1992 Legislative Session: 1st Session, 35th Parliament
FIRST READING


The following electronic version is for informational purposes only.
The printed version remains the official version.


Certified correct as passed Third Reading on the 2nd day of June, 1992
Ian D. Izard, Law Clerk.


MINISTER OF FINANCE AND
CORPORATE RELATIONS

BILL 6 -- 1992
CORPORATION CAPITAL TAX ACT

Contents

Section  

1 

Interpretation

2 

Permanent establishment

3 

Liability for tax

4 

Exemption from tax

5 

Apportionment of tax

6 

Taxation year

7 

Total paid up capital -- banks, trust companies and credit unions

8 

Total paid up capital -- investment dealers

9 

Total paid capital -- other corporations

10 

General rules applicable to the calculation of total paid up capital

11 

Deductions from total paid up capital

12 

Investment allowance

13 

Taxable paid up capital of a corporation applicable to British Columbia

14 

Deduction for eligible British Columbia expenditures

15 

Annual return

16 

Instalment payments and interest

17 

Requirements on responsible representatives

18 

Investigation

19 

Enforcement

20 

Penalty provision

21 

Power to make inquiry

22 

Power to specify records

23 

Duty of certain persons to give information

24 

Confidentiality

25 

Notice of assessment

26 

Continuing liability for tax

27 

Refund of overpayment

28 

Giving notice of assessment

29 

Appeal to minister

30 

Appeal to court

31 

Irregularity in procedure

32 

Payment date not affected by appeal

33 

Tax to constitute a lien

34 

Notice of proceedings

35 

Recovery by action

36 

Filing of certificate

37 

Attachment

38 

Recovery by distress

39 

Powers exercisable separately

40 

Notices in writing

41 

Delegation of powers

42 

Limitation

43 

Penalty for default

44 

Offence and penalty

45 

Regulations

46 

Transitional

47 

Repeal

48 

Consequential Amendment

49 

Commencement

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of the Province of British Columbia, enacts as follows:

Interpretation

1 (1) In this Act

"administrator" means the person designated as the administrator by the minister for the purposes of this Act;

"amount" means an amount of money or the dollar value of a right or thing;

"amount taxable" means the total paid up capital of a corporation, measured at the end of its taxation year, minus any deductions permitted under sections 11 to 14;

"assessment" includes reassessment;

"associated corporations" has the same meaning as in section 256 of the Income Tax Act (Canada);

"business" means an undertaking of any kind, and includes

(a) any profession, calling, trade or manufacture, and

(b) any

(i) adventure, or

(ii) concern

in the nature of trade;

"charter" includes

(a) an Act, statute, ordinance, letters patent, certificate or declaration,

(b) other instrument or provision of law by or under which a corporation is incorporated, amalgamated or continued,

(c) the memorandum, articles or bylaws, by whatever name called, of a corporation, and

(d) the constitution and rules of a credit union;

"corporation" includes

(a) the agent, assignee, trustee, liquidator, receiver or another official in whose hands, or under whose control, the whole or any part of a corporation's property is placed,

(b) a bank, trust company or credit union, and

(c) a Crown corporation with or without share capital;

"credit union" means credit union as defined in the Financial Institutions Act;

"jurisdiction" means

(a) a province of Canada, or

(b) a state outside Canada having sovereign power;

"nonresident" means not resident in Canada;

"permanent establishment" means a permanent establishment as determined under section 2;

"property" means property of any kind and includes

(a) a right to or interest in property,

(b) a share,

(c) a chose in action, and

(d) money;

"resident in Canada" means resident in Canada for purposes of the Income Tax Act (Canada);

"return" means a return in the form established by the minister;

"share" means a share of capital stock of a corporation;

"subsidiary controlled corporation" means a corporation more than 50% of the issued share capital of which, having full voting rights under all circumstances, belongs to the corporation to which it is subsidiary;

"tax" includes all penalties and interest that are, or may be, added to the tax under this Act;

"tax payable" by a corporation includes the tax payable by the corporation as fixed by assessment or reassessment or varied on appeal, in accordance with this Act;

"trust company" means a trust company as defined in the Financial Institutions Act, and includes

(a) an extraprovincial trust corporation as defined in that Act, and

(b) a corporation that is a subsidiary of a bank and is a loan company to which the Loan Companies Act (Canada) applies.

(2) Notwithstanding any other enactment, but subject to section 4, this Act applies to every government corporation as defined in section 1 of the Financial Administration Act.

Permanent establishment

2 (1) In this section "fixed place of business" includes but is not limited to a branch, a mine, an oil well, a farm, a timberland, a factory, a workshop, a warehouse, an office and an agency.

(2) A corporation that has a fixed place of business has a permanent establishment at that place.

(3) A corporation that has no fixed place of business has a permanent establishment at the principal place in which the corporation's business is conducted.

(4) A corporation has a permanent establishment at the place designated in its charter as being its head office.

(5) If a corporation carries on business through an employee or agent, established in a particular place, who has general authority to contract for the employer or principal or who has a stock of merchandise owned by the employer or principal from which the employee or agent regularly fills orders that the employee or agent receives, the corporation shall be deemed to have a permanent establishment at that place.

(6) A corporation that uses substantial machinery or substantial equipment in a particular place at any time has a permanent establishment at that place.

(7) A corporation otherwise having a permanent establishment in Canada, that owns land in a province shall be deemed to have a permanent establishment on that land.

(8) A nonresident corporation shall be deemed to have a permanent establishment at any place in Canada where it grows, mines, creates, manufactures, fabricates, improves, packs, preserves or constructs anything, in whole or in part, whether or not the nonresident corporation exports that thing without selling it before export.

(9) The fact that a corporation has business dealings through a commission agent, broker or other independent agent does not by itself mean that the corporation has a permanent establishment.

