Alberta Corporate Tax Regulation

(Consolidated up to 183/2024) ALBERTA REGULATION 119/2008 Alberta Corporate Tax Act ALBERTA CORPORATE TAX REGULATION Table of Contents 1 Definitions 2 Taxable income earned in Alberta 3 Prescribed leases 3.1 Prescribed corporations 4 Election under s26(1.7)(b) of the Act 5 Specified rates 5.1 Alberta SR&ED tax credit 5.2 Qualifying environmental trusts and Alberta QET tax credits 5.3 Innovation employment grant 6 Retention period of records and books 6.1 Collection of personal information 7 Interest rates 7.1 Conversion to Canadian currency 8 Consequential 9 Repeal Definitions 1 In this Regulation, (a) “Act” means the Alberta Corporate Tax Act ; (b) “federal regulations” means the regulations made under the Income Tax Act (Canada). Taxable income earned in Alberta 2 (1) For the purpose of section 19(2) of the Act, Part IV of the federal regulations applies for the purpose of determining “taxable income earned in Alberta” except that (a) with respect to subsection 404(1) of the federal regulations (i) if the aggregate of salaries and wages paid in the year by the bank is nil, the amount of taxable income that shall be deemed to have been earned by the bank in the year in Alberta is that proportion of its taxable income for the year that the aggregate amount of loans and deposits of its permanent establishment in Alberta for the year is of the aggregate amount of all loans and deposits of the bank for the year, or (ii) if the aggregate amount of loans and deposits of the bank for the year is nil, the amount of taxable income that shall be deemed to have been earned by the bank in the year in Alberta is that proportion of its taxable income for the year that the aggregate of its salaries and wages paid in the year by the bank to employees of its permanent establishment in Alberta is of the aggregate of all salaries and wages paid in the year by the bank; (b) with respect to subsection 406(1) of the federal regulations (i) if the equated track miles of the corporation for the year is nil, the amount of taxable income that shall be deemed to have been earned by the corporation in the year in Alberta is that proportion of its taxable income for the year that the gross ton miles of the corporation for the year in Alberta is of the gross ton miles of the corporation for the year in Canada, or (ii) if the gross ton miles of the corporation for the year is nil, the amount of taxable income that shall be deemed to have been earned by the corporation in the year in Alberta is that proportion of its taxable income for the year that the equated track miles of the corporation in Alberta is of the equated track miles of the corporation in Canada; (c) with respect to subsection 407(1) of the federal regulations (i) if the number of revenue plane miles flown by its aircraft in Canada during the year is nil, the amount of taxable income that shall be deemed to have been earned by the corporation in the year in Alberta is that proportion of its taxable income for the year that the capital cost of all the corporation’s fixed assets, except aircraft, in Alberta at the end of the year is of the capital cost of all its fixed assets, except aircraft, in Canada at the end of the year, or (ii) if the capital cost of all the corporation’s fixed assets, except aircraft, in Canada at the end of the year is nil, the amount of taxable income that shall be deemed to have been earned by the corporation in the year in Alberta is that proportion of its taxable income for the year that the number of revenue plane miles flown by its aircraft in Alberta during the year is of the total number of revenue plane miles flown by its aircraft in Canada during the year other than miles flown in a province in which the corporation had no permanent establishment; (d) with respect to section 408 of the federal regulations (i) if the aggregate of salaries and wages paid in the year by the corporation is nil, the amount of taxable income that shall be deemed to have been earned by the corporation in the year in Alberta is that proportion of its taxable income for the year that the number of bushels of grain received in the year in the elevators operated by the corporation in Alberta is of the total number of bushels of grain received in the year in all the elevators operated by the corporation, or (ii) if the total number of bushels of grain received in the year in all the elevators operated by the corporation is nil, the amount of taxable income that shall be deemed to have been earned by the corporation in the year in Alberta is that proportion of its taxable income for the year that the aggregate of salaries and wages paid in the year by the corporation to employees of its permanent establishment in Alberta is of the aggregate of all salaries and wages paid in the year by the corporation; (e) with