Alberta Forms

Where a corporation is not resident in Canada, "salaries and wages paid in all jurisdictions" by the corporation do not include salaries and wages paid to employees of a permanent establishment outside Canada. When calculating using the general allocation formula under the ITA (Reg. 402(3)(a)), "gross revenue in all jurisdictions" does not include gross revenue reasonably attributable to a permanent establishment outside Canada.

When the deduction under the provisions of subsection 8(2.2) of the Alberta Corporate Tax Act (ACTA) exceeds the deduction under subsection 20(12) of the Income Tax Act (ITA), the program will enter the balancing amount on lines 040 and 050 of Alberta Schedule 12 because the amounts claimed in the Workchart for Foreign Income Tax Credits and Alberta Schedule 4, Summary of Alberta Foreign Investment Income Tax Credit, will be different from the amounts in the federal Schedule 21.

If the amount claimed for Alberta is the lesser of the two amounts, there will be no difference between the amounts on the federal Schedule 21 and the Alberta Schedule 4, because the amount entered in the Alberta Schedule 4 must be the higher of the two amounts claimed.

To calculate the maximum expenditure limit allowed on this line, you must choose among all the associated corporations that are claiming a tax credit for scientific research & experimental development (SR&ED) incurred in Alberta after December 31, 2008, the corporation that has the longest taxation year.

The Section “Alberta Schedule 9 - Allocation of the maximum expenditure limit among associated corporations” in Schedule 9 Wrokchart, Related and Associated Corporations Workchart, allows you to allocate the expenditure limit (according to line 208 in Form AT1 Schedule 9) between each of the affected associated corporations that is claiming a tax credit relating to SR&ED incurred in Alberta after December 31, 2008. The amount allocated cannot exceed the maximum expenditure limit of a corporation calculated from its taxation year.

You must detail the qualified expenditures incurred in Alberta after December 31, 2008, for each third party identified on Form T1263, Third-Party Payments for SR&ED. For all of the third parties identified, the total of the amounts claimed should correspond to the portion of the federal amount on line 559 for expenditures incurred in Alberta before claiming any Alberta tax credit amount for scientific research & experimental development (SR&ED).

In Form T1263, a box allows you to post the name of the third party (line 701) to Form AT1 Schedule 9 LISTING, which you must complete.

Moreover, when expenditures were incurred in more than one jurisdiction, those expenditures must be allocated based on each of the affected jurisdictions for each third party identified on Form T1263.

You must detail the qualified expenditures incurred in Alberta after December 31, 2008, for each project for which Form T661 Part 2, Project Information has been completed. The total of the various amounts requested for each of the projects should correspond to the portion of the federal amount on line 559 for expenditures incurred in Alberta for each of the projects before claiming any Alberta tax credit amount for scientific research & experimental development (SR&ED).

In Form T661 Part 2, a box allows you to post the title (line 200) and the code (line 206) of the project to the AT1 Schedule 9 LISTING, which you must complete.

Moreover, when expenditures were incurred in more than one jurisdiction, those expenditures must be allocated based on each of the affected jurisdictions for each of the projects for which Form T661 Part 2 has been completed.

The calculation of Earned Depletion Base for Alberta purposes follows the same rules as the federal calculation. Corporations are reminded that no additions are permitted after December 31, 1989 to the Earned Depletion Base. To the extent that a corporation has a balance at the end of the preceding taxation year in its Earned Depletion Base, it is permitted to claim a deduction in the current taxation year subject to the existing rules.

As there are no additions permitted to this pool, only transfers received on amalgamation (pursuant to subsection 87(1.2) of the federal Act), transfers received on the wind-up of a subsidiary (pursuant to subsection 88(1.5) of the federal Act), or transfers received other than on amalgamation or wind-up of a subsidiary are permitted to be added to the earned depletion base. If the transferred expenses were regular expenses in the hands of the amalgamating company or the subsidiary being wound up then they should be recorded as regular expenses in the successor’s hands. In all other cases, the transferred earned depletion base is subject to the successor rules and should be entered in the successor expenses column.

Amounts transferred on the sale of resource property to a successor corporation must be deducted from the earned depletion base (regular expense column or successor expense column, as applicable).

The claim for the year (regular or successor expenses) is equal to the lessor of 25% of resource profits (as determined in accordance with the regulations to the federal Act) and the earned depletion base as of the end of the year before making any earned depletion claim.

Note: The amounts that are claimed on lines 007 and 019 must be included in the amount that is reported on line 022 of Schedule 12.

A corporation may deduct a mining exploration depletion allowance, the calculation of which follows the federal rules. No additions are permitted to be made to the mining exploration depletion base after December 31, 1989, except for transfers received by amalgamation, wind-up of a subsidiary or otherwise.

Transfers on the disposal of resource property to successor corporations should be deducted from the pool before calculating the amount available for the current year claim.

Note: The amount that is claimed on line 031 must be included in the amount that is reported on line 022 of Schedule 12.

Canadian exploration expenses (CEE) are generally intangible costs incurred to determine the existence, nature or location of an oil or gas reservoir not known previously to exist. The determination of the amounts to be included, deducted or claimed in the year follows the federal rules. CEE incurred during the current year are added to the opening pool balance as well as:

• reclassified Canadian development expenses;
• transfers on amalgamation or wind-up of a subsidiary;
• transfers other than on amalgamation or wind-up of a subsidiary;
• Canadian renewable and conservation expenses; and
• all other additions (e.g. repayments of government assistance, bad debts in respect of a sale or recovery of CEE, etc.)

Amounts that must be deducted from the pool include:

• government assistance and grants;
• amounts transferred on disposition of resource property to a successor corporation;
• current and previous year Canadian exploration expenses renounced in the year pursuant to a flow-through share agreement;
• expenses renounced under look-back rule; and
• other deductions or transfers (e.g. investment tax credits claimed in the immediately preceding year, amounts received from the sale of seismic data, etc.)

CEE is accounted for in two pools: one for regular expenses and one for successor expenses. The additions and deductions noted above must be recorded in the appropriate pool to determine the amount upon which the current year’s claims for the regular and successor CEE are based.

The maximum deduction allowed for the regular expense pool is the amount available. For the successor expense pool, the maximum deduction allowed is the lesser of: the amount available in the successor expense column, and; the income attributable to the disposition of successored properties together with the production income from those properties.

A principal business corporation is a corporation whose principal business is mining, oil and gas production, and related activities. A principal business corporation may only claim CEE up to the amount of its taxable income; it cannot create a loss. This limitation does not apply to non-principal business corporations.

Note: The amounts that are claimed on lines 061 and 081 must be carried forward to line 026 on Schedule 12. If the "amount available" in the regular expenses column is negative, include this amount in income at line 040 ("other" area) on Schedule 12 and enter "0" on lines 061 and 063.

Canadian development expenses (CDE) are generally intangible costs incurred in bringing known reservoirs into production. The determination of the amounts to be included, deducted or claimed in the year follows the federal rules. Additions to the cumulative CDE pool include:

• current year CDE;
• transfers on amalgamation or wind-up of a subsidiary;
• transfers other than on amalgamation or wind-up of a subsidiary; and
• other additions (e.g. bad debts in respect of a sale or recovery of CDE)

Amounts to be deducted from the CDE pool include:

• reclassified Canadian exploration expenses;
• government assistance and grants;
• receivable on disposition of underground oil and gas storage rights or mining property;
• credit balance in the cumulative Canadian oil and gas property expense pool;
• amounts transferred on the disposition of resource property to a successor;
• current and previous year Canadian development expenses renounced in the year pursuant to a flow-through share agreement;
• expenses renounced under look-back rule; and
• other deductions or transfers (e.g. amounts receivable as a recovery of costs included in CDE)

Similar to the cumulative CEE pool, CDE is accounted for in two pools: one for regular expenses and one for successor expenses. The additions and deductions noted above must be recorded in the appropriate pool to determine the amount upon which the current year's claims for the regular and successor CDE are based.

The maximum deduction for CDE is:

• 30% of the amount available in the regular expenses column; and
• the lesser of 30% of the amount available in the successor expenses column and the income attributed to the production income from the successored properties.

Note: If the amounts at lines 113 and 139 are positive, the current year’s CDE claims shown on lines 115 and 141 are added together and carried forward to line 028 on Schedule 12.

