Digital Services Tax Act (S.C. 2024, c. 15, s. 96)

Marginal note:Payment by the Minister on appeal

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  82 (1) If the Tax Court of Canada, the Federal Court of Appeal or the Supreme Court of Canada has, on the disposition of an appeal in respect of taxes, interest or a penalty payable under this Act by a person, referred an assessment back to the Minister for reconsideration and reassessment, or varied or vacated an assessment, the Minister must, without delay, whether or not an appeal from the decision of the Court has been or may be instituted,

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    (a) where the assessment has been referred back to the Minister, reconsider the assessment and make a reassessment in accordance with the decision of the Court unless otherwise directed in writing by the person; and

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    (b) refund any overpayment resulting from the variation, vacation or reassessment.

  The Minister may repay any tax, interest or penalties or surrender any security accepted by the Minister for tax, interest or penalties to that person or any other person that has filed another objection or instituted another appeal if, having regard to the reasons given on the disposition of the appeal, the Minister is satisfied that it would be just and equitable to do so, but for greater certainty, the Minister may, in accordance with the provisions of this Act, the Tax Court of Canada Act, the Federal Courts Act or the Supreme Court Act as they relate to appeals from decisions of the Tax Court of Canada or the Federal Court of Appeal, appeal from the decision of the Court despite any variation or vacation of any assessment by the Court or any reassessment made by the Minister under paragraph (a).

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  Marginal note:Interest on refund

  (2) If a refund is made under subsection (1) in respect of an assessment for a particular calendar year, interest at the rate prescribed by regulation must be paid for the period beginning on the day that is the later of July 30 of the following calendar year and the day on which the overpayment referred to in that subsection was paid and ending on the day on which the refund is paid.

Marginal note:Failure to register when required

83 A taxpayer that does not apply to register as and when required under section 41 is liable to a penalty of $20,000 for each of

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  (a) the calendar year in which it was required to apply to register;

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  (b) the calendar year in which it registers (or is registered under section 44), if the year is different from the year referred to in paragraph (a); and

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  (c) the calendar years, if any, between the years referred to in paragraphs (a) and (b).

Marginal note:Failure to file return when required

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  84 (1) A taxpayer that fails to file a return in respect of a calendar year as and when required under section 45 is liable to a penalty equal to the total of

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    (a) an amount equal to 5% of the taxpayer’s tax payable under this Act in respect of the year that was unpaid on the day on which the return was required to be filed, and

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    (b) the amount obtained when 1% of that unpaid tax is multiplied by the number of complete months, not exceeding 12, beginning on the day on which the return was required to be filed and ending on the day on which the return is filed.

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  Marginal note:Repeated failure to file — conditions

  (2) Subsection (3) applies to a taxpayer in respect of a calendar year, if the taxpayer

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    (a) fails to file a return in respect of the year as and when required by section 45;

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    (b) fails to comply with a demand sent under section 48 for a return in respect of the year; and

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    (c) was, before the day on which the return referred to in paragraph (a) was required to be filed, liable to a penalty under subsection (1) for a return in respect of any of the three preceding calendar years.

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  Marginal note:Repeated failure to file — penalty

  (3) If subsection (2) applies to a taxpayer in respect of a calendar year, the taxpayer is liable to a penalty equal to the total of

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    (a) an amount equal to 10% of the taxpayer’s tax payable under this Act in respect of the year that was unpaid on the day on which the return was required to be filed, and

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    (b) the amount obtained when 2% of that unpaid tax is multiplied by the number of complete months, not exceeding 20, beginning on the day on which the return was required to be filed and ending on the day on which the return is filed.

