The following electronic version is for informational purposes only.
The printed version remains the official version.
Certified correct as passed Third Reading on the 30th day of April, 2015
Craig James, Clerk of the House
HONOURABLE MICHAEL DE JONG
MINISTER OF FINANCE
HER MAJESTY, by and with the advice and consent of the Legislative Assembly of the Province of British Columbia, enacts as follows:
1 Section 1 of the Liquefied Natural Gas Income Tax Act, S.B.C. 2014, c. 34, is amended
(a) by adding the following definitions:
"applicable percentage",
(a) in relation to a taxation year that begins on or after January 1, 2017 and before January 1, 2037, means 3.5%, and
(b) in relation to a taxation year that begins on or after January 1, 2037, means 5%;
"assessable amount", in relation to an assessment of a taxpayer for a taxation year, means
(a) any tax payable under this Act by the taxpayer for the taxation year,
(b) any penalties payable under this Act by the taxpayer in relation to the taxation year, and
(c) any interest payable under this Act by the taxpayer in relation to tax or penalties referred to in paragraphs (a) and (b);
"balance-due date", in relation to a taxpayer for a taxation year, means the day the taxpayer must pay the amount remaining unpaid of the tax payable under this Act for the taxation year;
"band" has the same meaning as in section 2 of the Indian Act;
"commercial debt obligation", in relation to a taxpayer or partnership that is a debtor, means a debt obligation issued by the debtor the proceeds of which are used by the debtor for the purpose of gaining or producing income from an LNG source, but does not include
(a) that portion of the debt obligation the proceeds of which are not used by the debtor for the purpose of gaining or producing income from an LNG source, or
(b) that portion of the debt obligation the proceeds of which are used by the debtor, or that portion of the debt obligation reasonably considered to have been issued by the debtor to obtain proceeds in order for the debtor, to pay an amount that is a financing charge described in paragraph (a), (b) or (c) of the definition of "financing charge" in this section;
"commissioner" means
(a) subject to paragraph (b), the Commissioner of Income Tax appointed under the Income Tax Act, or
(b) another person designated under section 124.70 by the minister to administer this Act;
"determinable amount", in relation to a taxpayer for a taxation year in respect of an LNG source, means any of the following:
(a) the taxpayer's net operating income for the taxation year from the LNG source;
(b) the taxpayer's net operating loss for the taxation year from the LNG source;
(c) the taxpayer's net income for the taxation year from the LNG source;
(d) the balance of the taxpayer's capital investment account for the LNG source at the end of the taxation year;
(e) the amount of tax, if any, deemed by section 123 [deemed payment – closure tax credit] to be paid on account of the taxpayer's tax payable under this Act for the taxation year in respect of the LNG source;
"determinable partnership amount", in relation to a partnership for a fiscal period in respect of an LNG source, means any of the following:
(a) the amounts referred to in section 107 (1) (a) to (c) [income and loss of partnership] in respect of the partnership for the fiscal period in respect of the LNG source;
(b) the balance of the partnership's capital investment account for the LNG source at the end of the fiscal period;
(c) the balance of the partnership's adjusted capital investment account for the LNG source at the end of the fiscal period;
(d) the partnership's eligible expenditures in respect of the applicable LNG facility;
(e) any other amount, in respect of the partnership for the fiscal period, that the commissioner considers relevant in computing an amount referred to in section 98 (a) to (f) for a member of the partnership in respect of the LNG source;
"determination", in relation to a determination under Part 8.3, includes a redetermination;
"feedstock spur pipeline inlet" means a location, designated by regulation, on a feedstock pipeline;
"forgiven amount" means a forgiven amount as defined in section 124.12 [debt forgiveness rules];
"Indian" has the same meaning as in section 2 of the Indian Act;
"Indian Act" means the Indian Act (Canada);
"information return" means an information return that is provided for in the regulations and required to be filed under section 124.407 [demand for information return] or the regulations;
"instalment base", in relation to a taxpayer, means the taxpayer's instalment base determined under section 124.351 for a taxation year in respect of an LNG source;
"instalment-due date", in relation to a taxpayer for a taxation year, means each of the following:
(a) the day that is 3 months after the end of the taxpayer's preceding taxation year;
(b) the day that is 6 months after the end of the taxpayer's preceding taxation year;
(c) the day that is 9 months after the end of the taxpayer's preceding taxation year;
(d) the day that is 12 months after the end of the taxpayer's preceding taxation year;
"normal reassessment period" means the period referred to in section 124.311 (1) (b) for a taxpayer for a taxation year in respect of an LNG source;
"normal redetermination period" means the period referred to in section 124.342 (1) (b) for a partnership for a fiscal period in respect of an LNG source;
"notional tax benefit" means a taxpayer's notional tax benefit for a taxation year in respect of an LNG source as determined under section 124.371;
"partnership return" means a partnership return required to be filed under section 124.331 [partnership returns – general rule] or 124.332 [partnership return required on demand];
"registered", when used in relation to a person or partnership, means registered under section 124.21 in respect of an LNG source;
"return" means an information return, a partnership return or a tax return;
"tax benefit" means
(a) a reduction, avoidance or deferral of tax, or of another amount, payable under this Act, or
(b) an increase in a refund of tax, or of another amount, under this Act;
"tax return" means a tax return required to be filed under any of the following sections:
(a) section 124.300 [tax returns – general rule];
(b) section 124.301 [tax return required to be filed by person dealing with property or business of taxpayer];
(c) section 124.302 [tax return required on demand];
"taxpayer information" means information of any kind and in any form relating to one or more taxpayers
(a) that is obtained for the purposes of this Act by or on behalf of the minister, or
(b) that is prepared from information referred to in paragraph (a),
but does not include information that does not directly or indirectly reveal the identity of the taxpayer to whom the information relates; ,
(b) by repealing the definitions of "feedstock pipeline", "feedstock spur pipeline", "LNG facility inlet meter" and "proceeds of disposition" and substituting the following:
"feedstock pipeline" means that portion of a natural gas pipeline from and including a feedstock pipeline inlet on the natural gas pipeline to an LNG facility inlet meter;
"feedstock spur pipeline" means that portion of a feedstock pipeline from and including the feedstock spur pipeline inlet to an LNG facility inlet meter;
"LNG facility inlet meter", in relation to an LNG facility, means a meter at which the volume of natural gas is first measured after the natural gas is delivered to the LNG plant that is part of the LNG facility;
"proceeds of disposition" has the same meaning as in section 13 (21) of the federal Act, except that the definition in that section is to be read as if the reference in paragraph (h) of that definition to "section 79" were read as a reference to "section 124.10 of this Act"; ,
(c) in the definition of "capital investment property" by adding the following paragraphs:
(a.1) tangible personal property used on, and improvements to, the land described in section 7 (1) (b) [LNG facility] to carry out activities described in paragraph (g) of the definition of "liquefaction activities";
(a.2) a feedstock spur pipeline; ,
(d) in the definition of "financing charge" by repealing paragraph (d) and substituting the following:
(d) an amount paid by the taxpayer in satisfaction of the principal amount of a bond, debenture, bill of exchange, note, mortgage or similar obligation issued by the taxpayer,
but does not include an amount paid or payable by the taxpayer in order to obtain a bond that is deposited under section 124.600 [collection bond]; , and
(e) in the definition of "liquefaction activities" by repealing paragraphs (a) and (g) and substituting the following:
(a) acquiring, owning or disposing of liquefied natural gas, natural gas liquids or natural gas that is at an LNG facility, other than the following:
(i) acquiring, owning or disposing of natural gas before the natural gas passes through an LNG facility inlet meter for the LNG facility;
(ii) disposing of natural gas when the natural gas passes through an LNG facility inlet meter for the LNG facility;
(iii) acquiring liquefied natural gas, natural gas liquids or natural gas when the liquefied natural gas, natural gas liquids or natural gas leaves the LNG plant that is part of the LNG facility;
(iv) acquiring, owning or disposing of liquefied natural gas, natural gas liquids or natural gas after the liquefied natural gas, natural gas liquids or natural gas leaves the LNG plant that is part of the LNG facility;
(a.1) acquiring, owning or disposing of a right to acquire, own or dispose of liquefied natural gas, natural gas liquids or natural gas that is at an LNG facility, other than the following:
(i) acquiring, owning or disposing of a right to acquire, own or dispose of natural gas before the natural gas passes through an LNG facility inlet meter for the LNG facility;
(ii) disposing of a right to dispose of natural gas when the natural gas passes through an LNG facility inlet meter for the LNG facility;
(iii) acquiring a right to acquire liquefied natural gas, natural gas liquids or natural gas when the liquefied natural gas, natural gas liquids or natural gas leaves the LNG plant that is part of the LNG facility;
(iv) acquiring, owning or disposing of a right to acquire, own or dispose of liquefied natural gas, natural gas liquids or natural gas after the liquefied natural gas, natural gas liquids or natural gas leaves the LNG plant that is part of the LNG facility;
(g) in relation to a person who carries out one or more of the activities described in paragraphs (a) to (f) of this definition, constructing, administering or maintaining an LNG plant, or carrying out other activities that support the operations of the LNG plant; .
2 Section 2 is amended
(a) in subsection (2) by renumbering paragraph (a) as paragraph (a.1) and by adding the following paragraph:
(a) the definition of "balance-due day" in section 248 (1) of the federal Act; ,
(b) by adding the following subsection:
(2.1) The definition of "prescribed" in section 248 (1) of the federal Act applies for the purposes of this Act, but only in relation to provisions of the federal Act that apply for the purposes of this Act. , and
(c) by repealing subsection (4) (d) (i) and substituting the following:
(i) the reference to "return of income under Part I" were read as a reference to "tax return under section 124.300 of this Act", and .
3 Section 3 (2) is repealed and the following substituted:
(2) Subsection (1) (f) does not apply to sections 159 (2), 231.1 (3), 231.2, 231.7 (1) and 248 (17.2) of the federal Act, as those sections apply for the purposes of this Act.
4 Section 7 (1) (c) is repealed.
5 Section 8 is amended
(a) by repealing subsections (1) (a) (i) and (2) (b), and
(b) in subsection (1) (c) (iv) by adding "subject to the regulations," before "transmitting".
6 Section 9 is amended
(a) in subsection (1) by striking out "subsections (2) to (4)," and substituting "subsections (2) to (5),", and
(b) by adding the following subsection:
(5) If a person is a member of a partnership that engages in, or has income derived from, liquefaction activities and the person does not otherwise engage in, or have income derived from, liquefaction activities, the person has no taxation year that begins before the taxation year in which the partnership's first fiscal period ends.
7 Section 10 is amended
(a) in subsection (1) by striking out "subsections (3) and (4)," and substituting "subsections (3) to (5),",
(b) in subsection (2) by striking out "subsections (4), (5) and (6)" and substituting "subsections (4) to (6) and (8) to (11)", and
(c) by adding the following subsection:
(5) There is no fiscal period of a business or property of a person or partnership
(a) that begins before January 1, 2017, or
(b) for a period that would otherwise be a fiscal period of the business or property of the person or partnership under subsection (1), if the person or partnership has not engaged in, and has no income derived from, liquefaction activities before the end of that period.
8 The following section is added:
10.1 Section 249 (2) [references to certain taxation years and fiscal periods] of the federal Act applies for the purposes of this Act.
9 Section 12 (2) is repealed and the following substituted:
(2) In applying section 248 (16) and (16.1) of the federal Act for the purposes of this Act,
(a) that section is to be read as if the references to "and subsection 6 (8)" were excluded, and
(b) for greater certainty, the references in that section to "subsection 152 (3.1)" are to be read as references to that provision as it applies for the purposes of the federal Act.
10 Section 13 is amended by adding the following subsection:
(5) In applying section 248 (25.2) of the federal Act for the purposes of this Act, that section is to be read as if the reference to "paragraph (k) of the definition "disposition" in subsection (1)" were read as a reference to "paragraph (f) of the definition of "disposition" in section 1 of this Act".
11 Section 16 is amended
(a) in subsection (1) by adding the following:
section 248 (26) [debt obligations];
section 248 (27) [parts of debt obligations]; , and
(b) by adding the following subsection:
(4) In applying section 248 (26) of the federal Act for the purposes of this Act, paragraph (b) of that section is to be read as if the reference to "income" were read as a reference to "income from a business or property".
12 Section 22 (2) is repealed and the following substituted:
(2) No tax is payable under this Act on the net income or net operating income of a trust for the period when all of the beneficiaries of the trust are each
(a) exempt from paying tax under Part I of the federal Act in accordance with section 149 (1) (c), (d.5) or (d.6) of the federal Act, or
(b) if the net income or net operating income of the trust for the period were the net income or net operating income of the beneficiary,
(i) an Indian who would have been exempt from taxation under section 87 of the Indian Act or under a provision of a final agreement equivalent to that section in respect of the net income or net operating income, or
(ii) a band that would have been exempt from taxation under section 87 of the Indian Act in respect of the net income or net operating income.
13 Part 2 is amended by adding the following sections:
22.1 (1) Subject to section 22.2, this section applies to a taxpayer for a taxation year if under section 22 (1) to (3) no tax is payable under this Act on the net income or net operating income of the taxpayer for a period that is a part of the taxation year.
(2) If this section applies to a taxpayer for a taxation year, the taxpayer's net income or net operating income for the taxation year from an LNG source is, for the purposes of sections 18 [tax on net income] and 21 [tax on net operating income], deemed to be the proportion of the net income or net operating income for the taxation year from the LNG source, as determined under this Act without reference to this section, that the number of days in the taxation year that are not in the period referred to in subsection (1) of this section is of the number of days in the taxation year.
22.2 (1) This section applies in relation to a person that is a corporation or a trust if, at any time, the person becomes or ceases to be exempt under section 22 (1) to (3) from tax on the person's net income or net operating income.
(2) If this section applies in relation to a person, the following rules apply:
(a) the taxation year of the person that would, but for this paragraph, have included the time referred to in subsection (1) is deemed to end immediately before that time, a new taxation year of the person is deemed to begin at that time and, for the purpose of determining the person's fiscal period after that time, the person is deemed not to have established a fiscal period before that time;
(b) for the purpose of computing the person's income from a business or property for the person's first taxation year that ends after that time, the person is deemed to have deducted under section 20 [deductions permitted in computing income from business or property] of the federal Act, as that section applies for the purposes of this Act, and under section 38 [deduction of repaid financial incentives] of this Act in computing the person's income from a business or property for the person's taxation year that ended immediately before that time, the greatest amount that could have been claimed or deducted by the person for that taxation year as a reserve under those sections;
(c) the person is deemed
(i) to have disposed, at the time that is immediately before the time that is immediately before that time, of each property held by the person immediately before that time for proceeds of disposition equal to the fair market value of the property at that time, and
(ii) to have reacquired the property at that time at a cost, or in the case of capital investment property, at a capital cost, equal to that fair market value;
(d) for the purpose of applying the following provisions to the person, the person is deemed to be a new corporation or trust, as the case may be, the first taxation year of which began at that time:
(i) section 20 [tax pool balance];
(ii) section 58 [net operating loss account balance];
(iii) Part 8 [Closure Tax Credit].
14 Section 26 (3) is repealed and the following substituted:
(3) For the purposes of this Act, income or loss from a business or property does not include any gain or loss from the disposition of capital investment property.
15 Section 28 (5) is amended by striking out "in a transaction with a person with whom the taxpayer does not deal at arm's length".
16 Section 31 is amended by adding the following paragraph:
(f) an amount that is, under section 124.12 (5) [debt forgiveness rules], income of the taxpayer for the taxation year from the business or property.
17 Section 39 is amended by adding the following paragraph:
(a.1) that section is to be read as if the reference to "prescribed form" were read as a reference to "the form required by the commissioner"; .
18 Section 41 is amended
(a) by repealing subsection (1) and substituting the following:
(1) In applying section 34.1 (1) and (2) of the federal Act for the purposes of this Act,
(a) section 34.1 (1) and (2) of the federal Act is to be read as follows:
(i) as if the formula were the following:
| A | C |
| D |
(ii) without reference to the description of "B", and
(b) section 34.1 (2) (c) of the federal Act is to be read as if the reference to "return of income" were read as a reference to "tax return". , and
(b) in subsection (2) by striking out "Section 34.1 (8)" and substituting "Section 34.1 (8) (a)".
19 Section 42 is amended
(a) in subsection (1) by striking out the following:
subsection (7) [no additional income – bankrupt]; ,
(b) by repealing subsection (2) (f) and substituting the following:
(f) the description of "F" in paragraph (a) of that definition is to be read as if
(i) the reference to "return of income" were read as a reference to "tax return", and
(ii) the reference to "(other than an amount included in the description of E)" were excluded; , and
(c) by repealing subsection (3) (c) and substituting the following:
(c) subsection (3) [new partner designation] of that section is to be read
(i) as if, in paragraph (a) of that subsection, the reference to "return of income" were read as a reference to "tax return", and
(ii) as if, in the description of "A" in paragraph (b) of that subsection, the reference to "(other than any amount for which a deduction is available under section 112 or 113)" were excluded; .
20 Section 43 is amended by adding the following subsection:
(1.1) In applying the definition of "income shortfall adjustment" in section 34.3 (1) of the federal Act for the purposes of this Act, the description of "D" in that definition is to be read as if the reference to "the rate of interest prescribed under paragraph 4301 (a) of the Income Tax Regulations" were read as a reference to "the prescribed rate of interest".
21 Section 44 is amended by adding the following paragraph:
(d) if the taxpayer was not a bankrupt during the taxation year, any amount deducted under section 45.2 [reserve for debt forgiveness] in computing the taxpayer's net operating income for the preceding taxation year from the LNG source.
22 Section 45 (a) is repealed and the following substituted:
(a) an amount paid by the taxpayer in the taxation year in respect of fees or expenses incurred in preparing, instituting or prosecuting an objection or an appeal under this Act; .
23 The following sections are added to Division 4 of Part 3:
45.1 (1) Section 61.3 (1) and (3) of the federal Act applies for the purposes of this Act.
(2) In applying section 61.3 (1) of the federal Act for the purposes of this Act, the following rules apply:
(a) that section is to be read as if the reference to "the income for a taxation year of a corporation resident in Canada throughout the year that is not exempt from tax under this Part on its taxable income" were read as a reference to "a corporation's net operating income for a taxation year from an LNG source";
(b) that section is to be read as if paragraph (a) of that section were read as follows:
(a) the total of all amounts each of which is an amount that was included under section 31 (f) [other income inclusions] in computing the corporation's income for the taxation year from a business or property, and ;
(c) the formula in paragraph (b) of that section is to be read as if the formula were as follows:
A – 20(B – C – E)
(d) subparagraph (ii) of the description of "B" in paragraph (b) of that section is to be read as if the reference to "this Part or any of Parts I.3, II, VI and XIV" were read as a reference to "this Act, the Income Tax Act or Part I or XIV of the federal Act";
(e) the description of "C" in paragraph (b) of that section is to be read as if the reference to "this Part or any of Parts I.3, II, VI and XIV" were read as a reference to "this Act, the Income Tax Act or Part I or XIV of the federal Act";
(f) subparagraph (ii) of the description of "C" in paragraph (b) of that section is to be read
(i) as if the reference in clause (A) of that subparagraph to "the corporation is not an insurance corporation, a federal credit union or a bank to which clause (B) or (C) applies and" were excluded, and
(ii) without reference to clauses (B) and (C) of that subparagraph;
(g) paragraph (b) of that section is to be read without reference to the description of "D";
(h) the description of "E" in paragraph (b) of that section is to be read as if
(i) the reference to "50%" were read as a reference to "5%",
(ii) the reference in subparagraph (i) of that description to "income for the year" were read as a reference to "net operating income for the taxation year from the LNG source", and
(iii) the reference in subparagraph (i) of that description to "section 61.4" were read as a reference to "section 45.2 of this Act".
(3) In applying section 61.3 (3) of the federal Act for the purposes of this Act, that section is to be read as if the reference to "and 61.3 (2)" and the reference to "or 61.3 (2)" were excluded.
45.2 In computing a taxpayer's net operating income for a taxation year from an LNG source, the taxpayer may deduct as a reserve an amount not exceeding the least of the following:
(a) the amount determined by the following formula:
| amount = net amount – adjusted amount | |||
| where | |||
| net amount | = | the amount, if any, by which | |
| (i) | the total of all amounts each of which is an amount that was included under section 31 (f) [other income inclusions – debt forgiveness rules] in computing the taxpayer's income from a business or property for the taxation year or a previous taxation year | ||
| exceeds | |||
| (ii) | the total of all amounts deducted under section 61.3 (1) [deduction for insolvency with respect to corporations] of the federal Act, as that section applies for the purposes of this Act, in computing the taxpayer's net operating income from the LNG source for the taxation year or a previous taxation year; | ||
| adjusted amount | = | the amount, if any, by which the amount determined for the description of "net amount" in respect of the taxpayer for the taxation year exceeds the total of | |
| (i) | the amount that would be determined for the description of "net amount" in respect of the taxpayer for the taxation year if that value did not take into account amounts included or deducted in computing the taxpayer's net operating income for a previous taxation year, and | ||
| (ii) | the amount, if any, included under section 44 (d) in computing the taxpayer's net operating income for the taxation year from the LNG source; | ||
(b) the total of the following:
(i) 80% of the amount that would be determined for the description of "net amount" in paragraph (a) in respect of the taxpayer for the taxation year if that value did not take into account amounts included or deducted in computing the taxpayer's income from the business or property for a previous taxation year;
(ii) 60% of the amount that would be determined for the description of "net amount" in paragraph (a) in respect of the taxpayer for the taxation year if that value did not take into account amounts included or deducted in computing the taxpayer's income from the business or property for the taxation year or a previous taxation year, other than the preceding taxation year;
(iii) 40% of the amount that would be determined for the description of "net amount" in paragraph (a) in respect of the taxpayer for the taxation year if that value did not take into account amounts included or deducted in computing the taxpayer's income from the business or property for the taxation year or a previous taxation year, other than the second last preceding taxation year;
(iv) 20% of the amount that would be determined for the description of "net amount" in paragraph (a) in respect of the taxpayer for the taxation year if that value did not take into account amounts included or deducted in computing the taxpayer's income from the business or property for the taxation year or a previous taxation year, other than the third last preceding taxation year;
(c) if the taxpayer is a corporation that begins to wind up in the taxation year, zero.
24 Section 46 (2) is amended by striking out "and" at the end of paragraph (b), by adding ", and" at the end of paragraph (c) and by adding the following paragraph:
(d) a forgiven amount in respect of a commercial debt obligation issued by the taxpayer, in its entirety and despite section 124.12 (3), were deemed to be an amount included in the total of all amounts deducted under section 61 (1) (f) [debt forgiveness deduction] as an amount deducted under section 124.12 (4) in computing the balance of the taxpayer's capital investment account.
25 Section 54 (3) is amended
(a) by renumbering paragraph (a) as paragraph (a.1), and
(b) by adding the following paragraph:
(a) any amount to be deducted in accordance with section 117.2 [deduction in computing net income – distribution of property to beneficiary] for the taxation year in respect of the LNG source; .