(10) The fact that a corporation has

(a) a subsidiary controlled corporation at a place, or

(b) a subsidiary controlled corporation engaged in a trade or business at a place

does not by itself mean that the first mentioned corporation has a permanent establishment at that place.

(11) The fact that a corporation maintains an office solely for the purchase of merchandise does not by itself mean that the corporation has a permanent establishment at that office.

Liability for tax

3 (1) Every corporation that

(a) is a bank, trust company or credit union,

(b) has a permanent establishment in British Columbia, and

(c) has total paid up capital of more than $500 million determined under sections 7 and 8

shall pay to Her Majesty in right of the Province for each taxation year of the corporation, a tax in an amount equal to 3% of the amount taxable of that corporation.

(2) Every corporation that

(a) is a bank, trust company or credit union,

(b) has a permanent establishment in British Columbia,

(c) has total paid up capital of $500 million or less, and

(d) has total paid up capital of $1 million or more, or is one of 2 or more associated corporations that when considered together have total paid up capital in the aggregate of at least $1 million or more

shall pay to Her Majesty in right of the Province, for each taxation year of the corporation, a tax in an amount equal to 1% of the amount taxable of that corporation.

(3) Every corporation that

(a) is not a bank, trust company or credit union,

(b) has a permanent establishment in British Columbia, and

(c) has total paid up capital of $1 million or more, or is one of 2 or more associated corporations that when considered together have total paid up capital in the aggregate of $1 million or more

shall pay to Her Majesty in right of the Province, for each taxation year of the corporation, a tax in an amount equal to 0.3% of the amount taxable of that corporation.

(4) For the purposes of subsection (2) (d) or (3) (c), the determination of total paid up capital shall be made before the application of the deductions under sections 11 (d), 12, 13 and 14.

(5) Where a corporation is one of 2 or more associated corporations the aggregate total paid up capital for both or all of them, as the case may be, shall be computed for the purposes of subsections (2) (d) and (3) (c) by using the taxation year for each of the associated corporations ending in the same calendar year.

Exemption from tax

4 (1) If, in a taxation year of a corporation, the corporation's total taxable income, determined for the purposes of the Income Tax Act (Canada), is exempt from income tax under section 149 (1) or 149.1 of that Act, then, subject to subsection (2), that corporation is exempt from the tax under this Act for that taxation year.

(2) The exemption under subsection (1) does not apply to Crown corporations designated by regulation.

(3) The following corporations are exempt from the tax under this Act:

(a) the Insurance Corporation of British Columbia;

(b) an insurance company as defined in the Financial Institutions Act;

(c) an extraprovincial insurance corporation as defined in the Financial Institutions Act;

(d) a corporation, other than as described in paragraphs (a) to (c), that carries on the business of an insurer and is designated by regulation;

(e) British Columbia Central Credit Union.

Apportionment of tax

5 (1) If a corporation has a taxation year of more or less than 365 days, the tax payable under this Act by the corporation for that taxation year is equal to that proportion of the tax otherwise payable under this Act for the taxation year that the number of days in the taxation year bears to 365 or, in a leap year, 366.

(2) If a corporation ceases to have a permanent establishment in British Columbia during a taxation year, the taxation year shall be deemed to consist of the number of days in the year during which the corporation had a permanent establishment in British Columbia, and subsection (1) applies to that taxation year.

(3) If a corporation commences having a permanent establishment in British Columbia during a taxation year, the taxation year is deemed to consist of the number of days in the year during which the corporation had a permanent establishment in British Columbia, and subsection (1) applies to that taxation year.

(4) Where a corporation has a taxation year part of which is before April 1, 1992 and part of which is after March 31, 1992, the tax payable under this Act is equal to that proportion of the tax otherwise payable under this Act that the number of days in the taxation year after March 31, 1992 bears to the number of days in the taxation year.

Taxation year

6 (1) The taxation year of a corporation for the purposes of this Act coincides with its taxation year, or deemed taxation year, under the Income Tax Act (Canada).

(2) If a corporation's taxation year, or deemed taxation year, under the Income Tax Act (Canada) changes, or is deemed to change or to have changed, in any way because of the operation of that Act, then the corporation's taxation year for the purposes of this Act shall be deemed to change, or to have changed, at the same time, in the same manner and to the same extent.

(3) If a corporation changes its taxation year, the corporation shall advise the administrator of the new taxation year within 30 days after the change.

Total paid up capital -- banks, trust companies and credit unions

7 The total paid up capital of a bank, trust company or credit union means the aggregate of the amounts, computed at the end of its taxation year, of its

(a) capital stock,

(b) contributed surplus, and

(c) retained earnings.

Total paid up capital -- investment dealers

8 The total paid up capital of a corporation that is registered or licensed under the laws of a province to trade in securities means the aggregate of the amounts, computed at the end of its taxation year, of its

(a) capital stock,

(b) retained earnings, contributed surplus and any other surpluses,

(c) deferred credit, and

(d) subordinate indebtedness.

Total paid up capital -- other corporations

9 (1) In this section "current accounts payable" includes amounts that represent a corporation's

(a) employee source deductions,

(b) current income taxes payable,

(c) wages and salaries payable, and

(d) cheques issued and outstanding in excess of funds on deposit,

but does not include any amounts that represent

(e) the current portion of long term indebtedness, or

(f) liabilities incurred more than 120 days before the end of the corporation's taxation year and not paid by the end of that taxation year.

(2) The total paid up capital of a corporation that is not a bank, trust company, credit union or corporation described in section 8 means the aggregate of the amounts, computed at the end of its taxation year, of its

(a) capital stock,

(b) retained earnings, contributed surplus and any other surpluses, and

(c) liabilities, whether secured or unsecured, including any deferred credit and excluding current accounts payable.

