act” means the Alberta Income Tax Act (RSA 1980 cA‑31);

(o) “permanent establishment” means a permanent establishment as defined in section 2600 of the federal regulation;

(p) “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, or

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

(p.1) “Provincial Minister” means the Minister determined under section 16 of the Government Organization Act as the Minister responsible for this Act;

(q) “Receiver General” means the Receiver General of Canada;

(r) “refundable tax credit” means a tax credit under Part 1, Division 4 or Division 4.1;

(s) “specified percentage for the year” means the percentage specified in section 4;

(t) “tax collection agreement” means a tax collection agreement between the Government of Canada and the Government of Alberta entered into under section 62 or continued under section 86;

(u) “tax payable under this Act” means the tax payable as fixed by assessment or reassessment subject to variation on objection or on appeal, if any, in accordance with this Act;

(v) “taxable income” means taxable income determined under section 5;

(w) “taxation year”, in respect of an individual, means the period determined under the federal Act as the individual’s taxation year.

(2) Except to the extent that it is at variance with the definitions and interpretation provisions contained in this section, Part XVII of the federal Act applies for the purposes of this Act.

(3) In addition to any other variation under this Act, if a provision of the federal Act or the federal regulation applies for the purposes of this Act, the following applies:

(a) if a reference is made in that provision to another provision of the federal Act or the federal regulation and the other provision does not apply for the purposes of this Act because a provision of this Act applies instead of it, the reference to the other provision is deemed to be a reference to the provision of this Act that applies instead of it;

(b) if a reference is made in that provision to another provision of the federal Act or the federal regulation and the other provision does not apply for the purposes of this Act, that provision is to be read without reference to the other provision;

(c) if a reference is made in that provision to another provision of the federal Act or the federal regulation and the other provision applies in a different manner for the purposes of the federal Act or the federal regulation than it does for the purposes of this Act, the reference is deemed to be a reference to the other provision as it applies for the purposes of this Act;

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

(e) a reference in that provision to tax otherwise payable is to be read as a reference to tax payable under this Act unless that provision otherwise provides;

(f) if that provision contains a reference to tax under any of Parts I.1 to XIV of the federal Act, it is to be read

(i) without reference to tax under any of those Parts, and

(ii) without reference to any portion of that provision that applies only to or in respect of tax under any of those Parts;

(g) if 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 is to 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;

(h) a reference in that provision to a provision of the federal regulation that applies for the purposes of this Act is to be read as a reference to the regulation as it applies for the purposes of this Act;

(i) a reference in that provision

(i) to the Tax Court of Canada is to be read as a reference to the Court of Queen’s Bench, and

(ii) to the Federal Court of Appeal is to be read as a reference to the Court of Appeal of Alberta;

(j) a reference in that provision to the Minister or the Receiver General is to be read as a reference to the Provincial Minister.

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

(5) Section 257 of the federal Act applies for the purposes of this Act.

RSA 2000 cA‑30 s1;2002 c6 s2;2003 c13 s2;2005 c37 s2

Application

2 Except provisions of this Act that state otherwise, this Act applies to the 2001 taxation year and subsequent taxation years.

2000 cA‑35.03 s2

Part 1
Income Tax

Division 1
Liability for Tax

Liability for tax

3(1) An individual

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

(b) who was resident in a province other than Alberta or in a territory on the last day of a calendar year and had business income in Alberta in that calendar year, or

must pay tax as required by this Act.

(2) No tax is payable under this Act by an individual for a period when that individual was exempt from tax because of subsection 149(1) of the federal Act.

(3) In the case of an individual who died or became bankrupt during the calendar year, the words “calendar year” in subsection (1) shall be read as “taxation year”.

RSA 2000 cA‑30 s3;2006 c11 s2

Division 2
Computation of Tax

Specified percentage

4 The specified percentage for the 2001 taxation year and subsequent taxation years is 10%.

RSA 2000 cA‑30 s4;2001 c13 s3

Taxable income

5(1) An individual’s taxable income for the purposes of this Act is equal to the taxable income of the individual for the purposes of computing tax payable under Part I of the federal Act.

(2) An individual’s taxable income earned in Canada for the purposes of this Act is equal to the individual’s taxable income earned in Canada for the purposes of computing tax payable under Part I of the federal Act.

RSA 2000 cA‑30 s5;2003 c13 s3

Amount of tax payable

6(1) The tax payable under this Act for a taxation year by an individual who was resident in Alberta on the last day of the calendar year and had no business income outside Alberta in the taxation year is the amount determined by the formula

A x B

where

A is the specified percentage for the year;

B is the individual’s taxable income for the year.

(2) The tax payable under this Act for a taxation year by an individual who was resident in Alberta on the last day of the calendar year and had business income outside Alberta in the taxation year is the amount determined by the formula

A x B x (C-D)
C

where

A is the specified percentage for the year;

B is the individual’s taxable income for the year;

C is the individual’s income for the year as determined under section 1(1)(j)(i) or (iii), as the case may be;

D is the individual’s business income outside Alberta for the year that is included in amount C.

(3) The tax payable under this Act for a taxation year by an individual who was resident in a province or territory other than Alberta on the last day of the calendar year and had business income in Alberta in the taxation year is the amount determined by the formula

A x B x C
D

where

A is the specified percentage for the year;

B is the individual’s taxable income for the year;

C is the individual’s business income in Alberta for the year;

D is the individual’s income for the year as determined under section 1(1)(j)(i) or (iii), as the case may be.

