VII, s. 17]
(c)the total of all amounts each of which is the amount, if any, by which
(i)the amount that would be deemed by subsection 122.61(1) to be an overpayment on account of the person’s liability under this Part for the year that arose during a particular month or, where that person is a cohabiting spouse or common-law partner (within the meaning assigned by section 122.6) of an individual at the end of the year and at the beginning of the particular month, of that individual’s liability under this Part for the year that arose during the particular month, as the case may be, if that total were calculated by reference to the information provided
exceeds
(ii)the amount that is deemed by subsection 122.61(1) to be an overpayment on account of the liability of that person or that individual, as the case may be, under this Part for the year that arose during the particular month,
(c.1)the amount, if any, by which
(i)the total of all amounts each of which is an amount that would be deemed by section 122.5 to be paid by that person during a month specified for the year or, where that person is the qualified relation of an individual in relation to that specified month (within the meaning assigned by subsection 122.5(1)), by that individual, if that total were calculated by reference to the information provided in the person’s return of income (within the meaning assigned by subsection 122.5(1)) for the year
exceeds
(ii)the total of all amounts each of which is an amount that is deemed by section 122.5 to be paid by that person or by an individual of whom the person is the qualified relation in relation to a month specified for the year (within the meaning assigned to subsection 122.5(1)),
(c.2)the amount, if any, by which
(i)the amount that would be deemed under subsection 122.51(2) to be paid on account of the person’s tax payable under this Part for the year if the amount were calculated by reference to the information provided in the return
exceeds
(ii)the amount that is deemed under subsection 122.51(2) to be paid on account of the person’s tax payable under this Part for the year,
(c.3)the amount, if any, by which
(i)the total of all amounts each of which is an amount that would be deemed by subsection 122.7(2) or (3) to be a payment on account of the person’s tax payable under this Part or another person’s tax payable under this Part for the year if those amounts were calculated by reference to the information provided in the return
exceeds
(ii)the total of all amounts each of which is an amount that is deemed by subsection 122.7(2) or (3) to be a payment on account of the person’s tax payable under this Part and, where applicable, the other person’s tax payable under this Part for the year,
(c.4)the amount, if any, by which
(i)the total of all amounts each of which is an amount that would be deemed by section 122.8 to be paid by that person during a month specified for the year or, where that person is thequalified relationof an individual in relation to that specified month (within the meaning assigned by subsection 122.8(1)), by that individual, if that total were calculated by reference to the information provided in the person’sreturn of income(within the meaning assigned by subsection 122.8(1)) for the year
exceeds
(ii)the total of all amounts each of which is an amount that is deemed by section 122.8 to be paid by that person or by an individual of whom the person is thequalified relationin relation to a month specified for the year (within the meaning assigned by subsection 122.8(1)),
(c.5)the amount, if any, by which
(i)the total of all amounts each of which is an amount that would be deemed by subsection 122.9(2) to have been paid on account of the person’s tax payable under this Part for the year if that amount were calculated by reference to the person’s claim for the year under the subsection
exceeds
(ii)the total of all amounts each of which is the amount that the person is entitled to claim for the year under subsection 122.9(2),
(c.6)the amount, if any, by which
(i)the total of all amounts each of which is an amount that would be deemed by subsection 122.91(1) to have been paid on account of the person’s tax payable under this Part for the year if those amounts were calculated by reference to the information provided in the return
exceeds
(ii)the total of all amounts each of which is an amount that is deemed by subsection 122.91(1) to be a payment on account of the person’s tax payable under this Part for the taxation year,
(d)the amount, if any, by which
(i)the amount that would be deemed by subsection 127.1(1) to be paid for the year by the person if that amount were calculated by reference to the information provided in the return or form filed for the year pursuant to that subsection
exceeds
(ii)the amount that is deemed by that subsection to be paid for the year by the person,
(e)the amount, if any, by which
(i)the amount that would be deemed by subsection 127.41(3) to have been paid for the year by the person if that amount were calculated by reference to the person’s claim for the year under that subsection
exceeds
(ii)the maximum amount that the person is entitled to claim for the year under subsection 127.41(3),
(f)the amount, if any, by which
(i)the amount that would be deemed by subsection 125.4(3) to have been paid for the year by the person if that amount were calculated by reference to the information provided in the return filed for the year pursuant to that subsection
exceeds
(ii)the amount that is deemed by that subsection to be paid for the year by the person,
(g)the amount, if any, by which
(i)the amount that would be deemed by subsection 125.5(3) to have been paid for the year by the person if that amount were calculated by reference to the information provided in the return filed for the year pursuant to that subsection
exceeds
(ii)the amount that is deemed by that subsection to be paid for the year by the person,
(h)the amount, if any, by which
(i)the amount that would be deemed by subsection 125.6(2) or (2.1) to have been paid for the year by the person if that amount were calculated by reference to the information provided in the return filed for the year pursuant to that subsection
exceeds
(ii)the amount that is deemed by that subsection to be paid for the year by the person, and
(i)the amount, if any, by which
(i)the amount that would be deemed by any of subsections 125.7(2) to (2.2) to have been an overpayment by the person or partnership if that amount were calculated by reference to the information provided in the application filed pursuant to paragraph (a) of the definitionqualifying entityin subsection 125.7(1), paragraph (a) of the definitionqualifying renterin subsection 125.7(1) or paragraph (a) of the definitionqualifying recovery entityin subsection 125.7(1), as the case may be
exceeds
(ii)the amount that is deemed by that subsection to be an overpayment by the person or partnership.