26 Section 56 (1) (b) is amended by striking out "section 54 (3)" and substituting "section 54 (3) (a.1) and (b)".
27 Section 58 is amended by striking out "section 54 (3) (a)" and substituting "section 54 (3) (a.1)".
28 Section 61 (1) is amended by adding the following paragraph:
(f) the total of all amounts each of which is an amount that is, under section 124.12 (4) [debt forgiveness rules], deemed to be deducted from the balance of the taxpayer's capital investment account for the LNG source before that time.
29 Section 65 (3) (d) (i) is amended by striking out "minister" and substituting "commissioner".
30 Section 66 is amended
(a) in subsection (2) by striking out "subsections (3) and (4)," and substituting "subsections (3) to (5),", and
(b) by adding the following subsection:
(5) This section does not apply to a taxpayer for a taxation year that ends at or after a particular time in respect of a disposition of capital investment property of the taxpayer if the capital investment property is seized within the meaning of section 124.11 (2) at the particular time by the taxpayer in respect of a debt.
31 Section 71 is amended
(a) by renumbering the section as section 71 (1), and
(b) by adding the following subsection:
(2) Section 67.5 (2) [reassessments] of the federal Act does not apply for the purposes of this Act.
32 Section 77 (1) is amended by repealing the definition of "tax benefit".
33 Section 78 is amended
(a) in subsection (2) by striking out "section 28 (3) to (5)" and substituting "section 28 (3) or (4)", and
(b) by adding the following subsection:
(2.1) For the purposes of this section, a disposition under section 28 (5) by a taxpayer is deemed to be a dealing between an activity of the taxpayer referred to in subsection (1) (a) of this section and an activity of the taxpayer referred to in subsection (1) (b) of this section.
34 Section 79 is amended
(a) by repealing subsection (4),
(b) in subsection (5) by adding "and section 124.412 [anti-avoidance rule]" after "Division", and
(c) by adding the following subsection:
(6) An adjustment, other than an adjustment that results in or increases a transfer pricing capital adjustment or a transfer pricing income adjustment of a taxpayer for a taxation year, may not be made under subsection (5) unless, in the opinion of the commissioner, it would be appropriate in the circumstances that the adjustment be made.
35 Section 80 is amended
(a) by repealing subsection (1), and
(b) in subsection (2) (b) (i) by adding the following clause:
(A.1) section 124.412 [anti-avoidance rule]; .
36 Section 81 (c) is repealed and the following substituted:
(c) after the taxpayer or partnership is given a written demand by the commissioner, supplies the records or documents described in paragraphs (a) and (b) to the commissioner within the period specified in the demand.
37 Section 83 is amended in the definition of "qualifying expenditure" by striking out "or" at the end of paragraph (a), by adding ", or" at the end of paragraph (b) and by adding the following paragraph:
(c) a qualifying partnership expenditure incurred by the taxpayer under section 114.1 (3); .
38 Sections 84 (1) (a) and (b) and 85 (1) (a) and (b) are amended by striking out "minister" and substituting "commissioner".
39 Section 84 (3) is amended by striking out "the qualifying expenditure would have been deductible" and substituting "the qualifying expenditure, other than a qualifying partnership expenditure incurred by the taxpayer under section 114.1 (3), would have been deductible".
40 Section 90 is amended
(a) in subsection (1) by adding the following:
section 45.2 [reserve for debt forgiveness];
section 124.12 (1) [debt forgiveness rules], but only in relation to the definition of "forgiven amount" in that section;
section 124.315 [consequential reassessments and redeterminations – subsequent taxation years]. , and
(b) in subsection (2) by adding the following:
section 61.3 [deduction for insolvency with respect to corporations];
section 143.4 [expenditure – limit for contingent amount].
41 The following sections are added:
92.1 (1) Section 87 (7) of the federal Act applies for the purposes of this Act.
(2) In applying section 87 (7) of the federal Act for the purposes of this Act, that section is to be read as if
(a) the reference to "after May 6, 1974" were excluded, and
(b) everything after paragraph (d) of that section were excluded.
92.2 For the purposes of this Act, if an obligation of a debtor that is a predecessor corporation to pay an amount to a creditor that is a predecessor corporation is settled on an amalgamation of those corporations, the obligation is deemed to have been settled, immediately before the time that is immediately before the amalgamation, by a payment made by the debtor and received by the creditor of an amount equal to the lesser of
(a) the amount that would have been the unpaid principal amount of the obligation owed to the creditor at that time, and
(b) the amount that would have been the cost to the creditor of the obligation at that time.
42 Section 93 (b) is amended by striking out "section 54 (3) (a)" and substituting "section 54 (3) (a.1)".
43 Section 96 is amended by striking out "minister" in both places and substituting "commissioner".
44 Section 98 is amended by adding the following paragraphs:
(e.1) for the purposes of section 124.12 [debt forgiveness rules], a forgiven amount at any time in respect of a commercial debt obligation issued by the taxpayer;
(e.2) the taxpayer's net operating loss for the taxpayer's first taxation year under section 84 [amounts included in net operating loss account];
(e.3) the capital cost of capital investment property deemed under section 85 [amounts included in capital investment account] to have been acquired by the taxpayer at the beginning of the taxpayer's first taxation year; .
45 Section 101 is amended by adding the following paragraphs:
(c.1) section 106.1 [forgiven amounts in respect of commercial debt obligation issued by partnership];
(f.1) section 114.1 [qualifying partnership expenditures];
(f.2) section 114.2 [amounts respecting qualifying partnership property]; .
46 Section 103 is amended
(a) in subsections (1) (a) and (3) by striking out ", in relation to a fiscal period of the partnership,",
(b) in subsections (1) (a) and (3) (a) by striking out "the fiscal period" wherever it appears and substituting "a fiscal period",
(c) in subsections (1) (a) and (3) (a) by adding the following subparagraphs:
(v.1) a forgiven amount in respect of a commercial debt obligation issued by the partnership that is settled in a fiscal period;
(v.2) a qualifying expenditure, as defined in section 114.1, incurred by the partnership;
(v.3) a total amount computed under section 114.2 (4) (a) or (b) (i) or (ii) in respect of the partnership; , and
(d) in subsections (2) and (4) by striking out "balance" and substituting "balance, amount".
47 Division 1 of Part 6 is amended by adding the following section:
106.1 (1) This section applies to a taxpayer in relation to a commercial debt obligation if
(a) the taxpayer is a member of a partnership that engages in, or has income derived from, liquefaction activities in respect of an LNG source in a fiscal period of the partnership,
(b) the commercial debt obligation was issued by the partnership, and
(c) the commercial debt obligation is settled at any time in the fiscal period.
(2) If this section applies to a taxpayer in relation to a commercial debt obligation, a computation must be made of the amount that would be the forgiven amount in respect of the commercial debt obligation issued by the partnership at the time the commercial debt obligation was settled as if the partnership were the debtor that issued the commercial debt obligation.
(3) If a taxpayer is a member of a partnership for which an amount is computed under subsection (2),
(a) for the purposes of section 124.12 [debt forgiveness rules], the commercial debt obligation issued by the partnership is deemed to have been issued by the taxpayer, and
(b) the amount is, for the purposes of paragraph (b) of the definition of "forgiven amount" in section 124.12 and to the extent of the taxpayer's share of that amount, a forgiven partnership amount in respect of the commercial debt obligation.
48 Section 111 (4) (b) is amended by striking out "paragraph (b)" and substituting "paragraphs (b) and (f)".
49 Part 6 is amended by adding the following Division:
Division 3.1 – Computations for First Fiscal Period
114.1 (1) In this section, "qualifying expenditure" has the same meaning as in section 83, except that the definition in that section is to be read as if
(a) subject to paragraph (b) of this subsection,
(i) the references to "taxpayer" were read as references to "partnership",
(ii) the references to "taxpayer's" were read as references to "partnership's", and
(iii) the references to "taxation year" were read as references to "fiscal period", and
(b) paragraph (c) of that definition were read as follows:
(c) a qualifying partnership expenditure incurred by the partnership under section 114.1 (3) if
(i) the references in that section to "taxpayer" were read as references to "partnership", and
(ii) the reference in that section to "taxpayer's" were read as a reference to "partnership's"; .
(2) If a partnership has incurred a qualifying expenditure in respect of an LNG source, a computation must be made of the total of all amounts each of which is a qualifying expenditure incurred by the partnership in respect of the LNG source, but only to the extent that the qualifying expenditure would have been deductible in computing the partnership's income or loss from a business or property that is in respect of the LNG source if the qualifying expenditure had been incurred in the partnership's first fiscal period.
(3) If a taxpayer is a member of a partnership for which an amount is computed under subsection (2) in respect of an LNG source, that amount is, to the extent of the taxpayer's share of that amount, a qualifying partnership expenditure deemed to have been incurred by the taxpayer in respect of the LNG source.
114.2 (1) In this section, "qualifying partnership property", in relation to a partnership, means property that is
(a) capital investment property, and
(b) owned by the partnership immediately before the partnership's first fiscal period.
(2) For the purposes of this section, if a taxpayer is a member of a partnership that is a member of another partnership, the taxpayer is deemed to be a member of the other partnership.
(3) Section 97 [reference to person or taxpayer who is member of partnership] does not apply to this section.
(4) If a taxpayer is a member of a partnership that has qualifying partnership property in respect of an LNG source, a computation must be made of the following amounts:
(a) unless all of the members of the partnership who are taxpayers elect to apply section 85 (6) [amounts included in capital investment account] in respect of the LNG source for the taxpayers' first taxation years, the total fair market value, as at the beginning of the partnership's first fiscal period, of all the qualifying partnership property of the partnership;
(b) unless all of the members of the partnership who are taxpayers elect to apply section 85 (3) in respect of the LNG source for the taxpayers' first taxation years,
(i) the total of all amounts each of which is an amount that would otherwise be the capital cost to the partnership of each qualifying partnership property of the partnership, and
(ii) the total of all amounts each of which is a financial incentive that the partnership received before that first fiscal period in respect of or for the acquisition of the qualifying partnership property.
(5) If a taxpayer is a member of one or more partnerships that have qualifying partnership property in respect of an LNG source and the taxpayer elects to apply section 85 (3) in respect of the LNG source for the taxpayer's first taxation year, the taxpayer is deemed to have acquired capital investment property immediately before the taxpayer's first taxation year with a fair market value equal to the total of all amounts each of which is the amount to which the taxpayer is directly or indirectly entitled as the taxpayer's share of the total amount computed under subsection (4) (a) of this section in respect of a partnership that has qualifying partnership property in respect of the LNG source.
(6) If a taxpayer is a member of one or more partnerships that have qualifying partnership property in respect of an LNG source and the taxpayer elects to apply section 85 (6) in respect of the LNG source for the taxpayer's first taxation year, the taxpayer is
(a) deemed to have acquired capital investment property immediately before the taxpayer's first taxation year for an amount that would otherwise be the capital cost to the taxpayer equal to the total of all amounts each of which is the amount to which the taxpayer is directly or indirectly entitled as the taxpayer's share of the total amount computed under subsection (4) (b) (i) in respect of a partnership that has qualifying partnership property in respect of the LNG source, and
(b) deemed to have received a financial incentive before the taxpayer's first taxation year for the acquisition of that capital investment property in an amount equal to the total of all amounts each of which is the amount to which the taxpayer is directly or indirectly entitled as the taxpayer's share of the total amount computed under subsection (4) (b) (ii) in respect of a partnership that has qualifying partnership property in respect of the LNG source.
50 The following sections are added:
116.1 (1) In this section, "person" includes a band.
(2) Subsection (3) applies to a person in relation to particular property for a period if
(a) a trust holds the particular property for the period on condition
(i) that the particular property or property substituted for the particular property may
(A) revert to the person, or
(B) pass to other persons to be determined by the person at a time subsequent to the creation of the trust, or
(ii) that, during the existence of the person, the particular property may not be disposed of except with that person's consent or in accordance with that person's direction,
(b) the particular property or property for which the particular property was substituted was directly or indirectly received by the trust from the person, and
(c) the person is, for the period,
(i) a person who is exempt from tax under Part I of the federal Act in accordance with section 149 (1) (c), (d.5) or (d.6) of the federal Act,
(ii) a trust that is exempt under section 22 (2) from tax imposed under this Act,
(iii) an Indian who would have been exempt from taxation under section 87 of the Indian Act or under a provision of a final agreement equivalent to that section in respect of any income from or proceeds of disposition received for the particular property if the income or proceeds received were the income or proceeds of the Indian, or
(iv) a band that would have been exempt from taxation under section 87 of the Indian Act in respect of any income from or proceeds of disposition received for the particular property if the income or proceeds received were the income or proceeds of the band.
(3) If this section applies to a person in relation to particular property for a period,
(a) any income or loss from the particular property or from property substituted for the particular property for the period is deemed to be income or a loss of the person for the period, and
(b) any proceeds of disposition received for the particular property or for property substituted for the particular property in the period are deemed to be proceeds of disposition received by the person in the period.
117.1 Despite section 117, in computing a trust's income for a taxation year from a business or property or from another source described in Division 3 [Other Sources of Income] of Part 3, the trust may deduct an amount that is paid or becomes payable in the taxation year to a beneficiary if the beneficiary is
(a) a person who is exempt from tax under Part I of the federal Act in accordance with section 149 (1) (c), (d.5) or (d.6) of the federal Act at the time the amount is paid or becomes payable,
(b) a trust that is exempt under section 22 (2) from tax imposed under this Act at the time the amount is paid or becomes payable,
(c) an Indian who would have been exempt from taxation under section 87 of the Indian Act or under a provision of a final agreement equivalent to that section in respect of the income if the income were the income of the Indian, or
(d) a band that would have been exempt from taxation under section 87 of the Indian Act in respect of the income if the income were the income of the band.
117.2 (1) This section applies to a trust for a taxation year in respect of an LNG source if an amount must be included under section 54 (2) (b) [recaptured negative capital investment account balance] in computing the trust's net income for the taxation year from the LNG source and, in the taxation year,
(a) capital investment property of the trust has been distributed to a beneficiary of the trust and the beneficiary is
(i) a person who is exempt from tax under Part I of the federal Act in accordance with section 149 (1) (c), (d.5) or (d.6) of the federal Act at the time of the distribution,
(ii) a trust that is exempt under section 22 (2) from tax imposed under this Act at the time of the distribution,
(iii) an Indian who would have been exempt from taxation under section 87 of the Indian Act or under a provision of a final agreement equivalent to that section in respect of the property if the property were the property of the Indian immediately before the trust distributed the property, or
(iv) a band that would have been exempt from taxation under section 87 of the Indian Act in respect of the property if the property were the property of the band immediately before the trust distributed the property, or
(b) all or part of the proceeds of disposition received for capital investment property of the trust are paid or become payable to a beneficiary of the trust and the beneficiary is
(i) a person who is exempt from tax under Part I of the federal Act in accordance with section 149 (1) (c), (d.5) or (d.6) of the federal Act at the time the proceeds of disposition are paid or become payable,
(ii) a trust that is exempt under section 22 (2) from tax imposed under this Act at the time the proceeds of disposition are paid or become payable,
(iii) an Indian who would have been exempt from taxation under section 87 of the Indian Act or under a provision of a final agreement equivalent to that section in respect of any proceeds of disposition received for the property if the property were the property of the Indian, or
(iv) a band that would have been exempt from taxation under section 87 of the Indian Act in respect of any proceeds of disposition received for the property if the property were the property of the band.
(2) If this section applies to a trust for a taxation year in respect of an LNG source, in computing the trust's net income for the taxation year from the LNG source, the trust must deduct under section 54 (3) (a) an amount equal to the lesser of the following amounts:
(a) the amount equal to the total of all amounts each of which is
(i) the fair market value of property referred to in subsection (1) (a) of this section that was distributed in the taxation year to a beneficiary referred to in that subsection, or
(ii) the proceeds of disposition referred to in subsection (1) (b) of this section that were paid or payable in the taxation year to a beneficiary referred to in that subsection;
(b) the amount included under section 54 (2) (b) in computing the trust's net income for the taxation year from the LNG source.
117.3 For the purposes of sections 117.1 and 117.2, an amount is deemed not to have become payable to a beneficiary in a taxation year unless the amount was paid in the taxation year to the beneficiary or the beneficiary was entitled in the taxation year to enforce payment of the amount.
51 Section 123 is amended by striking out "balance-due day" and substituting "balance-due date".
52 Section 124 (1) (a) and (b) is amended by striking out "minister" and substituting "commissioner".
53 The following Parts are added:
Part 8.1 – Special Rules Applicable
in Certain Circumstances
124.10 (1) In this section:
"creditor", in relation to a particular person,
(a) includes a person to whom the particular person is obligated to pay an amount under a mortgage or similar obligation, and
(b) includes, if property was sold to the particular person under a conditional sales agreement, the seller of the property or any assignee of the seller with respect to the agreement;
"debt" includes an obligation to pay an amount under a mortgage or similar obligation or under a conditional sales agreement;
"person" includes a partnership;
"property" does not include
(a) money, or
(b) indebtedness owed by or guaranteed by the government of a country, or a province, state, or other political subdivision of that country;
"specified amount", in relation to a particular time for a debt owed by a person, means
(a) the unpaid principal amount of the debt at that time, or
(b) unpaid interest accrued to that time on the debt.
(2) For the purposes of this section, a property is surrendered at any time by a person to another person if
(a) the beneficial ownership of the property is acquired or reacquired at that time from the person by the other person, and
(b) the acquisition or reacquisition of the property is in consequence of the person's failure to pay all or part of one or more specified amounts of debts owed by the person to the other person immediately before that time.
(3) For the purposes of this Act, if a particular property is surrendered at any time by a person to a creditor of the person, the person's proceeds of disposition of the particular property are deemed to be equal to the fair market value at that time of the particular property.
(4) For the purposes of this Act, if a particular property is surrendered by a person to a creditor of the person, no amount is to be considered to have been paid or repaid by the person as a consequence of the acquisition or reacquisition of the surrendered property by the creditor.
124.11 (1) In this section, "creditor", "debt", "person", "property" and "specified amount" have the same meaning as in section 124.10.
(2) For the purposes of this section, a property is seized at any time by a creditor in respect of a debt if
(a) the beneficial ownership of the property is acquired or reacquired at that time by the creditor, and
(b) the acquisition or reacquisition of the property is in consequence of a person's failure to pay to the person all or part of the specified amounts of debts owed by the person to the creditor immediately before that time.
(3) If a property is seized at any time in a particular taxation year by a creditor in respect of a debt, for the purpose of computing the creditor's net operating income or net operating loss for the particular taxation year, the amount deducted under section 20 (1) (n) [reserve for unpaid amounts] of the federal Act, as that section applies for the purposes of this Act, in computing the creditor's income from a business for the preceding taxation year in respect of any disposition of the property before the particular taxation year is deemed to be the amount, if any, by which the amount so deducted exceeds the fair market value at that time of the particular property.
(4) If a particular property is seized at any time in a taxation year by a creditor in respect of a debt, the cost to the creditor of the particular property is, for the purposes of this Act, deemed to be the amount, if any, by which the fair market value at that time of the particular property exceeds the amount, if any, deducted under section 20 (1) (n) of the federal Act, as that section applies for the purposes of this Act, in respect of the particular property in computing the creditor's income for the preceding taxation year from a business.
(5) If a property is seized at any time in a taxation year by a creditor in respect of a debt, for the purposes of this Act,
(a) the creditor is deemed to have disposed of the debt at that time,
(b) the amount received on account of the debt as a consequence of the seizure is deemed
(i) to be received at that time, and
(ii) to be equal to the fair market value of the property at that time, and
(c) if any portion of the debt is outstanding immediately after that time, the creditor is deemed to have reacquired that portion immediately after that time at a cost equal to zero.
(6) If a property is seized at any time in a taxation year by a creditor in respect of a debt, no amount in respect of the debt
(a) is deductible in computing the creditor's income from a business or property for the taxation year or a subsequent taxation year as a bad, doubtful or impaired debt, or
(b) is to be included after that time in computing, for the purposes of this Act, any balance of undeducted outlays, expenses or other amounts of the creditor as a bad, doubtful or impaired debt.
124.12 (1) In this section:
"excluded obligation" means a commercial debt obligation issued by a debtor if
(a) the proceeds from the issue of the commercial debt obligation
(i) were included in computing the debtor's income from a business or property or the balance of the debtor's capital investment account or, but for the reference to "but does not include an amount described in section 7300 (a) [First Nations economic development] of the federal regulation or a prescribed amount" in the definition of "financial incentive" in section 1 of this Act, would have been so included,
(ii) were deducted in computing, for the purposes of this Act, any balance of undeducted outlays, expenses or other amounts, or
(iii) were deducted in computing the capital cost or cost to the debtor of any property of the debtor,
(b) section 78 [unpaid amounts] of the federal Act, as that section applies for the purposes of this Act, applies to the commercial debt obligation, or
(c) the principal amount of the commercial debt obligation would, if this Act were read without reference to section 124.10 [surrender of property] and this section and the commercial debt obligation were settled without any amount being paid in satisfaction of its principal amount, be included in computing the debtor's income from a business or property because of the settlement of the commercial debt obligation;
"forgiven amount", at any time in respect of a commercial debt obligation issued by a debtor, means,
(a) subject to paragraph (b), the amount determined by the following formula:
| amount = obligation amount – reductions | |||
| where | |||
| obligation amount | = | the lesser of the amount for which the commercial debt obligation was issued and the principal amount of the commercial debt obligation immediately before that time; | |
| reductions | = | the total of the following: | |
| (i) | the amount, if any, paid at that time in satisfaction of the principal amount of the commercial debt obligation; | ||
| (ii) | any portion of the principal amount of the commercial debt obligation that is satisfied by a surrender of the property by the debtor at or before that time; | ||
| (iii) | if the debtor is a bankrupt at that time, the principal amount of the commercial debt obligation immediately before that time; | ||
| (iv) | that portion of the principal amount of the commercial debt obligation immediately before that time as represents the principal amount of an excluded obligation; | ||
| (v) | if the debtor is a partnership and the commercial debt obligation was, since the later of the creation of the partnership or the issue of the commercial debt obligation, always payable to a member of the partnership actively engaged, on a regular, continuous and substantial basis, in those activities of the partnership that are other than the financing of the partnership business, the principal amount of the commercial debt obligation immediately before that time; | ||
| (vi) | the amount, if any, given at or before that time by the debtor to another person or partnership as consideration for the assumption of the commercial debt obligation by the other person or partnership, or | ||
(b) in the case of a commercial debt obligation deemed to have been issued by the debtor under section 106.1 (3) (a), the forgiven partnership amount under section 106.1 (3) (b) in respect of the commercial debt obligation issued by the debtor.
