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

Full Document:  

Act current to 2022-09-22 and last amended on 2022-09-01. Previous Versions

PART IIncome Tax (continued)

DIVISION IReturns, Assessments, Payment and Appeals (continued)

Payment of Tax (continued)

Marginal note:Where excess refunded

  •  (1) Where at any time the Minister determines that an amount has been refunded to a taxpayer for a taxation year in excess of the amount to which the taxpayer was entitled as a refund under this Act, the following rules apply:

    • (a) the excess shall be deemed to be an amount that became payable by the taxpayer on the day on which the amount was refunded; and

    • (b) the taxpayer shall pay to the Receiver General interest at the prescribed rate on the excess (other than any portion thereof that can reasonably be considered to arise as a consequence of the operation of section 122.5, 122.61 or 122.8) from the day it became payable to the date of payment.

  • Marginal note:Liability for refund by reason of s. 122.5

    (1.1) If a person is a qualified relation of an individual (within the meaning assigned by subsection 122.5(1)), in relation to one or more months specified for a taxation year, the person and the individual are jointly and severally, or solidarily, liable to pay the lesser of

    • (a) any excess described in subsection (1) that was refunded in respect of the taxation year to, or applied to a liability of, the individual as a consequence of the operation of section 122.5, and

    • (b) the total of the amounts deemed by subsection 122.5(3) to have been paid by the individual during those specified months.

  • Marginal note:Liability for refund — Climate Action Incentive

    (1.2) If a person is a qualified relation of an individual (within the meaning assigned by subsection 122.8(1)), in relation to one or more months specified for a taxation year, the person and the individual are jointly and severally, or solidarily, liable to pay the lesser of

    • (a) any excess described in subsection (1) that was refunded in respect of the taxation year to, or applied to a liability of, the individual as a consequence of the operation of section 122.8; and

    • (b) the total of the amounts deemed by subsection 122.8(4) to have been paid by the individual during those specified months.

  • Marginal note:Liability under other provisions

    (2) Subsections (1.1) and (1.2) do not limit a person’s liability under any other provision of this Act.

  • Marginal note:Liability for refunds by reason of section 122.61

    (2.1) If a person was a cohabiting spouse or common-law partner (within the meaning assigned by section 122.6) of an individual at the end of a taxation year, the person and the individual are jointly and severally, or solidarily, liable to pay any excess described in subsection (1) that was refunded in respect of the year to, or applied to a liability of, the individual as a consequence of the operation of section 122.61 if the person was the individual’s cohabiting spouse or common-law partner at the time the excess was refunded, but nothing in this subsection is deemed to limit the liability of any person under any other provision of this Act.

  • Marginal note:Liability for excess refunds under section 126.1 to partners

    (2.2) Every taxpayer who, on the day on which an amount has been refunded to, or applied to the liability of, a member of a partnership as a consequence of the operation of subsection 126.1(7) or (13) in excess of the amount to which the member was so entitled, is a member of that partnership is jointly and severally, or solidarily, liable with each other taxpayer who on that day is a member of the partnership to pay the excess and to pay interest on the excess, but nothing in this subsection is deemed to limit the liability of any person under any other provision of this Act.

  • Marginal note:Assessment

    (3) The Minister may at any time assess a taxpayer in respect of any amount payable by the taxpayer because of any of subsections (1) to (1.2) or for which the taxpayer is liable because of subsection (2.1) or (2.2), and the provisions of this Division (including, for greater certainty, the provisions in respect of interest payable) apply, with any modifications that the circumstances require, in respect of an assessment made under this section, as though it were made under section 152 in respect of taxes payable under this Part, except that no interest is payable on an amount assessed in respect of an excess referred to in subsection (1) that can reasonably be considered to arise as a consequence of the operation of section 122.5, 122.61 or 122.8.

