CAP. XXV.

An Act to Amend the Business Profits Tax Acts, 1917-1920.

SECTION

Passed June 6th, 1922.

SECTION

1-Respecting operation of sec. 3.

2-Respecting accounting periods.

WHHEREAS it was provided by Section twenty of the Preamble

Business Profits Tax Act, 1917, that the provisions of

section three of that Act should not continue in force after the thirty-first day of December, one thousand nine hundred and eighteen;

And Whereas the said section twenty was amended by the Business Profits Tax Acts of 1919 and 1920 to read one thousand nine hundred and nineteen," and "one thousand nine hundred and twenty" respectively;

And Whereas doubts have arisen respecting the meaning and effect of the said amendments and it is desirable to remove the same;

Be it therefore enacted by the Governor, the Legislative Enacting dause. Council and House of Assembly, in Legislative Session convened, as follows:

tion of sec. 3.

1. The provisions of section three of the Business Profits Respecting opera Tax Act, 1917, and of any amendments thereof, shall be deemed to have been in force continuously from the date of the passing of the said Act, or of the said amendments, until the thirty-first day of December, one thousand nine hundred and twenty.

ting periods.

2. The calendar years commencing on the first days of Respecting accounJanuary, one thousand nine hundred and nineteen and one thousand nine hundred and twenty, respectively, shall each be deemed to be an accounting period, for the purposes and within the meaning of sections three and four of the said Act of 1917, and the tax shall be payable therefor.

Enacting clause.

Interpretation.

BE it enacted by the Governor, the Legislative Council

and House of Assembly, in Legislative Session convened, as follows:

1. In this Act unless the context otherwise requires:

(a) "Board" shall mean a Board of Referees appointed under section thirteen hereof.

(b) "Minister" shall mean the Minister of Finance and Customs.

(c) "Normal Tax" shall mean the tax authorized by paragraph (a) of sub-section one of section four of this Act.

(d) "Person" shall mean any individual or person and any syndicate, trust, association, or other body, any body corporate, and the heirs, executors, administrators, curators and assigns or other legal representative of such person.

(e) "Supertax" shall mean the taxes authorized by paragraphs (b) to (i), both inclusive, of sub-section one

(f) "Taxpayer" shall mean any person paying, liable to pay, or believed by the Minister to be liable to pay, any tax imposed by this Act.

(g) "Year" shall mean the Calendar year.

(h) "Court" shall mean the Supreme Court of Newfoundland.

(i) "Dependent Child" shall mean a child under eighteen years of age and dependent on his parent for support on account of physical or mental incapacity.

(j) "Persons employed in Newfoundland" means all persons who receive, directly or indirectly, salary or wages, commissions, fees or other remuneration for personal services, any part of which is performed in the Colony.

(k) A business, trade, profession or occupation (as distinguished from personal service as employee) shall be deemed to be carried on within the Colony by a non-resident, when he occupies, has, maintains or operates desk room, an office, a shop, a store, a warehouse, a factory, an agency, or other place where his affairs are systematically and regularly carried on, notwithstanding the occasional consummation of isolated transactions without the Colony.

(1) "Commissioner or Assessor of Taxation" shall mean the officer appointed by the Governor-in-Council, pursuant to the provisions of this Act, having such powers and performing such duties as are assigned to him by the Governor-in-Council, or by the Minister under the provisions of this Act.

(m) The term "Dividends" includes cash dividends, stock dividends, scrip dividends, dividends “in kind”, profits of limited partnerships, and dividends on paid Life Insurance Policies.

up

(n) "Fiduciary' means a guardian, trustee, executor, administrator, receiver, conservator or any person,

L

Act

Meaning of income, deductions to be allowed.

whether individual or corporate, acting in a fiduciary capacity for any person or trust.

"income"

2. (1) For the purposes of this Act shall mean the annual net profit or gain, or gratuity, whether ascertained and capable of computation as being wages, salary or other fixed amount, or unascertained as being fees or emoluments, or as being profits from a trade, or commercial or financial or other business or calling, directly or indirectly received by a person from any office or employment, or from any profession or calling, or from any trade, manufacture or business, as the case may be; and shall include the interest, dividends, or profits, directly or indirectly received from money at interest upon any security or without security, or from stocks, or from any other investment, and whether such gains, or profits are divided or distributed or not, and also the annual profit or gain from any other source, including the income from, but not the value of, property acquired by gift, bequest, devise or descent; and including the income from, but not the proceeds of, life insurance policies paid upon the death of the person insured, or payments made or credited to the insured on life insurance endowment or annuity contracts upon the maturity of the term mentioned in the contract, or upon the surrender of the contract, with the following exemptions and deductions:

(a) Such reasonable amount as the Minister in his discretion may allow for depreciation, and the Minister, in determining the income derived from mining and from oil wells and timber limits, shall make such an allowance for the exhaustion of the mines, wells and timber limits, as he may deem fit and fair. A person shall not deduct from gross income any amount claimed as a loss on account of shrinkage in value of such securities through fluctuation of the market or otherwise. The loss allowable in such cases shall be that actually suffered when the securities mature or are disposed of. Any losses occurring from fires, storms, shipwrecks or other casualties or from theft,

sated for by insurance or otherwise, and that they have been incurred in the business or trade during the year, shall be allowable as deductions.

(b) Contributions or gifts made within the taxable year to corporations incorporated, or associations organized under the laws of the Colony and operated exclusively for religious, charitable, scientific or educational purposes, to such an amount as may be allowed by the Minister, in no case to exceed more than 10% of the taxpayer's net income as computed without the benefit of this sub-division. Such contributions or gifts shall be allowable as deductions only if verified under rules and regulations prescribed by the Assessor.

(c) For the purpose of the normal tax only, two hundred dollars for each child under eighteen years of age of the taxpayer, provided that in the case of a husband and wife, both of whom are taxpayers, such deduction shall not be allowed from both incomes but from one only. For the purpose of the normal tax only, a taxpayer who is the head of a family and who actually supports and maintains one or more individuals who are closely connected with him by blood relationship, relationship by marriage or by adoption, and whose right to exercise family control and provide for such dependent individual or individuals is based on some moral or legal obligation, shall be entitled to a deduction of two hundred dollars in respect of each such dependent individual, provided that not more than one taxpayer shall be entitled to such deduction in respect of the same dependent.

(d) Dividends received by or credited to shareholders of a corporation, which is liable to taxation under the provisions of this Act shall not be liable to the normal tax in the hands of the shareholders, but shall be liable to the supertax provisions of this Act. The amount of the exemption from the normal tax to the shareholders, shall not exceed the net