(2) The following rules apply for the purposes of this section:
(a) a commercial debt obligation issued by a debtor is settled at any time if the commercial debt obligation is settled or extinguished at that time, other than by way of a bequest or inheritance;
(b) if a corporation issues a share to a person or partnership as consideration for the settlement of a commercial debt obligation issued by the corporation and payable to the person or partnership, the amount paid in satisfaction of the commercial debt obligation because of the issue of the share is deemed to be equal to the fair market value of the share at the time the share was issued;
(c) if a commercial debt obligation issued by a corporation and payable to a person or partnership is settled at any time, the amount, if any, that can reasonably be considered to be the increase, as a consequence of the settlement of the commercial debt obligation, in the fair market value of shares of the capital stock of the corporation owned by the person or partnership, other than any shares acquired by the person or partnership as consideration for the settlement of the commercial debt obligation, is deemed to be an amount paid at that time in satisfaction of the commercial debt obligation;
(d) if any part of the consideration given by a debtor to another person or a partnership for the settlement at any time of a particular commercial debt obligation issued by the debtor and payable to the other person or the partnership consists of a new commercial debt obligation issued by the debtor to the other person or the partnership,
(i) an amount equal to the principal amount of the new commercial debt obligation is deemed to be paid by the debtor at that time, because of the issue of the new commercial debt obligation, in satisfaction of the principal amount of the particular commercial debt obligation, and
(ii) the new commercial debt obligation is deemed to have been issued for an amount equal to the amount, if any, by which the principal amount of the new commercial debt obligation exceeds the amount, if any, by which the principal amount of the new commercial debt obligation exceeds the amount for which the particular commercial debt obligation was issued;
(e) for the purpose of determining, at any time, whether 2 persons are related to each other or whether any person is controlled by any other person, it is to be assumed that
(i) each partnership and each trust is a corporation having a capital stock of a single class of voting shares divided into 100 issued shares,
(ii) each member of a partnership and each beneficiary under a trust owned at that time the number of issued shares of that class that is equal to the proportion of 100 that
(A) the fair market value at that time of the member's interest in the partnership or the beneficiary's interest in the trust
is of
(B) the fair market value at that time of all members' interests in the partnership or all beneficiaries' interests in the trust, and
(iii) if a beneficiary's share of the income or capital of a trust depends on the exercise by any person of, or the failure by any person to exercise, any discretionary power, the fair market value at any time of the beneficiary's interest in the trust is equal to,
(A) if the beneficiary is not entitled to receive or otherwise obtain the use of any of the income or capital of the trust before the death after that time of one or more other beneficiaries under the trust, zero, and
(B) in any other case, the total fair market value at that time of all beneficiaries' interests under the trust;
(f) if a commercial debt obligation is denominated in a currency, other than Canadian currency, the forgiven amount at any time in respect of the commercial debt obligation is to be determined with reference to the relative value of that currency and Canadian currency at the time the commercial debt obligation was issued;
(g) if an amount is paid in satisfaction of the principal amount of a particular commercial debt obligation issued by a debtor and, as a consequence of the payment, the debtor is legally obliged to pay that amount to another person or a partnership, the obligation to pay that amount to the other person or the partnership is deemed to be a commercial debt obligation that was issued by the debtor at the same time and in the same circumstances as the particular commercial debt obligation;
(h) for greater certainty, the amount that can be applied under this section to reduce another amount may not exceed that other amount;
(i) except for the purposes of this paragraph, if
(i) a commercial debt obligation issued by a debtor is settled at any time,
(ii) the debtor is at that time a member of a partnership, and
(iii) the commercial debt obligation was, under the agreement governing that commercial debt obligation, treated immediately before that time as a debt owed by the partnership,
the commercial debt obligation is to be considered to have been issued by the partnership and not by the debtor;
(j) despite paragraph (i), if a commercial debt obligation, for which a particular person or partnership is liable with one or more other persons or partnerships, is settled at any time in respect of the particular person but not in respect of all of the other persons, the portion of the commercial debt obligation that can reasonably be considered to be the particular person's share of that commercial debt obligation is to be considered to have been issued by the particular person and settled at that time and not at any subsequent time.
(3) If a commercial debt obligation issued by a taxpayer is settled at any time, the forgiven amount at that time in respect of the commercial debt obligation is, for the purposes of section 58 [net operating loss account balance], deemed at that time to be an amount deducted by the taxpayer under section 54 (3) (a.1) in respect of an LNG source for the taxation year that includes that time, to the extent that
(a) the commercial debt obligation relates to the LNG source, and
(b) the amount deemed to be deducted does not reduce to less than zero the balance of the taxpayer's net operating loss account for the taxation year for the LNG source.
(4) If a commercial debt obligation issued by a taxpayer is settled at any time and an amount less than the forgiven amount is deemed under subsection (3) to be deducted in respect of an LNG source, the remaining portion of the forgiven amount at that time in respect of the commercial debt obligation is deemed to be an amount deducted under section 61 (1) (f) immediately after that time from the balance of the taxpayer's capital investment account for the LNG source, to the extent that the amount deemed to be deducted does not reduce to less than zero the balance of the taxpayer's net capital investment account for the LNG source immediately after that time.
(5) If a commercial debt obligation issued by a taxpayer is settled in a taxation year and an amount less than the forgiven amount is deemed under subsection (3) and (4) to be deducted, in computing the taxpayer's income for the taxation year from the business or property in connection with which the obligation was issued, the remaining portion of the forgiven amount in respect of the obligation is, for the purposes of section 31 (f) [other income inclusions – debt forgiveness rules], income of the taxpayer for that taxation year from that business or property.
124.13 (1) For the purposes of this Act, if a synthetic disposition arrangement is entered into in respect of a property owned by a taxpayer and the synthetic disposition period of the arrangement is one year or more, the taxpayer is deemed
(a) to have disposed of the property immediately before the beginning of the synthetic disposition period for proceeds of disposition equal to the fair market value of that property at the beginning of the synthetic disposition period, and
(b) to have reacquired that property at the beginning of the synthetic disposition period at a cost, or in the case of capital investment property, at a capital cost, equal to that fair market value.
(2) Subsection (1) does not apply in respect of a property owned by a taxpayer if
(a) the synthetic disposition arrangement referred to in subsection (1) is a lease of tangible property, or
(b) the property is disposed of as part of the arrangement within one year after the day on which the synthetic disposition period of the arrangement begins.
124.14 Subject to this Act, the following sections of the federal Act apply for the purposes of this Act:
section 128 (1) [bankruptcy];
section 143.3 [expenditure – limitations];
section 143.4 [expenditure – limit for contingent amount].
124.15 (1) Section 128 (1) (f) and (g) of the federal Act does not apply for the purposes of this Act.
(2) In applying section 128 (1) of the federal Act for the purposes of this Act, the following rules apply:
(a) subject to paragraph (b) of this subsection, that section is to be read as if the references to "corporation" were read as references to "taxpayer";
(b) paragraph (c) of that section is to be read as if the reference to "the income and the taxable income of the corporation" were read as a reference to "the taxpayer's net income, net operating income or net operating loss from an LNG source, or the taxpayer's income or loss from a business or property,";
(c) paragraph (e) of that section is to be read as if the reference to ", or solidarily," were excluded.
(3) If a taxpayer has become a bankrupt and an order of discharge is granted in respect of the taxpayer, the following rules apply:
(a) despite section 20 [tax pool balance], the following may not be taken into account in computing the balance of the taxpayer's tax pool for an LNG source for the taxation year in which the order was granted or a subsequent taxation year:
(i) an amount payable by the taxpayer under section 21 [tax on net operating income] in respect of the LNG source for any taxation year previous to the taxation year in which the order was granted;
(ii) an amount deducted by the taxpayer under section 19 (1) (a), (b) or (c) [deduction from tax on net income] in respect of the LNG source for any taxation year previous to the taxation year in which the order was granted;
(b) despite section 58 [net operating loss account balance], the following may not be taken into account in computing the balance of the taxpayer's net operating loss account for an LNG source for the taxation year in which the order was granted or a subsequent taxation year:
(i) a net operating loss of the taxpayer from the LNG source for any taxation year previous to the taxation year in which the order was granted;
(ii) an amount deducted by the taxpayer under section 54 (3) (a.1) in respect of the LNG source for any taxation year previous to the taxation year in which the order was granted.
(4) If an individual has become a bankrupt and, in a taxation year beginning after an order of discharge has been granted in respect of the individual, the trustee deals in the estate of the individual or performs any act in the carrying on of the business of the individual,
(a) the trustee must file a tax return under section 124.301 [tax return required to be filed by person dealing with property or business of taxpayer] on behalf of the individual for the taxation year
(i) as if the individual had failed to file a tax return for the taxation year under section 124.300 [tax returns – general rule], and
(ii) with the individual's income for the taxation year from a business or property computed as if the only income of the individual for that taxation year was the income for the taxation year, if any, arising from dealings in the estate of the individual or acts performed in the carrying on of the business of the individual by the trustee, and
(b) the trustee is liable to pay any tax payable under this Act by the individual for that taxation year in respect of the trustee's dealings and actions referred to in paragraph (a).
124.16 In applying section 143.3 of the federal Act for the purposes of this Act, the following rules apply:
(a) subsection (2) of that section is to be read as if the reference to "income, taxable income" were read as a reference to "income or loss from a business or property";
(b) subsections (2), (3) and (4) of that section are to be read as if the references to "on or after November 17, 2005" were excluded;
(c) that section is to be read as if the following subsection were included:
(2.1) In computing the balance of a taxpayer's capital investment account, an expenditure of the taxpayer is deemed not to include any portion of the expenditure that would, if this Act were read without reference to this subsection, be included in determining the expenditure because of the taxpayer having granted or issued an option. ;
(d) subsection (3) of that section is to be read
(i) as if the reference to "income, taxable income or tax payable" were read as a reference to "income or loss from a business or property or tax payable, the balance of the corporation's capital investment account",
(ii) without reference to paragraph (a) (i) of that subsection, and
(iii) as if the reference in paragraph (a) (ii) of that subsection to "in any other case," were excluded;
(e) subsection (4) of that section is to be read
(i) as if the reference to "income, taxable income or tax payable" were read as a reference to "income or loss from a business or property or tax payable, the balance of the taxpayer's capital investment account",
(ii) without reference to paragraph (a) (i) of that subsection, and
(iii) as if the reference in paragraph (a) (ii) of that subsection to "in any other case," were excluded;
(f) subsection (5) of that section is to be read without reference to paragraphs (a) and (c) of that subsection.
124.17 (1) In this section:
"benefit" means a benefit within the meaning of section 7 (1) of the federal Act;
"qualifying person" means a corporation or a mutual fund trust;
"securities",
(a) in relation to a qualifying person that is a corporation, means shares of the capital stock of the corporation, and
(b) in relation to a qualifying person that is a mutual fund trust, means units of the trust.
(2) If a particular qualifying person has agreed to sell or issue securities of the particular qualifying person, or of a qualifying person with which the particular qualifying person does not deal at arm's length, to an employee of the particular qualifying person or of a qualifying person with which the particular qualifying person does not deal at arm's length, the particular qualifying person's income or loss for a taxation year from a business or property is deemed to be not less than what the particular qualifying person's income or loss for the taxation year from the business or property would have been if a benefit had not been conferred on the employee by the sale or issue of the securities.
124.18 (1) Section 143.4 (7) of the federal Act does not apply for the purposes of this Act.
(2) In applying section 143.4 of the federal Act for the purposes of this Act, the following rules apply:
(a) subsection (2) of that section is to be read without reference to paragraph (b) (ii) (B) of that subsection;
(b) subsection (3) of that section is to be read as if the reference to "earning income" were read as a reference to "gaining or producing income from an LNG source";
(c) subsection (4) of that section is to be read
(i) as if the reference to "another taxpayer" were read as a reference to "another person or partnership",
(ii) as if the reference to "other taxpayer" were read as a reference to "other person or partnership",
(iii) as if paragraph (a) of that subsection were read as follows:
(a) to be an amount received as a financial incentive at that time by the taxpayer in the course of gaining or producing income from an LNG source. , and
(iv) without reference to paragraph (b);
(d) subsection (6) of that section is to be read as if the reference to "another taxpayer" were read as a reference to "another person or partnership".
Part 8.2 – Registration
124.20 (1) A person must not engage in or derive income from liquefaction activities in respect of an LNG source unless the person is
(a) registered in respect of the LNG source,
(b) exempt from tax imposed under this Act, or
(c) exempt by regulation from the requirement to be registered in respect of the LNG source.
(2) Without limiting subsection (1), a person must not engage in or derive income from liquefaction activities in respect of an LNG source as a member of a partnership unless
(a) the partnership is registered in respect of the LNG source, or
(b) all members of the partnership are each
(i) exempt from tax imposed under this Act, or
(ii) exempt by regulation from the requirement to be registered in respect of the LNG source.
(3) A person who is registered in respect of an LNG source must not participate with another person or a partnership in a transaction in respect of the LNG source unless, at the time the transaction occurs,
(a) in the case of the other person, that person
(i) is registered in respect of the LNG source,
(ii) is exempt from tax imposed under this Act,
(iii) is exempt by regulation from the requirement to be registered in respect of the LNG source, or
(iv) is not engaging in or deriving income from liquefaction activities in respect of the LNG source, or
(b) in the case of the partnership,
(i) that partnership
(A) is registered in respect of the LNG source, or
(B) is not engaging in or deriving income from liquefaction activities in respect of the LNG source, or
(ii) all the members of that partnership are each
(A) exempt from tax imposed under this Act, or
(B) exempt by regulation from the requirement to be registered in respect of the LNG source.
(4) If a person who is registered in respect of an LNG source participates in a transaction with another person or a partnership that was registered in respect of the LNG source but whose registration is suspended or cancelled, the person does not contravene subsection (3) in relation to a transaction that occurs before the commissioner has given notice to the person under section 124.22 (8).
124.21 (1) An applicant may apply to the commissioner to be registered for the purposes of this Act in respect of an LNG source by filing with the commissioner
(a) an application in the form, and containing the information, required by the commissioner, and
(b) any other information or records required by the commissioner.
(2) On receipt of an application and the information and records referred to in subsection (1), the commissioner may, subject to subsections (4) to (6) and the regulations,
(a) register the applicant for the purposes of this Act in respect of the LNG source and issue the applicant a registration number, and
(b) make the registration subject to conditions specified by the commissioner.
(3) In addition to the conditions under subsection (2) (b), an applicant's registration under subsection (2) is subject to conditions imposed by regulation.
(4) Before the commissioner registers an applicant under subsection (2), the commissioner may require a bond to be deposited under section 124.600 [collection bond].
(5) The commissioner may refuse to register an applicant under subsection (2) if any of the following apply:
(a) the applicant does not hold the registrations, licences, permits or other authorizations that the applicant is required by law to hold in order to carry out operations in respect of the LNG source;
(b) the applicant has refused or neglected to comply with a provision of, or has committed an offence against,
(i) this Act or any other Act that has, as its purpose, the imposition of a tax,
(ii) the regulations made under this Act or any other Act described in subparagraph (i), or
(iii) the federal Act.
(6) The commissioner must refuse to register an applicant under subsection (2) if a bond required under section 124.600 has not been deposited by the date specified by the commissioner under that section.
(7) If the commissioner refuses to register an applicant under subsection (2), the commissioner, as soon as reasonably possible, must give the applicant written reasons for the refusal.
(8) This section applies to provide for the registration of a partnership in accordance with the following rules:
(a) the partnership is the applicant for registration;
(b) a member of the partnership may apply for registration of the partnership on behalf of the partnership.
124.22 (1) The commissioner may, without advance notice to a person, suspend the person's registration in respect of an LNG source for a period of up to 120 days if any of the following apply:
(a) the commissioner is satisfied that the person knowingly made a false statement or an omission in an application for registration or other record filed in respect of the application;
(b) the person refuses or neglects to comply with
(i) a condition, specified by the commissioner under section 124.21 (2) (b) or imposed by regulation, to which the person's registration is subject, or
(ii) a requirement to deposit a bond under section 124.600;
(c) the person has refused or neglected to comply with a provision of, or has committed an offence against,
(i) this Act or any other Act that has, as its purpose, the imposition of a tax,
(ii) the regulations made under this Act or any other Act described in subparagraph (i), or
(iii) the federal Act;
(d) the person does not hold the registrations, licences, permits or other authorizations that the person is required by law to hold in order to carry out operations in respect of the LNG source.
(2) If the commissioner suspends the registration of a person under subsection (1), the commissioner must, as soon as reasonably possible,
(a) give the person written reasons for the suspension, and
(b) provide the person with an opportunity to show the commissioner why the suspension should be lifted.
(3) Suspension of a person's registration under subsection (1) takes effect on the later of
(a) the date the written reasons for the suspension are given to the person, and
(b) the date the suspension begins as stated in the written reasons.
(4) Subject to subsection (5), the commissioner may, by written notice given to a person, cancel the person's registration in respect of an LNG source if any of the following apply:
(a) the commissioner is satisfied that the person knowingly made a false statement or an omission in an application for registration or other record filed in respect of the application;
(b) the person refuses or neglects to comply with
(i) a condition, specified by the commissioner under section 124.21 (2) (b) or imposed by regulation, to which the person's registration is subject, or
(ii) a requirement to deposit a bond under section 124.600;
(c) the person has refused or neglected to comply with a provision of, or has committed an offence against,
(i) this Act or any other Act that has, as its purpose, the imposition of a tax,
(ii) the regulations made under this Act or any other Act described in subparagraph (i), or
(iii) the federal Act;
(d) the person does not hold the registrations, licences, permits or other authorizations that the person is required by law to hold in order to carry out operations in respect of the LNG source.
(5) Before cancelling a person's registration under subsection (4), the commissioner must
(a) give the person written notice of the reasons for the proposed cancellation, and
(b) provide the person with an opportunity to show the commissioner why the registration should not be cancelled.
(6) Whether or not a request for cancellation is made by a person, the commissioner may, by written notice given to the person, cancel the person's registration in respect of an LNG source if the commissioner is satisfied that the person is not engaging in or deriving income from liquefaction activities in respect of the LNG source.
(7) Cancellation of a person's registration under subsection (4) or (6) takes effect on the later of
(a) the date the notice of cancellation is given to the person, and
(b) a future date stated in the notice.
(8) If a person's registration in respect of an LNG source is suspended or cancelled under subsection (1), (4) or (6), the commissioner must as soon as reasonably possible give notice of the suspension or cancellation to all persons who are registered in respect of the LNG source.
(9) This section applies in relation to a partnership registered under section 124.21 as if the partnership were a person.
Part 8.3 – Returns, Assessments, Determinations, Payments, Penalties, Interest and Refunds
Division 1 – Tax Returns
124.300 (1) Subject to subsection (2), a person must file with the commissioner a separate tax return for a taxation year in respect of each LNG source for which the person is a taxpayer.
(2) Subsection (1) does not apply to a taxpayer for a taxation year if,
(a) for a period that includes the taxation year, the taxpayer is exempt under section 22 (1) to (3) [exemptions from tax] from tax imposed under this Act, or
(b) at the end of the taxation year, the taxpayer is exempt under section 22 (4) from tax imposed under this Act.
(3) Subject to subsection (4), the taxpayer must file the tax return under subsection (1) within 6 months after the end of the taxpayer's taxation year and without any notice or demand.
(4) The commissioner may at any time extend the time established by subsection (3) for filing a tax return under subsection (1).
124.301 (1) Subject to subsection (2), a trustee in bankruptcy, assignee, liquidator, receiver, administrator or any other person administering, managing, winding up, controlling or otherwise dealing with the property or business of a taxpayer who has not filed a tax return for a taxation year required under section 124.300 must file the tax return with the commissioner within 6 months after the later of
(a) the end of the taxpayer's taxation year, and
(b) the date on which the person began dealing with the property or business of the taxpayer.
(2) The commissioner may at any time extend the time established by subsection (1) for filing a tax return under that subsection.
124.302 (1) On written demand given to a person by the commissioner, the person must file with the commissioner, on or before the date specified in the demand, a tax return for a taxation year in respect of an LNG source.
(2) Subsection (1) applies whether or not a tax return has been or is required to be filed under section 124.300 or 124.301.
124.303 (1) A tax return must be in the form and contain the information required by the commissioner.
(2) Without limiting subsection (1), a person required to file a tax return must in the tax return estimate the amount of tax payable, if any, under this Act for the taxation year in respect of the LNG source.
(3) A person required to file a tax return must
(a) file the tax return in the manner required by the regulations, and
(b) file, with the tax return, any other information or records required by the commissioner.
Division 2 – Assessments and Determinations
in Respect of Taxpayers
124.310 After the commissioner receives a taxpayer's tax return filed for a taxation year in respect of an LNG source and any other information or records required to be filed with the tax return, the commissioner must
(a) examine the tax return,
(b) assess the taxpayer for any assessable amounts for the taxation year in respect of the LNG source, and
(c) determine any determinable amounts for the taxpayer for the taxation year in respect of the LNG source.
124.311 (1) The commissioner may assess a taxpayer for an assessable amount for a taxation year in respect of an LNG source, or determine a determinable amount for a taxpayer for a taxation year in respect of an LNG source,
(a) at any time, if
(i) the taxpayer has failed to file a tax return for the taxation year in respect of the LNG source,
(ii) the taxpayer or a person filing the taxpayer's tax return for the taxation year in respect of the LNG source has made any misrepresentation or committed any fraud
(A) in filing the tax return, or
(B) in supplying at any time other information or records under this Act for the taxation year in respect of the LNG source, or
(iii) a waiver filed under subsection (2) by the taxpayer for the taxation year in respect of the LNG source is in effect at that time, or
(b) within 6 years after the date of the original notice of assessment for the taxation year in respect of the LNG source, in any other case.
(2) A taxpayer may file with the commissioner a waiver for a taxation year in respect of an LNG source, in the form and containing the information required by the commissioner, before the expiration of the normal reassessment period for the taxation year.
(3) A waiver filed under subsection (2) continues in effect until 6 months after the taxpayer files with the commissioner a notice revoking the waiver in the form and containing the information required by the commissioner.
(4) Despite subsection (1), an assessment or determination to which subsection (1) (a) (ii) or (iii) applies in respect of a taxpayer for a taxation year may be made after the taxpayer's normal reassessment period for the taxation year, but only to the extent that the assessment or determination can reasonably be considered as relating to,
(a) if subsection (1) (a) (ii) applies to the assessment or determination, any misrepresentation made by the taxpayer or a person who filed the taxpayer's tax return for the taxation year or any fraud committed by the taxpayer or that person in filing the tax return or in supplying any other information or records under this Act, or
(b) if subsection (1) (a) (iii) applies to the assessment or determination, a matter specified in the waiver filed with the commissioner for the taxation year.
(5) The authority of the commissioner to assess a taxpayer for an assessable amount, or determine a determinable amount for a taxpayer, under sections 124.312 to 124.318
(a) is in addition to the authority to make an assessment or a determination under section 124.310 or this section,
(b) is not limited by the authority to make an assessment or a determination under section 124.310 or this section, and
(c) does not limit the authority to make an assessment or a determination under section 124.310 or this section.