General rules applicable to the
calculation of total paid up capital

10 (1) For the calculation of total paid up capital under sections 7 to 9 and of amounts deductible under sections 11 to 14, a corporation that carries on business in a partnership or joint venture shall include its proportionate share, as a member of the partnership or joint venture, of the following partnership or joint venture amounts:

(a) subordinate indebtedness evidenced by obligations issued for terms of not less than 5 years;

(b) liabilities, whether secured or unsecured, including any deferred credit and excluding current accounts payable;

(c) shares and bonds of corporations resident in Canada;

(d) loans and advances to corporations resident in Canada;

(e) the carrying value of investments if any in a ship or aircraft, if deductible under section 12 (2) (c);

(f) eligible expenditure under section 14.

(2) A deduction shall be disallowed if it would unduly or artificially reduce total paid up capital.

(3) For the purposes of this Act, a corporation shall determine its total paid up capital on the basis of its non-consolidated financial statements using generally accepted accounting principles other than the equity method of accounting.

Deductions from total paid up capital

11 (1) There may be deducted from the total paid up capital of a corporation at the end of its taxation year

(a) the corporation's negative retained earnings, if any,

(b) the corporation's deferred tax debit, if any, to the extent recorded in its financial statements,

(c) in the case of a corporation that is solely engaged in exploration for a mineral resource and has incurred exploration costs that have not been written off to retained earnings, those exploration costs to the extent that they will not be deducted under section 14, and

(d) where the total paid up capital of the corporation, after applying the deductions under paragraphs (a) to (c) of this subsection and under section 12, is reduced to an amount that is $1 million or more but does not exceed $1 250 000, the appropriate further deduction shown below.

TOTAL PAID UP CAPITAL

EXCEEDS

BUT DOES NOT EXCEED

DEDUCTION

$1 000 000

$1 012 500

$955 938

1 012 500

1 025 000

916 875

1 025 000

1 037 500

876 563

1 037 500

1 050 000

835 000

1 050 000

1 062 500

792 188

1 062 500

1 075 000

748 125

1 075 000

1 087 500

702 813

1 087 500

1 100 000

656 250

1 100 000

1 112 500

608 438

1 112 500

1 125 000

559 375

1 125 000

1 137 500

509 063

1 137 500

1 150 000

457 500

1 150 000

1 162 500

404 688

1 162 500

1 175 000

350 625

1 175 000

1 187 500

295 313

1 187 500

1 200 000

238 750

1 200 000

1 212 500

180 938

1 212 500

1 225 000

121 875

1 225 000

1 237 500

61 563

1 237 500

1 250 000

25 000

(2) Where

(a) a corporation is one of 2 or more associated corporations, and

(b) the aggregate of the total paid up capital of both or all, as the case may be, of the associated corporations, at the end of each corporation's taxation year ending in the same calendar year and after applying the deductions under subsection (1) (a) to (c) of this section and under section 12 is $1 million or more but does not exceed $1 250 000,

the aggregate amounts of the total paid up capital for those associated corporations shall be reduced by an amount determined under subsection (1) (d) that is in the proportion that the amount for each of the associated corporations, after applying the deductions under subsection (1) (a) to (c) of this section and under section 12, bears to the aggregate amounts so determined for all of the associated corporations.

(3) A negative amount determined under subsection (1) (a) to (c) of this section and under section 12 for a corporation that is one of the 2 or more associated corporations referred to in subsection (2) (a) shall be deemed to be nil.

Investment allowance

12 (1) In this section

"cash on deposit with a savings institution" means, in relation to a corporation,

(a) a deposit with the savings institution creating a debtor creditor relationship between the corporation, as the depositor, and the savings institution, or

(b) rights held by the corporation against a savings institution based on bank paper or similar paper in use by a savings institution other than a bank, including but not limited to certificates of deposit bearer deposit notes, swap deposits and banker's acceptances;

"loans and advances to other corporations" does not include

(a) cash on deposit with a savings institution, or

(b) amounts that are to be repaid by the other corporations which amounts are loans or advances made within 120 days before the end of the taxation year of the corporation making the loan or advance.

(2) After applying the deductions under section 11 (1) (a) to (c) but before the deductions under section 11 (1) (d) and before the deductions under section 13 of the amounts of paid up capital applicable to jurisdictions other than British Columbia, there may be deducted from the total paid up capital of a corporation that is not a bank, trust company, credit union or corporation described in section 8 an investment allowance in an amount that equals that proportion of the total paid up capital by which the carrying value of investments made by the corporation in

(a) shares and bonds of other corporations,

(b) loans and advances to other corporations,

(c) subject to subsection (3), the amount that represents the carrying value of a corporation's investment, if any, in a ship or aircraft, and

(d) an amount equal to the security posted pursuant to section 10 of the Mines Act

bears to the total assets of the corporation.

(3) An investment referred to in subsection (2) (c) shall not be deducted under subsection (2) unless the income for the taxation year earned from the operation of the ship or aircraft is exempt under section 81 (1) (c) of the Income Tax Act (Canada).

Taxable paid up capital of a corporationapplicable to British Columbia

13 After applying the deductions under sections 11 and 12 and before applying any deductions under section 14, there may be deducted from the total paid up capital of a corporation at the end of its taxation year that portion of the total paid up capital that is used by the corporation in jurisdictions outside British Columbia determined under prescribed rules.

