Select Luxury Items Tax Act (S.C. 2022, c. 10, s. 135)

Marginal note:Acquisition of debtor’s property

144 For the purpose of collecting debts owed by a person to Her Majesty in right of Canada under this 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 any manner that the Minister considers reasonable.

Marginal note:Money seized from debtor

• 145 (1) If the Minister has knowledge or suspects that a person is holding money that was seized by a police officer in the course of administering or enforcing the criminal law of Canada from another person that is liable to pay any amount under this Act (in this section referred to as the “debtor”) and that is restorable to the debtor, the Minister may in writing require the person to turn over the money otherwise restorable to the debtor, in whole or in part, to the Receiver General on account of the debtor’s liability under this Act.

• Marginal note:Receipt issued by Minister

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

Marginal note:Seizure

• 146 (1) If a person fails to pay an amount as required under this Act, the Minister may in writing give 30 days notice to the person, addressed to their latest known address, of the Minister’s intention to direct that the person’s things be seized and disposed of. If the person fails to make the payment before the expiry of the 30 days, the Minister may issue a certificate of the failure and direct that the person’s things be seized.

• Marginal note:Disposition

  (2) Things that have been seized under subsection (1) must be kept for 10 days at the expense and risk of the owner. If the owner does not pay the amount due together with all expenses within the 10 days, the Minister may dispose of the things in a manner the Minister considers appropriate in the circumstances.

• Marginal note:Proceeds of disposition

  (3) Any surplus resulting from a disposition, after deduction of the amount owing and all expenses, must be paid or returned to the owner of the things seized.

• Marginal note:Exemptions from seizure

  (4) Any thing of any person in default that would be exempt from seizure under a writ of execution issued by a superior court of the province in which the seizure is made is exempt from seizure under this section.

Marginal note:Person leaving Canada or defaulting

• 147 (1) If the Minister suspects that a person has left or is about to leave Canada, the Minister may, before the day otherwise fixed for payment, by notice to the person served personally or sent by confirmed delivery service addressed to their latest known address, demand payment of any amount for which the person is liable under this Act or would be so liable if the time for payment had arrived, and the amount must be paid without delay despite any other provision of this Act.

• Marginal note:Seizure

  (2) If a person fails to pay an amount required under subsection (1), the Minister may direct that things of the person be seized, and subsections 146(2) to (4) apply, with any modifications that the circumstances require.

Marginal note:Definitions

• 148 (1) The following definitions apply in this section.

  assessed period

  assessed period of a person, in respect of an authorization under subsection (2) relating to a particular reporting period of the person, means

  • (a) if the hearing date is before the last day of the particular reporting period, the period beginning on the first day of the particular reporting period and ending on the assessment date; and

  • (b) in any other case, the particular reporting period. (période visée)

  assessment date

  assessment date, in respect of an authorization under subsection (2), means the day immediately before the hearing date. (date de cotisation)

  hearing date

  hearing date, in respect of an authorization under subsection (2), means the day on which a judge hears the application for the authorization. (date d’audience)

• Marginal note:Authorization to assess and take collection action

  (2) Despite section 139, if, on ex parte application by the Minister relating to a particular reporting period of a person, a judge is satisfied that there are reasonable grounds to believe that the net tax for the period, determined without reference to this section, would be a positive amount and that the collection of all or any part of that net tax would be jeopardized by a delay in its collection, the judge must, on any terms that the judge considers reasonable in the circumstances, authorize the Minister to, without delay,

  • (a) assess the net tax for the assessed period, determined in accordance with subsection (3); and

  • (b) take any of the actions described in sections 141 to 146 in respect of that amount.

• Marginal note:Effect of authorization

  (3) For the purposes of this Act, if an authorization is granted under subsection (2) in respect of an application relating to a particular reporting period of a person,

  • (a) if the hearing date is before the last day of the particular reporting period, the following periods are each deemed to be a separate reporting period of the person:

    • (i) the assessed period, and

    • (ii) the period beginning on the hearing date and ending on the last day of the particular reporting period;

  • (b) the day on or before which the person is required to file a return under section 55 for the assessed period is deemed to be the hearing date;

  • (c) the net tax for the assessed period is deemed to be equal to the amount that would be the net tax for the period if, on the assessment date, the person were to claim in a return filed under section 55 for the period all amounts, each of which is an amount that the person would be entitled on that day to claim as a rebate under Subdivision A of Division 4 of Part 1 or a negative amount that is required to be added in determining the net tax for the period;

  • (d) the net tax for the assessed period is deemed to have become due to the Receiver General on the hearing date;

  • (e) if, in assessing the net tax for the assessed period, the Minister takes into account an amount that the person would be entitled to claim as a rebate under Subdivision A of Division 4 of Part 1 or a negative amount that is required to be added in determining the net tax for the period, the person is deemed to have claimed the amount in a return filed under section 55 for the assessed period; and

  • (f) sections 82, 107, 116, 117 and 119 apply as if the net tax for the assessed period were not required to be paid, and the return for that period were not required to be filed, until the last day of the period described in subsection (9).

