Tax Rebate Discounting Act (R.S.C., 1985, c. T-3)

Marginal note:Limitation of discount

• 3 (1) Any discounter who acquires a right to a refund of tax from a client for a consideration that is less than the minimum consideration in relation to the refund of tax is guilty of an offence.

• Marginal note:Determination of consideration

  (2) For the purposes of determining the consideration paid or provided by a discounter for the acquisition of a right to a refund of tax from a client, the discount charged by the discounter includes the amount of any fee or charge levied or made by the discounter, or by any person not acting at arm’s length (within the meaning of the Income Tax Act) with the discounter, for the service of preparing the client’s return of income or for any other service directly related to the discounting transaction.

• Marginal note:Defence

  (3) Subsection (1) does not apply where the refund of tax exceeds the amount estimated to be the refund of tax at the time the right to the refund was acquired if

  • (a) the consideration paid for the right at that time was equal to or greater than the minimum consideration calculated as if the amount estimated to be the refund of tax were the refund of tax; and

  • (b) where the refund of tax, calculated for the purposes of this paragraph without reference to any interest on the overpayment or payment making up the refund, exceeds by ten dollars or more the amount estimated to be the refund of tax, the discounter, forthwith after receipt of the refund, pays or makes every reasonable effort to pay to the client the full amount of the excess and, in the event that the excess is not so paid within thirty days thereafter, forthwith remits the excess, together with a true copy of the notice referred to in paragraph 5(b), to the Receiver General to be held on account of any future tax liability of the client or to be paid to the client on application by the client to the Minister of National Revenue.