Alberta Bill 2 received first reading on March 14, 2018, ahead of Alberta's 2018 budget.
Alberta's Bill 2 includes measures to introduce the Interactive Digital Media Tax Credit and modify the Alberta Investor Tax Credit, as described in the 2018 provincial budget. However, the province has not yet published key regulations needed to apply the changes in the bill.
The corporate income tax measures in Bill 2 are considered substantively enacted for purposes of IFRS and Accounting Standards for Private Enterprise (ASPE) on March 14, 2018, the date the bill received first reading (as Alberta has a majority government).
Corporate income tax measures
Interactive Digital Media Tax Credit
Bill 2 introduces the framework for the new refundable Interactive Digital Media Tax Credit. The credit provides eligible corporations with a 25% refund on eligible salary and wage cost incurred on or after April 1, 2018. Companies employing "under-represented employees" may benefit from an enhanced credit. The amount of the enhanced credit will be determined by regulation (the budget had proposed that the enhanced credit would potentially be worth an additional 5%). Other key details of the credit are also still outstanding and will be published in related regulations (e.g., definitions of important terms such as "eligible activities", "salaries and wages" and what constitutes an "under-represented employee").
The provincial budget announced that more details regarding this credit will be available by summer 2018.
Alberta Investor Tax Credit
Bill 2 also includes measures to modify the Alberta Investor Tax credit. This credit provides a 30% tax credit to individuals and corporations investing in eligible Alberta businesses that undertake research, development or commercialization of new technology, products of processes. The bill modifies the credit so that certain investors may qualify for an additional 5% credit if they invest in eligible businesses that meet certain diversity and inclusion criteria. However, the details of these criteria are not yet available and are still to be published in a related regulation.
For more information, contact your KPMG adviser.
Information is current to April 24, 2018. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500