Deduction for eligible British
Columbia expenditures

14 (1) In this section

"B.C. development expenditure" has the same meaning as "Canadian development expense" in section 66.2 (5) (a) of the Income Tax Act (Canada), would have if

(a) the references in that provision to "Canada" and "taxpayer" were read as references to "British Columbia" and "corporation", and

(b) section 66.2 (5) (a) (iii) were disregarded;

"B.C. exploration expenditure" has the same meaning as "Canadian exploration expense" in section 66.1 (6) (a) of the Income Tax Act (Canada) would have if the references in that provision to "Canada" and "taxpayer" were read as references to "British Columbia" and "corporation";

"B.C. research expenditure" means an expenditure made by a corporation in respect of scientific research that is expenditure of the type that would be described in section 37 (1) (a) or (b) (ii) of the Income Tax Act (Canada) if the references in those provisions to "Canada" and "the taxpayer" were read as references to "British Columbia" and "corporation";

"eligible expenditure" means the sum of a corporation's

(a) B.C. exploration expenditure,

(b) B.C. development expenditure,

(c) B.C. research expenditure, and

(d) costs incurred in acquiring eligible property and eligible tourism property;

"eligible property" means property owned by a corporation at the end of the taxation year in which the corporation acquires the property, where the property

(a) is a building that the corporation acquired after March 31, 1992 or is a portion acquired after that date of a building,

(b) is machinery or equipment acquired by the corporation after March 31, 1992,

(c) has not been used, or acquired for use or lease, for any purpose whatever before it was acquired by the corporation, and

(d) meets the requirements of subsection (2)

and includes any air and water pollution abatement equipment and structures relating to any of the purposes described in subsection (2) (a), but does not include eligible tourism property;

"eligible tourism property" means property held by a corporation at the end of the taxation year in which the corporation acquires the property, where the property

(a) is

(i) a building or structure that the corporation acquired after March 31, 1992 or is a portion acquired after that date of a building or structure,

(ii) machinery or equipment acquired by the corporation after March 31, 1992, or

(iii) changes to land constructed by the corporation after March 31, 1992,

(b) has not been used, or acquired for use or lease, for any purpose whatever before it was acquired by the corporation, and

(c) that is to be used primarily by the corporation in prescribed tourism activities.

(2) The requirements referred to in paragraph (d) of the definition of "eligible property" in subsection (1) are that the corporation acquired the property to use it in British Columbia primarily for the purpose of

(a) manufacturing or processing goods for sale or lease,

(b) exploring or drilling for petroleum or natural gas,

(c) operating an oil or gas well, extracting petroleum or natural gas from a natural accumulation thereof or processing heavy crude oil recovered from a natural reservoir in British Columbia to a stage that is not beyond the crude oil stage or its equivalent,

(d) prospecting or exploring for or developing a mineral resource,

(e) extracting minerals from a mineral resource,

(f) cutting standing timber,

(g) processing ore from a mineral resource to a stage that is not beyond the prime metal stage or its equivalent,

(h) farming or fishing,

(i) storing grain,

(j) extracting and producing industrial minerals, or

(k) producing or processing steam or all-electrical energy for sale.

(3) For purposes of computing its amount taxable for a taxation year, a corporation that is not a bank, trust company or credit union, after the application of the deductions under sections 11 to 13, may deduct from its total paid up capital at the end of its taxation year an amount equal to

(a) for the first taxation year ending after March 31, 1992, the eligible expenditure incurred by the corporation between March 31, 1992 and the end of that taxation year, multiplied by the ratio that the total number of days in the taxation year bears to the number of days in the taxation year after March 31, 1992,

(b) for the second taxation year ending after March 31, 1992, the eligible expenditure incurred by the corporation during that taxation year, and

(c) for the third and subsequent taxation years ending after March 31, 1992, the sum of

(i) the eligible expenditure incurred by the corporation during its current taxation year, and

(ii) the eligible expenditure incurred by the corporation in its immediately preceding taxation year.

Annual return

15 (1) On or before the due date under subsection (4) and without notice or demand, a corporation on which tax is imposed by this Act shall

(a) deliver to the administrator a return, and

(b) pay to the minister the estimated tax or, if instalment payments have been made under section 16, the difference between the estimated tax and the amount paid by instalments.

(2) The return must

(a) contain an estimate of the tax payable, and

(b) be verified by a certificate, signed by a person qualified under subsection (3), certifying that the financial statements included in the return or attached are in agreement with the books of the corporation.

(3) The following persons are qualified to sign the certificate under subsection (2):

(a) the president or another officer of the corporation having personal knowledge of the affairs of the corporation;

(b) in the case of an extraprovincial company as defined in the Company Act, the manager or chief agent of the corporation in British Columbia.

(4) A return shall be filed within 184 days after the end of the taxation year and the date of the taxation year end shall be deemed to be the date on which the tax imposed by this Act is due.

(5) A corporation may apply to the administrator for permission to extend the time under subsection (4) and where the administrator is satisfied of the circumstances, the administrator may extend the time.

(6) Any extension of the time under subsection (5) does not constitute a waiver of liability for the tax, or for any penalties and interest imposed under this Act.

Instalment payments and interest

16 (1) Every corporation whose tax liability under this Act exceeds $3 000 shall pay instalments in accordance with this section on account of its tax payable for the current taxation year.

(2) Except as otherwise provided in this section, by the 15th day of the 4th, 7th, 10th and 13th month after the beginning of its current taxation year, a corporation shall pay an instalment equal to 25% of its estimated tax payable as determined under subsection (4) for the current taxation year.

(3) A corporation otherwise required by subsection (2) to make an instalment during the period April 1, 1992 to August 31, 1992 inclusive shall defer that instalment and include it with the next instalment due under subsection (2).

(4) A corporation must determine its estimated tax payable, by using either of the following methods

(a) by multiplying the tax payable by the corporation for its taxation year immediately preceding the current taxation year by the ratio that 365 bears to the number of days in that preceding taxation year, or

(b) by estimating the amount.