Marginal note:Interpretation
(2.1)For the purposes of subsection 163(2), the taxable income reported by a person in the person’s return for a taxation year shall be deemed not to be less than nil and theunderstatement of incomefor a year of a person means the total of
(a)the amount, if any, by which
(i)the total of all amounts that were not reported by the person in the person’s return and that were required to be included in computing the person’s income for the year
exceeds
(ii)the total of such of the amounts deductible by the person in computing the person’s income for the year under the provisions of this Act as were wholly applicable to the amounts referred to in subparagraph 163(2.1)(a)(i) and were not deducted by the person in computing the person’s income for the year reported by the person in the person’s return,
(b)the amount, if any, by which
(i)the total of all amounts deducted by the person in computing the person’s income for the year reported by the person in the person’s return
exceeds
(ii)the total of such of the amounts referred to in subparagraph 163(2.1)(b)(i) as were deductible by the person in computing the person’s income for the year in accordance with the provisions of this Act, and
(c)the amount, if any, by which
(i)the total of all amounts deducted by the person (otherwise than by virtue of section 111) from the person’s income for the purpose of computing the person’s taxable income for the year reported by the person in the person’s return
exceeds
(ii)the total of all amounts deductible by the person (otherwise than by virtue of section 111) from the person’s income for the purpose of computing the person’s taxable income for the year in accordance with the provisions of this Act.
Marginal note:False statement or omission
(2.2)Every person who, knowingly or under circumstances amounting to gross negligence, has made or has participated in, assented to or acquiesced in the making of, a false statement or omission in a renunciation that was to have been effective as of a particular date and that is purported to have been made under any of subsections 66(10) to 66(10.3), 66(12.6), 66(12.601) and 66(12.62), otherwise than because of the application of subsection 66(12.66), is liable to a penalty of 25% of the amount, if any, by which
(a)the amount set out in the renunciation in respect of Canadian exploration expenses, Canadian development expenses or Canadian oil and gas property expenses
exceeds
(b)the amount in respect of Canadian exploration expenses, Canadian development expenses or Canadian oil and gas property expenses, as the case may be, that the corporation was entitled under the applicable subsection to renounce as of that particular date.
Marginal note:False statement or omissions with respect to look-back rule
(2.21)A person is liable to the penalty determined under subsection 163(2.22) where the person,
(a)knowingly or under circumstances amounting to gross negligence has made or has participated in, assented to or acquiesced in the making of, a false statement or omission in a document required to be filed under subsection 66(12.73) in respect of a renunciation purported to have been made because of the application of subsection 66(12.66); or
(b)fails to file the document on or before the day that is 24 months after the day on or before which it was required to be filed.
Marginal note:Penalty
(2.22)For the purpose of subsection 163(2.21), the penalty to which a person is liable in respect of a document required to be filed under subsection 66(12.73) is equal to 25% of the amount, if any, by which
(a)the portion of the excess referred to in subsection 66(12.73) in respect of the document that was known or that ought to have been known by the person
exceeds
(b)where paragraph 163(2.21)(b) does not apply, the portion of the excess identified in the document, and
(c)in any other case, nil.
Marginal note:Idem
(2.3)Every person 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 omission in a prescribed form required to be filed under subsection 66(12.691) or 66(12.701) is liable to a penalty of 25% of the amount, if any, by which
(a)the assistance required to be reported in respect of a person or partnership in the prescribed form
exceeds
(b)the assistance reported in the prescribed form in respect of the person or partnership.
Marginal note:False statement or omission
(2.4)Every person or partnership 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 omission in a return is liable to a penalty of
(a)where the return is required to be filed under section 233.1, $24,000;
(b)if the return is required to be filed under section 233.2 in respect of a trust, the greater of
(i)$24,000, and
(ii)5% of the total of all amounts each of which is the fair market value, at the time it was made, of a contribution of the person or partnership made to the trust before the end of the last taxation year of the trust in respect of which the return is required;
(c)where the return is required to be filed under section 233.3 for a taxation year or fiscal period, the greater of
(i)$24,000, and
(ii)5% of the greatest of all amounts each of which is the total of the cost amounts to the person or partnership at any time in the year or period of a specified foreign property (as defined by subsection 233.3(1)(a) of the person or partnership in respect of which the false statement or omission is made;
(d)where the return is required to be filed under section 233.4 for a taxation year or fiscal period, the greater of
(i)$24,000, and
(ii)5% of the greatest of all amounts each of which is the total of the cost amounts to the person or partnership at any time in the year or period of a property of the person or partnership that is a share of the capital stock or indebtedness of the foreign affiliate in respect of which the return is being filed; and
(e)where the return is required to be filed under section 233.6 for a taxation year or fiscal period, the greater of
(i)$2,500, and
(ii)5% of the total of
(A)all amounts each of which is the fair market value of a property that is distributed to the person or partnership in the year or period by the trust and in respect of which the false statement or omission is made, and
(B)all amounts each of which is the greatest unpaid principal amount of a debt that is owing to the trust by the person or partnership in the year or period and in respect of which the false statement or omission is made.
Marginal note:Application to trust contributions
(2.41)In subparagraph (2.4)(b)(ii), subsections 94(1), (2) and (9) apply.
Marginal note:Shares or debt owned by controlled foreign affiliate
(2.5)For the purpose of paragraph 163(2.4)(d),
(a)shares or indebtedness owned by a controlled foreign affiliate of a person or partnership are deemed to be owned by the person or partnership; and
(b)the cost amount at any time of such shares or indebtedness to the person or partnership is deemed to be equal to 20% of the cost amount at that time to the controlled foreign affiliate of the shares or indebtedness.