124.312 (1) Subject to subsection (2), if the commissioner makes a determination under Division 4 in respect of a partnership or the minister amends or varies a decision of the commissioner on an objection that relates to a determination under Division 4 in respect of a partnership, the commissioner may do one or both of the following:
(a) assess any member of the partnership and any other taxpayer for an assessable amount for any taxation year in respect of an LNG source;
(b) determine a determinable amount for any member of the partnership and any other taxpayer for any taxation year in respect of an LNG source,
but only as is necessary to give effect to the determination under Division 4 or the decision of the minister in respect of the partnership.
(2) The commissioner may make an assessment or determination under subsection (1) only before the later of
(a) the expiration of the normal reassessment period for the taxation year, and
(b) the end of the day that is one year after the day on which,
(i) if the assessment or determination is giving effect to a determination under Division 4, all rights of objection and appeal expire or are determined in respect of the determination under Division 4 in respect of the partnership, or
(ii) if the assessment or determination is giving effect to a decision of the minister, all rights of appeal expire or are determined in respect of that decision.
(3) Subsection (4) applies if
(a) a determination is made under Division 4 in respect of a partnership for a fiscal period as a result of representations made to the commissioner that a person was a member of the partnership at any time in the fiscal period, and
(b) the commissioner, the minister or a court concludes at a subsequent time
(i) that the partnership did not exist for the fiscal period, or
(ii) that, throughout the fiscal period, the person was not a member of the partnership.
(4) If this subsection applies, the commissioner may, subject to subsection (5), assess any taxpayer for an assessable amount for any taxation year, or determine a determinable amount for any taxpayer for any taxation year, but only to the extent that the assessment or determination can reasonably be considered
(a) as relating to any matter that was relevant in the making of the determination made under Division 4,
(b) as resulting from the conclusion that the partnership did not exist for the fiscal period, or
(c) as resulting from the conclusion that the person was, throughout the fiscal period, not a member of the partnership.
(5) The commissioner may make an assessment or determination under subsection (4) only before the later of
(a) the expiration of the normal reassessment period for the taxation year, and
(b) the end of the day that is one year after the subsequent time referred to in subsection (3).
124.313 (1) Subsection (2) applies in relation to a taxpayer for a taxation year if
(a) the taxpayer is issued a notice of assessment, reassessment, additional assessment, determination or redetermination under the Income Tax Act or the federal Act for the taxation year, and
(b) an amount relevant in computing an assessable amount or determinable amount for the taxpayer would be changed if an assessment or determination were made under this Part applying a provision of this Act in a manner consistent with a similar provision of the Income Tax Act or the federal Act that was applied in relation to the notice referred to in paragraph (a).
(2) If this subsection applies in relation to a taxpayer for a taxation year,
(a) the taxpayer must notify the commissioner, within 90 days of receiving the notice referred to in subsection (1) (a), by filing with the commissioner
(i) a notice in the form and containing the information required by the commissioner, and
(ii) with the notice, any other information or records required by the commissioner, and
(b) subject to subsection (3), the commissioner may assess the taxpayer for an assessable amount for the taxation year in respect of an LNG source, or determine a determinable amount for the taxpayer for the taxation year in respect of an LNG source, but only to the extent that the assessment or determination can reasonably be considered as relating to the assessment, reassessment, additional assessment, determination or redetermination under the Income Tax Act or the federal Act.
(3) The commissioner may make an assessment or determination under subsection (2) only before the later of
(a) the expiration of the normal reassessment period for the taxation year, and
(b) the end of the day that is one year after the day that is the earlier of
(i) the day that the commissioner is notified by the taxpayer under subsection (2) (a), and
(ii) the day that the commissioner is otherwise notified of the assessment, reassessment, additional assessment, determination or redetermination under the Income Tax Act or the federal Act.
124.314 (1) This section applies in relation to a taxpayer if
(a) a court has, on the disposition of an appeal by the taxpayer in respect of an assessment or determination under this Division,
(i) allowed the appeal,
(ii) varied the decision from which the appeal was made, or
(iii) referred the decision back to the commissioner for reconsideration, and
(b) any further appeal is disposed of or the time for filing any further appeal has expired.
(2) If this section applies in relation to a taxpayer, the commissioner must
(a) reassess the taxpayer for an assessable amount, or
(b) redetermine a determinable amount for the taxpayer
in accordance with the decision of the court, unless otherwise directed in writing by the taxpayer.
124.315 (1) This section applies in relation to a taxpayer if the result of an assessment or determination under this Division, or a decision on an objection or appeal that relates to an assessment or determination under this Division, is to change a particular assessable amount or determinable amount for the taxpayer for a particular taxation year in respect of an LNG source.
(2) Subject to subsection (3), the commissioner may do one or both of the following in relation to a taxpayer to whom this section applies:
(a) reassess the taxpayer for an assessable amount for a subsequent taxation year;
(b) redetermine a determinable amount for the taxpayer for a subsequent taxation year,
but only to the extent that the reassessment or redetermination can reasonably be considered as relating to the change in the particular assessable amount or determinable amount for the taxpayer for the particular taxation year in respect of the LNG source.
(3) The commissioner may make a reassessment or redetermination under subsection (2) only before the later of
(a) the expiration of the normal reassessment period in respect of the subsequent taxation year, and
(b) the end of the day that is one year after the day on which all rights of objection and appeal expire or are determined in respect of the particular taxation year.
124.316 (1) The commissioner may at any time assess a taxpayer for an assessable amount for any taxation year, or determine a determinable amount for a taxpayer for any taxation year,
(a) as is necessary to give effect to section 67.5 (1) [non-deductibility of illegal payments] of the federal Act, as that section applies for the purposes of this Act, or
(b) as is necessary to give effect to section 143.4 [expenditure – limit for contingent amount] of the federal Act, as that section applies for the purposes of this Act.
(2) For the purpose of disposing of an appeal made under this Act, the commissioner may at any time, with the taxpayer's written consent, assess a taxpayer for an assessable amount for any taxation year, or determine a determinable amount for the taxpayer for any taxation year, as is necessary to give effect to the consent.
124.317 (1) The commissioner may at any time assess a person who is a legal representative of a taxpayer for any amount payable by the person under section 159 (3) [personal liability re person acting for another] of the federal Act, as that section applies for the purposes of this Act.
(2) The commissioner may at any time assess a person for any amount payable by the person under section 124.354 [if excess refunded].
(3) This Act applies to a person who is assessed under subsection (1) or (2) as if
(a) the person were a taxpayer, and
(b) the amount payable by the person were tax payable under this Act by the person for the taxation year in which the amount became payable.
124.318 (1) The commissioner may at any time assess a person for a penalty to which the person is liable under this Act, other than a penalty to which the person is liable under any of the following sections:
(a) section 80 [transfer pricing penalty];
(b) section 124.361 (1), (4) or (7) [failure to file tax return];
(c) section 124.365 [failure to make election before filing-due date];
(d) section 124.367 [failure to report amount];
(e) section 124.368 [false statement or omission].
(2) The commissioner may at any time assess a person for any interest payable under this Act by the person.
(3) The commissioner may at any time reassess a person
(a) as is necessary to give effect to a cancellation under section 124.372 of all or part of a penalty otherwise payable under this Act by the person, or
(b) as is necessary to give effect to a cancellation under section 124.385 of all or part of any interest otherwise payable under this Act by the person.
124.319 (1) Despite a prior assessment, or if no assessment has been made, a person continues to be liable for taxes, penalties and interest due under this Act.
(2) In making an assessment or determination under this Division, the commissioner
(a) is not bound by a return filed under this Act or any other information or records supplied under this Act, and
(b) may assess an assessable amount or determine a determinable amount despite the filing of a return or the supply of any other information or records under this Act or if no return has been filed.
(3) Subject to being amended or varied on an objection or on appeal or by a reassessment or redetermination, an assessment or determination under this Division is valid and binding despite any error, defect or omission in the assessment or determination or in procedure.
124.320 (1) After making an assessment or a determination under this Division in respect of a person, the commissioner must give the person a notice of assessment that includes a statement of the assessable amounts, any other amounts assessed under this Division and the determinable amounts.
(2) If a notice of assessment has been given to a person as required by this Act, the assessment or determination under this Division is deemed to have been made on the date of the notice.
(3) Evidence that a notice of assessment has been given is proof, in the absence of evidence to the contrary,
(a) that the amounts assessed under this Act are due and owing, and the onus of proving otherwise is on the person liable to pay the amounts assessed, and
(b) that the determinable amounts determined under this Division are correct, and the onus of proving otherwise is on the person in relation to whom the amounts have been determined.
Division 3 – Partnership Returns
124.330 For the purposes of this Division, if a person is a member of a partnership that is a member of another partnership, the person is deemed to be a member of the other partnership.
124.331 (1) This section applies to a person in relation to a fiscal period of a partnership if
(a) the person is, at any time in the fiscal period, a member of the partnership, and
(b) the partnership engages in or has income derived from liquefaction activities in respect of an LNG source at any time in the fiscal period.
(2) A person to whom this subsection applies must file with the commissioner a separate partnership return for the fiscal period of the partnership in respect of each LNG source for which the partnership engages in or has income derived from liquefaction activities.
(3) Subject to subsection (4), the person must file the partnership return under subsection (2) within 5 months after the end of the partnership's fiscal period and without any notice or demand.
(4) The commissioner may at any time extend the time established by subsection (3) for filing a partnership return under subsection (2).
124.332 (1) On written demand given by the commissioner to a person who is, at any time in a fiscal period of a partnership, a member of the partnership, the person must file with the commissioner, on or before the date specified in the demand, a partnership return for the fiscal period in respect of an LNG source.
(2) Subsection (1) applies whether or not a partnership return has been or is required to be filed under section 124.331.
124.333 (1) A partnership return must be in the form and contain the information required by the commissioner.
(2) A person required to file a partnership return must
(a) file the partnership return in the manner required by the regulations, and
(b) file, with the partnership return, any other information or records required by the commissioner.
124.334 For the purposes of this Division, a partnership return filed by a person who is a member of a partnership is deemed to have been filed by each member of the partnership.
Division 4 – Determinations in Respect of Partnerships
124.340 For the purposes of this Division, if a person is a member of a partnership that is a member of another partnership, the person is deemed to be a member of the other partnership.
124.341 After the commissioner receives a partnership return filed in respect of an LNG source for a fiscal period of a partnership and any other information or records required to be filed with the partnership return, the commissioner must
(a) examine the partnership return, and
(b) determine any determinable partnership amounts for the partnership for the fiscal period in respect of the LNG source.
124.342 (1) The commissioner may determine a determinable partnership amount for a partnership for a fiscal period in respect of an LNG source,
(a) at any time, if
(i) no person has filed a partnership return for the fiscal period in respect of the LNG source,
(ii) any member of the partnership or a person filing the partnership's partnership return for the fiscal period in respect of the LNG source has made any misrepresentation or committed any fraud
(A) in filing the partnership return, or
(B) in supplying at any time other information or records under this Act for the fiscal period in respect of the LNG source, or
(iii) a waiver filed under subsection (2) by a member of the partnership for the fiscal period in respect of the LNG source is in effect at that time, or
(b) within 6 years after the date of the original notice of determination for the fiscal period in respect of the LNG source, in any other case.
(2) Subject to subsection (4), a person who is a member of a partnership may file with the commissioner a waiver for a fiscal period in respect of an LNG source, in the form and containing the information required by the commissioner, before the expiration of the normal redetermination period for the fiscal period.
(3) A waiver filed under subsection (2) continues in effect until 6 months after, subject to subsection (4), a person who is a member of the partnership files with the commissioner a notice revoking the waiver in the form and containing the information required by the commissioner.
(4) A waiver filed under subsection (2), or a notice filed under subsection (3) revoking a waiver, in respect of a partnership for a fiscal period may be filed by a person who is a member of the partnership if that person is
(a) designated for that purpose in the partnership return filed under section 124.331 for the fiscal period, or
(b) otherwise expressly authorized by the partnership to file the waiver or notice.
(5) For the purposes of subsections (2) and (3), a waiver or a notice revoking a waiver filed by any member of a partnership in accordance with subsection (4) is deemed to have been filed by each member of the partnership.
(6) Despite subsection (1), a determination to which subsection (1) (a) (ii) or (iii) applies in respect of a partnership for a fiscal period may be made after the partnership's normal redetermination period for the fiscal period, but only to the extent that the determination can reasonably be considered as relating to,
(a) if subsection (1) (a) (ii) applies to the determination, any misrepresentation made by any member of the partnership or a person who filed the partnership's partnership return for the fiscal period or any fraud committed by any member of the partnership or that person in filing the partnership return or in supplying any other information or records under this Act, or
(b) if subsection (1) (a) (iii) applies to the determination, a matter specified in the waiver filed with the commissioner for the fiscal period.
(7) The authority of the commissioner to determine a determinable partnership amount for a partnership under sections 124.343 to 124.346
(a) is in addition to the authority to make a determination under section 124.341 or this section,
(b) is not limited by the authority to make a determination under section 124.341 or this section, and
(c) does not limit the authority to make a determination under section 124.341 or this section.
124.343 (1) Subsection (2) applies in relation to a member of a partnership for a fiscal period of the partnership if
(a) the member is issued a notice of determination or redetermination made in respect of the partnership under the federal Act for the fiscal period, and
(b) an amount relevant in computing a determinable partnership amount would be changed if a determination were made under this Part applying a provision of this Act in a manner consistent with a similar provision of the federal Act that was applied in relation to the notice referred to in paragraph (a).
(2) If this subsection applies in relation to a member of a partnership for a fiscal period of the partnership,
(a) the member must notify the commissioner, within 90 days of receiving the notice referred to in subsection (1) (a), by filing with the commissioner
(i) a notice in the form and containing the information required by the commissioner, and
(ii) with the notice, any other information or records required by the commissioner, and
(b) subject to subsection (3), the commissioner may determine a determinable partnership amount for the partnership for a fiscal period in respect of an LNG source, but only to the extent that the determination can reasonably be considered as relating to the determination or redetermination under the federal Act.
(3) The commissioner may make a determination under subsection (2) only before the later of
(a) the expiration of the normal redetermination period for the fiscal period, and
(b) the end of the day that is one year after the day that is the earlier of
(i) the day that the commissioner is notified by the member under subsection (2) (a), and
(ii) the day that the commissioner is otherwise notified of the determination or redetermination made under the federal Act.
(4) For the purposes of subsection (2), notification given by a person who is a member of a partnership is deemed to have been given by each member of the partnership.
124.344 (1) This section applies in relation to a partnership if
(a) a court has, on the disposition of an appeal in respect of a determination under this Division for the partnership,
(i) allowed the appeal,
(ii) varied the decision from which the appeal was made, or
(iii) referred the decision back to the commissioner for reconsideration, and
(b) any further appeal is disposed of or the time for filing any further appeal has expired.
(2) If this section applies in relation to a partnership, the commissioner must redetermine a determinable partnership amount for the partnership in accordance with the decision of the court, unless otherwise directed in writing by a member of the partnership expressly authorized by the partnership to provide that direction.
124.345 (1) This section applies in relation to a partnership if the result of a determination under this Division, or a decision on an objection or appeal that relates to a determination under this Division, is to change a particular determinable partnership amount for the partnership for a particular fiscal period in respect of an LNG source.
(2) Subject to subsection (3), the commissioner may, in relation to a partnership to which this section applies, redetermine a determinable partnership amount for the partnership for a subsequent fiscal period, but only to the extent that the redetermination can reasonably be considered as relating to the change in the particular determinable partnership amount for the partnership for the particular fiscal period in respect of that LNG source.
(3) The commissioner may make a redetermination under subsection (2) only before the later of
(a) the expiration of the normal redetermination period in respect of the subsequent fiscal period, and
(b) the end of the day that is one year after the day on which all rights of objection and appeal expire or are determined in respect of the particular fiscal period.
124.346 (1) The commissioner may at any time determine a determinable partnership amount for a partnership for any fiscal period
(a) as is necessary to give effect to section 67.5 (1) [non-deductibility of illegal payments] of the federal Act, as that section applies for the purposes of this Act, or
(b) as is necessary to give effect to section 143.4 [expenditure – limit for contingent amount] of the federal Act, as that section applies for the purposes of this Act.
(2) For the purpose of disposing of an appeal made under this Act that relates to a determination under this Division in respect of a partnership, the commissioner may at any time, with the written consent of the member of the partnership referred to in section 124.52 (10), determine a determinable partnership amount for the partnership for any fiscal period as is necessary to give effect to the consent.
124.347 (1) In making a determination under this Division, the commissioner
(a) is not bound by a partnership return or information return filed under this Act or any other information or records supplied under this Act, and
(b) may determine a determinable partnership amount despite the filing of a partnership return or information return or the supply of any other information or records under this Act or if no partnership return or information return has been filed.
(2) Subject to being amended or varied on an objection or appeal or by a redetermination, a determination under this Division is valid and binding despite any error, defect or omission in the determination or in procedure.
124.348 (1) After making a determination under this Division, the commissioner must give a notice of determination to the partnership and to each person who was a member of the partnership during the fiscal period.
(2) The notice of determination must include a statement of any determinable partnership amounts.
(3) If a notice of determination has been given to a person as required by this Act, the determination under this Division is deemed to have been made on the date of the notice.
(4) A determination made under this Division in respect of a partnership for a fiscal period is not invalid only because one or more persons who were members of the partnership during the fiscal period did not receive a notice of determination.
(5) Evidence that a notice of determination has been given is proof, in the absence of evidence to the contrary, that the determinable partnership amounts determined under this Division are correct, and the onus of proving otherwise is on the members of the partnership in relation to which the amounts have been determined.
Division 5 – Payment of Tax
124.350 (1) Subject to subsection (2), a taxpayer must make instalment payments in accordance with subsection (3) on account of the taxpayer's tax payable under this Act for a taxation year in respect of an LNG source if the taxpayer's instalment base for the taxation year in respect of the LNG source exceeds $100 000.
(2) Subsection (3) does not apply to a taxpayer for the taxpayer's first taxation year in respect of an LNG source unless the taxpayer is a new corporation referred to in section 88 (a) [new corporation resulting from amalgamation].
(3) A taxpayer who must make instalment payments for a taxation year in respect of an LNG source must pay to the government, on or before each instalment-due date for the taxation year, an amount at least equal to 25% of the lesser of
(a) the taxpayer's instalment base for the taxation year in respect of the LNG source, and
(b) the taxpayer's estimated tax payable for the taxation year in respect of the LNG source.
124.351 (1) In this section:
"last taxation year", in relation to a predecessor corporation, has the same meaning as in section 86;
"predecessor corporation" has the same meaning as in section 86.
(2) For the purposes of this Act, a taxpayer's instalment base for a taxation year in respect of an LNG source is, subject to subsections (3) and (4) of this section, equal to the amount determined by the following formula:
| amount = tax payable x | |
365 | |
| taxation year days |
| where | ||
| tax payable | = | the taxpayer's tax payable under this Act for the preceding taxation year in respect of the LNG source; |
| taxation year days | = | the lesser of 365 and the number of days in the preceding taxation year. |
(3) If the number of days in the preceding taxation year is less than 183, the taxpayer's instalment base for the taxation year in respect of the LNG source is equal to the greater of
(a) the amount otherwise determined under subsection (2), and
(b) the amount that would be determined by the formula in subsection (2) if the references in that subsection to "preceding taxation year" were read as references to "the taxpayer's most recent taxation year in which there were more than 182 days".
(4) If a taxpayer is a new corporation referred to in section 88 (a) [new corporation resulting from amalgamation], the taxpayer's instalment base for the taxpayer's first taxation year in respect of an LNG source is equal to the total of all amounts each of which is an amount that, subject to subsection (5), would be determined by the formula in subsection (2) if that formula were applied to each predecessor corporation in respect of the LNG source as if the predecessor corporation's last taxation year were the predecessor corporation's preceding taxation year.
(5) For the purposes of subsection (4), subsection (3) applies in respect of a predecessor corporation if the number of days in the predecessor corporation's last taxation year is less than 183.
124.352 (1) On or before the day a taxpayer is required to file a tax return for a taxation year in respect of an LNG source, the taxpayer must pay the amount remaining unpaid of the taxpayer's tax payable under this Act for the taxation year in respect of the LNG source as estimated in the tax return.
(2) If the amount of tax payable for a taxation year in respect of an LNG source assessed against a taxpayer, as stated in a notice of assessment, exceeds the estimate of the amount of tax payable for the taxation year in respect of the LNG source, as estimated in the tax return filed for that taxation year, the taxpayer must pay the amount of the excess not later than 30 days after the date of the notice of assessment.
124.353 (1) The following sections of the federal Act apply for the purposes of this Act:
section 159 (1) [person acting for another];
section 159 (2) [certificate before distribution];
section 159 (3) [personal liability];
section 159 (3.1) [appropriation of property].
(2) In applying section 159 (1) of the federal Act for the purposes of this Act, paragraph (a) of that section is to be read as if
(a) the reference to ", or solidarily," were excluded, and
(b) the reference in subparagraph (i) of that paragraph to "or the taxpayer's estate" were excluded.
(3) In applying section 159 (2) of the federal Act for the purposes of this Act, that section is to be read as if
(a) the references to "Minister" were read as references to "commissioner", and
(b) the reference to "by applying for one in prescribed form" were read as a reference to "by filing an application in the form required by the commissioner".
(4) In applying section 159 (3) of the federal Act for the purposes of this Act, that section is to be read without reference to paragraphs (b) and (c) of that section.
124.354 If at any time the commissioner determines that an amount has been refunded to a person in excess of the amount to which the person was entitled as a refund under this Act, the excess is deemed to be an amount that became payable by the person on the day on which the amount was refunded.
Division 6 – Penalties
124.360 (1) A person who contravenes section 124.20 (1) [requirement to be registered and transact only with registered persons or partnerships] is liable to a penalty equal to $1 000 for each whole or partial month during which the contravention continues.
(2) If one or more members of a partnership contravene section 124.20 (2), the partnership is liable to a penalty equal to $1 000 for each whole or partial month during which the contravention continues.
124.361 (1) Subject to subsection (2), a taxpayer who fails to file a tax return for a taxation year in respect of an LNG source as and when required by section 124.300 [tax returns – general rule] is liable to a penalty equal to the greater of the following:
(a) the product obtained by multiplying $100 by the number of days, not exceeding 100, during which the failure continues;
(b) if the taxpayer must pay tax under this Act for the taxation year in respect of the LNG source, the total of
(i) an amount equal to 10% of the taxpayer's notional tax benefit for the taxation year in respect of the LNG source, and
(ii) the product obtained by multiplying the following:
(A) an amount equal to 1% of the taxpayer's notional tax benefit for the taxation year in respect of the LNG source;
(B) the number of months, not exceeding 12 and rounded down to the nearest whole number, from the date on which the tax return was required to be filed to the date on which the tax return was filed.
(2) Subsection (1) does not apply to a taxpayer who is liable to a penalty under subsection (4) or (7) in respect of a failure to file a tax return for the same taxation year in respect of the same LNG source.
