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

Full Document:  

Act current to 2022-11-16 and last amended on 2022-10-18. Previous Versions

PART XVAdministration and Enforcement (continued)

Collection (continued)

Marginal note:Application of ss. 223(1) to (8) and (12)

  •  (1) Subsections 223(1) to 223(8) and 223(12) are applicable with respect to certificates made under section 223 or section 223 of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, after 1971 and documents evidencing such certificates that were issued by the Federal Court and that were filed, registered or otherwise recorded after 1977 under the laws of a province, except that, where any such certificate or document was the subject of an action pending in a court on February 10, 1988 or the subject of a court decision given on or before that date, section 223 shall be read, for the purposes of applying it with respect to that certificate or document, as section 223 of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, read at the time the certificate was registered or the document was issued, as the case may be.

  • Marginal note:Application of ss. 223(9) to (11)

    (2) Subsections 223(9) to 223(11) are applicable with respect to certificates made under section 223, or section 223 of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, after September 13, 1988.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1988, c. 55, s. 168

Marginal note:Garnishment

  •  (1) Where the Minister has knowledge or suspects that a person is, or will be within one year, liable to make a payment to another person who is liable to make a payment under this Act (in this subsection and subsections 224(1.1) and 224(3) referred to as the “tax debtor”), the Minister may in writing require the person to pay forthwith, where the moneys are immediately payable, and in any other case as and when the moneys become payable, the moneys otherwise payable to the tax debtor in whole or in part to the Receiver General on account of the tax debtor’s liability under this Act.

  • Marginal note:Idem

    (1.1) Without limiting the generality of subsection 224(1), where the Minister has knowledge or suspects that within 90 days

    • (a) a bank, credit union, trust company or other similar person (in this section referred to as the “institution”) will lend or advance moneys to, or make a payment on behalf of, or make a payment in respect of a negotiable instrument issued by, a tax debtor who is indebted to the institution and who has granted security in respect of the indebtedness, or

    • (b) a person, other than an institution, will lend or advance moneys to, or make a payment on behalf of, a tax debtor who the Minister knows or suspects

      • (i) is employed by, or is engaged in providing services or property to, that person or was or will be, within 90 days, so employed or engaged, or

      • (ii) where that person is a corporation, is not dealing at arm’s length with that person,

    the Minister may in writing require the institution or person, as the case may be, to pay in whole or in part to the Receiver General on account of the tax debtor’s liability under this Act the moneys that would otherwise be so lent, advanced or paid and any moneys so paid to the Receiver General shall be deemed to have been lent, advanced or paid, as the case may be, to the tax debtor.

  • Marginal note:Garnishment

    (1.2) Notwithstanding any other provision of this Act, the Bankruptcy and Insolvency Act, any other enactment of Canada, any enactment of a province or any law, but subject to subsections 69(1) and 69.1(1) of the Bankruptcy and Insolvency Act and section 11.09 of the Companies’ Creditors Arrangement Act, if the Minister has knowledge or suspects that a particular person is, or will become within one year, liable to make a payment

    • (a) to another person (in this subsection referred to as the “tax debtor”) who is liable to pay an amount assessed under subsection 227(10.1) or a similar provision, or

    • (b) to a secured creditor who has a right to receive the payment that, but for a security interest in favour of the secured creditor, would be payable to the tax debtor,

    the Minister may in writing require the particular person to pay forthwith, where the moneys are immediately payable, and in any other case as and when the moneys become payable, the moneys otherwise payable to the tax debtor or the secured creditor in whole or in part to the Receiver General on account of the tax debtor’s liability under subsection 227(10.1) or the similar provision, and on receipt of that requirement by the particular person, the amount of those moneys that is so required to be paid to the Receiver General shall, notwithstanding any security interest in those moneys, become the property of Her Majesty to the extent of that liability as assessed by the Minister and shall be paid to the Receiver General in priority to any such security interest.