  • Marginal note:Where amount applied to liability

    (4) Where an amount is applied to a liability of a taxpayer to Her Majesty in right of Canada in excess of the amount to which the taxpayer is entitled as a refund under this Act, this section applies as though that amount had been refunded to the taxpayer on the day it was so applied.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • R.S., 1985, c. 1 (5th Supp.), s. 160.1
  • 1994, c. 7, Sch. II, s. 132, Sch. VII, s. 16, c. 8, s. 25
  • 2000, c. 12, s. 142
  • 2002, c. 9, s. 43
  • 2013, c. 34, ss. 142(E), 314
  • 2022, c. 10, s. 18

Marginal note:Joint and several liability in respect of amounts received out of or under RRSP

  •  (1) Where

    • (a) an amount is received out of or under a registered retirement savings plan by a taxpayer other than an annuitant (within the meaning assigned by subsection 146(1)) under the plan, and

    • (b) that amount or part thereof would, but for paragraph (a) of the definition benefit in subsection 146(1), be received by the taxpayer as a benefit (within the meaning assigned by that definition),

    the taxpayer and the last annuitant under the plan are jointly and severally, or solidarily, liable to pay a part of the annuitant’s tax under this Part for the year of the annuitant’s death equal to that proportion of the amount by which the annuitant’s tax for the year is greater than it would have been if it were not for the operation of subsection 146(8.8) that the total of all amounts each of which is an amount determined under paragraph (b) in respect of the taxpayer is of the amount included in computing the annuitant’s income because of that subsection, but nothing in this subsection limits the liability of the annuitant under any other provision of this Act or of the taxpayer for the interest that the taxpayer is liable to pay under this Act on an assessment in respect of the amount that the taxpayer is liable to pay because of this subsection.

  • Marginal note:Joint and several liability in respect of amounts received out of or under RRIF

    (2) Where

    • (a) an amount is received out of or under a registered retirement income fund by a taxpayer other than an annuitant (within the meaning assigned by subsection 146.3(1)) under the fund, and

    • (b) that amount or part thereof would, but for paragraph 146.3(5)(a), be included in computing the taxpayer’s income for the year of receipt pursuant to subsection 146.3(5),

    the taxpayer and the annuitant are jointly and severally, or solidarily, liable to pay a part of the annuitant’s tax under this Part for the year of the annuitant’s death equal to that proportion of the amount by which the annuitant’s tax for the year is greater than it would have been if it were not for the operation of subsection 146.3(6) that the amount determined under paragraph (b) is of the amount included in computing the annuitant’s income because of that subsection, but nothing in this subsection limits the liability of the annuitant under any other provision of this Act or of the taxpayer for the interest that the taxpayer is liable to pay under this Act on an assessment in respect of the amount that the taxpayer is liable to pay because of this subsection.

  • Marginal note:Joint and several liability in respect of a qualifying trust annuity

    (2.1) If a taxpayer is deemed by section 75.2 to have received at any time an amount out of or under an annuity that is a qualifying trust annuity with respect to the taxpayer, the taxpayer, the annuitant under the annuity and the policyholder are jointly and severally, or solidarily, liable to pay the part of the taxpayer’s tax under this Part for the taxation year of the taxpayer that includes that time that is equal to the amount, if any, determined by the formula

    A – B

    where

    A
    is the amount of the taxpayer’s tax under this Part for that taxation year; and
    B
    is the amount that would be the taxpayer’s tax under this Part for that taxation year if no amount were deemed by section 75.2 to have been received by the taxpayer out of or under the annuity in that taxation year.
  • Marginal note:No limitation on liability

    (2.2) Subsection (2.1) limits neither

    • (a) the liability of the taxpayer referred to in that subsection under any other provision of this Act; nor

    • (b) the liability of an annuitant or policyholder referred to in that subsection for the interest that the annuitant or policyholder is liable to pay under this Act on an assessment in respect of the amount that the annuitant or policyholder is liable to pay because of that subsection.

  • Marginal note:Assessment

    (3) The Minister may at any time assess a taxpayer in respect of any amount payable because of this section, and the provisions of this Division (including, for greater certainty, the provisions in respect of interest payable) apply, with any modifications that the circumstances require, in respect of an assessment made under this section as though it had been made under section 152 in respect of taxes payable under this Part.