(5) For the first taxation year ending after March 31, 1992, the estimated tax payable calculated under subsection (4) (a) shall be adjusted by multiplying the estimated tax payable by the ratio that the number of days in the current taxation year after March 31, 1992 bears to 365.

(6) For the purposes of subsection (4) (a), the tax payable by a corporation for its taxation year immediately preceding the current taxation year shall be computed the same way as would have been required if at all material times

(a) this Act had been in force, and

(b) the tax had been annualized on the basis of 365 days in a taxation year or 366 days in a taxation year affected by a leap year.

(7) A corporation that does not pay an instalment within the time limits in subsection (2) shall pay interest on the amount of the instalment calculated

(a) from the time the instalment became due until payment is made, or

(b) if the instalment is not paid by the date by which a return must be filed under section 15, from the time of the instalment due date until that date.

(8) If

(a) a corporation pays an instalment on the basis of the estimate permitted by subsection (4) (b), and

(b) the amount of the instalment is less than 25% of the corporation's tax payable for the current taxation year,

the corporation shall pay interest on the amount of the difference calculated from the instalment due date until the date by which the return must be filed under section 15.

(9) Notwithstanding that this Act was not in force before April 1, 1992, a corporation that pays an instalment on the basis of the calculation permitted by subsection (4) (a) shall provide to the administrator all the information necessary to verify the calculation.

(10) If

(a) a corporation estimates its tax liability for a taxation year at less than $3 000, and

(b) the administrator believes that the tax liability exceeds $3 000, the administrator may order the corporation to make instalments of the taxes required in subsections (2) and (4).

(11) A corporation that is ordered under subsection (10) (b) to make instalments of the taxes required in subsections (2) and (4) shall make the instalments in accordance with the order.

(12) If a corporation by making instalments overpays its tax liability for a taxation year the overpayment earns interest from the date of each instalment payment until the date refunded, on the basis that 25% of the corporation's tax payable was due on the relevant date in subsection (2).

(13) Interest chargeable or creditable under this Act shall be at the prescribed rate and different rates of interest may be prescribed for different purposes.

(14) If a corporation's estimated tax payable determined under subsection (4) exceeds a prescribed amount, the administrator may order the corporation to enter into an arrangement whereby the instalment payments shall be made by electronic means.

Requirements on responsible representatives

17 (1) Every person, other than a trustee in bankruptcy, who is an assignee, liquidator, administrator, receiver, receiver- manager or any other like person, in this section referred to as the "responsible representative", administering, winding up, controlling or otherwise dealing with a property or business of a corporation, before distributing to one or more persons any property over which the responsible representative has control in that capacity, shall obtain a certificate from the administrator under this Act, certifying that all amounts

(a) for which the corporation is liable under this Act for the taxation year in which the distribution is made, or any preceding taxation year, and

(b) for the payment of which the responsible representative is or can reasonably be expected to become liable as the responsible representative

have been paid or that security for the payment of the amounts has been accepted by the administrator.

(2) A responsible representative, who distributes to one or more persons property over which the responsible representative has control in that capacity without obtaining the certificate required by subsection (1), is personally liable for the payment of the amounts referred to in subsection (1) to the extent of the value of the property distributed.

(3) The administrator may assess a responsible representative who is personally liable as set out in subsection (2) for the amounts referred to in subsection (1), in the same manner and with the same effect as if the assessment were an assessment of the corporation under sections 19 and 25.

Investigation

18 If the administrator thinks it necessary or advisable, or suspects that a corporation that has not made a return is liable to assessment, the administrator or a person authorized by the administrator, may make

(a) an independent investigation of the corporation, and

(b) an independent valuation and assessment of the amount taxable by the corporation.

Enforcement

19 (1) The administrator or a person authorized by the administrator for any purpose related to the administration or enforcement of this Act may

(a) during normal office hours enter into a place where a business is carried on or where anything is done in connection with a business or where business records are or should be kept and inspect the records that relate or may relate to the amount of tax payable under this Act, and

(b) by registered letter or by a demand served personally, require from any person a return, or any information or additional information, or the production of any records within any reasonable time the administrator or authorized person stipulates, provided that it is reasonable to make the demand in order to determine the liability or possible liability for tax under this Act.

(2) Where a record has been inspected or produced under this section, the person by whom it is inspected or to whom it is produced, may make or cause to be made one or more copies, and a document certified by the administrator or the authorized person to be a copy made pursuant to this section is evidence of the nature and content of the original.

(3) No person shall obstruct a person doing anything that he or she is authorized by this section to do.

(4) Under this Act, an affidavit by the administrator, or the authorized person referred to in subsection (1), in which are stated the facts necessary to establish

(a) compliance by the administrator or authorized person with this section, or

(b) default by the corporation on which a demand is made

shall be admitted as evidence in any court and is proof in the absence of evidence to the contrary of the facts stated.

Penalty provision

20 (1) Where a person, acting or purporting to act on behalf of a corporation, knowingly or under circumstances amounting to gross negligence in the carrying out of any duty or obligation imposed by or under this Act, has made, or has participated in, assented to or acquiesced in the making of, a statement or omission in a return, certificate, statement or answer filed or made as required by or under this Act or the regulations, with the result described in subsection (2), then the corporation is liable to a penalty of 25% of the amount by which the tax that would have been payable is less than the tax payable by the corporation for the taxation year.

(2) The result referred to in subsection (1), without which the penalty under subsection (1) does not apply is that the tax that would have been payable by the corporation for a taxation year, if the tax had been imposed on the basis of the information provided in the return, certificate, statement or answer, is less than the tax payable by the corporation for the taxation year.

Power to make inquiry

21 A person authorized in writing by the administrator may make inquiries as he or she considers necessary for ascertaining the tax liability of a corporation, and for the purpose of the inquiry the authorized person has all the protection, powers and authority conferred on commissioners under Part 2 of the Inquiry Act.