  • Marginal note:Definitions

    (1.3) In subsection 224(1.2),

    secured creditor

    secured creditor means a person who has a security interest in the property of another person or who acts for or on behalf of that person with respect to the security interest and includes a trustee appointed under a trust deed relating to a security interest, a receiver or receiver-manager appointed by a secured creditor or by a court on the application of a secured creditor, a sequestrator or any other person performing a similar function; (créancier garanti)

    security interest

    security interest means any interest in, or for civil law any right in, property that secures payment or performance of an obligation and includes an interest, or for civil law a right, created by or arising out of a debenture, mortgage, hypothec, lien, pledge, charge, deemed or actual trust, assignment or encumbrance of any kind whatever, however or whenever arising, created, deemed to arise or otherwise provided for; (garantie)

    similar provision

    similar provision means a provision, similar to subsection 227(10.1), of any Act of a province that imposes a tax similar to the tax imposed under this Act, where the province has entered into an agreement with the Minister of Finance for the collection of the taxes payable to the province under that Act. (disposition semblable)

  • Marginal note:Garnishment

    (1.4) Provisions of this Act that provide that a person who has been required to do so by the Minister must pay to the Receiver General an amount that would otherwise be lent, advanced or paid to a taxpayer who is liable to make a payment under this Act, or to that taxpayer’s secured creditor, apply to Her Majesty in right of Canada or a province.

  • Marginal note:Minister’s receipt discharges original liability

    (2) The receipt of the Minister for moneys paid as required under this section is a good and sufficient discharge of the original liability to the extent of the payment.

  • Marginal note:Idem

    (3) Where the Minister has, under this section, required a person to pay to the Receiver General on account of a liability under this Act of a tax debtor moneys otherwise payable by the person to the tax debtor as interest, rent, remuneration, a dividend, an annuity or other periodic payment, the requirement applies to all such payments to be made by the person to the tax debtor until the liability under this Act is satisfied and operates to require payments to the Receiver General out of each such payment of such amount as is stipulated by the Minister in the requirement.

  • Marginal note:Failure to comply with s. (1), (1.2) or (3) requirement

    (4) Every person who fails to comply with a requirement under subsection 224(1), 224(1.2) or 224(3) is liable to pay to Her Majesty an amount equal to the amount that the person was required under subsection 224(1), 224(1.2) or 224(3), as the case may be, to pay to the Receiver General.

  • Marginal note:Failure to comply with s. (1.1) requirement

    (4.1) Every institution or person that fails to comply with a requirement under subsection 224(1.1) with respect to moneys to be lent, advanced or paid is liable to pay to Her Majesty an amount equal to the lesser of

    • (a) the total of moneys so lent, advanced or paid, and

    • (b) the amount that the institution or person was required under that subsection to pay to the Receiver General.

  • Marginal note:Service of garnishee

    (5) Where a person carries on business under a name or style other than the person’s own name, notification to the person of a requirement under subsection 224(1), 224(1.1) or 224(1.2) may be addressed to the name or style under which the person carries on business and, in the case of personal service, shall be deemed to be validly served if it is left with an adult person employed at the place of business of the addressee.

  • Marginal note:Idem

    (6) Where persons carry on business in partnership, notification to the persons of a requirement under subsection 224(1), 224(1.1) or 224(1.2) may be addressed to the partnership name and, in the case of personal service, shall be deemed to be validly served if it is served on one of the partners or left with an adult person employed at the place of business of the partnership.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • R.S., 1985, c. 1 (5th Supp.), s. 224
  • 1994, c. 7, Sch. V, s. 91, Sch. VIII, s. 130, c. 21, s. 101
  • 1997, c. 12, s. 128
  • 2001, c. 17, s. 228(E)
  • 2005, c. 47, s. 139
  • 2007, c. 36, s. 108
  • 2013, c. 34, s. 161

Marginal note:Recovery by deduction or set-off

 Where a person is indebted to Her Majesty under this Act or under an Act of a province with which the Minister of Finance has entered into an agreement for the collection of the taxes payable to the province under that Act, the Minister may require the retention by way of deduction or set-off of such amount as the Minister may specify out of any amount that may be or become payable to the person by Her Majesty in right of Canada.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1979, c. 5, s. 64
  • 1980-81-82-83, c. 48, s. 104

Marginal note:Acquisition of debtor’s property

 For the purpose of collecting debts owed by a person to Her Majesty under this Act or under an Act of a province with which the Minister of Finance has entered into an agreement for the collection of taxes payable to the province under that Act, the Minister may purchase or otherwise acquire any interest in, or for civil law any right in, the person’s property that the Minister is given a right to acquire in legal proceedings or under a court order or that is offered for sale or redemption and may dispose of any interest or right so acquired in such manner as the Minister considers reasonable.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • R.S., 1985, c. 1 (5th Supp.), s. 224.2
  • 2013, c. 34, s. 162