A negative amount at line 139 is carried forward to line 107 of Area D – cumulative CDE. If an election pursuant to subparagraph 66.7(4)(a)(iii) of the federal Act has been filed by the corporation then a negative amount at line 139 is entered at line 167 of Area E (Cumulative Canadian Oil and Gas Property Expense).

If line 113 is negative, the negative amount must be included in income on line 040 of Schedule 12.

Canadian oil and gas property expenses (COGPE) are generally the costs of acquisition of oil and gas properties. The determination of the amounts to be included, deducted or claimed in the year follows the federal rules. Additions to the COGPE pool include:

• current year COGPE;
• amounts transferred on the amalgamation or wind-up of a subsidiary;
• amounts transferred other than on the amalgamation or wind-up of a subsidiary; and
• other additions (e.g. bad debts in respect of a sale or recovery of COGPE)

Amounts to be deducted from the COGPE pool include:

• amounts received or receivable on the disposition of Canadian oil and gas properties;
• government assistance and grants;
• amounts transferred on the disposition of resource properties to a successor; and
• other deductions or transfers (e.g. amounts recovered in respect of bad debts from a sale or recovery of COGPE)

The additions and deductions noted above must be recorded in one of the two pool components - regular expenses or successor expenses.

The maximum deduction for COGPE is:

• 10% of the amount available in the "regular expenses" column; and
• the lesser of 10% of the amount available in the "successor expenses" column and the income attributed to the production income from successored properties.

Note: If the "amount available" in both the "regular expenses" column and the "successor expenses" column are positive, then the amounts at lines 169 and 189 are totaled and carried forward to line 032 on Schedule 12.

If the "amount available" in the "successor expenses" column is negative, this amount must be entered at line 167 of Area E. If, however, the corporation has filed an election pursuant to subparagraph 66.7(4)(a)(iii) of the federal Act, a negative amount available must be carried forward to line 133 of Area D (CDE – "successor expenses" column).

If the COGPE "amount available" in the "regular expenses" column is negative, the corporation must enter the amount at line 105 in AREA D of Schedule 15.

Foreign exploration and development expenses are those that are not in respect of a country. If they are in respect of a country, complete Area G or H.

Foreign exploration and development expenses (FEDE) are generally those costs incurred in conducting resource exploration and development activities outside of Canada. The determination of the amounts to be included, deducted or claimed in the year follows the federal rules.

Area F corresponds to federal Schedule 12, Part 6.

Additions to the cumulative FEDE pool include:

• current year FEDE;
• amounts transferred on amalgamation or wind-up of a subsidiary; and
• amounts transferred other than on amalgamation or wind-up of a subsidiary

Any transfers of foreign resource property must be deducted from the cumulative FEDE pool. These additions and deductions must be recorded in one of the two pool components - regular expenses or successor expenses.

The maximum deduction for regular expenses FEDE is the lesser of:

• the amount available in the FEDE "regular expenses" column; and
• the greater of the foreign source resource income and 10% of the amount available in the FEDE "regular expenses" column

The maximum deduction for "successor expenses" FEDE is the lesser of the amount available in the "successor expenses" column and the foreign source resource income attributable to successored properties.

Note: The current year FEDE claim at lines 209 and 221 should be added together and carried forward to line 030 on Schedule 12.

If the "amount available" in either the "regular expenses" column or "successor expenses" column for FEDE is negative, the negative amount must be included in income at line 040 of Schedule 12.

Specified foreign exploration and development expenses are those that are in respect of a specific country and have been incurred before 2001. If they are in respect of two or more countries, determine a reasonable allocation to each country and maintain a consistent allocation in the following years.

Area G corresponds to federal Schedule 12, Part 7.

The determination of the amounts to be included, deducted or claimed in the year follows the federal rules.

The current year claim as per 66(4), line J, and 66.7(2), line S, should be carried forward to line 030 of Alberta Schedule 12.

Foreign resource expenses are those that are in respect of a specific country and that have been incurred in a taxation year beginning in 2001 or after. If there are two or more countries, determine a reasonable allocation to each country and maintain a consistent allocation in the following years.

Area H corresponds to federal Schedule 12, Part 8.

The determination of the amounts to be included, deducted or claimed in the year follows the federal rules.

The current year claim as per subsection 66.21(4), line JJ, and subsection 66.7(2.3), line SS, should be carried forward to line 030 of Alberta Schedule 12.