Marginal note:Application to partnerships
(2.6)For the purposes of paragraph 163(2.4)(d) and subsection 163(2.5), in determining whether a non-resident corporation or trust is a foreign affiliate or a controlled foreign affiliate of a partnership
(a)the definitionsdirect equity percentageandequity percentagein subsection 95(4) shall be read as if a partnership were a person; and
(b)the definitionscontrolled foreign affiliateandforeign affiliatein subsection 95(1) shall be read as if a partnership were a taxpayer resident in Canada.
Marginal note:Application to partnerships
(2.7)For the purpose of subsection 163(2.4), each act or omission of a member of a partnership in respect of an information return required to be filed by the partnership under section 233.3, 233.4 or 233.6 is deemed to be an act or omission of the partnership in respect of the return.
Marginal note:Application to members of partnerships
(2.8)For the purposes of this subsection and subsection 163(2.7), a person who is a member of a partnership that is a member of another partnership is deemed to be a member of the other partnership.
Marginal note:Partnership liable to penalty
(2.9)If a partnership is liable to a penalty under paragraph (2)(i), subsection (2.4) or (2.901) or section 163.2, 237.1 or 237.3, sections 152, 158 to 160.1, 161 and 164 to 167 and Division J apply, with any changes that the circumstances require, in respect of the penalty as if the partnership were a corporation.
Marginal note:Penalty — COVID-19
(2.901)Every eligible entity that is deemed by subsection 125.7(6) to have an amount of qualifying revenue — for a current reference period for a qualifying period — is liable to a penalty equal to 25% of the amount that would be deemed by subsection 125.7(2) or (2.1) to have been an overpayment by the eligible entity during that qualifying period if that amount were calculated by reference to the information provided in the application filed pursuant to paragraph (a) of the definitionqualifying entityin subsection 125.7(1) or paragraph (a) of the definitionqualifying renterin subsection 125.7(1), as the case may be.
Marginal note:Penalty — COVID-19
(2.902)Every eligible entity that is deemed by subsection 125.7(6.1) to have an amount of total current period remuneration for a qualifying period is liable to a penalty equal to 25% of the amount that would be deemed by subsection 125.7(2.2) to have been an overpayment by the eligible entity during that qualifying period if that amount were calculated by reference to the information provided in the application filed pursuant to paragraph (a) of the definitionqualifying recovery entityin subsection 125.7(1).
Marginal note:Application to non-resident trusts
(2.91)For the purposes of this subsection, paragraph 163(2.4)(d) and subsection 163(2.5),
(a)a non-resident trust is deemed to be a controlled foreign affiliate of each beneficiary of which the trust is a controlled foreign affiliate for the purpose of section 233.4;
(b)the trust is deemed to be a non-resident corporation having a capital stock of a single class divided into 100 issued shares;
(c)each beneficiary under the trust is deemed to own at any time the number of the issued shares of the corporation that is equal to the proportion of 100 that
(i)the fair market value at that time of the beneficiary’s beneficial interest in the trust
is of
(ii)the fair market value at that time of all beneficial interests in the trust; and
(d)the cost amount to a beneficiary at any time of a share of the corporation is deemed to be equal to the amount determined by the formula
A/B
where
Marginal note:Burden of proof in respect of penalties
(3)Where, in an appeal under this Act, a penalty assessed by the Minister under this section or section 163.2 is in issue, the burden of establishing the facts justifying the assessment of the penalty is on the Minister.
Marginal note:Effect of carryback of losses etc.
(4)In determining under subsection 163(2.1) the understatement of income for a taxation year of a person, the following amounts shall be deemed not to be deductible or excludable in computing the person’s income for the year:
(a)any amount that may be deducted under section 41 in respect of the person’s listed-personal-property loss for a subsequent taxation year;
(b)any amount that may be excluded from the person’s income because of section 49 in respect of the exercise of any option in a subsequent taxation year;
(b.1)any amount that may be deducted under subsection 147.2(4) in computing the person’s income for the year because of the application of subsection 147.2(6) as a result of the person’s death in the subsequent taxation year; and
(c)any amount that may be deducted in computing the person’s income for the year because of an election made under paragraph 164(6)(c) or 164(6)(d) in a subsequent taxation year by the person’s legal representative.
Marginal note:Penalty for late or deficient instalments
163.1Every person who fails to pay all or any part of an instalment of tax for a taxation year on or before the day on or before which the instalment is required by this Part to be paid is liable to a penalty equal to 50% of the amount, if any, by which
(a)the interest payable by the person under section 161 in respect of all instalments for the year
exceeds the greater of
(b)$1,000, and
(c)25% of the interest that would have been payable by the person under section 161 in respect of all instalments for the year if no instalment had been made for that year.
Marginal note:Definitions
163.2(1)The definitions in this subsection apply in this section.