• Marginal note:Affidavits

  (4) Statements contained in an affidavit filed in the context of an application under this section may be based on belief in which case it must include the grounds for that belief.

• Marginal note:Service of authorization and notice of assessment

  (5) An authorization granted under subsection (2) in respect of a person must be served by the Minister on the person within 72 hours after it is granted, except if the judge orders the authorization to be served at some other time specified in the authorization, and a notice of assessment for the assessed period must be served on the person together with the authorization.

• Marginal note:How service effected

  (6) For the purpose of subsection (5), service on a person must be effected by personal service on the person or service in accordance with the directions of a judge.

• Marginal note:Application to judge for direction

  (7) If service cannot reasonably be effected as and when required under this section, the Minister may, as soon as practicable, apply to a judge for further direction.

• Marginal note:Review of authorization

  (8) If a judge of a court has granted an authorization under subsection (2) in respect of a person, the person may, on six clear days notice to the Deputy Attorney General of Canada, apply to a judge of the court to review the authorization.

• Marginal note:Limitation period for review application

  (9) An application by a person under subsection (8) to review an authorization must be made

  • (a) within 30 days after the day on which the authorization was served on the person in accordance with this section; or

  • (b) within any further time that a judge may allow, on being satisfied that the application was made as soon as practicable.

• Marginal note:Hearing in camera

  (10) An application by a person under subsection (8) may, on the application of the person, be heard in private, if the person establishes to the satisfaction of the judge that the circumstances of the case justify proceedings heard in private.

• Marginal note:Disposition of application

  (11) On an application under subsection (8), the judge must determine the question summarily and may confirm, vary or set aside the authorization and make any other order that the judge considers appropriate.

• Marginal note:Effect of setting aside authorization

  (12) If an authorization is set aside under subsection (11), subsection (3) does not apply in respect of the authorization and any assessment made as a result of the authorization is deemed to be void.

• Marginal note:Directions

  (13) If any question arises as to the course to be followed in connection with anything done or being done under this section and there is no relevant direction in this section, a judge may give any direction with regard to the course to be followed that, in the opinion of the judge, is appropriate.

• Marginal note:No appeal from review order

  (14) No appeal lies from an order of a judge made under subsection (11).

Marginal note:Compliance by unincorporated bodies

• 149 (1) If any amount is required to be paid or any other thing is required to be done by or under this Act by a person (in this section referred to as the “body”) that is not an individual, estate or succession of a deceased individual, partnership, corporation, trust or joint venture, it is the joint and several, or solidary, liability and responsibility of

  • (a) every member of the body holding office as president, chairperson, treasurer, secretary or similar officer of the body,

  • (b) if there are no officers of the body referred to in paragraph (a), every member of any committee having management of the affairs of the body, and

  • (c) if there are no officers of the body referred to in paragraph (a) and no committee referred to in paragraph (b), every member of the body,

  to pay that amount or to comply with the requirement, and if the amount is paid or the requirement is fulfilled by an officer of the body referred to in paragraph (a), a member of a committee referred to in paragraph (b) or a member of the body, it is considered as compliance with the requirement.

• Marginal note:Assessment

  (2) The Minister may assess any person for any amount for which the person is liable under this section and, if the Minister sends a notice of assessment, sections 72 and 92 to 106 are applicable, with any modifications that the circumstances require.

• Marginal note:Limitation

  (3) An assessment of a person under subsection (2) must not

  • (a) include any amount that the body was liable to pay before the day the person became jointly and severally, or solidarily, liable;

  • (b) include any amount that the body became liable to pay after the day the person ceased to be jointly and severally, or solidarily, liable; or

  • (c) be made more than two years after the day on which the person ceased to be jointly and severally, or solidarily, liable unless the person was grossly negligent in the carrying out of any obligation imposed on the body by or under this Act or made, or participated in, assented to or acquiesced in the making of, a false statement or omission in a return, application, form, certificate, statement, invoice or answer made by the body.

Marginal note:Definition of transaction

• 150 (1) In this section, transaction has the meaning assigned by subsection 68(1).

