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

Marginal note:Certificates for receivers

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  32 (1) Every receiver that controls property of a taxpayer that is, or can reasonably be expected to become, required to pay any amount under this Act must, before distributing the property to any person, obtain a certificate from the Minister certifying that the following amounts have been paid, or that security for the payment of them has been accepted by the Minister, in accordance with this Act:

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    (a) all amounts that are payable under this Act by the taxpayer or the receiver (in that capacity) in respect of any calendar year, or period, preceding the calendar year, or period, during which the distribution is made; and

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    (b) all amounts that can reasonably be expected to become payable under this Act by the taxpayer or the receiver (in that capacity) in respect of the calendar year or period during which the distribution is made, or any previous calendar year or period.

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  Marginal note:Liability for failure to obtain certificate

  (2) Any receiver that distributes property without obtaining a certificate in respect of the amounts referred to in subsection (1) is personally liable for the payment of those amounts to the extent of the value of the property so distributed.

Marginal note:Partnerships

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  33 (1) For the purposes of this Act, anything done by a person as a member of a partnership is deemed to have been done by the partnership in the course of the partnership’s activities and not to have been done by the person.

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  Marginal note:Joint and several or solidary liability

  (2) A partnership and each member or former member (each of which is referred to in this subsection as the “member”) of the partnership (other than a member that is a limited partner and is not a general partner) are jointly and severally, or solidarily, liable for

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    (a) the payment of all amounts that are required to be paid by the partnership under this Act before or during the period during which the member is a member of the partnership or, if the member was a member of the partnership at the time the partnership was dissolved, after the dissolution of the partnership, except that

    • (i) the member is liable for the payment of amounts that become payable before the period only to the extent of the property that is regarded as property of the partnership under the relevant laws of general application to partnerships in force in a province or other jurisdiction, and

    • (ii) the payment by the partnership or by any member of the partnership of an amount in respect of the liability discharges their liability to the extent of that amount; and

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    (b) all other obligations under this Act that arose before or during that period for which the partnership is liable or, if the member was a member of the partnership at the time the partnership was dissolved, the obligations that arose upon or as a consequence of the dissolution.

Marginal note:Definitions

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  34 (1) The following definitions apply in this Division.

  tax benefit

  tax benefit means a reduction, avoidance or deferral of tax or other amount payable under this Act or an increase in a refund of tax or other amount under this Act. (avantage fiscal)

  tax consequences

  tax consequences to a person means the amount of tax or other amount payable by, or refundable to, the person under this Act, or any other amount that is relevant for the purposes of computing that amount. (attribut fiscal)

  transaction

  transaction includes an arrangement or event. (opération)

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  Marginal note:General anti-avoidance rule

  (2) If a transaction is an avoidance transaction, the tax consequences to a person are to be determined as is reasonable in the circumstances in order to deny a tax benefit that, in the absence of this section, would result, directly or indirectly, from that transaction or from a series of transactions that includes that transaction.

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  Marginal note:Avoidance transaction

  (3) An avoidance transaction means any transaction

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    (a) that, in the absence of this section, would result, directly or indirectly, in a tax benefit, unless the transaction may reasonably be considered to have been undertaken or arranged primarily for bona fide purposes other than to obtain the tax benefit; or

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    (b) that is part of a series of transactions, which series, in the absence of this section, would result, directly or indirectly, in a tax benefit, unless the transaction may reasonably be considered to have been undertaken or arranged primarily for bona fide purposes other than to obtain the tax benefit.

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  Marginal note:Application of subsection (2)

  (4) Subsection (2) applies to a transaction only if it may reasonably be considered that the transaction

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    (a) would, if this Act were read without reference to this section, result directly or indirectly in a misuse of the provisions of any one or more of

    • (i) this Act,

    • (ii) the Digital Services Tax Regulations, or

    • (iii) any other enactment that is relevant in computing tax or any other amount payable by or refundable to a person under this Act or in determining any amount that is relevant for the purposes of that computation; or

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    (b) would result directly or indirectly in an abuse having regard to those provisions, other than this section, read as a whole.

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  Marginal note:Determination of tax consequences

  (5) Without restricting the generality of subsection (2) and despite any other enactment, in determining the tax consequences to a person as is reasonable in the circumstances in order to deny a tax benefit that would, in the absence of this section, result directly or indirectly from an avoidance transaction

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    (a) any deduction, exemption or exclusion in computing Canadian digital services revenue, taxable Canadian digital services revenue or tax payable or any part thereof may be allowed or disallowed in whole or in part;

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    (b) any such deduction, exemption or exclusion, any revenue or other amount or part thereof may be allocated to any person;

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    (c) the nature of any payment or other amount may be recharacterized; and

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    (d) the tax effects that would otherwise result from the application of other provisions of this Act may be ignored.

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  Marginal note:Request for adjustments

  (6) If, with respect to a transaction, a notice of assessment involving the application of subsection (2) with respect to the transaction has been sent to a person, then any person (other than a person to which such a notice has been sent) is entitled, within 180 days after the day of sending of the notice, to request in writing that the Minister make an assessment applying subsection (2) with respect to that transaction.

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  Marginal note:Exception

  (7) Despite any other provision of this Act, the tax consequences to any person, following the application of this section, are only to be determined through a notice of assessment involving the application of this section.