culpable conductmeans conduct, whether an act or a failure to act, that
(a)is tantamount to intentional conduct;
(b)shows an indifference as to whether this Act is complied with; or
(c)shows a wilful, reckless or wanton disregard of the law. (conduite coupable)
entityincludes an association, a corporation, a fund, a joint venture, an organization, a partnership, a syndicate and a trust. (entité)
excluded activity, in respect of a false statement, means the activity of
(a)promoting or selling (whether as principal or agent or directly or indirectly) an arrangement, an entity, a plan, a property or a scheme (in this definition referred to as the “arrangement”) where it can reasonably be considered that
(i)subsection 66(12.68) applies to the arrangement,
(ii)the definitiontax shelterin subsection 237.1(1) applies to a person’s interest in the arrangement, or
(iii)one of the main purposes for a person’s participation in the arrangement is to obtain a tax benefit; or
(b)accepting (whether as principal or agent or directly or indirectly) consideration in respect of the promotion or sale of an arrangement. (activité exclue)
false statementincludes a statement that is misleading because of an omission from the statement. (faux énoncé)
gross compensationof a particular person at any time, in respect of a false statement that could be used by or on behalf of another person, means all amounts to which the particular person, or any person not dealing at arm’s length with the particular person, is entitled, either before or after that time and either absolutely or contingently, to receive or obtain in respect of the statement. (rétribution brute)
gross entitlementsof a person at any time, in respect of a planning activity or a valuation activity of the person, means all amounts to which the person, or another person not dealing at arm’s length with the person, is entitled, either before or after that time and either absolutely or contingently, to receive or obtain in respect of the activity. (droits à paiement)
participateincludes
(a)to cause a subordinate to act or to omit information; and
(b)to know of, and to not make a reasonable attempt to prevent, the participation by a subordinate in an act or an omission of information. (participer)
personincludes a partnership. (personne)
planning activityincludes
(a)organizing or creating, or assisting in the organization or creation of, an arrangement, an entity, a plan or a scheme; and
(b)participating, directly or indirectly, in the selling of an interest in, or the promotion of, an arrangement, an entity, a plan, a property or a scheme. (activité de planification)
subordinate, in respect of a particular person, includes any other person over whose activities the particular person has direction, supervision or control whether or not the other person is an employee of the particular person or of another person, except that, if the particular person is a member of a partnership, the other person is not a subordinate of the particular person solely because the particular person is a member of the partnership. (subalterne)
tax benefitmeans a reduction, avoidance or deferral of tax or other amount payable under this Act or an increase in a refund of tax or other amount under this Act. (avantage fiscal)
valuation activityof a person means anything done by the person in determining the value of a property or a service. (activité d’évaluation)
Marginal note:Penalty for misrepresentations in tax planning arrangements
(2)Every person who makes or furnishes, participates in the making of or causes another person to make or furnish a statement that the person knows, or would reasonably be expected to know but for circumstances amounting to culpable conduct, is a false statement that could be used by another person (in subsections (6) and (15) referred to as the “other person”) for a purpose of this Act is liable to a penalty in respect of the false statement.
Marginal note:Amount of penalty
(3)The penalty to which a person is liable under subsection (2) in respect of a false statement is
(a)where the statement is made in the course of a planning activity or a valuation activity, the greater of $1,000 and the total of the person’s gross entitlements, at the time at which the notice of assessment of the penalty is sent to the person, in respect of the planning activity and the valuation activity; and
(b)in any other case, $1,000.
Marginal note:Penalty for participating in a misrepresentation
(4)Every person who makes, or participates in, assents to or acquiesces in the making of, a statement to, or by or on behalf of, another person (in this subsection, subsections (5) and (6), paragraph (12)(c) and subsection (15) referred to as the “other person”) that the person knows, or would reasonably be expected to know but for circumstances amounting to culpable conduct, is a false statement that could be used by or on behalf of the other person for a purpose of this Act is liable to a penalty in respect of the false statement.
Marginal note:Amount of penalty
(5)The penalty to which a person is liable under subsection (4) in respect of a false statement is the greater of
(a)$1,000, and
(b)the lesser of
(i)the penalty to which the other person would be liable under subsection 163(2) if the other person made the statement in a return filed for the purposes of this Act and knew that the statement was false, and
(ii)the total of $100,000 and the person’s gross compensation, at the time at which the notice of assessment of the penalty is sent to the person, in respect of the false statement that could be used by or on behalf of the other person.
Marginal note:Reliance in good faith
(6)For the purposes of subsections (2) and (4), a person (in this subsection and in subsection (7) referred to as the “advisor”) who acts on behalf of the other person is not considered to have acted in circumstances amounting to culpable conduct in respect of the false statement referred to in subsection (2) or (4) solely because the advisor relied, in good faith, on information provided to the advisor by or on behalf of the other person or, because of such reliance, failed to verify, investigate or correct the information.
Marginal note:Non-application of subsection (6)
(7)Subsection (6) does not apply in respect of a statement that an advisor makes (or participates in, assents to or acquiesces in the making of) in the course of an excluded activity.
Marginal note:False statements in respect of a particular arrangement
(8)For the purpose of applying this section (other than subsections (4) and (5)),
(a)where a person makes or furnishes, participates in the making of or causes another person to make or furnish two or more false statements, the false statements are deemed to be one false statement if the statements are made or furnished in the course of
(i)one or more planning activities that are in respect of a particular arrangement, entity, plan, property or scheme, or
(ii)a valuation activity that is in respect of a particular property or service; and
(b)for greater certainty, a particular arrangement, entity, plan, property or scheme includes an arrangement, an entity, a plan, a property or a scheme in respect of which
(i)an interest is required to have, or has, an identification number issued under section 237.1 that is the same number as the number that applies to each other interest in the property,
(ii)a selling instrument in respect of flow-through shares is required to be filed with the Minister because of subsection 66(12.68), or
(iii)one of the main purposes for a person’s participation in the arrangement, entity, plan or scheme, or a person’s acquisition of the property, is to obtain a tax benefit.
Marginal note:Clerical services
(9)For the purposes of this section, a person is not considered to have made or furnished, or participated in, assented to or acquiesced in the making of, a false statement solely because the person provided clerical services (other than bookkeeping services) or secretarial services with respect to the statement.
Marginal note:Valuations
(10)Notwithstanding subsections (6) and 163(3), a statement as to the value of a property or a service (which value is in this subsection referred to as the “stated value”), made by the person who opined on the stated value or by a person in the course of an excluded activity is deemed to be a statement that the person would reasonably be expected to know, but for circumstances amounting to culpable conduct, is a false statement if the stated value is
(a)less than the product obtained when the prescribed percentage for the property or service is multiplied by the fair market value of the property or service; or
(b)greater than the product obtained when the prescribed percentage for the property or service is multiplied by the fair market value of the property or service.
