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

Marginal note:Liability of directors for failure to deduct

• 227.1 (1) Where a corporation has failed to deduct or withhold an amount as required by subsection 135(3) or 135.1(7) or section 153 or 215, has failed to remit such an amount or has failed to pay an amount of tax for a taxation year as required under Part VII or VIII, the directors of the corporation at the time the corporation was required to deduct, withhold, remit or pay the amount are jointly and severally, or solidarily, liable, together with the corporation, to pay that amount and any interest or penalties relating to it.

• Marginal note:Limitations on liability

  (2) A director is not liable under subsection 227.1(1), unless

  • (a) a certificate for the amount of the corporation’s liability referred to in that subsection has been registered in the Federal Court under section 223 and execution for that amount has been returned unsatisfied in whole or in part;

  • (b) the corporation has commenced liquidation or dissolution proceedings or has been dissolved and a claim for the amount of the corporation’s liability referred to in that subsection has been proved within six months after the earlier of the date of commencement of the proceedings and the date of dissolution; or

  • (c) the corporation has made an assignment or a bankruptcy order has been made against it under the Bankruptcy and Insolvency Act and a claim for the amount of the corporation’s liability referred to in that subsection has been proved within six months after the date of the assignment or bankruptcy order.

• Marginal note:Idem

  (3) A director is not liable for a failure under subsection 227.1(1) where the director exercised the degree of care, diligence and skill to prevent the failure that a reasonably prudent person would have exercised in comparable circumstances.

• Marginal note:Limitation period

  (4) No action or proceedings to recover any amount payable by a director of a corporation under subsection 227.1(1) shall be commenced more than two years after the director last ceased to be a director of that corporation.

• Marginal note:Amount recoverable

  (5) Where execution referred to in paragraph 227.1(2)(a) has issued, the amount recoverable from a director is the amount remaining unsatisfied after execution.

• Marginal note:Preference

  (6) Where a director pays an amount in respect of a corporation’s liability referred to in subsection 227.1(1) that is proved in liquidation, dissolution or bankruptcy proceedings, the director is entitled to any preference that Her Majesty in right of Canada would have been entitled to had that amount not been so paid and, where a certificate that relates to that amount has been registered, the director is entitled to an assignment of the certificate to the extent of the director’s payment, which assignment the Minister is hereby empowered to make.

• Marginal note:Contribution

  (7) A director who has satisfied a claim under this section is entitled to contribution from the other directors who were liable for the claim.

Marginal note:Applying payments under collection agreements

228 Where a payment is made to the Minister on account of tax under this Act, an Act of a province that imposes a tax similar to the tax imposed under this Act, or any two or more such Acts, such part of that payment as is applied by the Minister in accordance with the provisions of a collection agreement entered into under Part III of the Federal-Provincial Fiscal Arrangements and Federal Post-Secondary Education and Health Contributions Act against the tax payable by a taxpayer for a taxation year under this Act discharges the liability of the taxpayer for that tax only to the extent of the part of the payment so applied, notwithstanding that the taxpayer directed that the payment be applied in a manner other than that provided in the collection agreement or made no direction as to its application.

Marginal note:Repeal of s. 229

• 229.1 (1) Section 229 is repealed.

• Marginal note:Coming into force

  (2) Subsection 229.1(1) shall come into force on a day to be fixed by proclamation.

General

Marginal note:Records and books

• 230 (1) Every person carrying on business and every person who is required, by or pursuant to this Act, to pay or collect taxes or other amounts shall keep records and books of account (including an annual inventory kept in prescribed manner) at the person’s place of business or residence in Canada or at such other place as may be designated by the Minister, in such form and containing such information as will enable the taxes payable under this Act or the taxes or other amounts that should have been deducted, withheld or collected to be determined.