Power to specify records

22 (1) Every corporation shall keep adequate records for this Act, and if the records kept by the corporation, in the opinion of the administrator, are inadequate for this Act, the administrator may specify the records to be kept by that corporation.

(2) Where the records kept by a corporation, in the opinion of the administrator, are inadequate for this Act, or where a corporation, on the request of the administrator, fails or refuses to produce its records for examination by the administrator, or where a corporation alleges that the records kept by it have been lost or destroyed, the administrator may make his or her own valuation and assessment of the tax liability of the corporation.

Duty of certain persons to give information

23 Every person, in whatever capacity, who has information about the tax liability of a corporation, when required to do so by notice from the administrator, shall prepare and deliver to the administrator any information required within 30 days after the mailing of the notice.

Confidentiality

24 A person who has custody of or control over information or records under this Act shall not disclose the information or records to any other person except

(a) in the course of administering or enforcing this or another taxation Act,

(b) in court proceedings relating to this or another taxation Act,

(c) as provided in section 37.1, 37.2, 63.2 or 63.3 of the Family Relations Act or section 8 or 9 of the Family Maintenance Enforcement Act,

(d) under an agreement that

(i) is between the government and another government,

(ii) relates to the administration or enforcement of taxation enactments, and

(iii) provides for the disclosure of information and records to and the exchange of similar information and records with that other government, or

(e) for the purpose of the compilation of statistical information by the government or the government of Canada.

Notice of assessment

25 (1) After examination of a return, the administrator must

(a) verify or alter the amount of the tax payable, and

(b) give a notice of the assessment to the corporation.

(2) Any additional amount of tax due, as shown by a notice of assessment, shall be paid by the corporation to the minister not later than 29 days after the date on which the notice of assessment is issued.

(3) Where a corporation, required to make a payment under section 15, 16 or this section, fails or neglects to pay the tax payable as required, it shall pay interest on the amount it failed or neglected to pay at the prescribed rate from the date on which payment was required under section 15, 16 or this section, from the date of assessment to the date of payment.

Continuing liability for tax

26 (1) Notwithstanding prior assessments, or if no assessment has been made, a corporation continues liable for any tax due under this Act, and the administrator, at any time, may

(a) assess or reassess any corporation for a tax, or

(b) make additional tax assessments against a corporation.

(2) An assessment, reassessment or additional assessment under subsection (1) may be made

(a) at any time, if any person has made any misrepresentation or committed any fraud in making the return or supplying information under this Act, and

(b) within 6 years from the date of delivery of a return for a taxation year, in any other case.

Refund of overpayment

27 (1) If the examination of a return discloses that an overpayment has been made by the corporation, the minister, on the certificate of the administrator about the facts, shall refund the amount overpaid to the corporation from the consolidated revenue fund.

(2) If the examination of a return discloses that any further tax payable by that corporation is due or accruing due, any overpayment shall be applied in satisfaction of that further tax, and notice shall be given to the corporation, accompanied by the refund of any remainder of the overpayment remaining unapplied.

Giving notice of assessment

28 (1) Every notice of assessment under this Act shall be in writing, and is sufficiently given if delivered to an office of the corporation or to the address of the corporation stated in the last return under this Act or last known to the administrator.

(2) If the address of a corporation is not known to the administrator, the notice of assessment may be mailed to the corporation at the post office nearest to its permanent establishment.

(3) The notice of assessment, for all purposes of this Act, shall be deemed to be given on the date it is so delivered or mailed.

(4) Subject to any appeal provided by this Act, the giving of a notice of assessment to a corporation under this Act constitutes assessment of that corporation for the purposes of this Act.

Appeal to minister

29 (1) Except as otherwise provided in this Act, a corporation that objects to the amount at which it is assessed, or considers that it is not liable to taxation, in whole or in part, may personally or by its agents, within 60 days after the date of mailing the notice of assessment provided for in this Act, or within 60 days after the date of filing the return, serve a notice of an appeal to the minister by mailing it by registered mail addressed to the minister at the Parliament Buildings at Victoria, British Columbia.

(2) The notice shall

(a) state the name and address of the corporation, the amount of the tax, and the date of the notice of assessment, if any, and

(b) set out clearly and fully the reasons for the appeal and the facts on which it is based.

(3) On receipt of the notice of appeal, the minister shall

(a) consider it and the information and documents on file in the office of the administrator,

(b) decide the matter, and

(c) notify the appellant of the decision.

Appeal to court

30 (1) A decision of the minister under section 29 (3) may be appealed to the Supreme Court by way of an originating application.

(2) The Rules of Court relating to originating applications apply, but Rule 49 does not apply.

(3) A petition shall be filed in the court registry within 60 days after the date on the minister's notification of decision.

(4) Within 14 days after the filing of the petition under subsection (3), it shall be served on the Crown in accordance with section 8 of the Crown Proceeding Act and the Crown shall be designated "Her Majesty the Queen in right of the Province of British Columbia".

(5) The court may dismiss the appeal, allow the appeal, vary the decision from which the appeal is made or refer the decision back to the administrator for reconsideration.

(6) An appeal lies from a decision of the court to the Court of Appeal with leave of a justice of the Court of Appeal.

Irregularity in procedure

31 An assessment shall not be varied or disallowed because of any irregularity, informality, omission or error on the part of any person in the observation of any directory provision up to the date of the issuing of the notice of assessment.

Payment date not affected by appeal

32 (1) Neither the giving of a notice of appeal by any corporation nor any delay in the hearing of the appeal shall in any way

(a) affect the date for payment, the interest or penalties or any liability for payment provided by this Act for tax that is the subject matter of the appeal, or

(b) delay the collection of the tax.

