Regulations Amending the Income Tax Regulations (Capital Cost Allowance — 2009 Budget Measure, Miscellaneous Program)

FYI found this amendment for Budget 2009 announced a temporary 100% accelerated capital cost allowance (CCA) rate for new general-purpose electronic data processing equipment and systems software for that equipment (“computer equipment”)

P.C. 2009-847 May 28, 2009

Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to section 221 (see footnote a) of the Income Tax Act (see footnote b), hereby makes the annexed Regulations Amending the Income Tax Regulations (Capital Cost Allowance — 2009 Budget Measure, Miscellaneous Program).

REGULATIONS AMENDING THE INCOME TAX REGULATIONS (CAPITAL COST ALLOWANCE — 2009 BUDGET MEASURE, MISCELLANEOUS PROGRAM)

1. The portion of Class 52 in Schedule II to the Income Tax Regulations (see footnote 1) before paragraph (a) is replaced by the following:

Class 52

Property acquired by a taxpayer after January 27, 2009 and before February 2011 that

REGULATORY IMPACT
ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Issue: This amendment to the Income Tax Regulations corrects an error in P.C. 2009-660, SOR/2009-126, which was published on May 13, 2009, in the Canada Gazette, Part II.

Description: Budget 2009 announced a temporary 100% accelerated capital cost allowance (CCA) rate for new general-purpose electronic data processing equipment and systems software for that equipment (“computer equipment”) acquired after January 27, 2009 and before February 2011. The related Order in Council (P.C. 2009-660, SOR/2009-126) was published on May 13, 2009 in the Canada Gazette, Part II. Among other measures, that Order provides that computer equipment is to be included in new Class 52 in Schedule II to the Income Tax Regulations. New Class 52 mistakenly refers to computer equipment acquired before February 2010. The purpose of these Regulations is to correct that error by referring to computer equipment acquired “before February 2011.”

Cost-benefit statement: The cost of providing accelerated capital cost allowance for computer equipment is estimated in Budget Plan 2009 on the basis that the measure would apply to computer equipment acquired “after January 27, 2009 and before February 2011.” Consequently, no additional costs are associated with these Regulations.

Business and consumer impacts: There are no business and consumer impacts associated with these Regulations, as they operate only to correct the error described above.

Issue

This amendment to the Income Tax Regulations corrects an error in P.C. 2009-660, SOR/2009-126, which was published on May 13, 2009, in the Canada Gazette, Part II.

Budget 2009 announced a temporary 100% accelerated capital cost allowance (CCA) rate for new general-purpose electronic data processing equipment and systems software for that equipment (“computer equipment”) acquired after January 27, 2009, and before February 2011. The related Order in Council (P.C. 2009-660, SOR/2009-126) was published on May 13, 2009 in the Canada Gazette, Part II. Among other measures, that Order provides that computer equipment is to be included in new Class 52 in Schedule II to the Income Tax Regulations. New Class 52 mistakenly refers to computer equipment acquired after January 27, 2009 and before February 2010. The purpose of these Regulations is to correct that error by referring to such computer equipment acquired “before February 2011.”

Objectives

The objective of this amendment is to ensure that the correct application date applies to new Class 52 in Schedule II to the Income Tax Regulations. In the case of computer equipment described in new Class 52, the measure is temporary and is intended to encourage businesses to invest in new computers and systems software.

Description

This amendment ensures that the temporary 100% CCA rate for certain computers and systems software (new Class 52) applies to such assets acquired after January 27, 2009 and before February 2011.

Regulatory and non-regulatory options considered

No other options were considered as enacting this amendment is the only way to implement the Budget 2009 measure concerning computer equipment in the manner intended under the Income Tax Act and the Income Tax Regulations.

Benefits and costs

The cost of the temporary accelerated capital cost allowance rate for computer equipment is estimated in Budget Plan 2009 on the basis that the measure would apply to computer equipment acquired “after January 27, 2009 and before February 2011.” Consequently, no additional costs are associated with this amendment.

This amendment fits within the existing CCA regime that applies for the purpose of computing a taxpayer’s income, taxable income and taxes payable.

Rationale

The rationale for this amendment is to ensure that the temporary 100% CCA rate for computer equipment included in Class 52 in Schedule II to the Income Tax Regulations applies in the manner intended — that is, to such assets acquired after January 27, 2009 and before February 2011.

Implementation, enforcement and service standards

The Income Tax Act provides the necessary compliance mechanisms. These mechanisms allow the Minister of National Revenue to assess and reassess taxes payable, conduct audits and require production of relevant records and documents.

Contact

Kerry Harnish
Senior Tax Policy Officer
Tax Legislation Division
Department of Finance
L’Esplanade Laurier
140 O’Connor Street
Ottawa, Ontario
K1A 0G5
Telephone: 613-992-4385

Footnote a
S.C. 2007, c. 35, s. 62

Footnote b
R.S., c. 1 (5th Supp.)

Footnote 1
C.R.C., c. 945

http://www.gazette.gc.ca/rp-pr/p2/2009/2009-06-10/html/sor-dors155-eng.html

www.macpablodesigns.com

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One Response to Regulations Amending the Income Tax Regulations (Capital Cost Allowance — 2009 Budget Measure, Miscellaneous Program)

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