Bill 9 – 2017: Finance Statutes Amendment Act, 2017

HONOURABLE MICHAEL DE JONG
MINISTER OF FINANCE

BILL 9 – 2017

FINANCE STATUTES AMENDMENT ACT, 2017

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

SECTION 1: [Income Tax Act, section 4.34]

provides rules for the purposes of the child fitness credit in the event an individual becomes bankrupt in a calendar year, and
is consequential to amendments to the Income Tax Act (Canada) that make the child fitness credit refundable under that Act.

1 Section 4.34 of the Income Tax Act, R.S.B.C. 1996, c. 215, is amended by adding the following subsection:

(4) For the purposes of this section, if an individual becomes bankrupt in a calendar year, the following rules apply in respect of any taxation year that ends in the calendar year:

(a) subsection (2) is to be read as if the phrase "who is deemed to have paid an amount under section 122.8 of the federal Act for the year" were "who is deemed to have paid an amount under section 122.8 of the federal Act for the taxation year that ends at the end of the calendar year in which the individual becomes bankrupt";

(b) paragraph (a) (ii) of the description of "B" in subsection (2) is to be read as follows:

(ii) the amount that would be determined in respect of the qualifying child by the formula in the description of "B" in section 122.8 (2) of the federal Act and that would be included in computing the individual's deemed payment under that section for the year, if that Act were read without reference to section 122.8 (5) of that Act;

(c) paragraph (b) of the description of "B" in subsection (2) is to be read as if the phrase "for the year" in both places were "for the taxation year that ends at the end of the calendar year in which the individual becomes bankrupt";

(3) If more than one individual is entitled to a deduction under this section for a taxation year that ends in a calendar year in respect of a qualifying child, the following rules apply to those individuals for any taxation year that ends in the calendar year in respect of that qualifying child:

(a) the individuals may deduct an amount under this section only if the individuals are deemed to have paid amounts under section 122.8 of the federal Act for the taxation year that ends at the end of the calendar year;

(b) in respect of those individuals who meet the requirement referred to in paragraph (a) of this subsection,

(i) the total of all amounts deducted by the individuals under this section for all taxation years that end in the calendar year must not exceed the maximum amount that would be deductible for all taxation years that end in the calendar year by any one of the individuals if that individual were the only individual entitled to deduct an amount under this section, and

(ii) the total amount that is deductible under this section by any one of the individuals for all taxation years that end in the calendar year must be determined using the same proportion that, under section 122.8 (4) of the federal Act, is agreed to by the individual or is fixed for that individual by the federal minister.

SECTION 2: [Income Tax Act, section 34] incorporates by reference section 160.4 of the Income Tax Act (Canada).

2 Section 34 is amended by striking out "160.2, 160.21, 160.3," and substituting "160.2 to 160.4,".

SECTION 3: [Income Tax Act, section 79] clarifies a reference.

3 Section 79 (1) is amended in paragraphs (a) (ii) (C) and (b) (ii) (C) of the definition of "BC labour expenditure" by striking out "from" and substituting "after".

SECTION 4: [Income Tax Act, section 79] updates a reference to a minister.

4 Section 79 (1) is amended by repealing the definition of "certifying authority" and substituting the following:

"certifying authority" means the Minister of Jobs, Tourism and Skills Training and Minister Responsible for Labour; .

SECTION 5: [Income Tax Act, section 79] amends the definition of "eligible production" in section 79 (1) of the Act to exclude tax shelter investments as defined in section 143.2 (1) of the Income Tax Act (Canada).

5 Section 79 (1) is amended in the definition of "eligible production" by repealing paragraph (c) and substituting the following:

(c) neither the production nor any interest in a person or partnership that has, directly or indirectly, an interest in the production is a tax shelter investment as defined in section 143.2 (1) of the federal Act; .

SECTION 6: [Insurance Premium Tax Act, section 1]

defines "amount owing" to mean tax or an amount owing to the government under section 15.1 of the Act, as added by this Bill, and
defines "assessment" in order to clarify that assessment includes reassessment.

