The proposed amendments in s. 123.3 and s. 129 for calculating Part IV tax is not yet implemented in ProFile. These measures impact the additional tax on investment income and refundable tax on investment income of a Canadian-controlled private corporation. These measures are tabled in Bill C-2.
If passed, the proposed legislation will impact the followings lines/sections within the T2 return:
- T2 Jacket page 6 - Refundable portion of Part I tax
- Line A - Aggregate investment income from Schedule 7
- Line C - Foreign investment income from Schedule 7
- Line H - Foreign non-business income tax credit from line 632 on page
- Line L - Calculation of percentage of a CCPC's aggregate investment income
- T2 jacket page 6 - Dividend Refund
- Line S- Taxable dividends paid in the tax year from line 460 on page 2 of Schedule 3
- T2 Jacket page 7 - Part I tax
- Line G - Refundable tax on CCPC's investment income - 6 2/3% of whichever is less: amount C or amount F
- Schedule 3
- Column F - Part IV tax before deduction
Workaround
- The CRA will allow users to file a return from the position of proposed legislation (see CRA IT44). However, there is no mandatory requirement in this manner until it is in law. Users may continue to prepare their returns using the existing calculations.
- The rate will be updated in the following release.