  • Marginal note:Rules applicable

    (4) If a taxpayer and an annuitant have, by virtue of subsection (1) or (2), become jointly and severally, or solidarily, liable in respect of part or all of a liability of the annuitant under this Act, the following rules apply:

    • (a) a payment by the taxpayer on account of the taxpayer’s liability shall to the extent thereof discharge their liability; but

    • (b) a payment by the annuitant on account of the annuitant’s liability discharges the taxpayer’s liability only to the extent that the payment operates to reduce the annuitant’s liability to an amount less than the amount in respect of which the taxpayer was, by subsection (1) or (2), as the case may be, made jointly and severally, or solidarily, liable.

  • Marginal note:Rules applicable — qualifying trust annuity

    (5) If an annuitant or policyholder has, because of subsection (2.1), become jointly and severally, or solidarily, liable with a taxpayer in respect of part or all of a liability of the taxpayer under this Act, the following rules apply:

    • (a) a payment by the annuitant on account of the annuitant’s liability, or by the policyholder on account of the policyholder’s liability, shall to the extent of the payment discharge their liability, but

    • (b) a payment by the taxpayer on account of the taxpayer’s liability only discharges the annuitant’s and the policyholder’s liability to the extent that the payment operates to reduce the taxpayer’s liability to an amount less than the amount in respect of which the annuitant and the policyholder were, by subsection (2.1), made liable.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • R.S., 1985, c. 1 (5th Supp.), s. 160.2
  • 2013, c. 34, ss. 143, 315

Marginal note:Joint and several liability — registered disability savings plan

  •  (1) Where, in computing income for a taxation year, a taxpayer is required to include an amount in respect of a disability assistance payment (as defined in subsection 146.4(1)) that is deemed by subsection 146.4(10) to have been made at any particular time from a registered disability savings plan, the taxpayer and each holder (as defined in subsection 146.4(1)) of the plan immediately after the particular time are jointly and severally, or solidarily, liable to pay the part of the taxpayer’s tax under this Part for that taxation year that is equal to the amount, if any, determined by the formula

    A - B

    where

    A
    is the amount of the taxpayer’s tax under this Part for that taxation year; and
    B
    is the amount that would be the taxpayer’s tax under this Part for that taxation year if no disability assistance payment were deemed by subsection 146.4(10) to have been paid from the plan at the particular time.
  • Marginal note:No limitation on liability

    (2) Subsection (1) limits neither

    • (a) the liability of the taxpayer referred to in that subsection under any other provision of this Act, nor

    • (b) the liability of any holder referred to in that subsection for the interest that the holder is liable to pay under this Act on an assessment in respect of the amount that the holder is liable to pay because of that subsection.

  • Marginal note:Rules applicable — registered disability savings plans

    (3) Where a holder (as defined in subsection 146.4(1)) of a registered disability savings plan has, because of subsection (1), become jointly and severally, or solidarily, liable with a taxpayer in respect of part or all of a liability of the taxpayer under this Act, the following rules apply:

    • (a) a payment by the holder on account of the holder’s liability shall to the extent of the payment discharge the holder’s liability, but

    • (b) a payment by the taxpayer on account of the taxpayer’s liability only discharges the holder’s liability to the extent that the payment operates to reduce the taxpayer’s liability to an amount less than the amount in respect of which the holder was, by subsection (1), made liable.

  • Marginal note:Assessment

    (4) The Minister may at any time assess a taxpayer in respect of any amount payable because of this section, and the provisions of this Division (including, for greater certainty, the provisions in respect of interest payable) apply, with any modifications that the circumstances require, in respect of an assessment made under this section as though it had been made under section 152 in respect of taxes payable under this Part.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2007, c. 35, s. 118

Marginal note:Liability in respect of amounts received out of or under RCA trust

  •  (1) If an amount required to be included in the income of a taxpayer because of paragraph 56(1)(x) is received by a person with whom the taxpayer is not dealing at arm’s length, that person is jointly and severally, or solidarily, liable with the taxpayer to pay a part of the taxpayer’s tax under this Part for the taxation year in which the amount is received equal to the amount by which the taxpayer’s tax for the year exceeds the amount that would be the taxpayer’s tax for the year if the amount had not been received, but nothing in this subsection limits the liability of the taxpayer under any other provision of this Act or of the person for the interest that the person is liable to pay under this Act on an assessment in respect of the amount that the person is liable to pay because of this subsection.