• Marginal note:Records and books

  (2) Every qualified donee referred to in paragraphs (a) to (c) of the definition qualified donee in subsection 149.1(1) shall keep records and books of account — in the case of a qualified donee referred to in any of subparagraphs (a)(i) and (iii) and paragraphs (b), (b.1) and (c) of that definition, at an address in Canada recorded with the Minister or designated by the Minister — containing

  • (a) information in such form as will enable the Minister to determine whether there are any grounds for the revocation of its registration under this Act;

  • (b) a duplicate of each receipt containing prescribed information for a donation received by it; and

  • (c) other information in such form as will enable the Minister to verify the donations to it for which a deduction or tax credit is available under this Act.

• Marginal note:Idem, lawyers

  (2.1) For greater certainty, the records and books of account required by subsection 230(1) to be kept by a person carrying on business as a lawyer (within the meaning assigned by subsection 232(1)) whether by means of a partnership or otherwise, include all accounting records of the lawyer, including supporting vouchers and cheques.

• Marginal note:Minister’s requirement to keep records, etc.

  (3) Where a person has failed to keep adequate records and books of account for the purposes of this Act, the Minister may require the person to keep such records and books of account as the Minister may specify and that person shall thereafter keep records and books of account as so required.

• Marginal note:Limitation period for keeping records, etc.

  (4) Every person required by this section to keep records and books of account shall retain

  • (a) the records and books of account referred to in this section in respect of which a period is prescribed, together with every account and voucher necessary to verify the information contained therein, for such period as is prescribed; and

  • (b) all other records and books of account referred to in this section, together with every account and voucher necessary to verify the information contained therein, until the expiration of six years from the end of the last taxation year to which the records and books of account relate.

• Marginal note:Electronic records

  (4.1) Every person required by this section to keep records who does so electronically shall retain them in an electronically readable format for the retention period referred to in subsection 230(4).

• Marginal note:Exemptions

  (4.2) The Minister may, on such terms and conditions as are acceptable to the Minister, exempt a person or a class of persons from the requirement in subsection 230(4.1).

• Marginal note:Exception where no return filed

  (5) Where, in respect of any taxation year, a person referred to in subsection 230(1) has not filed a return with the Minister as and when required by section 150, that person shall retain every record and book of account that is required by this section to be kept and that relates to that taxation year, together with every account and voucher necessary to verify the information contained therein, until the expiration of six years from the day the return for that taxation year is filed.

• Marginal note:Exception where objection or appeal

  (6) Where a person required by this section to keep records and books of account serves a notice of objection or where that person is a party to an appeal to the Tax Court of Canada under this Act, that person shall retain every record, book of account, account and voucher necessary for dealing with the objection or appeal until, in the case of the serving of a notice of objection, the time provided by section 169 to appeal has elapsed or, in the case of an appeal, until the appeal is disposed of and any further appeal in respect thereof is disposed of or the time for filing any such further appeal has expired.

• Marginal note:Exception where demand by Minister

  (7) Where the Minister is of the opinion that it is necessary for the administration of this Act, the Minister may, by registered letter or by a demand served personally, require any person required by this section to keep records and books of account to retain those records and books of account, together with every account and voucher necessary to verify the information contained therein, for such period as is specified in the letter or demand.

• Marginal note:Permission for earlier disposal

  (8) A person required by this section to keep records and books of account may dispose of the records and books of account referred to in this section, together with every account and voucher necessary to verify the information contained therein, before the expiration of the period in respect of which those records and books of account are required to be kept if written permission for their disposal is given by the Minister.

Marginal note:Records re monetary contributions - Canada Elections Act

• 230.1 (1) Every agent authorized under the Canada Elections Act to accept monetary contributions referred to in that Act shall keep records, sufficient to enable each monetary contribution within the meaning assigned by subsection 127(4.1) that they receive and the expenditures that they make to be verified, (including a duplicate of the receipt referred to in subsection 127(3) for each of those monetary contributions) at

  • (a) in the case of an agent other than an official agent of a candidate, the address recorded in the registry of political parties or of electoral district associations referred to in the Canada Elections Act; and

  • (b) in the case of an official agent of a candidate, the agent’s address set out in the nomination papers filed under that Act with the returning officer when the candidate was a prospective candidate or any other address that the Minister designates.