(3) A person who fails to file a tax return as and when required by section 124.301 [tax return required to be filed by person dealing with property or business of taxpayer] is liable to a penalty of $10 for each day of default but not exceeding $50 in respect of that tax return.
(4) Subject to subsection (5), a taxpayer who fails to file a tax return for a taxation year in respect of an LNG source as and when required on demand under section 124.302 [tax return required on demand] is liable to a penalty equal to the product obtained by multiplying the amount that would be the penalty under subsection (1) of this section, if that subsection were to apply to the failure, by 2.
(5) Subsection (4) does not apply to a taxpayer who is liable to a penalty under subsection (7) in respect of a failure to file a tax return for the same taxation year in respect of the same LNG source.
(6) Subsection (7) applies to a taxpayer
(a) who fails to file a tax return for a taxation year in respect of an LNG source as and when required by section 124.300, and
(b) by whom, before the time of failure, a penalty was payable under subsection (1), (4) or (7) in respect of a tax return for any of the 3 preceding taxation years in respect of the LNG source.
(7) A taxpayer to whom this subsection applies is liable to a penalty equal to the greater of the following:
(a) the product obtained by multiplying $100 by the number of days, not exceeding 100, during which the failure continues;
(b) if the taxpayer must pay tax under this Act for the taxation year in respect of the LNG source, the total of
(i) an amount equal to 10% of the taxpayer's notional tax benefit for the taxation year in respect of the LNG source, and
(ii) the product obtained by multiplying the following:
(A) an amount equal to 2% of the taxpayer's notional tax benefit for the taxation year in respect of the LNG source;
(B) the number of months, not exceeding 20 and rounded down to the nearest whole number, from the date on which the tax return was required to be filed to the date on which the tax return was filed.
124.362 (1) If a person fails to file a partnership return for a fiscal period of a partnership in respect of an LNG source as and when required by section 124.331 [partnership returns – general rule], the partnership is liable to a penalty equal to the greater of
(a) $1 000, and
(b) the product obtained by multiplying $100 by the number of days, not exceeding 100, during which the failure continues.
(2) If a person fails to file a partnership return for a fiscal period of a partnership in respect of an LNG source as and when required on demand under section 124.332 [partnership return required on demand], the partnership is liable to a penalty equal to the product obtained by multiplying the amount that would be the penalty under subsection (1) of this section, if that subsection were to apply to the failure, by 2.
124.363 (1) If a person fails to file an information return as and when required by the regulations, other than an information return filed in respect of a partnership, the person is liable in respect of each failure to a penalty equal to the greater of
(a) $1 000, and
(b) the product obtained by multiplying $100 by the number of days, not exceeding 100, during which the failure continues.
(2) If a person fails to file an information return in respect of a partnership as and when required by the regulations, the partnership is liable in respect of each failure to a penalty equal to the greater of
(a) $1 000, and
(b) the product obtained by multiplying $100 by the number of days, not exceeding 100, during which the failure continues.
(3) If a person fails to file an information return as and when required on demand under section 124.407 (2) [demand for information return], the person is liable to a penalty equal to the product obtained by multiplying the amount that would be the penalty under subsection (1) of this section, if that subsection were to apply to the failure, by 2.
(4) If a person fails to file an information return in respect of a partnership as and when required on demand under section 124.407 (3), the partnership is liable to a penalty equal to the product obtained by multiplying the amount that would be the penalty under subsection (2) of this section, if that subsection were to apply to the failure, by 2.
124.364 (1) A person who fails to file a tax return in the manner required by the regulations is liable to a penalty of $1 000.
(2) If a person fails to file a partnership return in the manner required by the regulations, the partnership is liable to a penalty of $1 000.
(3) If a person fails to file an information return in the manner required by the regulations, other than an information return in respect of a partnership, the person is liable to a penalty of $1 000.
(4) If a person fails to file an information return in respect of a partnership in the manner required by the regulations, the partnership is liable to a penalty of $1 000.
124.365 (1) If a taxpayer elects to apply section 84 (3) [amounts included in net operating loss account] but fails to make the election before the filing-due date for the taxpayer's first taxation year, the taxpayer is liable to a penalty equal to the product obtained by multiplying $800 by the number of whole and partial months in the period beginning immediately after that filing-due date and ending on the day the election is made.
(2) If a taxpayer elects to apply section 85 (3) or (6) [amounts included in capital investment account] but fails to make the election before the filing-due date for the taxpayer's first taxation year, the taxpayer is liable to a penalty equal to the product obtained by multiplying $800 by the number of whole and partial months in the period beginning immediately after that filing-due date and ending on the day the election is made.
124.366 (1) Subject to subsection (2), if a person who is required to file a tax return or information return fails to provide any information required on the tax return or information return or fails to file any other information or record required to be filed with the tax return or information return, the person is liable to a penalty of $100 for each failure.
(2) If a person who is required to file a partnership return or an information return in respect of a partnership fails to provide any information required on the partnership return or information return or fails to file any other information or record required to be filed with the partnership return or information return, the partnership is liable to a penalty of $100 for each failure.
(3) Subject to subsection (4), if a person fails to provide information required by a regulation made under section 127.2 (f) to another person required to file a return or to supply any other information or records under this Act containing that information, the person is liable to a penalty of $100 for each failure.
(4) If a person who is a member of a partnership fails to provide information required, by a regulation made under section 127.2 (f), to be provided in relation to the partnership to another person required to file a return or to supply any other information or records under this Act containing that information, the partnership is liable to a penalty of $100 for each failure.
124.367 (1) Subsection (3) applies to a taxpayer who fails to report, in a tax return filed under this Act for a taxation year in respect of an LNG source,
(a) an amount required to be included in computing the taxpayer's net income or net operating income for the taxation year from the LNG source, or
(b) an amount required to be deducted in computing the balance of the taxpayer's capital investment account for the LNG source at the end of the taxation year.
(2) Subsection (3) does not apply to a taxpayer if the taxpayer
(a) is liable to a penalty under section 124.368 in respect of the amount referred to in subsection (1) (a) or (b) of this section, or
(b) the taxpayer is not required to pay tax under this Act for the taxation year in respect of the LNG source.
(3) A taxpayer to whom this subsection applies is liable to a penalty equal to 25% of the taxpayer's notional tax benefit for the taxation year in respect of the LNG source.
124.368 A taxpayer who knowingly, or under circumstances amounting to gross negligence, makes, or participates in, assents to or acquiesces in the making of, a false statement or an omission in a return or other record filed in respect of a taxation year for the purposes of this Act, is liable to a penalty equal to 100% of the taxpayer's notional tax benefit for the taxation year in respect of the LNG source.
124.369 (1) Subject to subsection (2), a person who fails to comply with a provision of this Act or the regulations is liable in respect of each failure, except where another provision of this Act sets out a penalty for the failure, to a penalty equal to the greater of
(a) $1 000, and
(b) the product obtained by multiplying $100 by the number of days, not exceeding 100, during which the failure continues.
(2) If a person who is a member of a partnership fails to comply with a provision of this Act or the regulations in respect of an obligation imposed on the person as a member of the partnership or on the partnership, the partnership is liable in respect of each failure, except where another provision of this Act sets out a penalty for the failure, to a penalty equal to the greater of
(a) $1 000, and
(b) the product obtained by multiplying $100 by the number of days, not exceeding 100, during which the failure continues.
124.370 If a partnership is liable to a penalty under this Division, this Act applies to the partnership in relation to the penalty as if the partnership were a corporation.
124.371 (1) For the purposes of this Act, a taxpayer's notional tax benefit for a taxation year in respect of an LNG source is, subject to subsection (2), the amount determined by the following formula:
| amount = notiional benefit – |  |
notional benefit x | |
tax paid | |
 |
| tax payable |
| where | ||||
| notional benefit | = | the taxpayer's notional benefit for the taxation year in respect of the LNG source as determined under subsection (3); | ||
| tax paid | = | the lesser of | ||
| (a) | the amount of tax paid by the taxpayer on or before the filing-due date for the taxation year in respect of tax payable by the taxpayer for the taxation year in respect of the LNG source, and | |||
| (b) | the amount of tax payable by the taxpayer for the taxation year in respect of the LNG source; | |||
| tax payable | = | the amount of tax payable by the taxpayer for the taxation year in respect of the LNG source. | ||
(2) For the purposes of section 124.368 [false statement or omission], a taxpayer's notional tax benefit for a taxation year in respect of an LNG source is equal to the taxpayer's notional benefit for the taxation year in respect of the LNG source as determined under subsection (3).
(3) For the purposes of subsections (1) and (2), a taxpayer's notional benefit for a taxation year in respect of an LNG source is equal to the total of the following:
(a) an amount equal to the applicable percentage for the taxation year of the total of the following:
(i) the amount, if any, by which the taxpayer's net operating income for the taxation year from the LNG source exceeds the amount originally reported in the taxpayer's tax return as the taxpayer's net operating income for that taxation year from that LNG source;
(ii) the amount, if any, by which the amount originally reported in the taxpayer's tax return as the taxpayer's net operating loss for the taxation year from the LNG source exceeds the taxpayer's net operating loss for that taxation year from that LNG source;
(iii) the amount, if any, by which the amount originally reported in the taxpayer's tax return as the balance of the taxpayer's capital investment account for the LNG source at the end of the taxation year exceeds the balance of the taxpayer's capital investment account for the LNG source at the end of that taxation year;
(b) the amount, if any, by which the amount of the tax credit under section 122 [closure tax credit] originally claimed in the application filed with the taxpayer's tax return for the taxation year in respect of the LNG source exceeds the amount deemed by section 123 [deemed payment – closure tax credit] to have been paid on account of the taxpayer's tax payable under this Act in respect of that LNG source.
(4) If a taxpayer has failed to file a tax return for a taxation year in respect of an LNG source as and when required under this Act, in determining the taxpayer's notional tax benefit under subsection (1) for the purposes of a penalty under section 124.361 [failure to file tax return], the taxpayer is deemed to
(a) have filed a tax return for the taxation year,
(b) have originally reported in that tax return a net operating income for the taxation year in respect of the LNG source equal to zero, and
(c) have originally reported in that tax return as the balance of the taxpayer's capital investment account for the LNG source at the end of the taxation year an amount equal to the amount, if any, that would be that balance if the balance of the taxpayer's capital investment account for the LNG source at the end of the preceding taxation year
(i) were reduced by any amount deducted under section 54 (3) (b) [capital investment account deduction] in computing the taxpayer's net income for the preceding taxation year from the LNG source, and
(ii) were increased by any amount included under section 54 (2) (b) [recaptured negative capital investment account balance] in computing the taxpayer's net income for the preceding taxation year from the LNG source.
124.372 The commissioner may at any time waive or cancel all or part of a penalty otherwise payable under this Act by a person.
Division 7 – Interest
124.380 (1) If a taxpayer fails to pay an instalment on or before an instalment-due date as required under section 124.350 [instalment payments] for a taxation year in respect of an LNG source, the taxpayer must pay to the government interest on the amount equal to 25% of the lesser of
(a) the taxpayer's instalment base for the taxation year in respect of the LNG source, and
(b) the taxpayer's tax payable for the taxation year in respect of the LNG source.
(2) A taxpayer who is required to pay an instalment under section 124.350 for a taxation year in respect of an LNG source must pay interest under subsection (3) if the taxpayer pays an instalment on or before an instalment-due date that is less than the amount that is equal to 25% of the lesser of
(a) the taxpayer's instalment base for the taxation year in respect of the LNG source, and
(b) the taxpayer's tax payable for the taxation year in respect of the LNG source.
(3) A taxpayer who must pay interest under this subsection must pay to the government interest on the amount by which the amount referred to in subsection (2) exceeds the amount of the instalment referred to in that subsection.
(4) Interest payable under subsection (1) or (3) is payable from the instalment-due date until the earlier of
(a) the date of payment, and
(b) the balance-due date for the taxation year.
124.381 If, for any period that begins after a taxpayer's balance-due date for a taxation year, the taxpayer's tax payable under this Act for the taxation year in respect of an LNG source exceeds the total of all amounts paid before that period on account of that tax payable, the taxpayer must pay to the government interest on the amount of excess for that period.
124.382 A person must pay to the government interest on a penalty assessed under this Act as follows:
(a) in the case of a penalty under section 80 [transfer pricing penalty], from the date on which the tax return for a taxation year in respect of which the penalty is payable was required to be filed until the date of payment;
(b) in the case of a penalty under section 124.361 [failure to file tax return] or 124.367 [failure to report amount], from the date on which the tax return for a taxation year was required to be filed until the date of payment;
(c) in the case of a penalty under section 124.362 [failure to file partnership return], from the date on which the partnership return for a fiscal period of the partnership was required to be filed until the date of payment;
(d) in the case of a penalty under section 124.363 [failure to file information return], from the date on which the information return was required to be filed until the date of payment;
(e) in the case of a penalty under section 124.364 [failure to file return in manner required], from the date on which the return was required to be filed until the date of payment;
(f) in the case of a penalty under section 124.366 (1) or (2) [failure to provide required information], from the date on which the return or other information or record was required to be filed until the date of payment;
(g) in the case of a penalty under section 124.368 [false statement or omission], from the date on which the return or other record was required to be filed until the date of payment;
(h) in the case of a penalty under a provision of this Act other than a provision referred to in paragraphs (a) to (g), from the date of the notice of assessment that specifies the amount of the penalty assessed until the date of payment.
124.383 Interest payable to the government under this Act must be calculated at the prescribed rate and in the prescribed manner.
124.384 Despite any other provision of this Division, if a person pays in full the amount that is owing to the government under this Act and that is specified in a notice of assessment or in a statement of account given by the commissioner to the person and that full payment is made within 30 days after the date of the notice of assessment or statement, interest is not payable on the amount owing from the date of the notice of assessment or statement until the date of payment.
124.385 The commissioner may at any time waive or cancel all or part of any interest otherwise payable under this Act by a person.
Division 8 – Refunds
124.390 (1) If a notice of assessment or statement of account given to a person discloses that an overpayment has been made under this Act by the person, the minister must refund the amount overpaid to the person.
(2) If, as a result of the minister amending or varying a decision of the commissioner, an overpayment has been made under this Act by a person, the minister must refund the amount overpaid to the person.
(3) Despite subsections (1) and (2), if further tax payable by the person is due or accruing due or another amount is owing to the government under this Act, the amount overpaid must first be applied in satisfaction of the tax and any other amount owing, and notice must be given by the commissioner to the person, accompanied by the refund of any amount overpaid and remaining unapplied.
(4) Despite subsections (1) to (3), if the amount to be refunded under subsection (1), (2) or (3) is less than $10, the amount overpaid, and, in the case of subsection (3), remaining unapplied, is deemed to be zero.
(5) A refund under this section may be made with the notice of assessment or after the notice of assessment has been given to the person.
124.391 (1) In this section, "payor" means a person or partnership that deposited a bond that was applied under section 124.600 (9) [collection bond] to pay an amount owing by another person.
(2) Despite section 124.390 but subject to subsection (3) of this section, if an amount from a bond deposited by a payor has been applied under section 124.600 (9) to an amount owing to the government under this Act by a person and there would be an overpayment under section 124.390 by the person if the amount applied had been paid by the person, the minister must refund to the payor the lesser of
(a) the amount applied under section 124.600 (9) from the bond deposited by the payor, and
(b) the amount that would be the overpayment.
(3) If amounts from bonds deposited by more than one payor have been applied under section 124.600 (9) to the amount owing by the person, the minister must, subject to subsection (5), refund to each payor the amount determined in accordance with the regulations.
(4) The total amount refunded under subsection (3) may not exceed the lesser of
(a) the amounts applied under section 124.600 (9) from the bonds deposited by the payors, and
(b) the amount that would be the overpayment under section 124.390 by the person if the amounts applied had been paid by the person.
(5) Section 124.390 (3) and (4) applies to a payor in relation to an amount to be refunded under subsection (2) or (3) of this section.
124.392 If the minister pays a refund under this Division, the minister must pay the refund from the consolidated revenue fund.
Part 8.4 – Administration and Enforcement
124.400 Subject to this Act, the following sections of the federal Act apply for the purposes of this Act:
section 231.1 [inspections];
section 231.2 [requirement to provide documents or information];
section 231.5 [copies and compliance];
section 231.6 [requirement to provide foreign-based information];
section 231.7 [compliance order].
124.401 In sections 231.1, 231.2, 231.5, 231.6 and 231.7 of the federal Act, as those sections apply for the purposes of this Act:
"authorized person" means the commissioner or a person authorized by the commissioner;
"dwelling-house" means
(a) a structure that is occupied as a private residence, or
(b) if only part of a structure is occupied as a private residence, that part of the structure;
"judge" means a judge of the Supreme Court;
"record" includes money and a security.
124.402 (1) In applying section 231.1 of the federal Act for the purposes of this Act, the following rules apply:
(a) subsection (1) of that section is to be read as if paragraphs (a) and (b) of that subsection were read as follows:
(a) inspect, audit or examine
(i) the records of a taxpayer or an applicant for registration, and
(ii) any record of the taxpayer, the applicant or of any other person that relates or may relate to
(A) the information that is or should be in the records of the taxpayer or applicant,
(B) any amount payable by the taxpayer under this Act, or
(C) any other amounts that are required to be determined for the purposes of this Act, and
(b) examine property in an inventory of a taxpayer and any property or process of, or matter relating to, the taxpayer, an applicant for registration or any other person, an examination of which may assist the authorized person
(i) in determining the accuracy of the inventory of the taxpayer, or
(ii) in ascertaining
(A) the information that is or should be in the records of the taxpayer or applicant,
(B) any amount payable by the taxpayer under this Act, or
(C) any other amounts that are required to be determined for the purposes of this Act, ;
(b) subsection (1) (c) of that section is to be read as if the reference to "books or" were excluded;
(c) subsection (3) of that section is to be read as if
(i) the reference to "Minister" were read as a reference to "commissioner", and
(ii) the references to "document" were read as references to "record".
(2) Except in accordance with the regulations, the power to inspect, audit and examine records under section 231.1 of the federal Act, as that section applies for the purposes of this Act, must not be used to inspect, audit and examine a record that is in the possession of a lawyer if the lawyer at that time claims that a particular client or a particular former client of the lawyer has solicitor-client privilege in relation to the record.
124.403 In applying section 231.2 of the federal Act for the purposes of this Act, the following rules apply:
(a) that section is to be read as if the references to "Minister" were read as references to "commissioner";
(b) subsection (1) of that section is to be read as if
(i) the reference to "of a listed international agreement or, for greater certainty, of a tax treaty with another country, by notice served personally or by registered or certified mail, require that any person provide," were read as a reference to "by written notice given to a person, require the person to provide,", and
(ii) the reference to "return of income or a supplementary return" were read as a reference to "return";
(c) subsections (1) and (2) of that section are to be read as if the references to "document" were read as references to "record";
(d) subsection (3) of that section is to be read as if the reference to "of the Federal Court" were excluded.
124.404 In applying section 231.5 of the federal Act for the purposes of this Act, the following rules apply:
(a) subsections (1) and (2) of that section are to be read as if the references to "sections 231.1 to 231.4" were read as references to "sections 231.1 and 231.2";
(b) subsection (1) of that section is to be read as if
(i) the references to "document" were read as references to "record",
(ii) the reference to "the person by whom it is seized, inspected, audited or examined or to whom it is provided or any officer of the Canada Revenue Agency" were read as a reference to "an authorized person", and
(iii) the reference to "the Minister or" were excluded;
(c) subsection (2) of that section is to be read as if the reference to "subsection 241 (10)" were read as a reference to "section 124.409 (1) of this Act".
124.405 In applying section 231.6 of the federal Act for the purposes of this Act, the following rules apply:
(a) subsection (1) of that section is to be read as if
(i) the reference to "any information or document" were read as a reference to "any information or record", and
(ii) the reference to "Canada" were read as a reference to "British Columbia";
(b) subsection (2) of that section is to be read as if the subsection were read as follows:
(2) Despite any other provision of this Act, the commissioner may, by written notice given to a taxpayer, require the taxpayer to provide any foreign-based information or document. ;
(c) subsections (3) and (6) of that section are to be read as if the references to "information" were read as references to "foreign-based information";
(d) in subsections (4), (6) and (8), a reference to a notice served under section 231.6 (2) of the federal Act, as that section applies for the purposes of this Act, includes a reference to the notice given in any other manner authorized by this Act;
(e) subsection (7) (b) of that section is to be read as if the reference to "subsection 152 (4)" were read as a reference to "section 124.311 (1) of this Act".
124.406 In applying section 231.7 (1) of the federal Act for the purposes of this Act, that section is to be read as if
(a) the references to "Minister" were read as references to "commissioner",
(b) the reference to ", notwithstanding subsection 238 (2)," were excluded,
(c) the references to "document" were read as references to "record", and
(d) the reference in paragraph (b) of that subsection to "(within the meaning of subsection 232 (1))" were excluded.
124.407 (1) For the purposes of this section, if a person is a member of a partnership that is a member of another partnership, the person is deemed to be a member of the other partnership.
(2) On written demand given by the commissioner to a person, the person must file with the commissioner, on or before the date specified in the demand, an information return as specified in the demand for the period specified in the demand.
(3) On written demand given by the commissioner to a person who is a member of a partnership, the person must file with the commissioner, on or before the date specified in the demand, an information return in respect of the partnership as specified in the demand for the period specified in the demand.
(4) Subsections (2) and (3) apply whether or not the person has been or is required to file an information return under the regulations.
(5) A person required to file an information return under this section must
(a) file the information return in the manner required by the regulations, and
(b) file, with the information return, any other information or records required by the commissioner.
(6) For the purposes of this section, an information return in respect of a partnership filed by a person who is a member of a partnership is deemed to have been filed by each member of the partnership.
124.408 If a provision of this Act or a regulation requires a person to file a form, receipt or other record, or to supply information, the commissioner may waive the requirement under this Act, but the person must file the record or supply the information on a subsequent request of the commissioner.
124.409 (1) In this section:
"authorized person" means a person who is engaged or employed, or who was formerly engaged or employed, by or on behalf of the government of British Columbia to assist in carrying out the provisions of this Act;
"official" means any person
(a) 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 the government of British Columbia, another province or Canada, or
(b) who was formerly so employed or formerly occupied such a position or was formerly so engaged;
"police officer" means a police officer as defined in section 462.48 (17) of the Criminal Code.
(2) Except as authorized by this section, an official must not
(a) knowingly provide, or knowingly allow to be provided, to any person any taxpayer information,
(b) knowingly allow any person to have access to any taxpayer information, or
(c) knowingly use any taxpayer information otherwise than in the course of the administration or enforcement of this Act or for a purpose for which the information was provided under this section.
(3) Despite any other enactment or law except section 241 (3) [communication where proceedings have been commenced] of the federal Act as that section applies for the purposes of this Act, an official must not be required, in connection with any legal proceedings, to give or produce evidence relating to any taxpayer information.
