Income Tax Act (R.S.C., 1985, c. 1 (5th Supp.))

Act current to 2014-09-01 and last amended on 2014-06-27. Previous Versions

Marginal note:Return
  •  (1) Every corporation resident in Canada that pays a taxable dividend (other than a capital gains dividend within the meaning assigned by subsection 130.1(4) or 131(1)) in a taxation year shall file with the Minister, not later than the corporation’s filing-due date for the taxation year, a return for the year under this Part in prescribed form containing an estimate of the taxes payable by it under this Part for the taxation year.

  • Marginal note:Provisions applicable to Part

    (2) Subsections 150(2) and (3), sections 151, 152, 158 and 159, subsections 161(1) and (11), sections 162 to 167 and Division J of Part I are applicable to this Part with such modifications as the circumstances require.

  • Marginal note:Joint and several liability from excessive eligible dividend designations

    (3) Without limiting the liability of any person under any other provision of this Act, if a Canadian-controlled private corporation or a deposit insurance corporation pays an eligible dividend in respect of which it has made an excessive eligible dividend designation to a shareholder with whom it does not deal at arm’s length, the shareholder is jointly and severally, or solidarily, liable with the corporation to pay that proportion of the corporation’s tax payable under this Part because of the designation that the amount of the eligible dividend received by the shareholder is of the total of all amounts each of which is a dividend in respect of which the designation was made.

  • Marginal note:Assessment

    (4) The Minister may, at any time after the last day on which a corporation may make an election under subsection 185.1(2) in respect of an excessive eligible dividend designation, assess a person in respect of any amount payable under subsection (3) in respect of the designation, and the provisions of Division I of Part I (including, for greater certainty, the provisions in respect of interest payable) apply, with any modifications that the circumstances require, to an assessment made under this subsection as though it were made under section 152.

  • Marginal note:Rules applicable

    (5) If under subsection (3) a corporation and a shareholder have become jointly and severally, or solidarily, liable to pay part or all of the corporation’s tax payable under this Part in respect of an excessive eligible dividend designation described in subsection (3),

    • (a) a payment at any time by the shareholder on account of the liability shall, to the extent of the payment, discharge their liability after that time; and

    • (b) a payment at any time by the corporation on account of its liability shall discharge the shareholder’s liability only to the extent of the amount determined by the formula

      (A - B) × C/D

      where

      A 
      is the total of
      • (i) the amount of the corporation’s liability, immediately before that time, under this Part in respect of the designation, and

      • (ii) the amount of the payment,

      B 
      is the amount of the corporation’s liability, immediately before that time, under this Act,
      C 
      is the amount of the eligible dividend received by the shareholder, and
      D 
      the total of all amounts each of which is a dividend in respect of which the designation was made.
  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 2007, c. 2, s. 51.