(4) The tax payable under this Act for a taxation year by an individual who

(a) was resident in Alberta throughout part of the calendar year,

(b) was not resident in any other province or territory after ceasing to be a resident of Alberta, and

is the amount determined by the formula

A x B x (C-D)
C

where

A is the specified percentage for the year;

B is the individual’s taxable income for the year;

C is the individual’s income for the year as determined under section 1(1)(j)(i);

D is the individual’s business income outside Alberta for the year that is included in amount C.

(5) The tax payable under this Act for a taxation year by an individual who at no time in the year was resident in Canada is the amount determined by the formula

A x B x C
D

where

A is the specified percentage for the year;

B is the individual’s taxable income earned in Canada for the year;

C is the total of the individual’s income for the year earned in Alberta as determined under section 2602 of the federal regulation and the taxable capital gain from the disposition of taxable Alberta property as determined by the Alberta regulation;

D is the individual’s income for the year as determined under section 1(1)(j)(ii).

(6) The tax payable under this Act for a taxation year by an individual who

(a) was resident in a jurisdiction outside Canada on the last day of the calendar year,

(b) was resident in a province or territory other than Alberta in the calendar year immediately prior to becoming a resident in a jurisdiction outside Canada, and

is the amount determined by the formula

A x B x C
D

where

A is the specified percentage for the year;

B is the individual’s taxable income for the year;

C is the individual’s business income in Alberta for the year;

D is the individual’s income for the year as determined under section 1(1)(j)(i).

(7) In the case of an individual who died or became bankrupt during the calendar year, the words “calendar year” in subsections (1), (2), (3), (4) and (6) shall be read as “taxation year”.

RSA 2000 cA‑30 s6;2002 c6 s3;2003 c13 s4;2004 c1 s2;
2006 c11 s3

Division 3
Tax Credits, Rebates and
Other Deductions

Deductions

7 The amounts that may be deducted under this Division and Division 6 may be deducted only from the amount of tax payable under section 6, except that amounts under sections 21 and 23 may also be deducted from tax payable under section 47.

2000 cA‑35.03 s7

Personal credits

8(1) For the purpose of computing the tax payable under this Act for a taxation year by an individual, there may be deducted the amount determined by the formula

A x B

where

A is the specified percentage for the year;

B is the total of

Marital status

(a) in the case of an individual who at any time in the year is a married person or a person who is in a common‑law partnership who supports the individual’s spouse or common‑law partner and is not living separate and apart from the spouse or common‑law partner because of a breakdown of their marriage or common‑law partnership, an amount equal to the total of

(i) $14 899, and

(ii) an amount determined by the formula

$14 899 – C

where

C is the income of the individual’s spouse or common‑law partner for the year or, where the individual and the individual’s spouse or common‑law partner are living separate and apart at the end of the year because of a breakdown of their marriage or common‑law partnership, the spouse’s or common‑law partner’s income for the year while married or in the common‑law partnership and not so separated,

Wholly dependent person

(b) in the case of an individual who does not claim a deduction for the year under clause (a) and who, at any time in the year,

(i) is

(A) a person who is unmarried and who does not live in a common‑law partnership, or

(B) a person who is married or in a common‑law partnership, who neither supported nor lived with his or her spouse or common‑law partner and who is not supported by that spouse or common‑law partner, and

(ii) whether alone or jointly with one or more other persons, maintains a self‑contained domestic establishment (in which the individual lives) and actually supports in that establishment a person who, at that time, is

(A) except in the case of a child of the individual, resident in Canada,

(B) wholly dependent for support on the individual, or on the individual and the other person or persons, as the case may be,

(D) except in the case of a parent or grandparent of the individual, either under 18 years of age or so dependent because of mental or physical infirmity,

an amount equal to the total of

(iii) $14 899, and

(iv) an amount determined by the formula

$14 899 – D

where

D is the income for the year of the dependent person,

Basic personal credit - single status

In‑home care of relative credit

(d) in the case of an individual who, at any time in the year alone or jointly with one or more persons, maintains a self‑contained domestic establishment that is the ordinary place of residence of the individual and of a particular person

(i) who has attained the age of 18 years before that time,

(ii) who

(A) is the individual’s child or grandchild, or

(B) is resident in Canada and is the parent, grandparent, brother, sister, aunt, uncle, nephew or niece of the individual or of the individual’s spouse or common‑law partner, and

(iii) who

(A) in the case of the individual’s parent or grandparent, has attained the age of 65 years before that time, or

(B) in the case of any of the relatives referred to in subclause (ii), is dependent on the individual because of that particular person’s mental or physical infirmity,

the amount determined by the formula

$24 229 – D.1

where

D.1 is the greater of $14 874 and the particular person’s income for the year,

Dependant credit

(e) for each dependant of the individual for the year who

(i) attained the age of 18 years before the end of the year, and

(ii) was dependent on the individual because of mental or physical infirmity,

the amount determined by the formula

$15 535 – E

where

E is the greater of $6180 and the income for the year of the dependant, and

Infirm dependant credit

(f) in the case of an individual entitled to a deduction under clause (b) in respect of a person and who would also be entitled but for