  • Marginal note:Assessment

    (2) The Minister may at any time assess a person in respect of any amount payable because of this section, and the provisions of this Division (including, for greater certainty, the provisions in respect of interest payable) apply, with any modifications that the circumstances require, in respect of an assessment made under this section as though it had been made under section 152 in respect of taxes payable under this Part.

  • Marginal note:Rules applicable

    (3) If a taxpayer and another person have, by virtue of subsection (1), become jointly and severally, or solidarily, liable in respect of part or all of a liability of the taxpayer under this Act, the following rules apply:

    • (a) a payment by the other person on account of the other person’s liability shall to the extent thereof discharge their liability; but

    • (b) a payment by the taxpayer on account of the taxpayer’s liability discharges the other person’s liability only to the extent that the payment operates to reduce the taxpayer’s liability to an amount less than the amount in respect of which the other person was, by subsection (1), made jointly and severally, or solidarily, liable.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • R.S., 1985, c. 1 (5th Supp.), s. 160.3
  • 2013, c. 34, ss. 144, 316

Marginal note:Liability in respect of transfers by insolvent corporations

  •  (1) If property is transferred at any time by a corporation to a taxpayer with whom the corporation does not deal at arm’s length at that time and the corporation is not entitled because of subsection 61.3(3) to deduct an amount under section 61.3 in computing its income for a taxation year because of the transfer or because of the transfer and one or more other transactions, the taxpayer is jointly and severally, or solidarily, liable with the corporation to pay the lesser of the corporation’s tax payable under this Part for the year and 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 for the property, but nothing in this subsection limits the liability of the corporation under any other provision of this Act or of the taxpayer for the interest that the taxpayer is liable to pay under this Act on an assessment in respect of the amount that the taxpayer is liable to pay because of this subsection.

  • Marginal note:Indirect transfers

    (2) Where

    • (a) property is transferred at any time from a taxpayer (in this subsection referred to as the “transferor”) to another taxpayer (in this subsection referred to as the “transferee”) with whom the transferor does not deal at arm’s length,

    • (b) the transferor is liable because of subsection 160.4(1) or this subsection to pay an amount of the tax of another person (in this subsection referred to as the “debtor”) under this Part, and

    • (c) it can reasonably be considered that one of the reasons of the transfer would, but for this subsection, be to prevent the enforcement of this section,

    the transferee is jointly and severally, or solidarily, liable with the transferor and the debtor to pay an amount of the debtor’s tax under this Part equal to the lesser of the amount of that tax that the transferor was liable to pay at that time and 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 for the property, but nothing in this subsection limits the liability of the debtor or the transferor under any provision of this Act or of the transferee for the interest that the transferee is liable to pay under this Act on an assessment in respect of the amount that the transferee is liable to pay because of this subsection.

  • Marginal note:Assessment

    (3) The Minister may at any time assess a person in respect of any amount payable by the person because of this section, and the provisions of this Division (including, for greater certainty, the provisions in respect of interest payable) apply, with any modifications that the circumstances require, in respect of an assessment made under this section, as though it had been made under section 152 in respect of taxes payable under this Part.

  • Marginal note:Rules applicable

    (4) If a corporation and another person have, because of subsection (1) or (2), become jointly and severally, or solidarily, liable in respect of part or all of a liability of the corporation under this Act

    • (a) a payment by the other person on account of that person’s liability shall to the extent thereof discharge their liability; and

    • (b) a payment by the corporation on account of the corporation’s liability discharges the other person’s liability only to the extent that the payment operates to reduce the corporation’s liability to an amount less than the amount in respect of which the other person was, by subsection (1) or (2), as the case may be, made jointly and severally, or solidarily, liable.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1995, c. 21, s. 40
  • 2013, c. 34, ss. 145, 317
 
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