• Marginal note:Information Return

  (2) Each agent to whom subsection (1) applies shall file with the Minister an information return in prescribed form and containing prescribed information. The return is to be filed within the period for the filing of a financial transactions return or an electoral campaign return, as the case may be, under the Canada Elections Act.

• Marginal note:Application of subsections 230(3) to (8)

  (3) Subsections 230(3) to (8) apply, with any modifications that the circumstances require, in respect of the keeping of records by agents as required by subsection (1).

• (4) and (5) [Repealed, 1994, c. 21, s. 106]

• (6) and (7) [Repealed, 2003, c. 19, s. 74(1)]

Marginal note:Definitions

231 In sections 231.1 to 231.8,

authorized person

authorized person means a person authorized by the Minister for the purposes of sections 231.1 to 231.5; (personne autorisée)

document

document includes money, a security and a record; (document)

dwelling-house

dwelling-house means the whole or any part of a building or structure that is kept or occupied as a permanent or temporary residence and includes

• (a) a building within the curtilage of a dwelling-house that is connected to it by a doorway or by a covered and enclosed passageway, and

• (b) a unit that is designed to be mobile and to be used as a permanent or temporary residence and that is being used as such a residence; (maison d’habitation)

judge

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

Marginal note:Information gathering

• 231.1 (1) An authorized person may, at all reasonable times, for any purpose related to the administration or enforcement of this Act,

  • (a) inspect, audit or examine any document, including books and records, of a taxpayer or any other person that may be relevant in determining the obligations or entitlements of the taxpayer or any other person under this Act;

  • (b) examine any property or process of, or matter relating to, a taxpayer or any other person, an examination of which may assist the authorized person in determining the obligations or entitlements of the taxpayer or any other person under this Act;

  • (c) enter any premises or place where any business is carried on, any property is kept, anything is done in connection with any business or any books or records are or should be kept, except that, if the premises or place is a dwelling-house, the authorized person may enter the dwelling-house without the consent of the occupant only under the authority of a warrant under subsection (3);

  • (d) require a taxpayer or any other person to give the authorized person all reasonable assistance, to answer all proper questions relating to the administration or enforcement of this Act and

    • (i) to attend with the authorized person, at a place designated by the authorized person, or by video-conference or by another form of electronic communication, and to answer the questions orally, and

    • (ii) to answer the questions in writing, in any form specified by the authorized person; and

  • (e) require a taxpayer or any other person to give the authorized person all reasonable assistance with anything the authorized person is authorized to do under this Act.

• (2) [Repealed, 2022, c. 19, s. 54]

• Marginal note:Application

  (3) Where, on ex parte application by the Minister, a judge is satisfied by information on oath that

  • (a) there are reasonable grounds to believe that a dwelling-house is a premises or place referred to in paragraph 231.1(1)(c),

  • (b) entry into the dwelling-house is necessary for any purpose relating to the administration or enforcement of this Act, and

  • (c) entry into the dwelling-house has been, or there are reasonable grounds to believe that entry will be, refused,

  the judge may issue a warrant authorizing an authorized person to enter the dwelling-house subject to such conditions as are specified in the warrant but, where the judge is not satisfied that entry into the dwelling-house is necessary for any purpose relating to the administration or enforcement of this Act, the judge may

  • (d) order the occupant of the dwelling-house to provide to an authorized person reasonable access to any document or property that is or should be kept in the dwelling-house, and

  • (e) make such other order as is appropriate in the circumstances to carry out the purposes of this Act,

  to the extent that access was or may be expected to be refused and that the document or property is or may be expected to be kept in the dwelling-house.