Budget Implementation Act, 2024, No. 1 (S.C. 2024, c. 17)
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Assented to 2024-06-20
PART 1Amendments to the Income Tax Act and Other Legislation (continued)
R.S., c. 1 (5th Supp.)Income Tax Act (continued)
39 (1) The Act is amended by adding the following after section 127.49, as enacted by subsection 38(1):
Marginal note:Definitions
127.491 (1) The following definitions apply in this section.
- at-risk amount
at-risk amount has the meaning assigned by subsection 96(2.2). (fraction à risques)
- clean economy allocation provision
clean economy allocation provision means
(a) subsection 127.48(12); or
(b) subsection 127.49(8). (disposition d’allocation pour l’économie propre)
- clean economy expenditure
clean economy expenditure means
(a) the capital cost of eligible clean hydrogen property as determined under section 127.48; or
(b) the capital cost of CTM property as determined under section 127.49. (dépense pour l’économie propre)
- clean economy provision
clean economy provision means
(a) this section;
(b) section 127.48; or
(c) section 127.49. (disposition pour l’économie propre)
- clean economy tax credit
clean economy tax credit means
(a) a clean hydrogen tax credit (as defined under section 127.48(1)); or
(b) a CTM investment tax credit (as defined under section 127.49(1)). (crédit d’impôt pour l’économie propre)
- limited partner
limited partner has the meaning assigned by subsection 96(2.4) if that subsection were read without reference to “if the member’s partnership interest is not an exempt interest (within the meaning assigned by subsection (2.5)) at that time and”. (commanditaire)
Marginal note:Credits in unreasonable proportions
(2) If the members of a partnership agree to share the amount of a clean economy tax credit of the partnership and the share of any member of that amount is not reasonable in the circumstances having regard to the capital invested in or work performed for the partnership by the members of the partnership or such other factors as may be relevant, that share shall, notwithstanding any agreement, be deemed to be the amount that is reasonable in the circumstances.
Marginal note:Limited partners
(3) Notwithstanding subsection (2), if a taxpayer is a limited partner of a partnership at the end of a fiscal period of the partnership, the total of all clean economy tax credits allocated to the taxpayer by the partnership in respect of that fiscal period shall not exceed the taxpayer’s at-risk amount in respect of the partnership at the end of that fiscal period.
Marginal note:Apportionment rule
(4) The amount required by any clean economy allocation provision to be added in computing a particular clean economy tax credit of a taxpayer in respect of a partnership for the taxation year in which the partnership’s fiscal period ends is deemed to be the portion of the amount otherwise determined under this section in respect of the taxpayer that is reasonably attributable to each particular clean economy tax credit.
Marginal note:Assistance received by member of partnership
(5) For the purposes of computing a clean economy tax credit, if, at a particular time, a taxpayer that is a member of a partnership has received, is entitled to receive or can reasonably be expected to receive government assistance or non-government assistance (as defined in subsection 127(9)), the amount of that assistance that may reasonably be considered to be in respect of a clean economy expenditure of the partnership shall be deemed to have been received at that time by the partnership as government assistance or non-government assistance, as the case may be, in respect of the expenditure.
Marginal note:Credit received by member of partnership
(6) For the purposes of subsection 13(7.1), if, pursuant to an allocation from a partnership under a clean economy allocation provision, an amount is added in computing a clean economy tax credit of a taxpayer at the end of the taxpayer’s taxation year, the amount shall be deemed to have been received by the partnership at the end of its fiscal period in respect of which the allocation was made as assistance from a government for the acquisition of depreciable property.
Marginal note:Tiered partnerships
(7) For the purposes of each clean economy provision, a person or partnership that is (or is deemed by this subsection to be) a member of a particular partnership that is a member of another partnership is deemed to be a member of the other partnership.