Marginal note:Exception
(11)Subsection (10) does not apply to a person in respect of a statement as to the value of a property or a service if the person establishes that the stated value was reasonable in the circumstances and that the statement was made in good faith and, where applicable, was not based on one or more assumptions that the person knew or would reasonably be expected to know, but for circumstances amounting to culpable conduct, were unreasonable or misleading in the circumstances.
Marginal note:Special rules
(12)For the purpose of applying this section,
(a)where a person is assessed a penalty that is referred to in subsection (2) the amount of which is based on the person’s gross entitlements at any time in respect of a planning activity or a valuation activity and another assessment of the penalty is made at a later time,
(i)if the person’s gross entitlements in respect of the activity are greater at that later time, the assessment of the penalty made at that later time is deemed to be an assessment of a separate penalty, and
(ii)in any other case, the notice of assessment of the penalty sent before that later time is deemed not to have been sent;
(b)a person’s gross entitlements at any time in respect of a planning activity or a valuation activity, in the course of which the person makes or furnishes, participates in the making of or causes another person to make or furnish a false statement, shall exclude the total of all amounts each of which is the amount of a penalty (other than a penalty the assessment of which is void because of subsection (13)) determined under paragraph (3)(a) in respect of the false statement for which notice of the assessment was sent to the person before that time; and
(c)where a person is assessed a penalty that is referred to in subsection (4), the person’s gross compensation at any time in respect of the false statement that could be used by or on behalf of the other person shall exclude the total of all amounts each of which is the amount of a penalty (other than a penalty the assessment of which is void because of subsection (13)) determined under subsection (5) to the extent that the false statement was used by or on behalf of that other person and for which notice of the assessment was sent to the person before that time.
Marginal note:Assessment void
(13)For the purposes of this Act, if an assessment of a penalty that is referred to in subsection (2) or (4) is vacated, the assessment is deemed to be void.
Marginal note:Maximum penalty
(14)A person who is liable at any time to a penalty under both subsections (2) and (4) in respect of the same false statement is liable to pay a penalty that is not more than the greater of
(a)the total amount of the penalties to which the person is liable at that time under subsection (2) in respect of the statement, and
(b)the total amount of the penalties to which the person is liable at that time under subsection (4) in respect of the statement.
Marginal note:Employees
(15)Where an employee (other than a specified employee or an employee engaged in an excluded activity) is employed by the other person referred to in subsections (2) and (4),
(a)subsections (2) to (5) do not apply to the employee to the extent that the false statement could be used by or on behalf of the other person for a purpose of this Act; and
(b)the conduct of the employee is deemed to be that of the other person for the purposes of applying subsection 163(2) to the other person.
Marginal note:Definitions
163.3(1)The following definitions apply in this section.
electronic cash registermeans a device that keeps a register or supporting documents through the means of an electronic device or computer system designed to record transaction data or any other electronic point-of-sale system. (caisse enregistreuse électronique)
electronic suppression of sales devicemeans
(a)a software program that falsifies the records of electronic cash registers, including transaction data and transaction reports; or
(b)a hidden programming option, whether preinstalled or installed at a later time, embedded in the operating system of an electronic cash register or hardwired into the electronic cash register that
(i)may be used to create a virtual second till, or
(ii)may eliminate or manipulate transaction records, which may or may not be preserved in digital formats, in order to represent the actual or manipulated record of transactions in the electronic cash register. (appareil de suppression électronique des ventes)
servicehas the same meaning as in subsection 123(1) of theExcise Tax Act. (service)
Marginal note:Penalty  —  use
(2)Every person that uses, or that knowingly, or under circumstances attributable to neglect, carelessness or wilful default, participates in, assents to or acquiesces in the use of, an electronic suppression of sales device or a similar device or software in relation to records that are required to be kept by any person under section 230 is liable to a penalty of
(a)unless paragraph (b) applies, $5,000; or
(b)$50,000 if the action of the person occurs after the Minister has assessed a penalty payable by the person under this section or section 285.01 of theExcise Tax Act.
Marginal note:Penalty  — possession
(3)Every person that acquires or possesses an electronic suppression of sales device or a right in respect of an electronic suppression of sales device that is, or is intended to be, capable of being used in relation to records that are required to be kept by any person under section 230 is liable to a penalty of
(a)unless paragraph (b) applies, $5,000; or
(b)$50,000 if the action of the person occurs after the Minister has assessed a penalty payable by the person under this section or section 285.01 of theExcise Tax Act.
Marginal note:Penalty  — manufacturing or making available
(4)Every person that designs, develops, manufactures, possesses for sale, offers for sale, sells, transfers or otherwise makes available to another person, or that supplies installation, upgrade or maintenance services for, an electronic suppression of sales device that is, or is intended to be, capable of being used in relation to records that are required to be kept by any person under section 230 is liable to a penalty of
(a)unless paragraph (b) or (c) applies, $10,000;
(b)unless paragraph (c) applies, $50,000 if the action of the person occurs after the Minister has assessed a penalty payable by the person under subsection (2) or (3) or subsection 285.01(2) or (3) of theExcise Tax Act; or
(c)$100,000 if the action of the person occurs after the Minister has assessed a penalty payable by the person under this subsection or subsection 285.01(4) of theExcise Tax Act.
Marginal note:Assessment
(5)The Minister may at any time assess a taxpayer in respect of any penalty payable by a person under subsections (2) to (4), and the provisions of this Division apply, with any modifications that the circumstances require, in respect of an assessment made under subsections (2) to (4) as though it had been made under section 152.
