Legislative Proposals Related to the Income Tax Act and Proposed Amendments to the Income Tax Regulations – Zero-Emission Vehicles and New Class 56
1 (1) The definition zero-emission vehicle in subsection 248(1) of the Income Tax Act is amended by striking out "and" at the end of paragraph
(b) and by replacing paragraph (c) with the following:
(c) does not meet any of the following conditions:
(i) it is a vehicle in respect of
which the taxpayer has, at any time, made an election under subsection 1103(2j) of the Income Tax Regulations,
(ii) it is a vehicle in respect of which assistance has been paid by the Government of Canada under a prescribed program, and
(iii) if the vehicle was acquired before March 2, 2020, either
(A) it has been used, or acquired for
use, for any purpose before it was acquired by the taxpayer, or
(B) it is a vehicle in respect of which an amount has been deducted under paragraph 20(1)(a) or subsection 20(16) by another person
or partnership, and
(d) would be accelerated investment incentive property of the taxpayer if
subsection 1104(4) of the Income Tax Regulations were read without
its exclusions for property included in Class 54 or Class 55 of Schedule II to the Income Tax Regulations. (véhicule zéro émission)
(2) Subsection
(1) is deemed to have come into force on March 2, 2020.
2 (1) Paragraph 1100(1)(a) of the Income Tax Regulations is amended by striking out "and" at the end of
subparagraph (xl), by adding "and" at the end of subparagraph (xli) and by adding the following after subparagraph
(xli):
(xlii) of Class 56, 30 per cent,
(2) The portion of the
description of A in subsection 1100(2) of the Regulations before subparagraph (a)(i) is replaced by the
following:
A is, in respect of property of the
class that became available for use by the taxpayer in the taxation year and that is accelerated investment
incentive property or property included in any of Classes 54 to 56,
(a) if the property is not included in paragraph (1)(v) or in any of Classes 12, 13, 14, 15,
43.1, 43.2, 53, 54, 55 and 56 or in Class 43 in the circumstances
described in paragraph (d),
(3) The portion of paragraph
(e) in the description of A in subsection 1100(2) of the Regulations before subparagraph (i) is replaced by the
following:
(e) if the class is Class 54 or Class 56,
(4) The description of D in
subsection 1100(2) of the Regulations is replaced by the following:
D is the total of all amounts, if
any, each of which is an amount included in the description of A in the definition undepreciated capital cost in subsection 13(21) of the Act in respect of
property of the class that became available for use by the taxpayer in the taxation year and that is accelerated
investment incentive property or property included in any of Classes 54
to 56, and
(5) Subparagraph (b)(ii) in
the description of F in subsection 1100(2) of the Regulations is replaced by the following:
(ii) property included in any of Classes 13, 14, 15, 23, 24, 27, 29, 34, 52, 54, 55 and 56,
(6) Subsections
(1) to (5) are deemed to have come into force on March 2, 2020.
3 (1) Subsection 1102(14.13) of the
Regulations is replaced by the following:
(14.13) Subsection (14) does not apply to an acquisition of property by a taxpayer from a person in
respect of which the property was included in any of Classes 54 to 56.
(2) Subsection
(1) is deemed to have come into force on March 2, 2020.
4 (1) Subsection 1103(2j) of the
Regulations is replaced by the following:
(2j) A taxpayer may, in its return of income filed with the Minister on or before its filing-due
date for the taxation year in which a property is acquired, elect not to include the property in any of Classes 54 to 56 in
Schedule II, as the case may be.
(2) Subsection
(1) is deemed to have come into force on March 2, 2020.
5 (1) The portion of subsection 1104(4) of
the Regulations before paragraph (a) is replaced by the following:
(4) For the purposes of this Part and Schedules II to VI, accelerated investment incentive property means property of a taxpayer
(other than property included in any of Classes 54 to 56) that
(2) Subsection
(1) is deemed to have come into force on March 2, 2020.
6 Schedule II to the
Regulations is amended by adding the following after Class 55:
CLASS 56
Property that is acquired, and
becomes available for use, by a taxpayer after March 1, 2020 and before 2028, if the property
(a) is either
(i) automotive equipment (other than a motor vehicle) that is fully
electric or powered by hydrogen, or
(ii) an addition or alteration made by the taxpayer to automotive equipment
(other than a motor vehicle) to the extent it causes the automotive equipment to become fully electric or powered by
hydrogen; and
(b) would be accelerated investment incentive property of the taxpayer if
subsection 1104(4) were read without its exclusion for property included in Class 56.
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