(4) Subject to subsection (5), an official may do one or more of the following:
(a) provide to any person taxpayer information that can reasonably be regarded as necessary for the purposes of the administration or enforcement of this Act, solely for those purposes;
(b) provide to any person taxpayer information that can reasonably be regarded as necessary for the purposes of determining any of the following:
(i) any tax, penalty, interest or other amount that is or may become payable by the person under this Act;
(ii) any refund or tax credit to which the person is or may become entitled under this Act;
(iii) the amount of any bond that the person is or may be required to deposit under this Act;
(iv) any other amount that is relevant for the purposes of a determination under subparagraphs (i) to (iii);
(c) provide taxpayer information as follows:
(i) to an official of the Department of Finance of the government of Canada, solely for the purposes of the formulation or evaluation of fiscal policy;
(ii) to an official solely for the purposes of the initial implementation of a fiscal policy or for the purposes of the administration or enforcement of an Act of the Parliament of Canada that provides for the imposition and collection of a tax or duty;
(iii) to an official solely for the purposes of the administration or enforcement of an enactment of British Columbia or another province that provides for the imposition or collection of a tax or duty;
(iv) to an official solely for the purposes of the administration or enforcement of any of the following:
(A) the Greenhouse Gas Industrial Reporting and Control Act;
(B) the International Business Activity Act;
(C) the Oil and Gas Activities Act;
(D) the Petroleum and Natural Gas Act;
(v) to an official of the ministry of the minister, solely for the purposes of the formulation or evaluation of fiscal policy;
(vi) to an official solely for the purposes of setting off against any sum of money that may be due or payable by the government of British Columbia a debt due to that government or to the government of another province or of Canada;
(d) provide taxpayer information relating to whether or not a person or partnership is registered in respect of an LNG source, or whether the person's or partnership's registration in respect of the LNG source is suspended or cancelled, to a person or partnership that is registered in respect of the LNG source;
(e) provide taxpayer information, or allow the inspection of or access to taxpayer information, as the case may be, under, and solely for the purposes of,
(i) sections 44 (2) and 61 (1) of the Freedom of Information and Protection of Privacy Act, or
(ii) sections 15, 16 and 17 of the Auditor General Act;
(f) provide taxpayer information solely for the purposes of sections 17 to 19 of the Financial Administration Act;
(g) provide taxpayer information, other than taxpayer information that expressly reveals the identity of the taxpayer to whom the information relates, that can reasonably be regarded as necessary for the purposes of Part 2 [Fiscal Reports: Public Accounts and Other Reports] of the Budget Transparency and Accountability Act, solely for those purposes;
(h) use taxpayer information to compile information in a form that does not directly or indirectly reveal the identity of the person to whom the information relates;
(i) use, or provide to any person, taxpayer information solely for a purpose relating to the supervision, evaluation or discipline of an authorized person by the government in respect of a period during which the authorized person was employed by, or engaged by or on behalf of, the government to assist in the administration or enforcement of this Act, to the extent that the information is relevant for the purpose;
(j) use taxpayer information relating to a person to provide information to the person;
(k) provide taxpayer information to a police officer solely for the purpose of investigating whether an offence has been committed under the Criminal Code, or the laying of an information or the preferring of an indictment, if
(i) the taxpayer information can reasonably be regarded as being necessary for the purpose of ascertaining
(A) the circumstances in which an offence under the Criminal Code may have been committed, or
(B) the identity of the person who may have committed an offence,
with respect to an official, or with respect to any person related to that official,
(ii) the official was or is engaged in the administration or enforcement of this Act, and
(iii) the offence can reasonably be considered to be related to that administration or enforcement;
(l) provide taxpayer information to, or allow inspection of or access to taxpayer information by, any person otherwise legally entitled to the information under an enactment of British Columbia solely for the purposes for which that person is entitled to the information.
(5) Except in accordance with an agreement entered into under section 124.410, an official must not under subsection (4) (a) to (c) or (f) to (l) provide taxpayer information to, or allow inspection of or access to taxpayer information by, an official of
(a) a public body, as defined in the Freedom of Information and Protection of Privacy Act, other than the ministry of the minister,
(b) the government of Canada, or
(c) the government of another province.
(6) The following sections of the federal Act apply for the purposes of this Act:
(a) section 241 (3) [communication where proceedings have been com-menced];
(b) section 241 (3.1) [circumstances involving danger];
(c) section 241 (4.1) [measures to prevent unauthorized use or disclosure];
(d) section 241 (5) [disclosure to taxpayer or on consent].
(7) In applying section 241 (3) of the federal Act for the purposes of this Act, that section is to be read as if the reference to "Subsections 241 (1) and 241 (2)" were read as a reference to "Section 124.409 (2) and (3) of this Act".
(8) To the extent of any inconsistency or conflict with the following sections of the Freedom of Information and Protection of Privacy Act, this section applies despite that Act:
(a) section 32 [use of personal information];
(b) section 33 [disclosure of personal information];
(c) section 33.1 [disclosure inside or outside Canada];
(d) section 33.2 [disclosure inside Canada only].
124.410 (1) In this section, "information-sharing agreement" means an agreement or arrangement to exchange, by electronic data transmission, electronic data matching or any other means, information for a purpose referred to in section 124.409 (4).
(2) The minister may enter into an information-sharing agreement with any of the following:
(a) the government of Canada or an agency of that government;
(b) the government of a province or other jurisdiction in Canada or an agency of that government;
(c) a public body, as defined in the Freedom of Information and Protection of Privacy Act.
(3) Subject to subsection (4), taxpayer information obtained by the minister under an information-sharing agreement may only be used or disclosed for the purpose for which the information was obtained under the applicable agreement.
(4) Subsection (3) does not prevent
(a) any taxpayer information obtained by the minister under an information-sharing agreement with the government of Canada or an agency of that government from being used or disclosed for the purpose of administering or enforcing an enactment administered by the minister that provides for the imposition and collection of a tax or for the purpose of administering or enforcing any of the following:
(i) the Greenhouse Gas Industrial Reporting and Control Act;
(ii) the International Business Activity Act;
(iii) the Oil and Gas Activities Act;
(iv) the Petroleum and Natural Gas Act, or
(b) any taxpayer information obtained by the minister under an information-sharing agreement from being used or disclosed for the purpose of administering or enforcing an Act of the Parliament of Canada that provides for the imposition and collection of a tax or duty.
124.411 (1) A person who is a taxpayer must keep records, including an inventory kept in the prescribed manner,
(a) at
(i) the person's place of business or residence in British Columbia, or
(ii) any other place designated for the person by the commissioner if an agreement is in effect between the commissioner and the person with respect to the keeping of records at that place, and
(b) in the form and containing the information that will enable the determination of
(i) tax payable under this Act, and
(ii) any other amounts that are required to be determined for the purposes of this Act.
(2) If the commissioner is satisfied that a person has failed to keep adequate records for the purposes of this Act, the commissioner may, by written notice given to the person, require the person to keep the records specified in the notice.
(3) Subject to subsections (4) to (6), a person required by this section to keep records must retain those records, and all other records necessary to verify the information contained in those records, for the prescribed period.
(4) If, in respect of any taxation year or fiscal period, a person referred to in subsection (1) has not filed a tax return or partnership return as and when required under this Act, the person must retain all records required by this section to be kept and that relate to that taxation year or fiscal period, and all other records necessary to verify the information contained in those records, until the expiration of 7 years from the day the tax return or partnership return is filed.
(5) If a person required by this section to keep records files a notice of objection or is a party to an appeal under this Act, the person must retain all records necessary for dealing with the objection or appeal until,
(a) in the case of an objection, the time provided by section 124.52 (1) to appeal has elapsed, or
(b) in the case of an appeal, the appeal is disposed of and any further appeal is disposed of or the time for filing any further appeal has expired.
(6) If the commissioner is of the opinion that it is necessary for the administration of this Act, the commissioner may, by written notice given to a person required by this section to keep records, require the person to retain those records, and all other records necessary to verify the information contained in those records, for the period specified in the notice.
(7) Despite subsections (3) to (6), a person required by this section to keep records may dispose of those records, and all other records necessary to verify the information contained in those records, before the expiration of the retention period otherwise applicable under this section if written permission for the disposal of those records is given by the commissioner.
(8) A person required by this section to keep records who does so electronically must retain those records in an electronically readable format for the retention period applicable under subsections (3) to (6).
(9) The commissioner may, on terms and conditions the commissioner considers appropriate, exempt a person or a class of persons from the requirement in subsection (8).
124.412 (1) In this section:
"avoidance transaction" means a transaction
(a) that, but for this section, would result, directly or indirectly, in a tax benefit, or
(b) that is part of a series of transactions that, but for this section, would result, directly or indirectly, in a tax benefit,
but does not include a transaction that may reasonably be considered
(c) to have been undertaken or arranged primarily for bona fide purposes other than one or more of the following:
(i) to obtain a tax benefit;
(ii) to reduce, avoid or defer a tax, or another amount payable as or in respect of tax, under any other enactment;
(iii) to increase a refund of tax, or of another amount in respect of tax, under any other enactment, or
(d) to be a transaction that would not result, directly or indirectly, in
(i) a misuse of the provisions of this Act or the regulations,
(ii) a misuse of the provisions of 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
(iii) an abuse having regard to those provisions, other than this section, read as a whole;
"tax consequences", in relation to a person, means
(a) the amount of
(i) the person's net operating income,
(ii) the person's net operating loss,
(iii) the person's net income,
(iv) the balance of the person's capital investment account, or
(v) tax, if any, deemed by section 123 [deemed payment – closure tax credit] to have been paid on account of the person's tax payable under this Act, or
(b) any amount, other than an amount referred to in paragraph (a), that is payable or refundable to the person under this Act or that is relevant for the purposes of determining any other amount referred to in this section;
"transaction" includes an arrangement or event.
(2) If a transaction is an avoidance transaction, the commissioner may determine the tax consequences to a person in a manner that is reasonable in the circumstances in order to deny a tax benefit that, but for this section, would result, directly or indirectly, from that transaction or from a series of transactions that includes that transaction.
(3) Without limiting subsection (2), in determining the tax consequences to a person in a manner that is reasonable in the circumstances in order to deny a tax benefit that, but for this section, would result, directly or indirectly, from an avoidance transaction, the commissioner may do one or more of the following:
(a) allow or disallow in whole or in part any amount included or deducted in computing an amount referred to in paragraph (a) or (b) of the definition of "tax consequences" in subsection (1);
(b) allocate to any person any inclusion or deduction referred to in paragraph (a) of this subsection or any other amount used in determining an amount payable or refundable under this Act;
(c) recharacterize the nature of any payment or other amount;
(d) ignore the tax effects that would otherwise result from the application of other provisions of this Act or the regulations.
(4) The tax consequences to any person, after the application of this section, must only be determined through an assessment or determination under Division 2 [Assessments and Determinations in Respect of Taxpayers] of Part 8.3.
(5) If a notice of assessment reflecting the application of subsection (2) to a transaction has been given to a person, any other person is entitled, within 180 days after the date of that notice, to request in writing that the commissioner make an assessment or determination under Division 2 of Part 8.3 applying subsection (2) of this section with respect to the transaction.
(6) On receipt of a request by a person under subsection (5), the commissioner must consider the request and make an assessment or a determination under Division 2 of Part 8.3, with respect to the person, despite the expiry of any time limit under Division 2 of that Part, except that an assessment or determination may be made in accordance with this subsection only to the extent that it may reasonably be regarded as relating to a transaction referred to in subsection (5) of this section.
Part 8.5 – Objections and Appeals
124.50 (1) Subject to this section, a person who objects to a decision of the commissioner in respect of any of the following may file a notice of objection in accordance with section 124.51:
(a) a refusal to register a person or partnership under section 124.21 [registration];
(b) a suspension of a person's or partnership's registration under section 124.22 (1) [suspension of registration];
(c) a cancellation of a person's or partnership's registration under section 124.22 (4) [cancellation of registration];
(d) an assessment under Division 2 [Assessments and Determinations in Respect of Taxpayers] of Part 8.3;
(e) a determination under Division 2 or 4 [Determinations in Respect of Partnerships] of Part 8.3;
(f) a determination under any of sections 124.601 and 124.603 to 124.605 [joint and several liability].
(2) Subsection (3) applies to a person in relation to an assessment or determination under Division 2 of Part 8.3 if at any time the commissioner makes the assessment or determination under any of the following provisions:
(a) section 124.311 (4) [assessments and determinations – general rules];
(b) section 124.312 (1) or (4) [consequential assessments and determinations – partnerships];
(c) section 124.313 (2) (b) [consequential assessments and determinations – other income taxes];
(d) section 124.314 [consequential reassessments and redeterminations after appeal];
(e) section 124.315 [consequential reassessments and redeterminations – subsequent taxation years];
(f) section 124.316 (1) [other assessments and determinations];
(g) Division 2 of Part 8.3, but only in relation to an assessment or determination made in accordance with section 124.412 (6) [anti-avoidance rule].
(3) If this subsection applies to a person in relation to an assessment or determination under Division 2 of Part 8.3, the person may object under subsection (1) to the decision of the commissioner, but only to the extent that the reasons for the objection can reasonably be considered,
(a) if the assessment or determination was made under section 124.312 (4), as relating to any matter or resulting from any conclusion specified in paragraph (a), (b) or (c) of that section and that was not conclusively determined by a court, and
(b) in any other case, as relating to any matter that gave rise to the assessment or determination and that was not conclusively determined by a court.
(4) Subsection (5) applies to a person in relation to a determination made under Division 4 of Part 8.3 if at any time the commissioner makes the determination under any of the following provisions:
(a) section 124.342 (6) [determinations – general rules];
(b) section 124.343 (2) (b) [consequential determinations – other income taxes];
(c) section 124.344 [consequential redeterminations after appeal];
(d) section 124.345 [consequential redeterminations – subsequent fiscal periods];
(e) section 124.346 (1) [other determinations].
(5) If this subsection applies to a person in relation to a determination under Division 4 of Part 8.3, the person may object under subsection (1) to the decision of the commissioner, but only to the extent that the reasons for the objection can reasonably be considered as relating to any matter that gave rise to the determination and that was not conclusively determined by a court.
(6) Subsections (3) and (5) do not limit the right of a person to object to a decision of the commissioner made before the time referred to in subsection (2) or (4).
(7) An objection may not be made by a person
(a) in relation to an assessment or determination made under any of the following provisions:
(i) section 124.316 (2) [other assessments and determinations – dis-position of appeal];
(ii) section 124.317 (2) [assessments of other amounts payable – excess refund];
(iii) section 124.318 (3) [cancellation of penalties and interest];
(iv) section 124.346 (2) [other determinations – disposition of appeal], or
(b) for greater certainty, in relation to an issue for which the right of objection has been waived in writing by the person.
(8) A person may object under subsection (1) to a decision of the commissioner in relation to a determination under any of sections 124.601 and 124.603 to 124.605, but only to the extent that the reasons for the objection can reasonably be considered as relating to any matter specified in section 124.601 (1), 124.603 (1) or (4), 124.604 (1) or (4) or 124.605 (1).
124.51 (1) A person wishing to object under section 124.50 must file written notice of the objection with the minister within 90 days after,
(a) in the case of a decision referred to in section 124.50 (1) (a), the date the person or partnership is given written reasons for the refusal,
(b) in the case of a decision referred to in section 124.50 (1) (b), the date the person or partnership is given written reasons for the suspension,
(c) in the case of a decision referred to in section 124.50 (1) (c), the date the person or partnership is given written notice of the cancellation,
(d) in the case of a decision referred to in section 124.50 (1) (d) or (e), the date of the notice of assessment or notice of determination in respect of the matter to which the taxpayer objects, or
(e) in the case of a decision referred to in section 124.50 (1) (f), the date the person is given written notice of the determination.
(2) Written notice of an objection to a decision referred to in section 124.50 (1) (e) in respect of a fiscal period of a partnership may be filed only by one member of the partnership, and that member must be
(a) designated for that purpose in the partnership return filed for the fiscal period, or
(b) otherwise expressly authorized by the partnership to make the objection.
(3) The person must set out in the notice of objection a statement of all material facts and the reasons in support of the objection.
(4) On receiving a notice of objection, the minister must
(a) consider the matter,
(b) affirm, amend or vary the decision of the commissioner, and
(c) give the person written notice of the result of the consideration of the objection.
(5) If under subsection (4) the minister amends or varies a decision of the commissioner referred to section 124.50 (1) (d), the minister may not include an amount in computing a taxpayer's net income or net operating income for a taxation year in respect of an LNG source that was not included in computing the taxpayer's net income or net operating income for the purpose of an assessment made under Division 2 of Part 8.3 before the end of the taxpayer's normal reassessment period for that taxation year.
(6) If under subsection (4) the minister amends or varies a decision of the commissioner in respect of a determination under Division 4 of Part 8.3, the minister may not include an amount in computing a partnership's income from a business or property or from another source described in Division 3 [Other Sources of Income] of Part 3 for a fiscal period in respect of an LNG source that was not included in computing the partnership's income for the purpose of a determination made under Division 4 of Part 8.3 before the end of the partnership's normal redetermination period for that fiscal period.
(7) The minister may advance an alternative argument in support of an assessment or determination made under Division 2 of Part 8.3 at any time after the normal reassessment period, or an alternative argument in support of a determination made under Division 4 of Part 8.3 at any time after the normal redetermination period, unless, on an appeal under this Act,
(a) there is relevant evidence that the taxpayer is no longer able to introduce without the leave of the court, and
(b) it is not appropriate in the circumstances for the court to order that the evidence be introduced.
124.52 (1) Subject to subsections (2) to (7), a decision of the minister under section 124.51 may be appealed to the Supreme Court by commencing an action within 90 days after the date of the notice of the minister's decision.
(2) Subsection (3) applies to a person in relation to a decision of the minister under section 124.51 if the decision relates to an assessment of the person, or a determination in respect of the person, under any of the following provisions:
(a) section 24.311 (4) [assessments and determinations – general rules];
(b) section 124.312 (1) or (4) [consequential assessments and determinations – partnerships];
(c) section 124.313 (2) (b) [consequential assessments and determinations – other income taxes];
(d) section 124.314 [consequential reassessments and redeterminations after appeal];
(e) section 124.315 [consequential reassessments and redeterminations – subsequent taxation years];
(f) section 124.316 (1) [other assessments and determinations];
(g) Division 2 of Part 8.3, but only in relation to an assessment or determination made in accordance with section 124.412 (6) [anti-avoidance rule].
(3) If this subsection applies to a person in relation to a decision of the minister referred to in subsection (2), the person may appeal the decision under subsection (1), but only to the extent that the reasons for the appeal can reasonably be considered,
(a) if the assessment or determination was made under section 124.312 (4), as relating to any matter or resulting from any conclusion specified in paragraph (a), (b) or (c) of that section and that was not conclusively determined by a court, and
(b) in any other case, as relating to any matter that gave rise to the assessment or determination and that was not conclusively determined by a court.
(4) Subsection (5) applies to a person in relation to a decision of the minister under section 124.51 if the decision relates to a determination in respect of the partnership under any of the following provisions:
(a) section 124.342 (6) [determinations – general rules];
(b) section 124.343 (2) (b) [consequential determinations – other income taxes];
(c) section 124.344 [consequential redeterminations after appeal];
(d) section 124.345 [consequential redeterminations – subsequent fiscal periods];
(e) section 124.346 (1) [other determinations].
(5) If this subsection applies to a person in relation to a decision of the minister relating to a determination referred to in subsection (4), the person may appeal the decision under subsection (1), but only to the extent that the reasons for the appeal can reasonably be considered as relating to any matter that gave rise to the determination and that was not conclusively determined by a court.
(6) Subsections (3) and (5) do not limit the right of a person to appeal a decision made before the decision referred to in subsection (2) or (4).
(7) Despite subsections (1), (3) and (5) and for greater certainty, a person may not appeal under subsection (1) a decision in respect of an issue for which the right of objection or appeal has been waived in writing by the person.
(8) Subject to this Act and the regulations, the Supreme Court Civil Rules relating to actions apply to appeals under this section, but the following provisions of those rules do not apply:
(a) Rule 3-7 (9), (11), (18) and (19) [Pleadings Generally];
(b) Rule 18-3 [Appeals];
(c) Rule 20-1 (3) [responding pleading].
(9) To bring an appeal under this section, a person must file a notice of appeal in the prescribed form instead of a notice of civil claim.
(10) An appeal of a decision of the minister arising from an objection to a decision referred to in section 124.50 (1) (e) in respect of a fiscal period of a partnership may be filed only by one member of the partnership, and that member must be
(a) designated for that purpose in the partnership return filed for the fiscal period, or
(b) otherwise expressly authorized by the partnership to file the appeal.
(11) If this section applies to an appeal in relation to a partnership, the appeal may be brought in the name of the partnership.
(12) An appellant must pay the court registry the prescribed fee on filing the notice of appeal.
(13) An appellant must set out the following in the notice of appeal:
(a) a concise statement of the material facts giving rise to the appeal;
(b) the relief sought by the appellant;
(c) a concise summary of the legal basis for the relief sought;
(d) the proposed place of trial.
(14) In the notice of appeal filed under subsection (9), the government must be designated "Her Majesty the Queen in right of the Province of British Columbia".
(15) Within 14 days after the filing of the notice of appeal under subsection (9), the notice of appeal must be served on the government in accordance with section 8 of the Crown Proceeding Act.
124.53 (1) The minister must, within the time referred to in subsection (3),
(a) file a response to appeal in the prescribed form instead of a response to civil claim, and
(b) serve a copy of the filed response to appeal on the appellant.
(2) The minister must set out the following in the response to appeal:
(a) for each fact set out in the notice of appeal, whether that fact is admitted, denied or outside the knowledge of the minister;
(b) whether the minister consents to, opposes or takes no position on the granting of the relief sought in the notice of appeal;
(c) if the minister opposes any of the relief sought in the notice of appeal, a concise summary of the legal basis for that opposition;
(d) a statement of the further material facts;
(e) a statement of the findings or assumptions of fact made by the minister in making the decision being appealed;
(f) a statement of the findings or assumptions of fact made by the commissioner in making the decision that was the subject of an objection to the minister that resulted in the decision referred to in paragraph (e).
(3) A response to appeal must be filed and served within the following applicable period:
(a) subject to paragraphs (b) and (c), 60 days after the day the notice of appeal is served on the government;
(b) subject to paragraph (c), the period agreed to by all parties to the proceeding;
(c) the period ordered by the court, which may be ordered before or after the expiration of the periods referred to in paragraphs (a) and (b).
124.54 (1) The court may strike out a notice of appeal or any part of it for failure to comply with section 124.52 (13) and may permit an amendment to be made to a notice of appeal or a new notice of appeal to be substituted for the one struck out.
(2) The court may
(a) strike out any part of a response to appeal for failure to comply with section 124.53 (2) or permit the amendment of a response to appeal, and
(b) strike out a response to appeal for failure to comply with section 124.53 (2) and order a new response to appeal to be filed within a time to be set by the order.