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  Marginal note:False statements or omissions

  (4) A person who knowingly, or under circumstances amounting to gross negligence, makes or participates in, assents to, or acquiesces in the making of, a false statement or omission in a return, application, form, certificate, statement, document, invoice, record or answer (each of which is in this subsection referred to as a “return”) is liable to a penalty equal to the greater of $5,000 and 25% of the total of

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    (a) if the false statement or omission is relevant to the determination of an amount payable under this Act by the person, the amount, if any, by which

    • (i) the amount that is payable

    exceeds

    • (ii) the amount that would be payable if it were determined on the basis of the information provided in the return, and

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    (b) if the false statement or omission is relevant to the determination of a refund or any other payment that may be obtained under this Act, the amount, if any, by which

    • (i) the amount that would be the refund or other payment that would be payable if it were determined on the basis of the information provided in the return

    exceeds

    • (ii) the amount of the refund or other payment that is payable to the person.

Marginal note:Failure to provide information

85 A person that fails to provide any information or record as and when required under this Act, or as prescribed by regulation, is liable to a penalty of $2,500 for each such failure, in addition to any other penalty under this Act. However, the person is not liable in the case of any information or record required in respect of another person under subsection 66(1) or section 104 if a reasonable effort was made by the person to obtain the information or record.

Marginal note:Unreasonable appeal

86 If the Tax Court of Canada disposes of an appeal by a person in respect of an amount payable under this Act or if such an appeal has been discontinued or dismissed without trial, the Court may, on the application of the Minister and whether or not the Court awards costs, order the person to pay to the Receiver General for Canada an amount not exceeding 10% of any part of the amount that was in controversy in respect of which the Court determines that there were no reasonable grounds for the appeal, if in the opinion of the Court one of the main purposes for instituting or maintaining any part of the appeal was to defer the payment of any amount payable under this Act.

Marginal note:Definitions

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  87 (1) The following definitions apply in this section.

  planning activity

  planning activity includes

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    (a) organizing or creating, or assisting in the organization or creation of, an arrangement, an entity, a plan or a scheme; and

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    (b) participating, directly or indirectly, in the selling of an interest in, or the promotion of, an arrangement, an entity, a plan, a property or a scheme. (activité de planification)

  section 52 avoidance planning

  section 52 avoidance planning by a transferor or a transferee, means planning activity in respect of a transaction or series of transactions

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    (a) that is, or is part of, a section 52 avoidance transaction; and

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    (b) for which one of the purposes of the transaction or series of transactions is to reduce

    • (i) a transferee’s joint and several, or solidary, liability for tax owing under this Act by the transferor, or

    • (ii) the transferor’s or transferee’s ability to pay any amount that is or that may become owing under this Act. (planification d’évitement en vertu de l’article 52)

  section 52 avoidance transaction

  section 52 avoidance transaction means a transaction or series of transactions in respect of which

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    (a) the conditions set out in paragraph 52(7)(a) or (b) are met; or

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    (b) if subsection 52(7) applied to the transaction or series of transactions, the amount determined under subparagraph 52(7)(c)(ii) would exceed the amount determined under subparagraph 52(7)(c)(i). (opération d’évitement en vertu de l’article 52)

  transferee

  transferee refers to “transferee” as used in subsections 52(2) and (7). (bénéficiaire du transfert)

  transferor

  transferor refers to “transferor” as used in subsections 52(2) and (7). (auteur du transfert) 

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  Marginal note:Section 52 avoidance penalty

  (2) Every transferor or transferee that engages in, participates in, assents to or acquiesces in planning activity that the transferor or transferee, as the case may be, knows is section 52 avoidance planning, or would reasonably be expected to know is section 52 avoidance planning, but for circumstances amounting to gross negligence, is liable to a penalty that is the lesser of

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    (a) 50% of the amount payable under this Act (determined without reference to this subsection), the joint and several, or solidary liability for which was sought to be avoided through the planning, and

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    (b) $100,000.

Marginal note:General penalty

88 A person that fails to comply with any provision of this Act, or the regulations made under this Act, for which no other penalty is specified in this Act is liable to a penalty of $2,500.

Marginal note:Payment of penalties

89 A person that is required to pay a penalty under this Act must pay it,

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  (a) in the case of a penalty payable under section 83, on the day on which the taxpayer was required to apply to register;

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  (b) in the case of a penalty payable under section 84, on the day on which the taxpayer was required to file the return; and

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  (c) in any other case, on the day on which the notice of original assessment of the penalty was sent.