• Marginal note:Tax liability — transfers not at arm’s length

  (2) If at any time a person transfers property, either directly or indirectly, by means of a trust or by any other means, to

  • (a) the transferor’s spouse or common-law partner or an individual that has since become the transferor’s spouse or common-law partner,

  • (b) an individual that was under 18 years of age, or

  • (c) another person with whom the transferor was not dealing at arm’s length,

  the transferee and transferor are jointly and severally, or solidarily, liable to pay under this Act an amount equal to the lesser of

  • (d) the amount determined by the formula

    A – B

    where

    A

    is the amount, if any, by which the fair market value of the property at that time exceeds the fair market value at that time of the consideration given by the transferee for the transfer of the property, and

    B

    is the amount, if any, by which the amount assessed the transferee under subsection 325(2) of the Excise Tax Act, paragraph 97.44(1)(b) of the Customs Act, subsection 160(2) of the Income Tax Act, subsection 297(3) of the Excise Act, 2001, subsection 161(3) of the Greenhouse Gas Pollution Pricing Act or subsection 80(3) of the Underused Housing Tax Act in respect of the property exceeds the amount paid by the transferor in respect of the amount so assessed, and

  • (e) the total of all amounts each of which is

    • (i) an amount that the transferor is liable to pay under this Act for the reporting period of the transferor that includes that time or any preceding reporting period of the transferor, or

    • (ii) interest or penalty for which the transferor is liable as of that time,

  but nothing in this subsection limits the liability of the transferor under this Act.

• Marginal note:Fair market value of undivided interest

  (3) For the purpose of this section, the fair market value at any time of an undivided interest in a property, expressed as a proportionate interest in that property, is, subject to subsection (6), deemed to be equal to the same proportion of the fair market value of that property at that time.

• Marginal note:Assessment

  (4) The Minister may at any time assess a transferee in respect of any amount payable by reason of this section, and the provisions of sections 72 and 92 to 106 apply, with any modifications that the circumstances require.

• Marginal note:Rules applicable

  (5) If a transferor and transferee have, by reason of subsection (2), become jointly and severally, or solidarily, liable in respect of part or all of the liability of the transferor under this Act, the following rules apply:

  • (a) a payment by the transferee on account of the transferee’s liability must, to the extent of the payment, discharge their liability; and

  • (b) a payment by the transferor on account of the transferor’s liability only discharges the transferee’s liability to the extent that the payment operates to reduce the transferor’s liability to an amount less than the amount in respect of which the transferee was, by subsection (2), made jointly and severally, or solidarily, liable.

• Marginal note:Transfers to spouse or common-law partner

  (6) Despite subsection (2), if at any time an individual transfers property to the individual’s spouse or common-law partner under a decree, order or judgment of a competent tribunal or under a written separation agreement and, at that time, the individual and the individual’s spouse or common-law partner were separated and living apart as a result of the breakdown of their marriage or common-law partnership as defined in subsection 248(1) of the Income Tax Act, for the purposes of paragraph (2)(d), the fair market value at that time of the property so transferred is deemed to be nil, but nothing in this subsection limits the liability of the individual under this Act.

• Marginal note:Anti-avoidance rules

  (7) For the purposes of this section, if a person transfers property to another person as part of a transaction or series of transactions, the following rules apply:

  • (a) the transferor is deemed to not be dealing at arm’s length with the transferee at the time of the transfer of the property if

    • (i) the transferor and the transferee do not deal at arm’s length at any time during the period beginning immediately prior to the transaction or series of transactions and ending immediately after the transaction or series of transactions, and

    • (ii) it is reasonable to conclude that one of the purposes of undertaking or arranging the transaction or series of transactions is to avoid joint and several, or solidary, liability of the transferee and the transferor under this section for an amount payable under this Act;

  • (b) an amount that the transferor is liable to pay under this Act (including, for greater certainty, an amount that the transferor is liable to pay under this section, regardless of whether the Minister has made an assessment under subsection (4) in respect of that amount) is deemed to have become payable in the reporting period of the transferor in which the property was transferred, if it is reasonable to conclude that one of the purposes of the transfer of the property is to avoid the payment of a future charge debt by the transferor or transferee; and

  • (c) the amount determined for A in paragraph (2)(d) is deemed to be the greater of

    • (i) the amount otherwise determined for A in paragraph (2)(d) without reference to this paragraph, and

    • (ii) the amount determined by the formula

      A − B

      where

      A

      is the fair market value of the property at the time of the transfer, and

      B

      is the fair market value, at its lowest at any time during the period beginning immediately prior to the transaction or series of transactions and ending immediately after the transaction or series of transactions, of the consideration given by the transferee for the transfer of the property (other than any part of the consideration that is in a form that is cancelled or extinguished during that period) provided that the consideration is held by the transferor at that time.