Alberta’s Bill 35, which accelerates the corporate income tax rate drop received Royal Assent
Alberta's Bill 35 received Royal Assent on December 9, 2020. As a result, tax measures introduced in the bill, including an accelerated drop in the province's general corporate income tax rate to 8% (from 10%) effective July 1, 2020 and the province's new Innovation Employment Grant, are now law.
The corporate income tax measures included in Bill 35 are considered substantively enacted for IFRS and Accounting Standards for Private Enterprise (ASPE) purposes on October 20, 2020, the date Bill 35 received first reading (as Alberta has a majority government). The corporate income tax measures are considered enacted for U.S. GAAP purposes on December 9, 2020, the date the bill received Royal Assent.
Corporate tax measures
Corporate income tax rate
Bill 35 reduces Alberta's general corporate income tax rate to 8% (from 10%), effective July 1, 2020. Previously, the general corporate income tax rate was not scheduled to decrease to 8% until January 1, 2022.
Extension of certain legislated deadlines
Bill 35 grants Alberta ministerial authority to temporarily extend certain tax filing deadlines, including for certain provincial SR&ED claims and applications for an extension to file notices of objections, that Alberta previously announced (see "Alberta extends SR&ED and other tax deadlines" on TaxNewsNow).
New Innovation Employment Grant
Bill 35 also introduced the new Innovation Employment Grant that provides a refundable tax credit to certain small and medium-sized Alberta-based companies that invest in research and development (R&D) after December 31, 2020 (see "Alberta's accelerated corporate tax rate drop to 8%" on TaxNewsNow).
Personal tax measure
Bill 35 also accelerates a planned decrease in the provincial dividend tax credit rate on eligible dividends, as a result of the acceleration of the corporate tax rate drop to 8%. As a result, the combined top marginal rate on eligible dividends for residents of Alberta in 2021 will increase to 34.31% (from 31.71%). This change was previously scheduled to come into effect January 1, 2022.
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Information is current to December 15, 2020. 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
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