respect to section 409 of the federal regulations (i) if the aggregate of salaries and wages paid in the year by the corporation is nil, the amount of taxable income that shall be deemed to have been earned by the corporation in the year in Alberta is that proportion of its taxable income for the year that the number of kilometres driven by the corporation’s vehicles, whether owned or leased, on roads in Alberta in the year is of the total number of kilometres driven by those vehicles in the year on roads other than roads in provinces or countries in which the corporation had no permanent establishment, or (ii) if the number of kilometres driven by the corporation’s vehicles, whether owned or leased, in the year is nil, the amount of taxable income that shall be deemed to have been earned by the corporation in the year in Alberta is that proportion of its taxable income for the year that the aggregate of salaries and wages paid in the year by the corporation to employees of its permanent establishment in Alberta is of the aggregate of all salaries and wages paid in the year by the corporation; (f) with respect to section 411 of the federal regulations (i) if the aggregate of salaries and wages paid in the year by the corporation is nil, the amount of taxable income that shall be deemed to have been earned by the corporation in the year in Alberta is that proportion of its taxable income for the year that the number of miles of pipeline of the corporation in Alberta is of the number of miles of pipeline of the corporation in all the provinces in which the corporation had a permanent establishment, or (ii) if the number of miles of pipeline of the corporation in the year is nil, the amount of taxable income that shall be deemed to have been earned by the corporation in the year in Alberta is that proportion of its taxable income for the year that the aggregate of salaries and wages paid in the year by the corporation to employees of its permanent establishment in Alberta is of the aggregate of all salaries and wages paid in the year by the corporation to employees of its permanent establishments in Canada. (2) When a corporation is not resident in Canada, subsection 413(1) of the federal regulations shall be read as if “taxable income earned in Canada as determined under section 115 of the Act” were replaced with “taxable income earned in Canada as determined under section 17.1 of the Alberta Corporate Tax Act ”. (2.1) In this section and in the application of Part IV of the federal regulations, “permanent establishment” means permanent establishment as defined in the Act. (3) This section comes into force on the coming into force of section 3(a) of the Alberta Corporate Tax Amendment Act, 2007 . AR 119/2008 s2;280/2009 Prescribed leases 3 For the purposes of sections 26(1)(e.1)(ii) and 106(1)(c.1)(ii) of the Act, the following are prescribed leases: 7184100 257 7184100 258 7185050 264 7185070 269 7185070 270 7185070 271 7185080 275 7185080 276 7185090 278 7186020 283 7186020 284 7186030 289 7186040 298 7186060 304 7186060 305 7186070 306 7186120 314 7187040 321 Prescribed corporations 3.1 (1) For the purposes of section 36.1(2.1) of the Act, a “prescribed corporation” means any corporation except (a) an insurance corporation as defined in subsection 248(1) of the federal Act, (b) a non‑resident corporation, (c) a corporation reporting in functional currency as defined in subsection 261(1) of the federal Act, or (d) a corporation that is exempt from taxation under section 35 of the Act and section 149 of the federal Act. (2) For the purposes of section 36.1(2.4)(b) of the Act, “a prescribed corporation” means (a) an insurance corporation as defined in subsection 248(1) of the federal Act, (b) a non‑resident corporation, or (c) a corporation reporting in functional currency as defined in subsection 261(1) of the federal Act. AR 218/2017 s2;53/2024 Election under s26(1.7)(b) of the Act 4 An election under section 26(1.7)(b) of the Act shall be made on or before the day that is the earliest of the days on or before which (a) the purchaser, (b) the vendor, or (c) a corporation associated with the vendor is required to file a return of income pursuant to section 36(1) of the Act for the taxation year in which the acquisition to which the election relates occurred. Specified rates 5 (1) In this section, “period”, with respect to a year, means any of the following: (a) the period beginning on January 1 and ending on March 31; (b) the period beginning on April 1 and ending on June 30; (c) the period beginning on July 1 and ending on September 30; (d) the period beginning on October 1 and ending on December 31. (2) For the purpose of subsections (3) and (4), the specified rate for a period is as follows: (a) for a period after December 31, 1994 and before April 1, 2000, as set out in the following Table: Table Quarter 1995 Rates 1996 Rates 1997 Rates 1998 Rates 1999 Rates 2000 Rates January 1 to March 31 73.56% 74.28% 70.55% 65.83% 73.64% 28.40% April 1 to June 30 73.47% 73.62% 40.40% 64.22% 73.30% July 1 to September 30 73.72% 70.33% 63.80% 73.54% 73.31% October 1 to December 31 74.23% 73.05% 70.65% 73.68% 55.29% (b) for a period after March 31, 2000 and before January 1, 2009, 25%. (3) For the purpose of sections 26(1)(i) and 106(1)(g) of the Act, the weighted average rate for a taxation year is the aggregate of the amounts that are the product obtained when the specified rate for a period, all or part of which falls in the taxation year, is multiplied by the proportion that the number of days in the taxation year that are in that period is of the total number of days in the taxation year. (4) For the purpose of sections 26.4(1) and 112(1) of the Act, the moving average of the specified rates at the end of a particular month in a taxation year is the aggregate of the amounts that are the product obtained when the specified rate for a period, all or part of which falls in the taxation year on or before the end of the month, is multiplied by the proportion that the number of days in the period to the end of the month is of the number of days in the taxation year to the end of the month. Alberta SR&ED tax credit 5.1 (1) For the purpose of section 26.6(1)(h) of the Act, the prescribed corporations are those that are subject to any of the following regulations: (a) Payment in Lieu of Tax Regulation (AR 112/2003); (b) City of Medicine Hat Payment in Lieu of Tax Regulation (AR 235/2003); (c) ABC Benefits Corporation Regulation (AR 272/96). (2) For the purposes of section 41(1.01) of the Act, the time after which the Provincial Minister may determine the amount of the Alberta SR&ED tax credit to which the corporation is entitled is the later of (a) the date the Provincial Minister receives the corporation’s Alberta SR&ED tax credit claim for the taxation year in the prescribed form, and (b) the earlier of (i) the date the federal Minister confirms to the Provincial Minister the amount of federal expenditures of the corporation allowed for federal investment tax credit purposes for the taxation year, and (ii) the date the Provincial Minister receives a copy of the federal notice of assessment or notification, which relates to the amount of federal expenditures of the corporation allowed for federal investment tax credit purposes for the taxation year and all relevant supporting documentation. AR 280/2009 s3;37/2010 Qualifying environmental trusts and Alberta QET tax credits 5.2 (1) Repealed AR 218/2017 s3. (2) A corporation entitled to a tax credit under section 26.92(1) of the Act may deduct from its tax otherwise payable under the Act for a taxation year an amount not exceeding the lesser of (a) the corporation’s Alberta QET tax credit for the particular year, and (b) the corporation’s tax otherwise payable under the Act for the particular year. (3) The amount deducted under subsection (2) is deemed to have been paid on account of the corporation’s tax payable under the Act for the particular year on the corporation’s balance-due day for the particular year. (4) For the purposes of section 26.92(3) of the Act, the amount by which a corporation’s Alberta QET tax credit for the particular year exceeds the amount referred to in subsection (2)(b) (a) may be applied by the Provincial Minister to pay any tax, interest or penalty owing by the corporation for that or any taxation year pursuant to the Act, or any other amount owing to the Crown in right of Alberta, and the part of the amount not so applied shall be paid to the corporation, and (b) is deemed to have been paid by the corporation on the later of the corporation’s balance-due day for the particular year and the day on which the corporation’s application for the Alberta QET tax credit was received by the Provincial Minister. (5) Subject to subsection (6), for the purposes of section 26.92(4) of the Act, a corporation entitled to a tax credit under section 26.92(1) of the Act applies for the Alberta QET tax credit by making a claim for the Alberta QET tax credit in its return for the particular year in accordance with Part 8 of the Act. (6) For the purposes of section 26.92(4) of the Act, a corporation that applies for the Alberta QET tax credit shall submit to the Provincial Minister a letter or statement from each qualifying environmental trust of which the corporation is a beneficiary, specifying as applicable in respect of the last taxation year of the qualifying environmental trust, (a) the income subject to tax as reported by the qualifying environmental trust for federal income tax purposes pursuant to subsection 211.6(3) of the federal Act and the Alberta tax paid on that income pursuant to section section 6.2 of the Alberta