Marginal note:Waiving or cancelling penalties

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  90 (1) The Minister may, on or before the day that is 10 calendar years after the end of a calendar year in which a penalty became payable under this Act by a person, or on application by the person on or before that day, waive or cancel all or any portion of that penalty, and may despite subsection 70(1), make any assessment of the penalty payable by the person that is necessary to take into account the waiver or cancellation of the penalty.

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  Marginal note:Refund of amount waived or cancelled

  (2) If a person has paid an amount of penalty and the Minister waives or cancels any portion of that amount under subsection (1), the Minister must refund the portion of the amount and pay interest on it at the rate prescribed by regulation beginning on the day that is 30 days after the day on which the Minister received an application in a manner satisfactory to the Minister to apply that subsection (or, if there is no such application, on the day on which the Minister waives or cancels the portion of the amount) and ending on the day on which the portion of the amount is paid as a refund or applied against another amount owed by the person to His Majesty in right of Canada.

Marginal note:Failure to file or comply

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  91 (1) A person that fails to file a return as and when required under this Act or that fails to comply with an obligation under subsection 65(6) or (8) or section 66, or an order made under section 97, is guilty of an offence and, in addition to any penalty otherwise provided under this Act, is liable on summary conviction to a fine of not less than $2,000 and not more than $40,000.

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  Marginal note:Saving

  (2) A person that is convicted of an offence under subsection (1) for a failure to comply with a provision of this Act is not liable to a penalty imposed under this Act for the same failure, unless a notice of assessment for the penalty was issued before the information or complaint giving rise to the conviction was laid or made.

Marginal note:Offences for false or deceptive statement

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  92 (1) A person commits an offence that

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    (a) makes, or participates in, assents to or acquiesces in the making of, a false or deceptive statement in a return, application, form, certificate, statement, document, invoice, record or answer filed or made under this Act;

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    (b) for the purposes of evading payment of any amount payable under this Act, or obtaining a refund or other payment payable under this Act to which the person is not entitled,

    • (i) destroys, alters, mutilates, conceals or otherwise disposes of any records of a person, or

    • (ii) makes, or assents to or acquiesces in the making of, a false or deceptive entry, or omits, or assents to or acquiesces in the omission, to enter a material particular in the records of a person;

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    (c) intentionally, in any manner, evades or attempts to evade compliance with this Act or payment of an amount payable under this Act;

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    (d) intentionally, in any manner, obtains or attempts to obtain a refund or other payment payable under this Act to which the person is not entitled; or

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    (e) conspires with any person to commit an offence described in any of paragraphs (a) to (d).

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  Marginal note:Punishment

  (2) A person that commits an offence under subsection (1) is guilty of an offence punishable on summary conviction and, in addition to any penalty otherwise provided under this Act, is liable to a fine of not less than 50% and not more than 200% of the amount payable that was sought to be evaded, or of the refund or other payment sought, or, if the amount that was sought to be evaded cannot be ascertained, a fine of not less than $2,000 and not more than $40,000.

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  Marginal note:Prosecution on indictment

  (3) A person that is charged with an offence described in subsection (1) may, at the election of Attorney General of Canada, be prosecuted on indictment and, if convicted, is, in addition to any penalty otherwise provided for under this Act, liable to a fine of not less than 100% and not more than 200% of the amount payable that was sought to be evaded, or of the refund or other payment sought, or, if the amount that was sought to be evaded cannot be ascertained, a fine of not less than $5,000 and not more than $100,000.

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  Marginal note:Penalty on conviction

  (4) A person that is convicted of an offence under subsection (1) is not liable to a penalty imposed under this Act for the same evasion or attempt unless a notice of assessment for that penalty was issued before the information or complaint giving rise to the conviction was laid or made.

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  Marginal note:Stay of appeal

  (5) If, in any appeal under this Act, substantially the same facts are at issue as those that are at issue in a prosecution under this section, the Minister may file a stay of proceedings with the Tax Court of Canada and, on that filing, the proceedings before the Tax Court of Canada are stayed pending a final determination of the outcome of the prosecution.