Marginal note:Limitation
(6)Despite section 152, if at any time the Minister assesses a penalty payable by a person under subsections (2) to (4), the Minister is not to assess, at or after that time, another penalty payable by the person under subsections (2) to (4) that is in respect of an action of the person that occurred before that time.
Marginal note:Certain defences not available
(7)Except as otherwise provided in subsection (8), a person does not have a defence in relation to a penalty assessed under subsections (2) to (4) by reason that the person exercised due diligence to prevent the action from occurring.
Marginal note:Due diligence
(8)A person is not liable for a penalty under subsection (3) or (4) in respect of an action of the person if the person exercised the degree of care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances to prevent the action from occurring.
Marginal note:Assessment vacated
(9)For the purposes of subsections (2) to (8), if an assessment of a penalty under subsections (2) to (4) is vacated, the penalty is deemed to have never been assessed.
Marginal note:Refunds
164(1)If the return of a taxpayer’s income for a taxation year has been made within 3 years from the end of the year, the Minister
(a)may,
(i)before sending the notice of assessment for the year, where the taxpayer is, for any purpose of the definitionrefundable investment tax credit(as defined in subsection 127.1(2)), a qualifying corporation (as defined in that subsection) and claims in its return of income for the year to have paid an amount on account of its tax payable under this Part for the year because of subsection 127.1(1) in respect of its refundable investment tax credit (as defined in subsection 127.1(2)), refund all or part of any amount claimed in the return as an overpayment for the year, not exceeding the amount by which the total determined under paragraph (f) of the definitionrefundable investment tax creditin subsection 127.1(2) in respect of the taxpayer for the year exceeds the total determined under paragraph (g) of that definition in respect of the taxpayer for the year,
(ii)before sending the notice of assessment for the year, where the taxpayer is aqualified corporation(as defined in subsection 125.4(1)), aneligible production corporation(as defined in subsection 125.5(1)) or aqualifying journalism organization(as defined in subsection 125.6(1)) and an amount is deemed under subsection 125.4(3), 125.5(3) or 125.6(2) or (2.1) to have been paid on account of its tax payable under this Part for the year, refund all or part of any amount claimed in the return as an overpayment for the year, not exceeding the total of those amounts so deemed to have been paid, and
(iii)on or after sending the notice of assessment for the year, refund any overpayment for the year, to the extent that the overpayment was not refunded pursuant to subparagraph (i) or (ii); and
(b)shall, with all due dispatch, make the refund referred to in subparagraph (a)(iii) after sending the notice of assessment if application for it is made in writing by the taxpayer within the period within which the Minister would be allowed under subsection 152(4) to assess tax payable under this Part by the taxpayer for the year if that subsection were read without reference to paragraph 152(4)(a).
Marginal note:Repayment on objections and appeals
(1.1)Subject to subsection 164(1.2), where a taxpayer
(a)has under section 165 served a notice of objection to an assessment and the Minister has not within 120 days after the day of service confirmed or varied the assessment or made a reassessment in respect thereof, or
(b)has appealed from an assessment to the Tax Court of Canada,
and has applied in writing to the Minister for a payment or surrender of security, the Minister shall, where no authorization has been granted under subsection 225.2(2) in respect of the amount assessed, with all due dispatch repay all amounts paid on account of that amount or surrender security accepted therefor to the extent that
(c)the lesser of
(i)the total of the amounts so paid and the value of the security, and
(ii)the amount so assessed
exceeds
(d)the total of
(i)the amount, if any, so assessed that is not in controversy, and
(ii)1/2 of the amount so assessed that is in controversy if
(A)the taxpayer is a large corporation (within the meaning assigned by subsection 225.1(8)), or
(B)the amount is in respect of a particular amount claimed under section 110.1 or 118.1 and the particular amount was claimed in respect of a tax shelter.
Marginal note:Collection in jeopardy
(1.2)Notwithstanding subsection 164(1.1), where, on application by the Minister made within 45 days after the receipt by the Minister of a written request by a taxpayer for repayment of an amount or surrender of a security, a judge is satisfied that there are reasonable grounds to believe that the collection of all or any part of an amount assessed in respect of the taxpayer would be jeopardized by the repayment of the amount or the surrender of the security to the taxpayer under that subsection, the judge shall order that the repayment of the amount or a part thereof not be made or that the security or part thereof not be surrendered or make such other order as the judge considers reasonable in the circumstances.
Marginal note:Notice of application
(1.3)The Minister shall give 6 clear days notice of an application under subsection 164(1.2) to the taxpayer in respect of whom the application is made.
Marginal note:Application of ss. 225.2(4), (10), (12) and (13)
(1.31)Where an application under subsection 164(1.2) is made by the Minister, subsections 225.2(4), 225.2(10), 225.2(12) and 225.2(13) are applicable in respect of the application with such modifications as the circumstances require.
Marginal note:Provincial refund
(1.4)Where, at any time, a taxpayer is entitled to a refund or repayment on account of taxes imposed by a province or as a result of a deduction in computing the taxes imposed by a province and the Government of Canada has agreed to make the refund or repayment on behalf of the province, the amount thereof shall be a liability of the Minister of National Revenue to the taxpayer.
Marginal note:Exception
(1.5)Notwithstanding subsection (1), the Minister may, on or after sending a notice of assessment for a taxation year, refund all or any portion of any overpayment of a taxpayer for the year
(a)if the taxpayer is an individual (other than a trust) or a graduated rate estate for the year and the taxpayer’s return of income under this Part for the year was filed on or before the day that is 10 calendar years after the end of the year;
(b)where an assessment or a redetermination was made under subsection 152(4.2) or 220(3.1) or 220(3.4) in respect of the taxpayer; or
(c)to the extent that the overpayment relates to an assessment of another taxpayer under subsection 227(10) or (10.1) (in this paragraph referred to as the “other assessment”), if the taxpayer’s return of income under this Part for the taxation year is filed on or before the day that is two years after the date of the other assessment and if the other assessment relates to
(i)in the case of an amount assessed under subsection 227(10), a payment to the taxpayer of a fee, commission or other amount in respect of services rendered in Canada by a non-resident person or partnership, and
(ii)in the case of an amount assessed under subsection 227(10.1), an amount payable under subsection 116(5) or (5.3) in respect of a disposition of property by the taxpayer.
Marginal note:When subsection (1.52) applies
(1.51)Subsection (1.52) applies to a taxpayer for a taxation year if, at any time after the beginning of the year
(a)the taxpayer has, in respect of the tax payable by the taxpayer under this Part (and, if the taxpayer is a corporation, Parts I.3, VI, VI.1 and XIII.1) for the year, paid under any of sections 155 to 157 one or more instalments of tax;
(b)it is reasonable to conclude that the total amount of those instalments exceeds the total amount of taxes that will be payable by the taxpayer under those Parts for the year; and
(c)the Minister is satisfied that the payment of the instalments has caused or will cause undue hardship to the taxpayer.
Marginal note:Instalment refund
(1.52)If this subsection applies to a taxpayer for a taxation year, the Minister may refund to the taxpayer all or any part of the excess referred to in paragraph (1.51)(b).
Marginal note:Penalties, interest not affected
(1.53)For the purpose of the calculation of any penalty or interest under this Act, an instalment is deemed not to have been paid to the extent that all or any part of the instalment can reasonably be considered to have been refunded under subsection (1.52).
Marginal note:COVID-19 refunds
(1.6)Notwithstanding subsection (2.01), at any time after the beginning of a taxation year of a taxpayer in which an overpayment is deemed to have arisen under any of subsections 125.7(2) to (2.2), the Minister may refund to the taxpayer all or any part of the overpayment.
Marginal note:COVID-19 refunds — partnerships
(1.61)For the purposes of subsection (1.6), references to a taxpayer include a partnership and the reference to a taxation year includes a fiscal period.
Marginal note:Limitation of repayment on objections and appeals
(1.7)Subsection 164(1.1) does not apply in respect of an amount paid or security furnished under section 116 by a non-resident person.
Marginal note:Request to pay refund to province
(1.8)An individual (other than a trust) may, in the individual’s return of income for a taxation year, request the Minister to pay to Her Majesty in right of a prescribed province all or any part of a refund for the year claimed by the individual in the return and, where the individual makes such a request,
(a)the Minister may make the payment to Her Majesty in right of the province in accordance with the request; and
(b)the amount of the payment is deemed to have been refunded under this section to the individual at the time a notice of an original assessment of tax payable under this Part by the individual for the year, or a notification that no tax is payable under this Part by the individual for the year, is sent to the individual.
Marginal note:Application to other debts
(2)Instead of making a refund or repayment that might otherwise be made under this section, the Minister may, where the taxpayer is, or is about to become, liable to make any payment to Her Majesty in right of Canada or in right of a province, apply the amount of the refund or repayment to that other liability and notify the taxpayer of that action.
Marginal note:Withholding of refunds
(2.01)The Minister shall not, in respect of a taxpayer, refund, repay, apply to other debts or set-off amounts under this Act at any time unless all returns of which the Minister has knowledge and that are required to be filed by the taxpayer at or before that time under this Act, theExcise Tax Act, theAir Travellers Security Charge Act, theExcise Act, 2001, theUnderused Housing Tax Actand theSelect Luxury Items Tax Acthave been filed with the Minister.
Marginal note:Application respecting refunds under s. 122.5
(2.1)Where an amount deemed under section 122.5 to be paid by an individual during a month specified for a taxation year is applied under subsection 164(2) to a liability of the individual and the individual’s return of income for the year is filed on or before the individual’s balance-due day for the year, the amount is deemed to have been so applied on the day on which the amount would have been refunded if the individual were not liable to make a payment to Her Majesty in right of Canada.
Marginal note:Application respecting refunds re section 122.61
(2.2)Subsection 164(2) does not apply to a refund to be made to a taxpayer and arising because of section 122.61 except to the extent that the taxpayer’s liability referred to in that subsection arose from the operation of paragraph 160.1(1)(a) with respect to an amount refunded to the taxpayer in excess of the amount to which the taxpayer was entitled because of section 122.61.
Marginal note:Application respecting refunds — Climate Action Incentive
(2.21)Where an amount deemed under section 122.8 to be paid by an individual during a month specified for a taxation year is applied under subsection (2) to a liability of the individual and the individual’s return of income for the year is filed on or before the individual’s balance-due day for the year, the amount is deemed to have been so applied on the day on which the amount would have been refunded if the individual were not liable to make a payment to Her Majesty in right of Canada.
Marginal note:Form deemed to be return of income
(2.3)For the purpose of subsection (1), where a taxpayer files the form referred to in paragraph (b) of the definitionreturn of incomein section 122.6 for a taxation year, the form is deemed to be a return of the taxpayer’s income for that year and a notice of assessment in respect of that return is deemed to have been sent by the Minister.
