February 9, 2012
2012 Alberta Budget Highlights
Today Alberta Finance Minister Ron Liepert delivered the province’s 2012 budget. The budget anticipates a deficit of $886 million for 2012-13, a surplus of $952 million for 2013-14 and a surplus of about $5 billion for 2014-15.
The budget does not include any corporate or personal income tax rate changes.
Highlights of tax measures announced in today’s budget are summarized below.
Business Tax Changes
Alberta’s SR&ED tax credit
Alberta’s refundable Scientific Research and Experimental Development (SR&ED) investment tax credit (ITC) is worth 10% of annual eligible expenditures up to $4 million, for a maximum credit of $400,000 for all corporations that carry on business at a permanent establishment situated in Alberta. Eligible expenditures for Alberta purposes are those that qualify for federal ITC purposes that were incurred in Alberta.
The Alberta expenditure base is reduced by federal ITCs earned in the prior year on that portion of federal eligible expenditures that generate Alberta ITCs in that year, i.e., Alberta’s credit is reduced by the federal ITC. The budget proposes to eliminate this “grind” to the Alberta SR&ED tax credit, effective for tax years ending after March 31, 2012.
Property Tax Changes
Education property tax
In 2012, education property tax rates will remain at 2011 levels. As such, the residential/farm rate will be $2.70 per $1,000 of equalized assessment and the non-residential rate will be $3.97 per $1,000 of equalized assessment.
We can help
Your KPMG adviser can help you assess the effect of the tax changes in this year’s Alberta budget on your personal finances or business affairs, and point out ways to take advantage of their benefits or ease their impact. We can also keep you abreast of the progress of these proposals as they make their way into law and help you bring any concerns you may have to the attention of the Alberta Ministry of Finance.
Information is current to February 9, 2012. The information contained in this TaxNewsFlash-Canada 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.
KPMG LLP, the audit, tax and advisory firm (kpmg.ca), a Canadian limited liability partnership established under the laws of Ontario, is the Canadian member firm of KPMG International Cooperative (“KPMG International”). KPMG International’s member firms have 140,000 professionals, including more than 7,900 partners, in 146 countries.
The independent member firms of the KPMG network are affiliated with KPMG International, a Swiss entity. Each KPMG firm is a legally distinct and separate entity, and describes itself as such.
KPMG's Canadian Web site is located at http://www.kpmg.ca/
© 2012 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.