Bill 18 - An Act Respecting Fiscal Measures

BILL 18

An Act Respecting Fiscal Measures

Her Majesty, by and with the advice and consent of the Legislative Assembly of New Brunswick, enacts as follows:

Financial Corporation Capital Tax Act

1( 1) Section 2 of the Financial Corporation Capital Tax Act, chapter F-11.1 of the Acts of New Brunswick, 1987, is repealed and the following is substituted:

Liability for tax and tax payable

2( 1) A financial corporation that has a permanent establishment within the Province shall pay to Her Majesty the Queen in right of the Province a tax at the rate of 4% of the amount taxable of the financial corporation.

2( 2) Despite subsection (1), a financial corporation that is a bank that has a permanent establishment within the Province shall pay to Her Majesty the Queen in right of the Province a tax at the rate of 5% of the amount taxable of the bank which rate applies on or after April 1, 2016.

2( 3) If a financial corporation that is a bank has a fiscal year beginning before April 1, 2016, and ending on or after April 1, 2016, the tax payable by the financial corporation for the fiscal year shall be calculated as follows:

(a) by dividing the fiscal year into two notional fiscal years, the first ending on March 31, 2016, and the second beginning on April 1, 2016;

(b) by apportioning the amount taxable between the two notional fiscal years proportionately according to the number of days in each;

( i) tax for the first notional fiscal year in accordance with subsection (1), and

( ii) tax for the second notional fiscal year in accordance with subsection (2); and

(d) by adding together the amounts determined under paragraph (c) and the total is the tax payable in respect of that fiscal year.

1( 2) The Act is amended by adding after section 15 the following:

TAX CREDIT

New Brunswick employment tax credit

15.1( 1) The following definitions apply in this section.

“business services centre” means a distinct entity of an eligible financial corporation where specific business services for the corporation are consolidated, centralized and executed, including but not limited to accounting, payroll, human resources, information technology, legal, compliance and security services. (centre de services d’affaires)

“eligible employee”, in respect of a fiscal year, means an individual who was, in the fiscal year, an employee of an eligible financial corporation at its business services centre located in the Province, who was resident in the Province in the fiscal year and to whom section 11 of the New Brunswick Income Tax Act applied in the fiscal year. (employé admissible)

“eligible financial corporation” means a financial corporation that is a bank. (corporation financière admissible)

“eligible salaries”, of an eligible financial corporation for a fiscal year, means the salaries or wages of eligible employees directly attributable to the eligible financial corporation that are incurred in the fiscal year. (traitements admissibles)

15.1( 2) An eligible financial corporation is eligible for a New Brunswick employment tax credit for a fiscal year if

(a) it operates a business services centre located in the Province where eligible employees are employed,

(b) it is liable to pay the tax for the fiscal year,

(c) it files with its financial corporation capital tax return for the fiscal year a New Brunswick employment tax credit certificate issued in accordance with the regulations, and

(d) it meets all other requirements in this Act and the regulations.

15.1( 3) The amount of the employment tax credit is determined as follows:

A - B

where

A is the tax payable under this Act by the eligible financial corporation taking into consideration the salaries and wages of all of its employees located in the Province, and

B is the tax payable under this Act by the eligible financial corporation taking into consideration the salaries and wages of all of its employees located in the Province excluding the eligible salaries of its eligible employees.

15.1( 4) If the eligible salaries of eligible employees change in a fiscal year, the employment tax credit for the fiscal year shall be prorated.

15.1( 5) If at any time in a fiscal year an eligible financial corporation does not meet the requirements in this Act and the regulations, the Minister may refuse to apply the employment tax credit in respect of that corporation for all or part of that fiscal year.

1( 3) Subsection 24(1) of the Act is amended by adding after paragraph (b) the following:

(b.1) governing the New Brunswick employment tax credit referred to in section 15.1;

(b.2) governing the New Brunswick employment tax credit certificates referred to in section 15.1, including applications for the certificates, issuance of the certificates and revocation of the certificates;

New Brunswick Income Tax Act

2( 1) Section 55 of the New Brunswick Income Tax Act, chapter N-6.001 of the Acts of New Brunswick, 2000, is amended by adding after subsection (2.31) the following:

55( 2.32) Effective April 1, 2016, the tax payable by a corporation under this Part for a taxation year is 14% of the corporation’s taxable income earned in the year in New Brunswick.

2( 2) Section 56 of the Act is amended by adding after subsection (4.31) the following:

56( 4.32) Effective April 1, 2016, the reference to “14.5%” in subsection (1) shall be read as a reference to “14%”.

2( 3) Section 57 of the Act is amended

(a) in subsection (1.05) by striking out “For the period commencing on July 1, 2011” and substituting “For the period commencing on July 1, 2011, and ending on June 30, 2013”;

(b) by adding after subsection (1.05) the following:

57( 1.06) For the period commencing on July 1, 2013, and ending on March 31, 2016, the reference to “13%” in paragraph (1)(b) shall be read as a reference to “12%”.

57( 1.07) For the period commencing on April 1, 2016, the reference to “13%” in paragraph (1)(b) shall be read as a reference to “14%”.

Real Property Transfer Tax Act

3 Section 2 of the Real Property Transfer Tax Act, chapter R-2.1 of the Acts of New Brunswick, 1983, is amended

(a) in subsection (1.01) by repealing the portion preceding paragraph (a) and substituting the following:

2( 1.01) For the period commencing on June 1, 2012, and ending on March 31, 2016, every person who tenders a deed for registration in the Province shall pay, before the deed is registered, a tax computed at the rate of 0.5% of the greater of

(b) by adding after subsection (1.02) the following:

2( 1.03) On or after April 1, 2016, every person who tenders a deed for registration in the Province shall pay, before the deed is registered, a tax computed at the rate of 1% of the greater of

(a) the consideration for the transfer, or

(b) the assessed value of the real property.

2( 1.04) Despite subsection (1.03), in respect of an agreement for sale or purchase executed before February 3, 2016, the percentage referred to in subsection (1.03) shall be read as 0.5%, regardless of the date on which the deed is tendered for registration.

Commencement

4( 1) Subject to subsection (2), this Act comes into force on April 1, 2016.

4( 2) Paragraph 2(3)(a) and paragraph 2(3)(b) as it relates to subsection 57(1.06) shall be deemed to have come into force on July 1, 2013.