(2) Subsection (1) is deemed to have come into force immediately after the expiration of March 27, 2023, except that before January 2024, the definitions clean economy allocation provision, clean economy expenditure, clean economy provision and clean economy tax credit in subsection 127.491(1) of the Act, as enacted by subsection (1), are to be read as follows:
- clean economy allocation provision
clean economy allocation provision means subsection 127.48(12). (disposition d’allocation pour l’économie propre)
- clean economy expenditure
clean economy expenditure means a capital cost of eligible clean hydrogen property as determined under section 127.48. (dépense pour l’économie propre)
- clean economy provision
clean economy provision means
(a) this section; or
(b) section 127.48. (disposition pour l’économie propre)
- clean economy tax credit
clean economy tax credit means a clean hydrogen tax credit (as defined under section 127.48(1)). (crédit d’impôt pour l’économie propre)
40 (1) The description of A in section 127.51 of the Act is replaced by the following:
- A
- is 20.5%;
(2) Paragraph (a) of the description of C in section 127.51 of the Act is replaced by the following:
(a) the first dollar amount for the year referred to in paragraph 117(2)(d), in the case of an individual (other than a trust) or a qualified disability trust (as defined in subsection 122(3)); and
(3) Subsections (1) and (2) apply to taxation years that begin after December 31, 2023.
41 (1) Subparagraph 127.52(1)(d)(i) of the Act is replaced by the following:
(i) the references to the fraction applicable to the individual for the year in each of paragraphs 38(a) and (b) and section 41 were read as a reference to “1/1”, and
(2) The formula in subparagraph 127.52(1)(d)(ii) of the Act is replaced by the following:
A ÷ B
(3) Subsection 127.52(1) of the Act is amended by adding the following after paragraph (d):
(d.1) in respect of a disposition to which paragraph 38(a.1) applies, the portion of that paragraph before subparagraph (i) were read as “a taxpayer’s taxable capital gain for a taxation year from the disposition of a property is equal to 3/10 of the taxpayer’s capital gain for the year from the disposition of the property if”;
(4) The portion of subparagraph 127.52(1)(g)(ii) of the Act before clause (A) is replaced by the following:
(ii) the total of all amounts each of which is
(5) Clause 127.52(1)(g)(ii)(A) of the French version of the Act is replaced by the following:
(A) un montant attribué par la fiducie en application du paragraphe 104(21) pour l’année,
(6) The portion of clause 127.52(1)(g)(ii)(B) of the French version of the Act before subclause (I) is replaced by the following:
(B) la partie d’un gain en capital imposable net de la fiducie qu’il est raisonnable de considérer :
(7) Subparagraphs 127.52(1)(h)(i) to (vi) of the Act are replaced by the following:
(i) the amounts deducted under subsection 110(2),
(ii) 7/5 of the amounts deducted under any of paragraph 110(1)(d.01) and subsections 110.6(2) and (2.1),
(iii) the amount that would be deductible under paragraph 110(1)(f) if the individual deducted 1/2 of the amount the individual deducted for the year under subparagraph 110(1)(f)(v),
(iv) 1/2 of the amount deducted for the year under subsection 110.7(1), and
(v) the amount deducted under paragraph 110(1)(g);
(8) Clause 127.52(1)(i)(i)(A) of the Act is replaced by the following:
(A) 1/2 of all amounts deducted for the year under paragraphs 111(1)(a), (c), (d) and (e), and
(9) The portion of clause 127.52(1)(i)(i)(B) of the English version of the Act before subclause (I) is replaced by the following:
(B) the total of all amounts that would be deductible under those paragraphs for the year if the amount that would be deductible under paragraphs 111(1)(a), (c), (d) and (e) was 1/2 of the amount that would otherwise be deductible under those paragraphs and if
(10) Clause 127.52(1)(i)(ii)(A) of the Act is replaced by the following:
(A) the total of all amounts deducted under paragraph 111(1)(b), and
(11) Clause 127.52(1)(i)(ii)(B) of the Act is amended by striking out “and” at the end of subclause (II) and by replacing subclause (III) with the following:
(III) paragraphs (c.1) and (d) of this subsection applied in computing the individual’s net capital loss for any taxation year that ends after 2011 and begins before 2024, and
(IV) paragraph (c.1) of this subsection applied in computing the individual’s net capital loss for any taxation year that begins after 2023; and
(12) Paragraph 127.52(1)(j) of the Act is replaced by the following:
(j) in computing the individual’s income for the year, the individual deducted 1/2 of the amount deducted for the year under
(i) paragraphs 8(1)(c) to (e), (g) to (l.2) and (p) to (t),
(ii) paragraphs 20(1)(c) to (f) in respect of an amount borrowed to earn income from property for the year, other than an amount described under any of paragraphs (b), (c), (c.2), (c.3) and (e.1),
(iii) paragraphs 60(e), (e.1) and (g),
(iv) subsections 62(1) and (2),
(v) subsections 63(1) and (2.2), and
(vi) section 64.
