Acts and Regulations

2012-104 - New Brunswick Income Tax Act

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NEW BRUNSWICK
REGULATION 2012-104
under the
New Brunswick Income Tax Act
(O.C. 2012-403)
Filed December 18, 2012
1The heading “Citation” preceding section 1 of the French version of New Brunswick Regulation 2001-11 under the New Brunswick Income Tax Act is repealed and the following is substituted:
Titre
2Section 1 of the French version of the Regulation is repealed and the following is substituted:
1Règlement sur les corporations agréées à capital de risque de travailleurs - Loi de l’impôt sur le revenu du Nouveau-Brunswick.
3Section 2 of the Regulation is repealed and the following is substituted:
Definitions
2The following definitions apply in this Regulation.
“Act” means the New Brunswick Income Tax Act.(Loi)
“eligible business entity” means eligible business entity as defined in subsection 204.8(1) of the Federal Act.(entreprise admissible)
“eligible investment” means eligible investment as defined in subsection 204.8(1) of the Federal Act.(placement admissible)
“equity capital” means the amount of consideration paid in money for which approved shares are issued.(capitaux propres)
“reserve” means reserve as defined in subsection 204.8(1) of the Federal Act.(réserve)
4Section 3 of the Regulation is amended by striking out “2010 and 2011” and substituting “2010, 2011 and 2012”.
5Section 4 of the Regulation is amended by striking out “2011 taxation year” and substituting “2011 and 2012 taxation years”.
6The Regulation is amended by adding after section 4 the following:
Investment requirements
4.1(1)A registered labour-sponsored venture capital corporation shall comply with the following requirements for the investment of equity capital that it raised in New Brunswick from the sale of its approved shares on or before March 17, 2009, and that was required to be invested by it on or after that date:
(a) at least 80% of the equity capital shall be invested at all times in a taxation year in eligible investments or reserves in New Brunswick; and
(b) at least 60% of the equity capital raised in a taxation year by the corporation shall be invested in eligible investments in New Brunswick within five years after the end of the year in which the equity capital was raised.
4.1(2)A registered labour-sponsored venture capital corporation shall comply with the following requirements for the investment of equity capital that it raised in New Brunswick from the sale of its approved shares after March 17, 2009, and that was required to be invested by it after that date:
(a) at least 40% of the equity capital shall be invested in eligible business entities in New Brunswick within the year immediately following the end of the corporation’s taxation year in which the equity capital was raised;
(b) at least 60% of the equity capital shall be invested in eligible business entities in New Brunswick within the year immediately following the end of the period described in paragraph (a); and
(c) at least 75% of the equity capital shall be invested in eligible business entities in New Brunswick within the year immediately following the end of the period described in paragraph (b).
4.1(3)If the Minister of Finance of New Brunswick imposes a penalty under subsection 50(2.6) of the Act, a registered labour-sponsored venture capital corporation that fails to comply with the requirements in paragraph (1)(b) shall pay a penalty calculated as follows:
(B/60%) × 15%
3where
3Bis the investment shortfall of the corporation.
4.1(4)For the purposes of subsection (3), the investment shortfall of the corporation is the amount by which the amount of equity capital that is required to be invested in eligible investments by year end under paragraph (1)(b) exceeds the amount of equity capital that actually was invested in eligible investments by year end under paragraph (1)(b).
4.1(5)If the Minister of Finance of New Brunswick imposes a penalty under subsection 50(2.6) of the Act, a registered labour-sponsored venture capital corporation that fails to comply with the requirements in subsection (2) shall pay a penalty calculated as follows:
C × 12%
5where
5C is the cumulative investment shortfall of the corporation.
4.1(6)For the purposes of subsection (5), the cumulative investment shortfall of the corporation is the amount by which the cumulative amount of equity capital that is required to be invested in eligible business entities by year end under subsection (2) exceeds the amount of equity capital that actually was invested in eligible business entities by year end under subsection (2).
4.1(7)A registered labour-sponsored venture capital corporation shall pay the penalty referred to in subsection (3) or (5) within 90 days after the end of the year in which the investment shortfall occurred and to which the penalty relates.
4.1(8)From the date on which a penalty is required to be paid, the amount of the penalty bears interest at the rate of 1.06% per month compounded monthly.
7Sections 4 and 5 of this Regulation shall be deemed to have come into force on January 1, 2012.