6 Section 1 (1) of the Insurance Premium Tax Act, R.S.B.C. 1996, c. 232, is amended by adding the following definitions:

SECTION 7: [Insurance Premium Tax Act, section 15] amends the section for consistency with section 15.1 of the Act, as added by this Bill.

(a) in subsection (1) by striking out "If the examination of a taxpayer's return discloses that overpayment has been made by the taxpayer," and substituting "If it appears from an inspection, audit, examination or investigation or from other information available to the commissioner that an overpayment has been made by a taxpayer,", and

(b) in subsection (2) by striking out "if further tax payable by that taxpayer is due or accruing due," and substituting "if there is an amount owing by the taxpayer," and by striking out "the tax," and substituting "the amount owing,".

SECTION 8: [Insurance Premium Tax Act, section 15.1] provides that if an excess amount is refunded to a taxpayer or applied to tax payable by a taxpayer,

the excess amount is deemed to be an amount that became payable on the date the amount was refunded or applied, and
the taxpayer is liable to pay interest on the excess amount from the date the excess amount became payable to the date of payment.

Excess refund

15.1 (1) If it appears from an inspection, audit, examination or investigation or from other information available to the commissioner that an amount has been refunded to a taxpayer in excess of the amount to which the taxpayer was entitled as a refund under this Act,

(a) the excess is deemed to be an amount that became payable by the taxpayer on the date on which the amount was refunded, and

(b) the taxpayer is liable to pay interest on the excess calculated at the rate and in the manner prescribed by the Lieutenant Governor in Council from the date the excess became payable to the date of payment.

(2) If an amount applied under section 15 (2) to an amount owing by a taxpayer is in excess of the amount to which the taxpayer is entitled as a refund under this Act, this section applies in respect of the amount applied as if that amount had been refunded to the taxpayer on the date the amount was applied to the amount owing.

SECTION 9: [Insurance Premium Tax Act, section 16]

replaces a reference to "tax due" with a reference to "amount owing", consequential to the addition by this Bill of section 15.1 to the Act,
removes references to "reassess" and "reassessment", consequential to the addition by this Bill of the definition of "assessment" to section 1 (1) of the Act,
authorizes the commissioner to make assessments at any time for amounts payable under section 15.1 of the Act, as added by this Bill, and
clarifies that, subject to appeal or reassessment, an assessment or penalty remains binding despite an error, defect or omission.

(a) in subsection (1) by striking out "any tax due" and substituting "an amount owing",

(2.1) The commissioner may assess a taxpayer at any time for any amount payable by the taxpayer under section 15.1.

(6) Subject to being amended, changed or varied on appeal or by reassessment, an assessment or penalty made or imposed under this Act is valid and binding despite any error, defect or omission in the assessment or penalty or in procedure.

SECTION 10: [Insurance Premium Tax Act, section 17] prohibits a person from appealing an assessment made under section 16 (2.1) of the Act, as added by this Bill.

(a) in subsection (1) by striking out "A person who objects" and substituting "Subject to subsection (4), a person who objects", and

(4) An appeal may not be made under this section in relation to an assessment made under section 16 (2.1).

SECTION 11: [Insurance Premium Tax Act, section 18.1] clarifies that a court may not vary or disallow an assessment because of an irregularity in procedure.

Irregularity in procedure

18.1 An assessment must not be varied or disallowed by a court because of an irregularity, informality, omission or error on the part of any person in the observation of any directory provision up to the date of the issuing of the notice of assessment.

SECTIONS

12 TO 19: [Insurance Premium Tax Act, sections 20 to 24 and 26 to 27.1] are consequential to the addition by this Bill of the definitions of "amount owing" and "assessment" to section 1 (1) of the Act.

12 Section 20 is amended by striking out "no assessment of tax, interest and penalties" and substituting "no amount owing under this Act that is".

SECTIONS

(a) in subsection (1) by striking out "A tax imposed or assessed under this Act" and substituting "An amount owing under this Act by a taxpayer" and by striking out "effective December 31 of the year for which the tax is imposed," and substituting "effective December 31 of the year in respect of which the amount is owing,",

(b) in subsection (2) (b) by striking out "the taxes due," and substituting "the amount owing,", and

SECTIONS

(a) in subsection (1) by striking out "a tax" and substituting "an amount owing", and

(b) in subsection (2) by striking out "the tax." and substituting "the amount owing."

SECTIONS

15 Section 23 is amended by striking out "The amount of tax that is due and payable" and substituting "An amount owing under this Act".

SECTIONS

(1) If a person fails to pay an amount owing under this Act, the commissioner may issue a certificate specifying the amount owed and the name of the person who owes it.

SECTIONS

(a) in subsection (1) by striking out "the amount of tax that is due and payable," and substituting "an amount owing under this Act,",

(b) in subsection (1) (a) by striking out "tax," and substituting "amount owing,",

(d) in subsection (5) by striking out "the amount of the tax" and substituting "the amount owing", and

(e) in subsection (6) by striking out "the person for whose taxes the property was distrained," and substituting "the taxpayer in respect of whom the property was distrained,", by striking out "paid to the person," and substituting "paid to the taxpayer," and by striking out "the person's" and substituting "the taxpayer's".

SECTIONS

(a) in subsection (1) by striking out "recovery of taxes" and substituting "the recovery of an amount owing", and

(b) in subsection (2) by striking out "a tax" and substituting "an amount owing".

SECTIONS

(a) in subsection (1) (a) by striking out "taxes," and substituting "an amount owing,", and

SECTION 20: [Logging Tax Act, section 1]

defines "amount owing" to mean taxes or an amount owing to the government under section 21.1 of the Act, as added by this Bill, and
defines "assessment" in order to clarify that assessment includes reassessment.

20 Section 1 of the Logging Tax Act, R.S.B.C. 1996, c. 277, is amended by adding the following definitions:

SECTION 21: [Logging Tax Act, section 15.11] adds rules for calculating interest under section 15 or 15.1 of the Act if tax payable under the Act is reduced as a result of the deduction, reduction or exclusion of a loss carryback or other amount described in section 161 (7) (a) of the Income Tax Act (Canada).

Calculation of interest if loss carryback or other
amount applied under Income Tax Act (Canada)

15.11 If the deduction, reduction or exclusion of amounts described in section 161 (7) (a) of the Income Tax Act (Canada), on account of tax payable under that Act, results in the reduction of tax payable under this Act for a taxation year, the following rules apply for the purposes of calculating interest payable under section 15 or 15.1 of this Act:

(a) the amount of tax payable under this Act for the taxation year is deemed to be the amount that would be payable if the consequences of that deduction, reduction or exclusion were not taken into consideration;

(b) the amount by which the tax payable under this Act is reduced for the taxation year is deemed to be an amount that was paid, on account of that tax payable, on the date that is 60 days after the date on which the commissioner receives notice, under section 20 (5) of this Act, that tax payable under the Income Tax Act (Canada) has been reassessed as a result of that deduction, reduction or exclusion.

SECTIONS

22 AND 23: [Logging Tax Act, sections 16 and 17] are consequential to the addition by this Bill of the definition of "amount owing" to section 1 of the Act.

22 Section 16 is amended by striking out "pay any tax and interest and penalties assessed and levied with respect to that income" and substituting "pay the amount owing with respect to that income".

SECTIONS

22 AND 23: [Logging Tax Act, sections 16 and 17] are consequential to the addition by this Bill of the definition of "amount owing" to section 1 of the Act.

23 Section 17 is amended by striking out "no unpaid assessment of tax, interest and penalties" and substituting "no amount owing under this Act that is".

SECTION 24: [Logging Tax Act, section 20]

replaces a reference to "taxes due" with a reference to "amount owing", consequential to the addition by this Bill of section 21.1 to the Act,
removes references to "reassess" and "reassessment", consequential to the addition by this Bill of the definition of "assessment" to section 1 of the Act,
authorizes the commissioner to make assessments at any time for amounts payable under section 21.1 of the Act, as added by this Bill, and
clarifies that, subject to appeal or reassessment, an assessment or penalty remains binding despite an error, defect or omission.

(a) in subsection (1) by striking out "taxes due" and substituting "an amount owing",

(2.1) The commissioner may assess a taxpayer at any time for any amount payable by the taxpayer under section 21.1. ,

(d) in subsection (5) by striking out "assessment, reassessment or additional assessment" in both places and substituting "assessment or additional assessment",

SECTION 25: [Logging Tax Act, section 21] amends the section for consistency with section 21.1 of the Act, as added by this Bill.

(a) in subsection (1) by striking out "If the examination of a taxpayer's return discloses that an overpayment has been made by the taxpayer," and substituting "If it appears from an investigation, examination or inquiry or from other information available to the commissioner that an overpayment has been made by a taxpayer,",

(b) in subsection (2) by striking out "if further tax payable by the taxpayer is due or accruing due," and substituting "if there is an amount owing by the taxpayer,", and

SECTION 26: [Logging Tax Act, section 21.1] provides that if an excess amount is refunded to a taxpayer or applied to tax payable by a taxpayer,

the excess amount is deemed to be an amount that became payable on the date the amount was refunded or applied, and
the taxpayer is liable to pay interest on the excess amount from the date the excess amount became payable to the date of payment.

Excess refund

21.1 (1) If it appears from an investigation, examination or inquiry or from other information available to the commissioner that an amount has been refunded to a taxpayer for a taxation year in excess of the amount to which the taxpayer was entitled as a refund under this Act,

(a) the excess is deemed to be an amount that became payable by the taxpayer on the date on which the amount was refunded, and

(2) If an amount applied under section 21 (2) to an amount owing by a taxpayer is in excess of the amount to which the taxpayer is entitled as a refund under this Act, this section applies in respect of the amount applied as if that amount had been refunded to the taxpayer on the date the amount was applied to the amount owing.

SECTION 27: [Logging Tax Act, section 23] prohibits a person from appealing an assessment made under section 20 (2.1) of the Act, as added by this Bill.

(5) An appeal may not be made under this section in relation to an assessment made under section 20 (2.1).

SECTION 28: [Logging Tax Act, section 26] clarifies that the section applies in relation to appeals made to a court.

SECTIONS

29 TO 36: [Logging Tax Act, sections 28 to 31, 33 to 34.1 and 35] are consequential to the addition by this Bill of the definitions of "amount owing" and "assessment" to section 1 of the Act.

(a) in subsection (1) by striking out "A tax imposed or assessed under this Act" and substituting "An amount owing under this Act by a taxpayer" and by striking out "the taxation year of the taxpayer for which the tax is imposed," and substituting "the taxation year in respect of which the amount is owing,",

(b) in subsection (2) (b) by striking out "the taxes due," and substituting "the amount owing,", and

SECTIONS

29 TO 36: [Logging Tax Act, sections 28 to 31, 33 to 34.1 and 35] are consequential to the addition by this Bill of the definitions of "amount owing" and "assessment" to section 1 of the Act.

30 Section 29 (1) and (2) is amended by striking out "a tax" and substituting "an amount owing".

SECTIONS

29 TO 36: [Logging Tax Act, sections 28 to 31, 33 to 34.1 and 35] are consequential to the addition by this Bill of the definitions of "amount owing" and "assessment" to section 1 of the Act.

31 Section 30 is amended by striking out "The amount of tax due and payable" and substituting "An amount owing under this Act".

SECTIONS

29 TO 36: [Logging Tax Act, sections 28 to 31, 33 to 34.1 and 35] are consequential to the addition by this Bill of the definitions of "amount owing" and "assessment" to section 1 of the Act.

(1) If a person fails to pay an amount owing under this Act, the commissioner may

(a) issue a certificate specifying the amount owed and the name of the person who owes it, and

SECTIONS

29 TO 36: [Logging Tax Act, sections 28 to 31, 33 to 34.1 and 35] are consequential to the addition by this Bill of the definitions of "amount owing" and "assessment" to section 1 of the Act.

(a) in subsection (1) by striking out "the amount of a tax that is due and payable," and substituting "an amount owing under this Act,",

(b) in subsection (1) (a) by striking out "tax," and substituting "amount owing,",

(d) in subsection (5) by striking out "the amount of the tax" and substituting "the amount owing", and

(e) in subsection (6) by striking out "the person for whose taxes the property was distrained," and substituting "the taxpayer in respect of whom the property was distrained,", by striking out "the claimant," and substituting "the taxpayer," and by striking out "the claimant's" and substituting "the taxpayer's".

SECTIONS

29 TO 36: [Logging Tax Act, sections 28 to 31, 33 to 34.1 and 35] are consequential to the addition by this Bill of the definitions of "amount owing" and "assessment" to section 1 of the Act.

(a) in subsection (1) by striking out "taxes" and substituting "an amount owing", and

(b) in subsection (2) by striking out "a tax" and substituting "an amount owing".

SECTIONS

29 TO 36: [Logging Tax Act, sections 28 to 31, 33 to 34.1 and 35] are consequential to the addition by this Bill of the definitions of "amount owing" and "assessment" to section 1 of the Act.

(a) in subsection (1) (a) by striking out "taxes," and substituting "an amount owing,", and

SECTIONS

29 TO 36: [Logging Tax Act, sections 28 to 31, 33 to 34.1 and 35] are consequential to the addition by this Bill of the definitions of "amount owing" and "assessment" to section 1 of the Act.

36 Section 35 (b) and (d) is amended by striking out "payment of tax" and substituting "payment of an amount owing under this Act".

SECTION 37: [Tobacco Tax Act, section 37] provides for the amount of bond if a bond is required as a condition of holding a dealer's permit or a retail authorization.

(a) in subsection (3) by striking out "The amount of" and substituting "Subject to subsection (5), the amount of",

(b) in subsection (4) by striking out "If there" and substituting "Subject to subsection (5), if there", and

(5) If a bond is required as a condition of holding a dealer's permit or a retail authorization, the amount of the bond determined by the director under this section must be at least $5 000.

Transitional Provisions

SECTION 38: [Income Tax Act transition – definition of "eligible production"] provides a transitional rule consequential to the amendment made by this Bill to the definition of "eligible production" in section 79 (1) of the Income Tax Act and corresponds to a transitional rule for a similar amendment to the Income Tax Act (Canada).

Income Tax Act transition – definition of "eligible production"

38 (1) Subject to subsection (2), paragraph (c) of the definition of "eligible production" in section 79 (1) of the Income Tax Act, as that paragraph read on November 14, 2003, applies in respect of taxation years that end on or before November 14, 2003.

(2) Paragraph (c) of the definition of "eligible production" in section 79 (1) of the Income Tax Act, as enacted by this Act, applies in respect of the following:

(b) a film or video production in respect of which a corporation has, in a return of income filed before November 14, 2003, claimed an amount under section 80 of the Income Tax Act in respect of a BC labour expenditure, as defined in section 79 (1) of that Act, incurred after March 31, 1998.

SECTION 39: [Logging Tax Act transition] provides that the amendments made by this Bill to the Logging Tax Act apply in respect of taxation years beginning on or after January 1, 2009.

Logging Tax Act transition

39 The amendments made by this Act to the Logging Tax Act apply in respect of taxation years beginning on or after January 1, 2009.

Commencement

40 The provisions of this Act referred to in column 1 of the following table come into force as set out in column 2 of the table:

Explanatory Notes

SECTION 2: [Income Tax Act, section 34] incorporates by reference section 160.4 of the Income Tax Act (Canada).

SECTION 4: [Income Tax Act, section 79] updates a reference to a minister.

SECTION 7: [Insurance Premium Tax Act, section 15] amends the section for consistency with section 15.1 of the Act, as added by this Bill.

SECTION 8: [Insurance Premium Tax Act, section 15.1] provides that if an excess amount is refunded to a taxpayer or applied to tax payable by a taxpayer,

SECTION 10: [Insurance Premium Tax Act, section 17] prohibits a person from appealing an assessment made under section 16 (2.1) of the Act, as added by this Bill.

SECTION 11: [Insurance Premium Tax Act, section 18.1] clarifies that a court may not vary or disallow an assessment because of an irregularity in procedure.

12 TO 19: [Insurance Premium Tax Act, sections 20 to 24 and 26 to 27.1] are consequ ential to the addition by this Bill of the definitions of "amount owing" and "assessment" to section 1 (1) of the Act.