Personal Income Tax Act and subsection 211.6(4) of the federal Act, and (b) the corporation’s share of the income subject to tax and the corporation’s share of the Alberta tax on that income. AR 209/2014 s2;218/2017 Innovation employment grant 5.3 (1) For the purpose of section 26.95(1)(g) of the Act, the prescribed corporations are those that are subject to any of the following regulations: (a) Payment in Lieu of Tax Regulation (AR 112/2003); (b) City of Medicine Hat Payment in Lieu of Tax Regulation (AR 235/2003); (c) ABC Benefits Corporation Regulation (AR 272/96). (2) For the purposes of section 41(1.02) of the Act, the time after which the Provincial Minister may determine the amount of the innovation employment grant to which a corporation is entitled is the later of (a) the date the Provincial Minister receives the corporation’s claim for the innovation employment grant for the taxation year in the prescribed form, and (b) the earlier of (i) the date the federal Minister provides the Provincial Minister with all information necessary for the determination of the corporation’s innovation employment grant for the year, and (ii) the date the Provincial Minister receives a copy of the federal notice of assessment or notification, and all relevant supporting documentation, that confirms all information necessary for the determination of the corporation’s innovation employment grant for the year. (3) This section has effect on January 1, 2021. AR 58/2021 s2 Retention period of records and books 6 Subsection 5800(1) of the federal regulations applies for the purpose of prescribing the retention periods for records and books of account required to be retained under section 61(3)(a) of the Act. Collection of personal information 6.1 (1) The Provincial Minister may, as necessary to administer or enforce the Act, including the collection of an amount payable under the Act, collect personal information about a director of a corporation. (2) The Provincial Minister may collect personal information about a director of a corporation directly from the director, or from any other source as necessary to administer or enforce the Act. AR 27/2015 s2 Interest rates 7 Part XLIII of the federal regulations applies for the purpose of prescribing the interest rate under any section of the Act requiring a prescribed interest rate, except that (a) the reference to “Receiver General” in paragraph 4301(a) of the federal regulations shall be read as a reference to “Provincial Minister”, and (b) repealed AR 183/2024 s2, (c) paragraph 4301(b) of the federal regulations shall be read as follows: (b) every provision of the Act that requires interest at a prescribed rate to be paid or applied on an amount payable by the Provincial Minister to a taxpayer, the prescribed rate in effect during any particular quarter is, (i) for a quarter ending before January 1, 2010, the rate, expressed as a percentage per year, for the particular quarter set out in the following Table: Table First Quarter Second Quarter Third Quarter Fourth Quarter January 1 to March 31 April 1 to June 30 July 1 to September 30 October 1 to December 31 1981 6.0% 6.0% 6.0% 6.0% 1982 8.0% 7.5% 8.0% 8.0% 1983 6.0% 5.0% 5.0% 5.0% 1984 5.0% 5.0% 5.5% 6.5% 1985 6.0% 5.0% 5.0% 5.0% 1986 4.5% 5.5% 5.0% 4.5% 1987 4.5% 4.0% 4.0% 4.5% 1988 4.5% 4.5% 4.5% 5.0% 1989 5.5% 6.0% 6.5% 7.5% 1990 7.5% 7.5% 8.0% 8.0% 1991 7.5% 6.5% 6.0% 5.5% 1992 5.5% 5.0% 4.5% 4.0% 1993 5.0% 4.5% 4.0% 3.5% 1994 3.5% 3.0% 4.0% 4.5% 1995 4.0% 5.0% 5.5% 4.5% 1996 4.5% 4.0% 3.5% 3.5% 1997 3.0% 2.5% 3.0% 3.0% 1998 3.0% 3.5% 3.5% 3.5% 1999 3.5% 3.5% 3.5% 2.5% 2000 2.5% 3.0% 3.0% 3.0% 2001 3.0% 3.0% 2.5% 2.5% 2002 1.5% 1.0% 1.5% 1.5% 2003 1.5% 1.5% 2.0% 1.5% 2004 1.5% 1.5% 1.0% 1.5% 2005 1.5% 1.5% 1.5% 1.5% 2006 1.5% 2.0% 2.0% 2.5% 2007 2.5% 2.5% 2.5% 2.5% 2008 2.0% 2.0% 1.5% 1.5% 2009 1.0% 0.5% 0.5% 0.5% (ii) for a quarter ending after December 31, 2009, the product obtained when the rate determined under subparagraph 4301(a)(i) in respect of the particular quarter is multiplied by 50%. AR 119/2008 s7;200/2010;33/2011;183/2024 Conversion to Canadian currency 7.1 (1) For the purposes of section 4.02(3)(c) of the Act, the corporation’s tax payable for the taxation year must be converted to Canadian currency using the average exchange rate for the taxation year. (2) For the purposes of subsection (1) and section 4.02(4) and (6) of the Act, the average exchange rate for the taxation year is the average of the rate of exchange quoted by the Bank of Canada at noon on each business day in the taxation year for the exchange of a unit of the particular currency for a unit of Canadian currency. AR 280/2009 s4;37/2010;200/2010 Consequential 8 The Regulations Act Regulation (AR 288/99) is amended by repealing section 17(1)(t). Repeal 9 The Alberta Corporate Tax Regulation (AR 105/81) is repealed.