(2) If the tax is set aside or reduced on appeal, the minister shall refund to the corporation the amount of the tax or excess paid by it, and of any additional interest or penalty imposed and paid on the tax or excess.

Tax to constitute a lien

33 (1) The tax imposed or assessed under this Act

(a) is a lien and charge in favour of the Crown on the entire assets of the corporation, or the entire assets of the corporation in the hands of a trustee, effective as of the end of the taxation year of the corporation for which the tax is imposed, and

(b) has priority over all other claims of every person except claims secured by liens, charges or encumbrances registered prior to that date.

(2) The liens and charges created by this section and their priority are not lost or impaired by any neglect, omission or error of the administrator, or of any agent or person acting under the administrator, or by taking or failing to take proceedings to recover the tax, or by the tender or acceptance of any partial payment of the tax, or by want of registration.

Notice of proceedings

34 Before taking any proceedings for the recovery of the tax under this Act, the administrator shall give notice to the corporation of the intention to enforce payment, but failure to give notice does not affect the validity of any enforcement proceedings taken.

Recovery by action

35 The amount of the tax due and payable may be recovered by action in a court as a debt due to the Crown in right of the Province.

Filing of certificate

36 (1) Where default is made in the payment of the whole or part of tax that is due and payable, the administrator may

(a) issue his or her certificate stating that the tax is due, the amount remaining unpaid, including interest and penalties, and the name of the corporation required to pay it, and

(b) file the certificate with the Supreme Court.

(2) A certificate filed under subsection (1) with the Supreme Court shall be of the same effect, and proceedings may be taken, as if it were a judgment of the Supreme Court for the recovery of a debt in the amount stated against the person named.

Attachment

37 (1) If the administrator has knowledge or suspects that a person is or is about to become indebted or liable to make a payment to a corporation, the administrator may demand that the person pay the money otherwise payable to the corporation in whole or in part to the minister on account of the corporation's liability under this Act.

(2) Without limiting the generality of subsection (1), if the administrator has knowledge or suspects that a person is about to advance money to, or make a payment on behalf of, or make a payment in respect of a negotiable instrument issued by a corporation, the administrator may demand that that person pay to the minister on account of the corporation's liability under this Act the money that would otherwise be so advanced or paid.

(3) If under this section the administrator demands that a person pay to the minister, on account of the liability under this Act of a corporation, money otherwise payable by that person to the corporation 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 corporation until the liability under this Act is satisfied, and

(b) operates to require payments to the administrator out of each payment of the amount stipulated by the administrator in the demand.

(4) Money or a beneficial interest in money in a savings institution

(a) on deposit to the credit of a corporation at the time a demand is served, or

(b) deposited to the credit of a corporation after a demand is served

is money for which the savings institution is indebted to the corporation within the meaning of this section, but money on deposit or deposited to the credit of a corporation as described in paragraph (a) or (b) does not include money on deposit or deposited to the credit of a corporation in its capacity as a trustee.

(5) A demand under this section continues in effect until the earlier of

(a) the demand being satisfied, or

(b) the expiration of 90 days after the demand is mailed or served.

(6) Notwithstanding subsection (5), a demand made in respect of a periodic payment referred to in subsection (3) continues in effect until satisfied unless no periodic payment is made or is liable to be made within 90 days after the demand is mailed or served, in which case the demand ceases to have effect on the expiration of that period.

(7) A person who fails to comply with a demand under subsection (1) or (3) is liable to pay to Her Majesty in right of the Province an amount equal to the amount that the person was required under subsection (1) or (3), as the case may be, to pay to the minister.

(8) A person who fails to comply with a demand under subsection (2) is liable to pay to Her Majesty in right of the Province an amount equal to the lesser of

(a) the aggregate of the money advanced or paid, and

(b) the amount that the person was required under subsection (2) to pay to the administrator.

(9) The receipt of the minister for money paid under this section is a good and sufficient discharge of the original liability to the extent of the payment.

(10) Money paid by any person to the minister in compliance with a demand under this section shall be deemed to have been paid by that person to the corporation in respect of which the demand was made.

(11) Where a person carries on business under a name or style other than the person's own name, the demand under subsection (1), (2) or (3) may be addressed to the name or style under which the person carries on business and, in the case of personal service, shall be deemed to have been validly served if left with an adult person employed at the place of business of the addressee.

(12) Where persons carry on business in partnership, the demand under subsection (1), (2) or (3) may be addressed to the partnership name and, in the case of personal service, shall be deemed to have been validly served if served on one of the partners or left with an adult person employed at the place of business of the partnership.

Recovery by distress

38 (1) The administrator or the administrator's agent may levy the amount of the tax that is due and payable, with costs, by distress of

(a) the goods and chattels of the corporation liable to pay the tax,

(b) any goods and chattels in that corporation's possession, wherever they may be found in British Columbia, or

(c) any goods and chattels found on that corporation's premises that are the property of or in the possession of any other occupant of the premises, and that would be subject to distress for arrears of rent due to a landlord.

(2) The costs of the administrator or the agent of the administrator for a distress under this section are chargeable against the corporation referred to in subsection (1) and shall be those payable as between landlord and tenant.

(3) Where distress is made, the administrator or the administrator's agent, by advertisement posted up in at least 3 conspicuous public places in the locality where the sale of the property distrained is to be made, shall give at least 10 days' public notice of the time and place of the sale and of the name of the corporation in default.

(4) At the time given in the notice, the administrator or the administrator's agent shall sell at public auction the property distrained, or so much of it as may be necessary.

(5) If the property distrained is sold for more than the amount of the tax and costs, and if no claim to the surplus is made by any other person on the ground that the property sold belonged to the person, or that the person was entitled by lien or other right to the surplus, the surplus shall be paid over to the person in whose possession the property was when the distress was made, and a receipt shall be taken.