(13) Subsections (1) to (12) apply to taxation years that begin after December 31, 2023.
42 (1) Paragraphs 127.531(a) and (b) of the Act are replaced by the following:
(a) 1/2 of an amount deducted under any of subsections 118(1), (2), (3) and (10), sections 118.01 to 118.07, subsections 118.3(1), (2) and (3) and sections 118.5 to 118.9 in computing the individual’s tax payable for the year under this Part;
(b) 1/2 of the amount that was claimed under section 118.2 in computing the individual’s tax payable for the year under this Part, determined without reference to this Division, to the extent that the amount claimed does not exceed the maximum amount deductible under that section in computing the individual’s tax payable for the year under this Part, determined without reference to this Division;
(c) 4/5 of the amount that was claimed under section 118.1 in computing the individual’s tax payable for the year under this Part, determined without reference to this Division, to the extent that the amount claimed does not exceed the maximum amount deductible under that section in computing the individual’s tax payable for the year under this Part, determined without reference to this Division; and
(d) an amount deducted under section 119 or subsection 127(1) in computing the individual’s tax payable for the year under this Part.
(2) Subsection (1) applies to taxation years that begin after December 31, 2023.
43 (1) The definition foreign taxes in subsection 127.54(1) of the English version of the Act is replaced by the following:
- foreign taxes
foreign taxes of an individual for a taxation year means the total of the business-income taxes, as defined in subsection 126(7), paid by the individual for the year in respect of businesses carried on by the individual in countries other than Canada and 2/3 of the non-business-income taxes, as defined in that subsection, paid by the individual for the year to the governments of countries other than Canada. (impôts payés à l’étranger)
(2) Paragraph (b) of the definition foreign income in subsection 127.54(1) of the Act is replaced by the following:
(b) the individual’s incomes for the year (as would be determined if paragraph 127.52(1)(d) were applicable) from sources in countries other than Canada in respect of which the individual has paid non-business-income taxes, as defined in subsection 126(7), to governments of countries other than Canada; (revenu de source étrangère )
(3) The description of A in subparagraph 127.54(2)(b)(ii) of the Act is replaced by the following:
- A
- is 20.5%, and
(4) Subsections (2) and (3) apply to taxation years that begin after December 31, 2023.
44 (1) Paragraph 127.55(f) of the Act is replaced by the following:
(f) a taxation year of a trust throughout which the trust is
(i) a trust referred to in paragraph 150(1.2)(f), (g), (i), (j), (l) or (n),
(ii) an investment fund (as defined in subsection 251.2(1)) unless the trust qualifies as an investment fund because of or in connection with a transaction or event or series of transactions or events one of the main purposes of which is to avoid tax under this Division,
(iii) a trust
(A) all of the beneficiaries of which are any combination of
(I) persons exempt from tax under this Division, and
(II) trusts described in this subparagraph,
(B) under which no person (other than a person described in subclause (A)(I) or (II)) can be added as a beneficiary,
(C) in which all interests are fixed interests (as defined in subsection 94(1)), and
(D) that is irrevocable,
(iv) a trust that is exempt from tax under this Part,
(v) a trust described in subsection 143(1), or
(vi) a unit trust if the total fair market value of the units of the trust that are listed on a designated stock exchange represents all or substantially all of the total fair market value of all the units of the trust.
(2) Subsection (1) applies to taxation years that begin after December 31, 2023.
- Date modified: