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Explanatory Note

CHAPTER 9

An Act to amend the Taxation Act, 2007

Assented to June 20, 2012

Note: This Act amends the Taxation Act, 2007. For the legislative history of the Act, see the Table of Consolidated Public Statutes – Detailed Legislative History at www.e-Laws.gov.on.ca.

Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

1.  (1)  The definition of “highest tax rate” in subsection 3 (1) of the Taxation Act, 2007 is repealed and the following substituted:

“highest tax rate” means,

(a) 12.16 per cent in respect of taxation years ending after December 31, 2011 and before January 1, 2013, and

(b) 13.16 per cent in respect of taxation years ending after December 31, 2012; (“taux d’imposition le plus élevé”)

(2)  Subsection 3 (1) of the Act is amended by adding the following definition:

“upper middle tax rate” means 11.16 per cent. (“taux d’imposition moyen supérieur”)

2.  Subsection 6 (1) of the Act is repealed and the following substituted:

Basic personal income tax, 2012 and subsequent years

(1)  The basic personal income tax for a taxation year of an individual ending after December 31, 2011 is the amount determined under the following rules:

1. If the individual’s tax base for the year does not exceed $39,020, the amount of tax payable by the individual is calculated by multiplying the individual’s tax base for the year by the lowest tax rate for the year.

2. If the individual’s tax base for the year exceeds $39,020, but does not exceed $78,043, the amount of tax payable by the individual is calculated using the formula,

A + B

in which,

“A” is the amount calculated by multiplying $39,020 by the lowest tax rate for the year, and

“B” is the amount calculated by multiplying the amount by which the individual’s tax base for the year exceeds $39,020 by the middle tax rate for the year.

3. If the individual’s tax base for the year exceeds $78,043, but does not exceed $500,000, the amount of tax payable by the individual is calculated using the formula,

A + C + D

in which,

“A” is the amount calculated by multiplying $39,020 by the lowest tax rate for the year,

“C” is the amount calculated by multiplying $39,023 by the middle tax rate for the year, and

“D” is the amount calculated by multiplying the amount by which the individual’s tax base for the year exceeds $78,043 by the upper middle tax rate for the year.

4. If the individual’s tax base for the year exceeds $500,000, the amount of tax payable by the individual is calculated using the formula,

A + C + E + F

in which,

“A” is the amount calculated by multiplying $39,020 by the lowest tax rate for the year,

“C” is the amount calculated by multiplying $39,023 by the middle tax rate for the year,

“E” is the amount calculated by multiplying $421,957 by the upper middle tax rate for the year, and

“F” is the amount calculated by multiplying the amount by which the individual’s tax base for the year exceeds $500,000 by the highest tax rate for the year.

3.  The definition of “II” in subsection 9 (21) of the Act is repealed and the following substituted:

“II” is 11.16 per cent, and

4.  The definition of “A” in section 14 of the Act is repealed and the following substituted:

“A” is 11.16 per cent,

5.  Paragraph 1 of subsection 23 (1) of the Act is repealed and the following substituted:

1. Subsection 6 (1) with respect to taxation years ending after December 31, 2012.

6.  Clauses 29 (2) (c), (d) and (e) of the Act are repealed and the following substituted:

(c) 11.5 per cent multiplied by the ratio of the number of days in the taxation year that are after June 30, 2011 to the total number of days in the taxation year.

7.  Clauses 31 (4) (c), (d) and (e) of the Act are repealed and the following substituted:

(c) 7 per cent multiplied by the ratio of the number of days in the taxation year that are after June 30, 2011 to the total number of days in the taxation year.

8.  (1)  Subsection 33 (1) of the Act is amended by striking out “ending before July 1, 2013” in the portion before the formula.

(2)  Clauses (b) and (c) of the definition of “X” in subsection 33 (1) of the Act are repealed and the following substituted:

(b) 0.015 multiplied by the ratio of the number of days in the taxation year that are after June 30, 2011 to the total number of days in the taxation year.

Commencement

9.  (1)  Subject to subsections (2) and (3), this Act comes into force on the day it receives Royal Assent.

(2)  Sections 1, 2, 3, 4 and 5 are deemed to have come into force on January 1, 2012.

(3)  Sections 6, 7 and 8 come into force on July 1, 2012.

Short title

10.  The short title of this Act is the Taxation Amendment Act, 2012.

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