(6) If a claim is made by the corporation for whose tax the property was distrained, and the claim is admitted, the surplus shall be paid to the corporation, and a receipt shall be taken.

(7) If the claim is contested, the surplus shall be retained by the administrator until the rights of the parties have been determined in court or otherwise.

Powers exercisable separately

39 (1) The powers conferred by this Act for the recovery of tax by action in court, by filing a certificate, by distress and by demand may be exercised separately, or concurrently, or cumulatively.

(2) The liability of a corporation for the payment of the tax under this Act shall not be affected in any way by the fact that a fine has been paid or a penalty imposed on it for a contravention of this Act.

Notices in writing

40 (1) Every demand and notice, other than a notice of assessment, authorized or required to be given to a person by a public officer under the Act shall be in writing, and is sufficiently given if it is delivered to him, her or it personally, or by registered mail addressed to the address stated in the person's last return or to the last address known to the administrator.

(2) Proof of the receipt by a person of any demand or notice may be established in any court by showing that the notice was delivered or mailed in a manner provided in this section, and the burden of proof is on the person seeking to establish the fact that the demand or notice was not received by the person.

(3) In a prosecution or any proceeding for any matter arising under this Act, the facts necessary to establish the giving of any demand or notice, to establish compliance on the part of the administrator or other officer with this Act or to establish the failure of any person to comply with this Act, may be sufficiently proved in any court by the production of an affidavit of the administrator or other person designated by the minister setting out the facts.

Delegation of powers

41 (1) The administrator, with the approval of the minister, may authorize any person acting under the administrator's direction to perform and exercise duties imposed and powers conferred by this Act on the administrator as, in the opinion of the administrator, may be conveniently performed or exercised by that person.

(2) The performance or exercise of duties or powers by a person authorized under subsection (1) shall be of the same force and effect as if they were performed or exercised by the administrator.

Limitation

42 An information for an offence against this Act must be laid within 6 years from the time when the matter of the information arose.

Penalty for default

43 (1) A corporation that fails to deliver a return as and when required by section 15 shall pay a penalty of an amount equal to 10% of the tax that was unpaid when the return was required to be delivered.

(2) A corporation that fails to pay the tax due within the period stipulated under sections 15 and 16 shall pay a penalty of 10% of the tax that was unpaid.

(3) A corporation that fails to complete the information required on the return to be delivered under section 15 is liable to a penalty of $50.

Offence and penalty

44 (1) Section 5 of the Offence Act does not apply to this Act or to the regulations.

(2) Every person who has

(a) made, or participated in, assented to or acquiesced in the making of, false or deceptive statements in a return, certificate, statement or answer delivered or made as required by or under this Act or the regulations,

(b) in order to evade payment of the tax imposed by this Act, destroyed, altered, mutilated, secreted or otherwise disposed of the records of a corporation,

(c) made, or assented to, or acquiesced in the making of, false or deceptive entries, or omitted, or assented to, or acquiesced in the omission, to enter a material particular, in records of a corporation,

(d) wilfully in any manner evaded or attempted to evade compliance with or payment of tax imposed by this Act, or

(e) conspired with any person to commit an offence described in paragraphs (a) to (d)

commits an offence and, in addition to any penalty otherwise provided by this Act, is liable on conviction to a fine of not less than $25 and not more than $10 000 plus, in an appropriate case, an amount of not more than double the amount of the tax that should have been shown to be payable or that was sought to be evaded, or to imprisonment for a term of not more than 2 years, or to both a fine and imprisonment.

(3) For every default in complying with section 22, 23, 26 or 27, the persons in default are each liable, on conviction, to a penalty of not less than $10 for each day during which the default continues.

(4) An officer, director or agent of the corporation who directed, authorized, assented to, acquiesced or participated in the commission of the offence is a party to the offence, but this section does not affect the liability of the corporation for the same offence.

(5) A person who contravenes section 16 (11), 19 (3) or 24 commits an offence and is liable to a fine of not more than $2 000.

Regulations

45 The Lieutenant Governor in Council may make regulations including but not limited to regulations prescribing anything that by this Act is to be prescribed or is to be determined by regulation.

Transitional

46 Notwithstanding the repeal made by section 47 of this Act of the former Corporation Capital Tax Act a corporation that became liable for tax under that Act before its repeal

(a) continues liable for any such tax remaining outstanding at and after the coming into force of this Act,

(b) in respect of the tax described in paragraph (a), shall continue to make instalments and file and pay the tax on the same basis as was required under the repealed Act,

(c) in computing its tax liability and the amount required for the instalments in respect of the tax described in paragraph (a), the corporation shall proportion its tax liability for the current taxation year on the basis that it would if the repealed Act had not been repealed, and

(d) the tax liability shall be in the proportion that the number of days in the corporation's taxation year before April 1, 1992 bears to the number of days in its taxation year.

 
Repeal

47 The Corporation Capital Tax Act, R.S.B.C. 1979, c. 69, is repealed.

 
Consequential Amendment

 
Hydro and Power Authority Act

48 Section 52 (6) of the Hydro and Power Authority Act, R.S.B.C. 1979, c. 188, is amended by adding "the Corporation Capital Tax Act," after "the Company Act, section 152,".

Commencement

49 (1) This Act shall be deemed to have come into force on April 1, 1992 and is retroactive to the extent necessary to give it effect on and after that date.

(2) Regulations that may be made under this Act as a result of the enactment of this Act may be made retroactive to a time not earlier than March 31, 1992, and if made retroactive, shall be deemed to have come into force at that time.

(3) Subsection (2) and this subsection are repealed on October 1, 1992.


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