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  Marginal note:Duties of Minister

  (8) On receipt of a request by a person under subsection (6), the Minister must, without delay, consider the request and, despite subsection 70(1), assess the person. However, an assessment may be made under this subsection only to the extent that it may reasonably be regarded as relating to the transaction referred to in subsection (6).

Marginal note:Series of transactions

35 For the purposes of this Division, a series of transactions is deemed to include any related transactions completed in contemplation of the series.

Marginal note:Definitions

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  36 (1) The following definitions apply in this Part.

  Agency

  Agency means the Canada Revenue Agency continued by subsection 4(1) of the Canada Revenue Agency Act. (Agence)

  bank

  bank means a bank or an authorized foreign bank, as those terms are defined in section 2 of the Bank Act, that is not subject to the restrictions and requirements referred to in subsection 524(2) of that Act. (banque)

  business number

  business number means any number (other than a Social Insurance Number) used by the Minister to identify a person for the purposes of this Act. (numéro d’entreprise)

  Commissioner

  Commissioner means, except in sections 39, 105 and 122, the Commissioner of Revenue appointed under section 25 of the Canada Revenue Agency Act. (commissaire)

  judge

  judge, in respect of any matter, means a judge of a superior court having jurisdiction in the province in which the matter arises or a judge of the Federal Court. (juge)

  official

  official means a person who is employed in the service of, who occupies a position of responsibility in the service of, or who is engaged by or on behalf of, His Majesty in right of Canada or a province, or a person who was formerly so employed, who formerly occupied such a position or who formerly was so engaged. (fonctionnaire)

  record

  record means any material on which representations, in any form, of information or concepts are recorded or marked and that is capable of being read or understood by an individual or a computer system or other device. (registre)

  registration threshold

  registration threshold means the amount prescribed by regulation. (seuil d’inscription)

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  Marginal note:Person resident in Canada

  (2) For the purposes of this Part, a person is deemed to be resident in Canada at any time

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    (a) in the case of a corporation, if the corporation is

    • (i) incorporated in Canada and not continued elsewhere, or

    • (ii) continued in Canada;

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    (b) in the case of a partnership, an unincorporated society, a club, an association or organization, or a branch thereof, if the member or participant, or a majority of the members or participants, having management and control thereof is or are resident in Canada at that time;

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    (c) in the case of a labour union, if it is carrying on activities as such in Canada and has a local union or branch in Canada at that time; and

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    (d) in the case of an individual, if the individual is deemed under any of paragraphs 250(1)(a) to (f) of the Income Tax Act to be resident in Canada at that time.

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  Marginal note:Administration or enforcement

  (3) For greater certainty, a reference in this Part to the administration or enforcement of this Act includes the collection of any amount payable under this Act.

Marginal note:Minister’s duty

37 The Minister must administer and enforce this Act and the Commissioner may exercise the powers and perform the duties of the Minister under this Act.

Marginal note:Staff

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  38 (1) The persons that are necessary to administer and enforce this Act are to be appointed, employed or engaged in the manner authorized by law.

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  Marginal note:Delegation of powers

  (2) The Minister may authorize any person who is employed or engaged by the Agency, or occupies a position of responsibility in the Agency, to exercise powers or perform duties of the Minister under this Act, including any judicial or quasi-judicial power or duty.

Marginal note:Administration of oaths

39 Any person, if so designated by the Minister, may administer oaths and take and receive affidavits, declarations and affirmations for the purposes of, or incidental to, the administration or enforcement of this Act, and every person so designated has for those purposes all the powers of a commissioner for administering oaths or taking affidavits.

Marginal note:Waiving the filing of documents

40 If any provision of this Act or a regulation requires a person to file a form or other document in the form and manner prescribed by the Minister (other than a return or a form, or other document, with respect to an election) or to provide information, prescribed by the Minister, the Minister may waive the requirement, but at the Minister’s request the person must provide the document or information by the date set out in the request.

Marginal note:Requirement to register

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  41 (1) A taxpayer must apply to register under this Act on or before the earliest of

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    (a) January 31 of the year following the first year of application, if the taxpayer

    • (i) has Canadian digital services revenue greater than nil

      • (A) for the first year of application, or

      • (B) if the rate referred to in the description of B in subsection 10(2) is greater than nil, for any calendar year that is after 2021 and before the first year of application, and

    • (ii) would meet the conditions set out in paragraphs 10(1)(a) and (b) in respect of a calendar year for which the condition set out in subparagraph (i) is satisfied if the references to “in-scope revenue threshold” in paragraph 10(1)(b) were read as references to “registration threshold”; and

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    (b) January 31 of the year following a calendar year, after the first year of application, for which calendar year the taxpayer

    • (i) has Canadian digital services revenue greater than nil, and

    • (ii) would meet the conditions set out in paragraphs 10(1)(a) and (b) if the references to “in-scope revenue threshold” in paragraph 10(1)(b) were read as references to “registration threshold”.

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  Marginal note:Waiving requirement under subsection (1)

  (2) The Minister may waive a taxpayer’s requirement under subsection (1), but at the Minister’s request the taxpayer must apply to register by the date set out in the request.