Marginal note:Payment of moneys seized from tax debtor

  •  (1) Where the Minister has knowledge or suspects that a particular person is holding moneys that were seized by a police officer in the course of administering or enforcing the criminal law of Canada from another person (in this section referred to as the “tax debtor”) who is liable to make a payment under this Act or under an Act of a province with which the Minister of Finance has entered into an agreement for the collection of taxes payable to the province under that Act and that are restorable to the tax debtor, the Minister may in writing require the particular person to turn over the moneys otherwise restorable to the tax debtor in whole or in part to the Receiver General on account of the tax debtor’s liability under this Act or under the Act of the province, as the case may be.

  • Marginal note:Receipt of Minister

    (2) The receipt of the Minister for moneys turned over as required by this section is a good and sufficient discharge of the requirement to restore the moneys to the tax debtor to the extent of the amount so turned over.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • R.S., 1985, c. 1 (5th Supp.), s. 224.3
  • 1994, c. 21, s. 102

Marginal note:Seizure of goods, chattels or movable property

  •  (1) If a person has failed to pay an amount as required by this Act, the Minister may give 30 days notice to the person by registered mail addressed to the person’s latest known address of the Minister’s intention to direct that the person’s goods and chattels, or movable property, be seized and sold, and, if the person fails to make the payment before the expiration of the 30 days, the Minister may issue a certificate of the failure and direct that the person’s goods and chattels, or movable property, be seized.

  • Marginal note:Sale of seized property

    (2) Property seized under this section shall be kept for 10 days at the cost and charges of the owner and, if the owner does not pay the amount owing together with the costs and charges within the 10 days, the property seized shall be sold by public auction.

  • Marginal note:Notice of sale

    (3) Except in the case of perishable goods, notice of the sale setting out the time and place thereof, together with a general description of the property to be sold shall, a reasonable time before the goods are sold, be published at least once in one or more newspapers of general local circulation.

  • Marginal note:Surplus returned to owner

    (4) Any surplus resulting from the sale after deduction of the amount owing and all costs and charges shall be paid or returned to the owner of the property seized.

  • Marginal note:Exemptions from seizure

    (5) Goods and chattels, or movable property, of any person in default that would be exempt from seizure under a writ of execution issued out of a superior court of the province in which the seizure is made are exempt from seizure under this section.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • R.S., 1985, c. 1 (5th Supp.), s. 225
  • 2013, c. 34, s. 163

Marginal note:Collection restrictions

  •  (1) If a taxpayer is liable for the payment of an amount assessed under this Act, other than an amount assessed under subsection 152(4.2), 169(3) or 220(3.1), the Minister shall not, until after the collection-commencement day in respect of the amount, do any of the following for the purpose of collecting the amount:

    • (a) commence legal proceedings in a court,

    • (b) certify the amount under section 223,

    • (c) require a person to make a payment under subsection 224(1),

    • (d) require an institution or a person to make a payment under subsection 224(1.1),

    • (e) [Repealed, 2006, c. 4, s. 166]

    • (f) require a person to turn over moneys under subsection 224.3(1), or

    • (g) give a notice, issue a certificate or make a direction under subsection 225(1).

  • Marginal note:Collection-commencement day

    (1.1) The collection-commencement day in respect of an amount is

    • (a) in the case of an amount assessed under subsection 188(1.1) in respect of a notice of intention to revoke given under subsection 168(1) or any of subsections 149.1(2) to (4.1), one year after the day on which the notice was mailed;

    • (b) in the case of an amount assessed under section 188.1, one year after the day on which the notice of assessment was sent; and

    • (c) in any other case, 90 days after the day on which the notice of assessment was sent.

  • Marginal note:No action by Minister

    (2) If a taxpayer has served a notice of objection under this Act to an assessment of an amount payable under this Act, the Minister shall not, for the purpose of collecting the amount in controversy, take any of the actions described in paragraphs (1)(a) to (g) until after the day that is 90 days after the day on which notice is sent to the taxpayer that the Minister has confirmed or varied the assessment.

  • Marginal note:Idem

    (3) Where a taxpayer has appealed from an assessment of an amount payable under this Act to the Tax Court of Canada, the Minister shall not, for the purpose of collecting the amount in controversy, take any of the actions described in paragraphs (1)(a) to (g) before the day of mailing of a copy of the decision of the Court to the taxpayer or the day on which the taxpayer discontinues the appeal, whichever is the earlier.

  • Marginal note:Idem

    (4) Where a taxpayer has agreed under subsection 173(1) that a question should be determined by the Tax Court of Canada, or where a taxpayer is served with a copy of an application made under subsection 174(1) to that Court for the determination of a question, the Minister shall not take any of the actions described in paragraphs (1)(a) to (g) for the purpose of collecting that part of an amount assessed, the liability for payment of which will be affected by the determination of the question, before the day on which the question is determined by the Court.

  • Marginal note:Idem

    (5) Notwithstanding any other provision in this section, where a taxpayer has served a notice of objection under this Act to an assessment or has appealed to the Tax Court of Canada from an assessment and agrees in writing with the Minister to delay proceedings on the objection or appeal, as the case may be, until judgment has been given in another action before the Tax Court of Canada, the Federal Court of Appeal or the Supreme Court of Canada in which the issue is the same or substantially the same as that raised in the objection or appeal of the taxpayer, the Minister may take any of the actions described in paragraphs (1)(a) to (g) for the purpose of collecting the amount assessed, or a part thereof, determined in a manner consistent with the decision or judgment of the Court in the other action at any time after the Minister notifies the taxpayer in writing that

    • (a) the decision of the Tax Court of Canada in that action has been mailed to the Minister,

    • (b) judgment has been pronounced by the Federal Court of Appeal in that action, or

    • (c) judgment has been delivered by the Supreme Court of Canada in that action,

    as the case may be.

  • Marginal note:Where ss. (1) to (4) do not apply

    (6) Subsections (1) to (4) do not apply with respect to

    • (a) an amount payable under Part VIII;

    • (a.1) an amount payable under section 281;

    • (b) an amount required to be deducted or withheld, and required to be remitted or paid, under this Act or the Regulations;

    • (c) an amount of tax required to be paid under section 116 or a regulation made under subsection 215(4) but not so paid;

    • (d) the amount of any penalty payable for failure to remit or pay an amount referred to in paragraph (b) or (c) as and when required by this Act or a regulation made under this Act; and

    • (e) any interest payable under a provision of this Act on an amount referred to in this paragraph or any of paragraphs (a) to (d).

  • Marginal note:One-half collection

    (7) If an amount has been assessed under this Act in respect of a corporation for a taxation year in which it was a large corporation, or in respect of a particular amount claimed under section 110.1 or 118.1 where the particular amount was claimed in respect of a tax shelter, then subsections (1) to (4) do not limit any action of the Minister to collect

    • (a) at any time on or before the particular day that is 90 days after the day of the sending of the notice of assessment, 1/2 of the amount so assessed; and

    • (b) at any time after the particular day, the amount, if any, by which the amount so assessed exceeds the total of

      • (i) all amounts collected before that time with respect to the assessment, and

      • (ii) 1/2 of the amount in controversy at that time.

  • Marginal note:Definition of large corporation

    (8) For the purposes of this section and section 235, a corporation (other than a corporation described in subsection 181.1(3)) is a large corporation in a particular taxation year if the total of the taxable capital employed in Canada of the corporation, at the end of the particular taxation year, and the taxable capital employed in Canada of any other corporation, at the end of the other corporation’s last taxation year that ends at or before the end of the particular taxation year, if the other corporation is related (within the meaning assigned for the purposes of section 181.5) to the corporation at the end of the particular taxation year, exceeds $10 million, and, for the purpose of this subsection, a corporation formed as a result of the amalgamation or merger of 2 or more predecessor corporations is deemed to be the same corporation as, and a continuation of, each predecessor corporation.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • R.S., 1985, c. 1 (5th Supp.), s. 225.1
  • 1994, c. 7, Sch. II, s. 184, Sch. VIII, s. 131, c. 21, s. 103
  • 1998, c. 19, s. 225
  • 2001, c. 17, s. 179
  • 2005, c. 19, s. 49
  • 2006, c. 4, ss. 85, 166
  • 2010, c. 25, s. 66
  • 2013, c. 33, s. 20
  • 2016, c. 12, s. 60
 
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