(3) If a notice of appeal is struck out for failure to comply with section 124.52 (13) and a new notice of appeal is not filed as and when permitted by the court, the court may dispose of the appeal by dismissing it.
(4) If a response to appeal is not filed as required by section 124.53 (2) or is struck out under this section and a new response to appeal is not filed as ordered by the court within the time ordered, the court may dispose of the appeal without notice to any party or after a hearing on the basis that the allegations of fact in the notice of appeal are true.
(5) If an appeal is continued under section 124.55 as a petition proceeding, this section applies to
(a) a petition as if the petition were a notice of appeal, and
(b) a response to petition as if the response were a response to appeal.
124.55 (1) An appeal brought under section 124.52 is continued as a petition proceeding if
(a) the notice of appeal and reply to the notice of appeal have been filed and served,
(b) all parties to the appeal agree to the continuation of the proceeding as a petition proceeding, and
(c) all parties complete a notice, in the prescribed form, to continue the proceeding as a petition proceeding and the notice is filed in the registry.
(2) On the continuation of an appeal as a petition proceeding,
(a) the notice of appeal is deemed to be a petition, and
(b) the response to appeal is deemed to be a response to petition.
(3) Subject to this section and the regulations, the Supreme Court Civil Rules relating to petition proceedings apply to appeals continued under this section, but Rule 18-3 [Appeals] of those rules does not apply.
(4) An appellant must, within 30 days after the day the notice referred to in subsection (1) (c) is filed,
(a) file affidavits in support of the petition, and
(b) serve on all parties to the appeal a copy of each filed affidavit.
(5) The minister must, within 30 days after the day the affidavits in support of the petition are served,
(a) file all affidavits that have not already been filed and on which the minister intends to rely at the hearing of the petition, and
(b) serve on all parties to the appeal a copy of each affidavit filed under paragraph (a).
(6) Parties to the proceeding may agree to extend the period for the filing and service of affidavits under subsection (4) or (5).
124.56 (1) An appeal under this Division is a new hearing that is not limited to the evidence and issues that were before the minister.
(2) The Supreme Court may
(a) dismiss the appeal,
(b) allow the appeal,
(c) vary the decision from which the appeal is made, or
(d) refer the decision back to the commissioner for reconsideration.
(3) An appeal lies from a decision of the Supreme Court to the Court of Appeal with leave of a justice of the Court of Appeal.
124.57 An assessment or determination made by the commissioner under Division 2 or 4 of Part 8.3 must not be varied or disallowed by a court because of an irregularity, informality, omission or error on the part of a person in the observation of any directory provision up to the date of the notice of assessment or notice of determination.
124.58 Neither the filing of a notice of objection or a notice of appeal, nor a delay in the consideration of an objection or the hearing of an appeal,
(a) affects the date an amount, that is owing to the government under this Act and that is the subject matter of the objection or appeal, is payable under this Act,
(b) affects the amount of interest payable on an amount that is owing to the government under this Act and that is the subject matter of the objection or appeal, or
(c) delays the collection of an amount that is owing to the government under this Act and that is the subject matter of the objection or appeal, or any interest payable under this Act on that amount.
Part 8.6 – Recovery of Amounts Owing
124.600 (1) Subject to this section and the regulations, the commissioner may require a person or partnership that is registered or that is an applicant for registration to deposit or to have deposited on their behalf with the commissioner a bond, by way of cash or other security satisfactory to the commissioner, by the date specified by the commissioner.
(2) Subject to subsection (3), a bond deposited under subsection (1) by or on behalf of a person may be in respect of the person's obligations to pay amounts to the government under this Act in respect of one or more LNG sources.
(3) A bond deposited under subsection (1) by or on behalf of a partnership in respect of the obligations of one or more members of the partnership to pay amounts to the government under this Act may not be in respect of obligations to pay amounts in respect of more than one LNG source.
(4) Subject to subsections (5) to (7), the amount of the bond is to be determined by the commissioner.
(5) Without limiting the matters the commissioner may consider in determining the amount of a bond or whether a bond is satisfactory, the commissioner must consider any prescribed matters.
(6) The amount of the bond required to be deposited by or on behalf of a person or partnership in respect of an LNG source may not exceed the maximum amount established by the regulations for the LNG source.
(7) Despite subsection (6), if a bond is deposited in respect of more than one LNG source, the amount of the bond may not exceed the total of all amounts each of which is a maximum amount referred to in subsection (6) for an LNG source in respect of which the bond is deposited.
(8) If the commissioner requires a person or partnership to deposit or to have deposited on their behalf an additional bond or an additional amount of bond under subsection (1), subsections (6) and (7) apply to the total of all amounts of the bonds required to be deposited by the person or partnership.
(9) If a bond has been deposited in respect of a person's obligation to pay an amount owing to the government under this Act and the person has failed to pay the amount owing, the commissioner, after giving written notice in accordance with subsection (10), may apply all or part of the bond to that amount owing.
(10) Before applying all or part of a bond under subsection (9), the commissioner must give written notice to the following:
(a) the person referred to in subsection (9) who owes the amount to the government;
(b) if the person referred to in paragraph (a) did not deposit the bond, the person or partnership that deposited the bond;
(c) if all or part of the bond is to be applied to an amount for which the person referred to in subsection (9) is jointly and severally liable under any of sections 124.601 and 124.603 to 124.605, the other person referred to in the applicable section who owes the amount to the government.
(11) Despite subsections (9) and (10), failure to give notice under subsection (10) (b) or (c) does not affect the validity of the commissioner applying all or part of the bond.
(12) If the amount of the bond required to be deposited by or on behalf of a person or partnership has been reduced by the commissioner and the bond was deposited by way of cash, the commissioner may pay from the consolidated revenue fund to the person or partnership that deposited the bond an amount equal to the reduction.
(13) If a person's or partnership's registration in respect of an LNG source is cancelled under section 124.22 (6) and a bond has been deposited by way of cash in respect of the LNG source by or on behalf of the person or partnership, the commissioner may, subject to subsection (14) of this section, pay from the consolidated revenue fund to the person or partnership that deposited the bond an amount equal to the amount remaining of the bond.
(14) If a person's or partnership's registration in respect of an LNG source is cancelled under section 124.22 (6), the commissioner may not return a bond deposited in respect of the LNG source by or on behalf of the person or partnership, and may not pay from the consolidated revenue fund to the person or partnership that deposited the bond an amount equal to the amount remaining of the bond, unless the commissioner is satisfied that the person for whom the bond has been deposited has no amount owing to the government under this Act or cannot reasonably be expected to become liable to pay an amount to the government under this Act.
(15) If all or a part of a bond deposited by or on behalf of a person is applied to an amount for which the person is jointly and severally liable under any of sections 124.601 and 124.603 to 124.605 for an amount owing by the other person referred to in the applicable section, the person may, despite any agreement between those persons, recover an amount from the other person by retaining from amounts payable to the other person an amount not exceeding the amount of the bond applied to the amount owing by the other person.
124.601 (1) Subsection (3) applies in relation to a taxpayer if the commissioner determines that
(a) the taxpayer engaged in or derived income from liquefaction activities in respect of an LNG source in a taxation year,
(b) the taxpayer was required to be registered in respect of the LNG source in the taxation year in which the taxpayer engaged in or derived income from liquefaction activities referred to in paragraph (a) but was not registered in respect of that LNG source at the end of the taxation year, and
(c) another person was required to be registered in respect of the LNG source at any time in the other person's taxation year that ends in the taxpayer's taxation year but was not registered in respect of that LNG source at the end of that other person's taxation year.
(2) If the commissioner makes a determination under subsection (1), the commissioner must give, to the taxpayer and the other person, written notice of the determination and the liability of the taxpayer under subsection (3).
(3) If this subsection applies in relation to a taxpayer, the taxpayer is jointly and severally liable for all amounts assessed under this Act against the other person referred to in subsection (1) (c) in respect of the LNG source, and any interest that accrues on those amounts, for that other person's taxation year that ends in the taxpayer's taxation year.
124.602 (1) Sections 124.603 and 124.604 apply in relation to transactions that occur on or after January 1, 2017, including any transaction that arises from an agreement or arrangement entered into before January 1, 2017 or before a participant in the transaction is a taxpayer.
(2) Sections 124.603 and 124.604 do not apply in relation to a taxpayer for a taxation year of the taxpayer if section 124.601 applies to the taxpayer for the taxation year.
(3) For greater certainty, a taxpayer is not jointly and severally liable under section 124.603 or 124.604 for an amount for which the other person is jointly and severally liable under section 124.601.
124.603 (1) Subsection (3) applies in relation to a taxpayer if the commissioner determines that
(a) the taxpayer participated with another person in a transaction in respect of an LNG source,
(b) the taxpayer was registered in respect of the LNG source at the time of the transaction or at the end of the taxpayer's taxation year in which the transaction occurred, and
(c) the other person was required to be registered in respect of that LNG source at the time the transaction occurred but was not registered at that time and was not registered at the end of that person's taxation year in which the transaction occurred.
(2) If the commissioner makes a determination under subsection (1), the commissioner must give, to the taxpayer and the other person, written notice of the determination and the liability of the taxpayer under subsection (3).
(3) If this subsection applies in relation to a taxpayer, the taxpayer is jointly and severally liable for all amounts assessed under this Act against the other person in respect of the LNG source, and any interest accruing on those amounts, for that person's taxation year in which the transaction occurred.
(4) If a taxpayer is jointly and severally liable under subsection (3) for amounts assessed against a person who was registered in respect of the LNG source but whose registration is suspended or cancelled, the taxpayer is not liable under that subsection if the transaction occurs before the commissioner has given notice to the taxpayer under section 124.22 (8).
124.604 (1) Subsection (3) applies in relation to a taxpayer if the commissioner determines that
(a) the taxpayer participated with a partnership in a transaction in respect of an LNG source,
(b) the taxpayer was registered in respect of the LNG source at the time of the transaction or at the end of the taxpayer's taxation year in which the transaction occurred,
(c) the partnership was not registered in respect of that LNG source at the time that transaction occurred, and
(d) a member of the partnership was required to be registered in respect of that LNG source at the time that transaction occurred but was not registered at that time and was not registered at the end of the member's taxation year in which the partnership's fiscal period in which the transaction occurred ends.
(2) If the commissioner makes a determination under subsection (1), the commissioner must give, to the taxpayer and to the member of the partnership referred to in subsection (1) (d), written notice of the determination and the liability of the taxpayer under subsection (3).
(3) If this subsection applies in relation to a taxpayer, the taxpayer is jointly and severally liable, in respect of the member of the partnership referred to in subsection (1) (d), for all amounts assessed under this Act against the member in respect of the LNG source, and any interest accruing on those amounts, for that member's taxation year in which the partnership's fiscal period in which the transaction occurred ends.
(4) If a taxpayer is jointly and severally liable under subsection (3) for amounts assessed against a person who was registered in respect of the LNG source but whose registration is suspended or cancelled, the taxpayer is not liable under that subsection if the transaction occurs before the commissioner has given notice to the taxpayer under section 124.22 (8).
(5) For the purposes of this section, if a person is a member of a partnership that is a member of another partnership, the person is deemed to be a member of the other partnership.
124.605 (1) Subsection (3) applies in relation to a taxpayer who is a member of a partnership if the commissioner determines that
(a) the partnership engaged in or derived income from liquefaction activities in respect of an LNG source in a fiscal period of the partnership,
(b) the taxpayer was registered in respect of the LNG source at the end of the taxpayer's taxation year in which the fiscal period of the partnership ends, and
(c) another member of the partnership was required to be registered in respect of the LNG source at any time in the fiscal period of the partnership but was not registered at the end of the member's taxation year in which that fiscal period of the partnership ends.
(2) If the commissioner makes a determination under subsection (1), the commissioner must give to the taxpayer and the other member of the partnership referred to in subsection (1) (c) written notice of the determination and the liability of the taxpayer under subsection (3).
(3) If this subsection applies in relation to a taxpayer, the taxpayer is jointly and severally liable, in respect of the other member of the partnership referred to in subsection (1) (c), for all amounts assessed under this Act against that other member in respect of the LNG source, and any interest accruing on those amounts, for that other member's taxation year in which the fiscal period of the partnership ends.
(4) For greater certainty, a taxpayer is not jointly and severally liable under subsection (3) for an amount for which the other member of the partnership is jointly and severally liable under section 124.601.
(5) For the purposes of this section except subsection (2), if a person is a member of a partnership that is a member of another partnership, the person is deemed to be a member of the other partnership.
124.606 The government may commence a proceeding in a court of competent jurisdiction to recover an amount owing to the government under this Act as a debt due to the government.
124.607 (1) If a person fails to pay an amount owing to the government under this Act, the commissioner may issue a certificate specifying the amount owed and the name of the person who owes it.
(2) The commissioner may file with the Supreme Court a certificate issued under subsection (1).
(3) A certificate filed under subsection (2) has the same force and effect, and all proceedings may be taken on the certificate, as if the certificate were a judgment of the court in favour of the government for the recovery of a debt in the amount specified in the certificate against the person named in the certificate.
(4) If the amount specified in a certificate is different from the actual amount owing to the government under this Act, the commissioner may correct the amount by issuing a new certificate specifying the revised amount owed and the name of the person who owes it.
(5) The commissioner may file with the Supreme Court a certificate issued under subsection (4).
(6) A certificate filed under subsection (5)
(a) revises the certificate filed under subsection (2) that names the same person,
(b) is deemed to be filed at the same time as the certificate it revises, and
(c) has the same force and effect, and all proceedings may be taken on the certificate, as if the certificate were a judgment of the court in favour of the government for the recovery of a debt in the amount specified in the certificate against the person named in the certificate.
124.608 (1) Remedies available to the government for the recovery of an amount owing to the government under this Act may be exercised separately, concurrently or cumulatively.
(2) The liability of a person for the payment of an amount owing to the government under this Act is not affected by a fine or penalty imposed on or paid by the person for contravention of this Act.
124.609 (1) In this section, "debtor" means any person who is liable to pay to the government an amount under this Act.
(2) If the commissioner knows or suspects that a person is or is about to become indebted or liable to make a payment to a debtor, the commissioner may demand that that person pay to the government on account of the debtor's liability under this Act all or part of the money otherwise payable to the debtor.
(3) Without limiting subsection (2), if the commissioner knows or suspects that a person is about to advance money to or make a payment on behalf of a debtor, or make a payment in respect of a negotiable instrument issued by a debtor, the commissioner may demand that that person pay to the government on account of the debtor's liability under this Act the money that would otherwise be advanced or paid.
(4) If under this section the commissioner demands that a person pay to the government, on account of a debtor's liability under this Act, money otherwise payable by that person to the debtor as interest, rent, remuneration, a dividend, an annuity or other periodic payment, the demand
(a) is applicable to all of those payments to be made by the person to the debtor until the liability under this Act is satisfied, and
(b) operates to require payments to the government out of each payment of the amount stipulated by the commissioner in the demand.
(5) Money or a beneficial interest in money in a savings institution
(a) on deposit to the credit of a debtor at the time a demand is given, or
(b) deposited to the credit of a debtor after a demand is given
is money for which the savings institution is indebted to the debtor within the meaning of this section, but money on deposit or deposited to the credit of a debtor as described in paragraph (a) or (b) does not include money on deposit or deposited to the credit of a debtor in the debtor's capacity as a trustee.
(6) A demand under this section continues in effect until the earliest of the following:
(a) subject to paragraphs (b) and (c), the demand is satisfied;
(b) subject to paragraph (c), 90 days after the demand is given;
(c) three years after the demand is given, if the demand is made in respect of an outstanding legal claim or insurance claim that, if resolved in the debtor's favour, will result in money becoming available to the debtor.
(7) Despite subsection (6), if a demand is made in respect of a periodic payment referred to in subsection (4), the demand continues in effect until it is satisfied unless no periodic payment is made or is liable to be made within 90 days after the demand is given, in which case the demand ceases to have effect at the end of that period.
(8) Money demanded from a person by the commissioner under this section becomes payable
(a) as soon as the person is given the demand, if that person is indebted or liable to make a payment to the debtor at the time the demand is given, or
(b) as soon as the person becomes indebted or liable to make a payment to the debtor, in any other case.
(9) A person who fails to comply with a demand under subsection (2) or (4) is liable to pay to the government an amount equal to the amount that the person was required to pay under subsection (2) or (4).
(10) A person who fails to comply with a demand under subsection (3) is liable to pay to the government an amount equal to the lesser of
(a) the total of the money advanced or paid, and
(b) the amount that the person was required to pay under subsection (3).
(11) Money paid by any person to the government in compliance with a demand under this section
(a) satisfies the original liability to the extent of the payment, and
(b) is deemed to have been paid by that person to the debtor.
124.610 (1) In this section:
"amount owing" means an amount owing to the government under this Act and any interest on that amount;
"collateral" has the same meaning as in the Personal Property Security Act;
"financing statement" has the same meaning as in the Personal Property Security Act;
"inventory" has the same meaning as in the Personal Property Security Act;
"personal property registry" means the registry under the Personal Property Security Act;
"proceeds" has the same meaning as in the Personal Property Security Act;
"purchase money security interest" has the same meaning as in the Personal Property Security Act;
"security interest" has the same meaning as in the Personal Property Security Act.
(2) If a person is required to pay an amount to the government under this Act and does not pay the amount, the commissioner may register a lien
(a) against the real property of the person by registering a certificate of lien in the prescribed form in the appropriate land title office in the same manner that a charge is registered under the Land Title Act, and
(b) against the personal property of the person by registering a financing statement in the personal property registry.
(3) On registration of a certificate of lien against the real property of a person under subsection (2) (a), a lien is created on the real property against which the lien is registered for the amount owing.
(4) On registration of a lien against the personal property of a person under subsection (2) (b), a lien is created on the present and after acquired personal property in which the person has a legal or equitable interest for the amount owing.
(5) A lien registered under subsection (2) (b) against personal property does not have priority over
(a) a security interest that secures unpaid wages under section 87 (3) of the Employment Standards Act, regardless of when that security interest arises, or
(b) a purchase money security interest in collateral other than collateral that at the time the purchase money security interest attaches is inventory or its proceeds.
(6) In relation to a certificate of lien registered under subsection (2) (a) against the real property of a person, the commissioner may register a certificate of lien in the form prescribed for the purposes of subsection (2) (a) in the appropriate land title office in the same manner that a charge is registered under the Land Title Act if
(a) the certificate of lien registered under subsection (2) (a) against the real property of the person contains a statement of the amount owing, and
(b) the commissioner is satisfied that the amount referred to in paragraph (a) of this subsection that is stated in that certificate of lien is incorrect.
(7) In relation to a financing statement registered under subsection (2) (b) against the personal property of a person, the commissioner may register a financing change statement, as defined in the Personal Property Security Act, in the personal property registry if
(a) the financing statement registered under subsection (2) (b) against the personal property of the person contains a statement of the amount owing, and
(b) the commissioner is satisfied that the amount referred to in paragraph (a) of this subsection that is stated in that financing statement is incorrect.
(8) A certificate of lien registered under subsection (6) and a financing change statement registered under subsection (7) must contain a revised statement of the amount owing.
(9) On registration of a certificate of lien against the real property of a person under subsection (6), the certificate of lien registered under subsection (2) (a) against the real property of the person is, at the same time it was originally registered, deemed to be revised to set out the amount owing as stated in the certificate of lien registered under subsection (6).
(10) On registration of a financing change statement against the personal property of a person under subsection (7), the financing statement registered under subsection (2) (b) against the personal property of the person is, at the same time it was originally registered, deemed to be revised to set out the amount owing as stated in the financing change statement registered under subsection (7).
124.611 (1) Before taking proceedings for the recovery of an amount owing to the government under this Act, the commissioner must give to the person who owes the amount notice of the commissioner's intention to enforce payment.
(2) Failure to give notice under subsection (1) does not affect the validity of proceedings taken for the recovery of an amount owing to the government under this Act.
124.612 (1) In this section, "collection proceeding" means
(a) a proceeding under section 124.606 for the recovery of an amount owing to the government,
(b) the filing of a certificate under section 124.607,
(c) the making of a demand under section 124.609, and
(d) the registration or enforcement of a lien under section 124.610.
(2) A collection proceeding may be commenced at any time within 7 years after the date of the notice of assessment for the amount claimed in the collection proceeding.
(3) Despite subsection (2), a collection proceeding that relates to a contravention of this Act or the regulations and that involves wilful default or fraud may be commenced at any time.
(4) If, before the expiry of the limitation period that applies under subsection (2) to an amount claimed, a person acknowledges liability in respect of the amount claimed, the date of the notice of assessment is, for the purposes of subsection (2), deemed to be the day on which the acknowledgement is made.
(5) Subsection (4) does not apply to an acknowledgment, other than an acknowledgement referred to in subsection (6), unless the acknowledgment is
(a) in writing,
(b) signed, by hand or by electronic signature within the meaning of the Electronic Transactions Act,
(c) made by the person making the acknowledgment or the person's agent, and
(d) made to the government or an agent of the government.
(6) In the case of an amount claimed to which the limitation period under subsection (2) applies, for the purposes of subsection (4), part payment of the amount by the person against whom the claim is or may be made or by the person's agent is an acknowledgment by the person against whom the claim is or may be made of liability in respect of the claim.
(7) Section 24 (2), (4) and (10) of the Limitation Act applies for the purposes of this section.
(8) The liability of a person for the payment of an amount owing to the government under this Act is not affected by the expiry of the limitation period that applies under subsection (2) to the amount claimed.
124.613 The commissioner may apply to the Supreme Court for an injunction ordering a person to cease engaging in liquefaction activities until the person complies with this Act and the regulations and the person's obligations under this Act are fulfilled.
Part 8.7 – General
124.70 The minister may designate as commissioner to administer this Act a person who is appointed under the Public Service Act.
124.71 (1) The commissioner may, in writing, delegate any of the commissioner's powers or duties under this Act.
(2) A delegation under subsection (1) may be to a named person or to a class of persons.
124.72 (1) If under this Act a document, other than a document to which section 124.73 [how reasons and notices are given by commissioner] or 124.74 [how demands are given by commissioner] applies, must or may be given by the commissioner to a person, the document may be given in any of the following manners:
(a) if the person is an individual, by leaving the document with the person;
(b) by leaving the document with a person apparently employed at the place of business of the person;
(c) by sending the document by registered mail to the last known address of the person according to the records of the commissioner;
(d) by sending the document by ordinary mail to the last known address of the person according to the records of the commissioner;
(e) by sending the document by electronic mail to the last known electronic mail address of the person according to the records of the commissioner;
(f) by sending the document by fax to the last known fax number of the person according to the records of the commissioner;
(g) by sending the document to the person by another communication method agreed to by the person and the commissioner;
(h) if the person is a corporation, by leaving the document with
(i) a board member or senior officer of the corporation, or
(ii) a person referred to in section 124.301 [tax return required to be filed by person dealing with property or business of taxpayer] who is dealing with the property or business of the corporation;
(i) if the person is an extraprovincial corporation, by leaving the document with
(i) a person referred to in paragraph (h), or
(ii) an attorney for the extraprovincial corporation.
