Corporate Tax Rates and Legislation / 2015 Issue 4 /... From Tax Management and Accounting Services

Corporate Tax Rates and Legislation / 2015 Issue 4 / January 7, 2016
From Tax Management and Accounting Services
Q4 2015 Accounting status
This quarterly update discusses developments related to the accounting for income taxes in Canada. This
edition includes:
 Legislative changes—October 1, 2015, to
 Federal and provincial/territorial bills—
 Accounting updates—October 1, 2015, to
 Corporate income tax rates—accounting
December 31, 2015
December 31, 2015
tabled or received royal assent in 2015
status (January 1, 2012, to December 31, 2015)
 PwC contacts
Legislative changes—
October 1 to December 31, 2015
Legislative developments from October 1 to
December 31, 2015, that affect income taxes are
outlined below.
Alberta budget
On October 27, 2015, Alberta’s NDP government
tabled its first budget, as well as Alberta Bill 4
(see Table 1). The budget and bill did not contain
any key tax changes and did not revise general
corporate or manufacturing and processing
income tax rates; these rates had already been
revised by Alberta Bill 2 (see Table 1). See our
Tax Insights “2015 Alberta NDP budget: Tax
highlights” at www.pwc.com/ca/taxinsights.
Status: See Table 1 for the status of Alberta’s
legislation.
www.pwc.com/ca/tmas
Accounting updates—October 1 to December 31, 2015
Financial Accounting Standards Board (FASB)
Accounting for Income Taxes Projects
This past year there has been considerable activity at the FASB related to accounting for
income taxes. This includes several income tax accounting projects aimed at reducing
complexity in accounting standards and improving the effectiveness of disclosures in the
notes to financial statements. For a summary of the FASB developments that are relevant
to tax departments, see our publication, FASB Accounting for Income Taxes Projects at
www.pwc.com/us.
Accounting Standards Updates (ASUs) on income taxes
On October 5, 2015, the FASB discussed external feedback received and began
redeliberations on two proposed ASUs “Income Taxes (Topic 740): Intra-Entity Asset
Transfers” and “Income Taxes (Topic 740): Balance Sheet Classification of Deferred
Taxes.” The FASB:

will issue an ASU for the balance sheet classification topic with minor modifications
on adoption and effective dates

asked its staff to conduct further research with respect to evaluating the intra-entity
asset transfers topic
For more information, see our Tax Insights “FASB redeliberates two proposed
Accounting Standards Updates (“ASU”)” www.pwc.com/us.
International Accounting Standards (IAS) 12, Income Taxes
Draft Interpretation: Uncertainty over Income Tax Treatments
On October 21, 2015, the International Accounting Standards Board’s IFRS
Interpretations Committee (IFRIC) released a draft Interpretation “Uncertainty over
Income Tax Treatments” on how to measure current and deferred tax assets and
liabilities arising from uncertain tax positions. Comments are due by January 19, 2016.
For more information, see our publication, Uncertainty over Income Tax Treatments:
Client action plan at www.pwc.com/us.
2
PwC
Federal and provincial/territorial bills
Table 1 lists key bills that include income tax rate changes or other income tax changes
(e.g. for research and development) that were:


tabled or received royal assent during 2015, or
tabled before 2015, but did not receive royal assent before 2015
Table 1: Federal and provincial/territorial bills
Shaded rows indicate
a change in status
from October 1 to
December 31, 2015.
Legislation
Bill # Bill name
Federal
An Act to implement certain provisions of the
C-592 budget tabled in Parliament on April 21, 2015 and
other measures
May 7/15
June 23/15
C-23
An Act to amend the Income Tax Act
December 9/15
Not as of
December
31/15
2
An Act to Restore Fairness to Public Revenue
June 18/15
June 29/15
Alberta
Manitoba
36
Newfoundland
and Labrador
6
12
An Act to Implement Various Tax Measures and to
Enact the Fiscal Planning and Transparency Act
Budget Measures Implementation Act, 2015
Liquefied Natural Gas Income Tax Amendment Act,
2015
The Budget Implementation and Tax Statutes
Amendment Act, 2015
An Act to Amend the Income Tax Act, 2000
An Act to Amend the Income Tax Act, 2000, No. 2
Nova Scotia
108
Financial Measures (2015) Act
4
10
British Columbia
26
91
Ontario
144
13
Quebec
Recognized for accounting
purposes
Canada1
US GAAP
39
69
Saskatchewan
178
Yukon
86
An Act to implement Budget measures and to enact
and amend various Acts
An Act to implement Budget measures and to enact
or amend certain other statutes
An Act to give effect to the Budget Speech
delivered on 4 June 2014 and to various other
fiscal measures
An Act to give effect to the Update on Québec’s
Economic and Financial Situation presented on
2 December 2014 and to amend various legislative
provisions
An Act to give effect to fiscal measures announced
mainly in the Budget speech delivered on 26 March
2015
An Act to amend The Income Tax Act, 2000 and to
make a consequential amendment to The Graduate
Retention Program Act
Act to Amend the Income Tax Act and the Yukon
Child Benefit Regulation
February 17/15
December
11/15
March 25/15
March 25/15
May 14/15
October 27/15
June 23/15
June 9/15
November
5/15
June 23/15
June 23/15
April 27/15
May 11/15
April 23/15
June 4/15
November 18/15
December
10/15
December 4/14
October
21/15
May 14/15
October
26/15
November 10/15
December
4/15
April 20/15
May 14/15
April 9/15
April 30/15
June 9/15
1.
For information on when income tax changes are considered substantively enacted for
accounting purposes for Canadian GAAP, see the Appendix in “Q1 2013 Accounting status” at
www.pwc.com/ca/tmas.
2.
Bill C-59 (short title, Economic Action Plan 2015 Act, No. 1.) implements some 2015 federal
budget and other measures that were in the May 4, 2015 Notice of Ways and Means Motion.
3.
Bill C-2 implements measures that were in the December 7, 2015 Notice of Ways and Means
Motion. See our Tax Insights “Alert for private corporations: Some tax rates to increase” at
www.pwc.com/ca/taxinsights.
PwC
3
Corporate income tax rates—accounting status
(January 1, 2012, to December 31, 2015)
The following information excludes Canadian-controlled private corporation small
business rates and thresholds.
Table 2: Corporate income tax rates—accounting status
There were no changes
in status from October 1
to December 31, 2015.
Effective date
Federal
Alberta
General and
manufacturing and
processing (M&P)
Provincial SIFT tax
factor/rate1
General and M&P
British Columbia General and M&P
Rate
Recognized for
accounting purposes
Canada
US GAAP
Bill #
Before January 1/12
N/A
15%
Before January 1/12
Varies
1
Before July 1/15
July 1/15
Before April 1/13
April 1/13
Before January 1/12
Before July 1/13
10%
12%
10%
11%
12%
10%
Before January 1/12
June 18/15 June 29/15
Before January 1/12
June 27/13 July 25/13
Before January 1/12
Before January 1/12
N/A
2
N/A
2
N/A
N/A
51
Manitoba
General and M&P
New Brunswick
General and M&P
July 1/13
12%
May 22/13
Newfoundland
and Labrador
General
M&P
Before January 1/12
14%
5%
Before January 1/12
N/A
General and M&P
Before January 1/12
11.5%
Before January 1/12
N/A
General and M&P
General and M&P
Before January 1/12
Before January 1/12
Before July 1/12
16%
12%
11.5%
11%
11.5%
10%
11.5%
10%
Before January 1/12
Before January 1/12
N/A
N/A
Before January 1/12
N/A
June 20/12
Before January 1/12
June 20/12
114
N/A
114
Before January 1/12
N/A
16%
Before January 1/12
N/A
11.9%
11.8%
11.7%
11.6%
11.5%
11.9%
12%
10%
15%
2.5%
Before January 1/12
N/A
Northwest
Territories
Nova Scotia
Nunavut
General
Ontario
Prince Edward
Island
Quebec
Saskatchewan
Yukon
July 1/12
July 1/13
M&P
Corporate Minimum
Tax (CMT)
Before January 1/12
General and M&P
Before January 1/12
Before January 1/17
January 1/17
General and M&P
January 1/18
January 1/19
January 1/20
SIFT Distribution Tax Before January 1/12
General
Before January 1/12
M&P
General
Before January 1/12
M&P
2.7%
June 21/13
Not as of December 31/15 None
Before January 1/12
N/A
Before January 1/12
N/A
Before January 1/12
N/A
1. Except for Quebec, the “provincial Specified Investment Flow-Through (SIFT) tax rate” is:
 based on the general provincial corporate income tax rate for each province in which the
SIFT has a permanent establishment
 10% for SIFTs that do not have a permanent establishment in a province
4
PwC
Let’s talk
For a deeper discussion of how the accounting status of tax rates and legislation might
affect your business, please contact:
John Gotts, Greater Toronto Area
Tax Management and Accounting
Services (TMAS) Leader
+1 (905) 815 6398
[email protected]
Christine Girouard, Montreal
+1 (514) 205 5284
[email protected]
Spence McDonnell, Greater Toronto Area
+1 (416) 869 2328
[email protected]
Genevieve Groulx, Calgary
+1 (403) 441 6350
[email protected]
© 2016 PricewaterhouseCoopers LLP, an Ontario limited liability partnership. All rights reserved.
PwC refers to the Canadian member firm, and may sometimes refer to the PwC network. Each member firm is a separate
legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and
should not be used as a substitute for consultation with professional advisers.