(2) If under this Act a document, other than a document to which section 124.73 or 124.74 applies, must or may be given by the commissioner to a partnership, the document may be given in any of the following manners:
(a) by leaving the document with
(i) an individual who is a member of the partnership, or
(ii) a person apparently employed at the place of business of the partnership;
(b) by sending the document by registered mail to the last known address of
(i) a member of the partnership, or
(ii) the partnership;
(c) by sending the document to
(i) a member of the partnership in any of the manners referred to in subsection (1) (d) to (g), or
(ii) the partnership in any of the manners referred to in subsection (1) (d) to (g), as if the partnership were a person.
(3) A document given to
(a) a person in any of the manners referred to in subsection (1) (c) to (f), or
(b) a member of a partnership, or a partnership, in any of the manners referred to in subsection (1) (d) to (f) or (2) (b)
is deemed to have been given on the date the document was sent.
(4) Despite subsection (3), if a notice of assessment or a notice of determination is sent by registered mail, ordinary mail or electronic mail, the notice, for the purposes of this Act, is deemed to have been given on the date of that notice.
(5) For the purposes of this Act, the date of a notice or statement given by the commissioner is the date stated on the notice or statement.
(6) If a person carries on business under a name or style other than the person's own name, the document to be given in accordance with this Part may be addressed to the name or style under which the person carries on business.
(7) If under section 124.51 (4) (c) [process for objections and powers of minister] the minister is required to give a notice to a person,
(a) the notice may be given in any of the manners referred to in subsection (1) or (2) of this section, and
(b) if sent by registered mail, ordinary mail or electronic mail, the notice is deemed to have been given on the date of that notice.
124.73 (1) Subsections (2) and (3) apply to reasons and notices that, under any of the following provisions, must or may be given by the commissioner to a person or a partnership:
(a) section 124.21 (7) [registration];
(b) section 124.22 (2), (4), (5), (6) or (8) [suspension or cancellation of registration];
(c) section 124.600 [collection bond];
(d) section 124.601 (2) [joint and several liability – taxpayer not registered];
(e) section 124.603 (2) [joint and several liability – registered taxpayer's transaction with another person];
(f) section 124.604 (2) [joint and several liability – registered taxpayer's transaction with partnership];
(g) section 124.605 (2) [joint and several liability – partnership with non-registered members];
(h) section 231.2 (1) [requirement to provide documents or information] of the federal Act, as that section applies for the purposes of this Act;
(i) section 231.6 (2) [requirement to provide foreign-based information] of the federal Act, as that section applies for the purposes of this Act.
(2) Reasons and notices to which this subsection applies may be given to a person in any of the manners referred to in section 124.72 (1) (a), (b), (c), (h) or (i).
(3) Reasons and notices to which this subsection applies may be given to a partnership in any of the manners referred to in section 124.72 (2) (a) or (b).
(4) If under section 124.611 [notice of enforcement proceedings], a notice must be given by the commissioner to a person, the notice may be given in any of the manners referred to in section 124.72 (1) (a), (b), (c), (e), (f), (h) or (i).
(5) If under section 124.611 a notice must be given by the commissioner to a partnership, the notice may be given in any of the following manners:
(a) by giving the notice in any of the manners referred to in section 124.72 (2) (a) or (b);
(b) by sending the notice to
(i) a member of the partnership in any of the manners referred to in section 124.72 (1) (e) or (f), or
(ii) the partnership in any of the manners referred to in section 124.72 (1) (e) or (f), as if the partnership were a person.
(6) Section 124.72 (3) applies for the purposes of this section.
124.74 (1) Subsections (2) and (3) apply to a demand that, under any of the following provisions, must or may be given by the commissioner to a person or a partnership:
(a) section 81 (c) [contemporaneous documentation supporting reasonable efforts];
(b) section 124.302 [tax return required on demand];
(c) section 124.332 [partnership return required on demand];
(d) section 124.407 [demand for information return].
(2) A demand to which this subsection applies may be given to a person in any of the manners referred to in section 124.72 (1) (a), (b), (c), (h) or (i).
(3) A demand to which this subsection applies may be given to a partnership in any of the manners referred to in section 124.72 (2) (a) or (b).
(4) If under section 124.609 [attachment of funds] a demand must or may be given by the commissioner to a person, the demand may be given in any of the manners referred to in section 124.72 (1) (a), (b), (c), (e), (f), (h) or (i).
(5) If under section 124.609 a demand must or may be given by the commissioner to a partnership, the demand may be given in any of the following manners:
(a) by giving the demand in any of the manners referred to in section 124.72 (2) (a) or (b);
(b) by sending the demand to
(i) a member of the partnership in any of the manners referred to in section 124.72 (1) (e) or (f), or
(ii) the partnership in any of the manners referred to in section 124.72 (1) (e) or (f), as if the partnership were a person.
(6) Section 124.72 (3) applies for the purposes of this section.
124.75 (1) Proof of the receipt by a person or partnership of a document to which section 124.72, 124.73 or 124.74 applies may be established in any court by showing that the document was given in an applicable manner provided for in that section.
(2) A person or partnership seeking to establish the fact that a document referred to in subsection (1) was not received by the person or partnership bears the burden of proving that fact.
124.76 If under this Act a document must or may be given to the minister, the document is conclusively deemed to have been given to the minister if delivered to the office of the deputy minister.
124.77 (1) The commissioner may issue a document certifying one or more of the following:
(a) that a person has not filed a return, a notice or an application required to be filed under this Act;
(b) that a record, other than a return, notice or application referred to in paragraph (a), was not filed or supplied under this Act;
(c) that a person has not made an election required to be made under this Act;
(d) that a person filed a return, a notice or an application required to be filed under this Act on a particular day;
(e) that a record, other than a return, notice or application referred to in paragraph (d), was filed or supplied under this Act on a particular day;
(f) that a person made an election required to be made under this Act on a particular day;
(g) that the commissioner gave notice under section 124.22 of a suspension or cancellation of registration on a particular day;
(h) that a document that must or may be given by the commissioner was given to a person or partnership in a particular manner on a particular day;
(i) that a notice of objection was not filed within the time allowed;
(j) that a request under section 124.412 (5) [anti-avoidance rule] was not made within the time allowed.
(2) A document issued under subsection (1) is proof, in the absence of evidence to the contrary, of the matter certified in the document.
(3) In a prosecution or proceeding in respect of any matter arising under this Act, the facts necessary to establish compliance by the commissioner with this Act or the regulations may be sufficiently proved in any court by the production of an affidavit of the commissioner or a person authorized by the commissioner setting out the facts.
124.78 (1) For the purposes of this Act, a measurement of a volume of natural gas is to be expressed per 1 000 m3 at standard conditions of 101.325 kPa and 15°C and rounded to one decimal place.
(2) For the purposes of this Act, the heating value of natural gas is to be expressed in gigajoules per 1 000 m3.
(3) For the purposes of this Act, the measuring and taking of samples of natural gas is to be made in accordance with the regulations made under the Oil and Gas Activities Act.
Part 8.8 – Offences and Penalties
124.80 (1) A person who does any of the following commits an offence:
(a) fails to file a return as and when required under this Act;
(b) fails to comply with a written notice given to the person under any of the following provisions:
(i) section 124.411 (2) or (6) [keeping and retaining records];
(ii) section 231.2 (1) [requirement to provide documents or information] of the federal Act, as that section applies for the purposes of this Act;
(iii) section 231.6 (2) [requirement to provide foreign-based information] of the federal Act, as that section applies for the purposes of this Act.
(2) A person who contravenes section 124.20 (1) [requirement to be registered and transact only with registered persons or partnerships] or 124.411 (1), (3), (4), (5) or (8) [keeping and retaining records] commits an offence.
(3) A person who contravenes section 231.5 (2) [compliance] of the federal Act, as that section applies for the purposes of this Act, commits an offence.
124.81 (1) A person who does any of the following commits an offence:
(a) makes, or participates in, assents to or acquiesces in the making of, a false or deceptive statement in
(i) a return, notice or application filed under this Act, or
(ii) an election made under this Act;
(b) destroys, alters, mutilates, hides or otherwise disposes of a record to evade payment of an amount to be paid to the government under this Act;
(c) makes, or participates in, assents to or acquiesces in the making of, a false or deceptive entry in a record related to an amount to be paid to the government under this Act;
(d) omits, or participates in, assents to or acquiesces in the omission of, a material particular in a record required to be kept under this Act;
(e) makes or uses, or participates in, assents to or acquiesces in the making or use of, a record in a false or deceptive manner in order to obtain a tax benefit;
(f) wilfully, in any manner, fails to comply with this Act or the regulations;
(g) wilfully, in any manner, evades or attempts to evade compliance with this Act or the regulations or payment of tax payable under this Act;
(h) conspires with any person to do anything described in paragraphs (a) to (g).
(2) In addition to any penalty under section 124.82, a taxpayer who commits an offence under subsection (1) is liable to a fine of not less than 50% and not more than 200% of the amount of tax that was sought to be evaded.
124.82 (1) An individual who commits an offence under section 124.80 (1), (2) or (3) or 124.81 (1) is liable to
(a) a fine of not more than $100 000,
(b) imprisonment for not more than 2 years, or
(c) both the fine and imprisonment referred to in paragraphs (a) and (b) of this subsection.
(2) A corporation that commits an offence under section 124.80 (1), (2) or (3) or 124.81 (1) is liable to a fine of not more than $100 000.
124.83 (1) A person commits an offence if
(a) the person contravenes section 124.409 (2) [communication of information], or
(b) the person knowingly contravenes an order made under section 241 (4.1) [measures to prevent unauthorized use or disclosure] of the federal Act as that section applies for the purposes of this Act.
(2) A person
(a) to whom taxpayer information has been provided for a particular purpose under section 124.409 (4) (b), (e), (g), (i), (k) or (l), or
(b) who is an official to whom taxpayer information has been provided for a particular purpose under section 124.409 (4) (a), (c) or (f)
and who for any other purpose knowingly uses, provides to any person, allows the provision to any person of, or allows access to, that information commits an offence.
(3) An individual who commits an offence under subsection (1) or (2) is liable to
(a) a fine of not more than $5 000,
(b) imprisonment for not more than 12 months, or
(c) both the fine and imprisonment referred to in paragraphs (a) and (b) of this subsection.
(4) A corporation that commits an offence under subsection (1) or (2) is liable to a fine of not more than $5 000.
124.84 If a corporation commits an offence under this Act, an employee, officer, director or agent of the corporation who authorized, permitted or acquiesced in the offence also commits that offence, whether or not the corporation is prosecuted or convicted.
124.85 The time limit for laying an information for an offence under this Act is 8 years after the time when the subject matter of the proceedings arose.
124.86 Section 5 [general offence] of the Offence Act does not apply to this Act or the regulations.
54 The following sections are added to Part 9:
127.1 The Lieutenant Governor in Council may make regulations as follows:
(a) for the purposes of section 124.20, exempting a person or class of persons from the requirement to be registered in respect of an LNG source;
(b) for the purposes of section 124.21,
(i) respecting conditions that may be specified by the commissioner in relation to a person's registration, and
(ii) imposing conditions to which a person's registration is subject;
(c) for the purposes of section 124.600 (1), prescribing circumstances in which the commissioner may not require a person to deposit a bond;
(d) for the purposes of section 124.600 (5), prescribing matters the commissioner must consider in determining the amount of a bond or whether a bond is satisfactory, including matters relating to an applicant's potential liability under sections 124.601 and 124.603 to 124.605;
(e) respecting the maximum amount of the bond that may be required under section 124.600 in respect of an LNG source, which maximum amount may be established considering the tax that may be payable under this Act by all persons engaging in or deriving income from liquefaction activities in respect of the LNG source.
127.2 The Lieutenant Governor in Council may make regulations as follows:
(a) requiring a person or class of persons to file information returns respecting any class of information required in connection with assessments or determinations under this Act;
(b) requiring a person or class of persons to file, with an information return required to be filed under paragraph (a), any other information or records required by the commissioner;
(c) respecting information returns, including, without limitation, regulations respecting
(i) the form and content of information returns,
(ii) when information returns must be filed, and
(iii) the manner of filing information returns;
(d) applying section 124.407 (1) or (6) to information returns required to be filed under paragraph (a) of this subsection in respect of a partnership;
(e) respecting records to be kept by a person required to file an information return, including, without limitation, regulations respecting
(i) the form of the records,
(ii) the manner in which the records are to be kept, and
(iii) the length of time the records are to be retained by the person;
(f) requiring a person to provide the person's name, address, registration number issued under section 124.21 or other information required by the regulations, including information relating to a partnership of which the person is a member, to another person or a class of persons required to file a return or to supply any other information or records under this Act containing that information;
(g) respecting the use of information required to be provided under a regulation made under paragraph (f) by the person to whom the information is provided;
(h) requiring a person who is required to file a partnership return to supply a copy of the partnership return or part of the partnership return to the person to whom the partnership return or part of the partnership return relates;
(i) requiring a person who is, by a regulation made under paragraph (a), required to file an information return to supply a copy of the information return or part of the information return to the person to whom the information return or part of the information return relates;
(j) respecting the manner by which a copy must be supplied further to a requirement to supply a copy under paragraph (h) or (i).
127.3 (1) In this section, "client" means a particular client or a particular former client.
(2) This section applies in relation to a record or a part of a record
(a) that is in the possession of a lawyer and that is about to be inspected, audited or examined under this Act or about to be seized under a warrant in relation to an offence under this Act, and
(b) for which the lawyer at that time makes a claim of solicitor-client privilege for a client of the lawyer in relation to the record or part of the record.
(3) The Lieutenant Governor in Council may make regulations in relation to a record or a part of a record referred to in subsection (2) as follows:
(a) establishing procedures for allowing a record or part of a record to be retained or seized and to be held in a secure manner until
(i) the claim of solicitor-client privilege is waived by the client, or
(ii) the claim is determined, or the record or part of the record is otherwise dealt with, on application to the Supreme Court in accordance with the regulations;
(b) establishing a right to apply to the Supreme Court to resolve a claim of solicitor-client privilege regarding a record or part of a record retained or seized under paragraph (a) and establishing how the court is to deal with such an application.
127.4 (1) The Lieutenant Governor in Council may make regulations as follows:
(a) establishing rules governing the practice and procedure of the Supreme Court in an appeal under this Act;
(b) providing that a rule under the Supreme Court Civil Rules does not apply to an appeal under this Act.
(2) To the extent of any inconsistency or conflict between a rule made under subsection (1) and a rule made under the Court Rules Act, the rule made under subsection (1) prevails.
127.5 The Lieutenant Governor in Council may make regulations as follows:
(a) for the purposes of section 8 (1) (c) (iv), excluding from forming part of an LNG plant
(i) all or part of a series of systems used or intended to be used for transmitting liquefied natural gas for regasification, or
(ii) any tangible personal property or improvements that are part of the series of systems used or intended to be used for transmitting liquefied natural gas for regasification;
(b) prescribing a rate of interest for the purposes of the description of "D" in the definition of "income shortfall adjustment" in section 34.3 (1) of the federal Act, as that section applies for the purposes of this Act;
(c) prescribing for a contravention of a regulation a penalty not exceeding the maximum fine or term of imprisonment, or both, set out in section 124.82 [penalties].
55 The following sections are added:
128.1 Section 29 is amended
(a) in subsection (2.1) by striking out "paragraph" and substituting "paragraphs" and by adding the following paragraph:
(f) in respect of a taxpayer that is a corporation, the assessment, reassessment or additional assessment is made
(i) as a consequence of an assessment or reassessment of the corporation, or a determination or redetermination in respect of the corporation, under the Liquefied Natural Gas Income Tax Act, and
(ii) before the day that is one year after the date of the notice of assessment or notice of determination under the Liquefied Natural Gas Income Tax Act respecting the action referred to in subparagraph (i). , and
(b) by repealing subsection (2.2) and substituting the following:
(2.2) In applying section 152 (4.01) of the federal Act for the purposes of this Act, the reference in that section to "paragraph (4) (a), (b), (b.1) or (c)" must be read as "paragraph (4) (a), (b), (c), (e) or (f)" and that section must be read as including the following paragraphs:
(c) where paragraph (4) (e) applies to the assessment, reassessment or additional assessment, determining or redetermining the corporation's taxable income earned in the year in British Columbia, as defined in section 13.3 of this Act; and
(d) where paragraph (4) (f) applies to the assessment, reassessment or additional assessment, determining the corporation's deduction under Part 13 [Natural Gas Tax Credit] for the taxation year.
128.2 Section 38 (1.01) is amended by adding the following paragraph:
(j) the amount, if any, by which
(i) the amount that would be deducted under section 172 of this Act for the year by the person if that amount were calculated by reference to the information in the return or form filed under section 174 (1) (a) of this Act
exceeds
(ii) the amount that the person is entitled to deduct for the year under section 172 of this Act.
128.3 Section 47 (3) is amended by striking out "128 (2) and 138 (2)" and substituting "128 (2), 138 (2) and 174 (2)".
128.4 Section 64 (5) is amended by adding the following paragraph:
(e.1) provide taxpayer information relating to Part 13, other than taxpayer information that expressly reveals the identity of the taxpayer to whom the information relates, that can reasonably be regarded as necessary for the purposes of Part 2 [Fiscal Reports: Public Accounts and Other Reports] of the Budget Transparency and Accountability Act, solely for those purposes, .
56 Section 129, as it enacts Part 13 of the Income Tax Act, R.S.B.C. 1996, c. 215, is amended
(a) in section 172 (1) of the Income Tax Act by adding the following definition:
"credit calculation change" means the prescribing of a percentage for the purposes of subsection (4) (b), including any amendment to the regulations that effects a change in or the repeal of a percentage prescribed for the purposes of subsection (4) (b); ,
(b) in section 172 (3) (b) of the Income Tax Act by striking out "subsection (7)," and substituting "subsections (7) and (8),",
(c) in section 172 of the Income Tax Act by repealing subsections (4) to (6) and substituting the following:
(4) A qualifying corporation's annual natural gas tax credit for a taxation year that begins on or after January 1, 2017 is the total of the following:
(a) 0.5% of the qualifying corporation's eligible cost of natural gas for the taxation year;
(b) the amount, if any, determined for the taxation year under subsection (4.1);
(c) if the qualifying corporation is a member of a partnership, as determined under the Liquefied Natural Gas Income Tax Act, the amount, if any, determined for the taxation year under subsection (5.2).
(4.1) Subject to subsection (5.1), the amount to be included under subsection (4) (b) in determining the qualifying corporation's annual natural gas tax credit for the taxation year is the prescribed percentage, if any, of the qualifying corporation's eligible cost of natural gas for that taxation year.
(5) A qualifying corporation's eligible cost of natural gas for a taxation year is an amount equal to the total cost, as determined under the Liquefied Natural Gas Income Tax Act, of all natural gas acquired or notionally acquired in the taxation year by the qualifying corporation at the LNG facility inlet meters for an LNG facility.
(5.1) If, during the taxation year of a qualifying corporation, there are one or more credit calculation changes, the qualifying corporation must determine its eligible cost of natural gas for that taxation year in accordance with the following:
(a) the corporation must divide its taxation year into notional taxation years as follows:
(i) the first of those notional taxation years begins on the first day of the corporation's taxation year and ends on the day before the day on which the first credit calculation change that occurs in its taxation year takes effect;
(ii) subject to subparagraph (iii), a notional taxation year will begin on each day in the corporation's taxation year on which a credit calculation change takes effect and will end on the day before the day in its taxation year on which the next credit calculation change takes effect;
(iii) the last notional taxation year begins on the day on which the last credit calculation change that occurs in the corporation's taxation year takes effect and ends on the last day of its taxation year;
(b) the corporation must, for each notional taxation year within the corporation's taxation year, multiply the percentage prescribed for the purposes of subsection (4.1), if any, on the first day of that notional taxation year by an amount equal to the total cost, as determined under the Liquefied Natural Gas Income Tax Act, of all natural gas acquired or notionally acquired in the notional taxation year by the qualifying corporation at the LNG facility inlet meters for an LNG facility;
(c) the corporation must add to the amount determined under paragraph (b) for the first notional taxation year within the corporation's taxation year the amounts determined under paragraph (b) for each of the other notional taxation years within its taxation year;
(d) the total amount determined under paragraph (c) is the amount determined under subsection (4.1) for the corporation's taxation year.
(5.2) The amount to be included under subsection (4) (c) in determining the qualifying corporation's annual natural gas tax credit for the taxation year is the amount equal to the total of all amounts each of which is the qualifying corporation's appropriate portion of a partnership's annual natural gas tax credit for the fiscal period of the partnership ending in the taxation year of the qualifying corporation, as determined under subsection (6).
(6) For the purposes of subsection (5.2), the following rules apply for determining the amount of a qualifying corporation's appropriate portion of a partnership's annual natural gas tax credit for a fiscal period of the partnership:
(a) the amount of the partnership's annual natural gas tax credit is to be determined by applying subsections (4) to (5.1) as if the partnership were a qualifying corporation and the partnership's fiscal period were its taxation year;
(b) the appropriate portion is that portion that may reasonably be considered to be the qualifying corporation's share of the amount determined under paragraph (a) of this subsection.
(8) For the purposes of subsection (3) (b), if a qualifying corporation is subject to a loss restriction event, within the meaning of section 251.2 (2) of the federal Act, at any time in a particular taxation year, the total of the qualifying corporation's annual natural gas tax credits for all taxation years preceding the particular taxation year, less any amounts that were previously deducted by the qualifying corporation under subsection (2) for those preceding taxation years, is deemed to be zero. ,
(d) in section 172 (7) of the Income Tax Act by striking out "in those preceding taxation years," and substituting "for those preceding taxation years,", and
(e) by adding the following sections to Part 13 of the Income Tax Act:
173 (1) If, on or after January 1, 2017, 2 or more corporations amalgamate within the meaning of section 87 (1) of the federal Act, the new corporation is deemed, for the purposes of this Part, to be a continuation of each of its predecessor corporations.
(2) If, on or after January 1, 2017, a subsidiary corporation is wound up within the meaning of section 88 (1) of the federal Act, the parent corporation is deemed, for the purposes of this Part, to be a continuation of the subsidiary corporation.
174 (1) A qualifying corporation that wishes to claim a deduction under this Part in respect of a taxation year must
(a) file, with the return of income filed by the corporation under section 29 for that taxation year, an application for the deduction in the form, and containing the information, required by the Commissioner of Income Tax, and
(b) have filed all tax returns required to be filed under the Liquefied Natural Gas Income Tax Act for the taxation year and all preceding taxation years.
(2) A qualifying corporation is not entitled to a deduction under this Part in respect of a taxation year unless, within 18 months after the end of the taxation year, the corporation files the form containing the information required under subsection (1) (a).
57 This Act comes into force on the date of Royal Assent.