Marginal note:Interest on refunds and repayments
(3)If, under this section, an amount in respect of a taxation year (other than an amount, or a portion of the amount, that can reasonably be considered to arise from the operation of section 122.5, 122.61, 122.8 or 125.7) is refunded or repaid to a taxpayer or applied to another liability of the taxpayer, the Minister shall pay or apply interest on it at the prescribed rate for the period that begins on the day that is the latest of the days referred to in the following paragraphs and that ends on the day on which the amount is refunded, repaid or applied:
(a)if the taxpayer is an individual, the day that is 30 days after the individual’s balance-due day for the year;
(b)if the taxpayer is a corporation, the day that is 120 days after the end of the year;
(c)if the taxpayer is
(i)a corporation, the day that is 30 days after the day on which its return of income for the year was filed under section 150, unless the return was filed on or before the corporation’s filing-due date for the year, and
(ii)an individual, the day that is 30 days after the day on which the individual’s return of income for the year was filed under section 150;
(d)in the case of a refund of an overpayment, the day on which the overpayment arose; and
(e)in the case of a repayment of an amount in controversy, the day on which an overpayment equal to the amount of the repayment would have arisen if the total of all amounts payable on account of the taxpayer’s liability under this Part for the year were the amount by which
(i)the lesser of the total of all amounts paid on account of the taxpayer’s liability under this Part for the year and the total of all amounts assessed by the Minister as payable under this Part by the taxpayer for the year
exceeds
(ii)the amount repaid.
Marginal note:Idem
(3.1)Where at a particular time interest has been paid to, or applied to a liability of, a taxpayer under subsection 164(3) or 164(3.2) in respect of an overpayment and it is determined at a subsequent time that the actual overpayment was less than the overpayment in respect of which interest was paid or applied,
(a)the amount by which the interest that has been paid or applied exceeds the interest, if any, computed in respect of the amount that is determined at the subsequent time to be the actual overpayment shall be deemed to be an amount (in this subsection referred to as “the amount payable”) that became payable under this Part by the taxpayer at the particular time;
(b)the taxpayer shall pay to the Receiver General interest at the prescribed rate on the amount payable computed from that particular time to the day of payment; and
(c)the Minister may at any time assess the taxpayer in respect of the amount payable and, where the Minister makes such an assessment, the provisions of this Division are applicable, with such modifications as the circumstances require, in respect of the assessment as though it had been made under section 152.
Marginal note:Interest where amounts cancelled
(3.2)Notwithstanding subsection (3), if an overpayment of a taxpayer for a taxation year is determined because of an assessment made under subsection 152(4.2) or 220(3.1) or (3.4) and an amount in respect of the overpayment is refunded to, or applied to another liability of, the taxpayer under subsection (1.5) or (2), the Minister shall pay or apply interest on the overpayment at the prescribed rate for the period beginning on the day that is 30 days after the day on which the Minister received a request in a manner satisfactory to the Minister to apply those subsections and ending on the day on which the amount is refunded or applied.
Marginal note:Interest on interest repaid
(4)Where at any particular time interest has been paid to, or applied to a liability of, a taxpayer pursuant to subsection 164(3) in respect of the repayment of an amount in controversy made to, or applied to a liability of, the taxpayer and it is determined at a subsequent time that the repayment or a part thereof is payable by the taxpayer under this Part, the following rules apply:
(a)the interest so paid or applied on that part of the repayment that is determined at the subsequent time to be payable by the taxpayer under this Part shall be deemed to be an amount (in this subsection referred to as the “interest excess”) that became payable under this Part by the taxpayer at the particular time;
(b)the taxpayer shall pay to the Receiver General interest at the prescribed rate on the interest excess computed from the particular time to the day of payment; and
(c)the Minister may at any time assess the taxpayer in respect of the interest excess and, where the Minister makes such an assessment, the provisions of this Division and Division J are applicable, with such modifications as the circumstances require, in respect of the assessment as though it had been made under section 152.
Marginal note:Duty of Minister
(4.1)Where the Tax Court of Canada, the Federal Court of Appeal or the Supreme Court of Canada has, on the disposition of an appeal in respect of taxes, interest or a penalty payable under this Act by a taxpayer resident in Canada,
(a)referred an assessment back to the Minister for reconsideration and reassessment, or
(b)varied or vacated an assessment,
the Minister shall with all due dispatch, whether or not an appeal from the decision of the Court has been or may be instituted,
(c)where the assessment has been referred back to the Minister, reconsider the assessment and make a reassessment in accordance with the decision of the Court, unless otherwise directed in writing by the taxpayer, and
(d)refund any overpayment resulting from the variation, vacation or reassessment,
and the Minister may repay any tax, interest or penalties or surrender any security accepted therefor by the Minister to that taxpayer or any other taxpayer who has filed another objection or instituted another appeal if, having regard to the reasons given on the disposition of the appeal, the Minister is satisfied that it would be just and equitable to do so, but for greater certainty, the Minister may, in accordance with the provisions of this Act, theTax Court of Canada Act, theFederal Courts Actor theSupreme Court Actas they relate to appeals from decisions of the Tax Court of Canada or the Federal Court of Appeal, appeal from the decision of the Court notwithstanding any variation or vacation of any assessment by the Court or any reassessment made by the Minister under paragraph 164(4.1)(c).
Marginal note:Effect of carryback of loss, etc.
(5)For the purpose of subsection 164(3), the portion of any overpayment of the tax payable by a taxpayer for a taxation year that arose as a consequence of
(a)the deduction of an amount, in respect of a repayment under subsection 68.4(7) of theExcise Tax Actmade in a subsequent taxation year, in computing the amount determined under subparagraph 12(1)(x.1)(ii),
(a.1)any amount deducted under section 119 in respect of the disposition of a taxable Canadian property in a subsequent taxation year,
(b)the deduction of an amount under section 41 in respect of the taxpayer’s listed-personal-property loss for a subsequent taxation year,
(c)the exclusion of an amount from the taxpayer’s income for the year by virtue of section 49 in respect of the exercise of an option in a subsequent taxation year,
(d)the deduction of an amount under section 118.1 in respect of a gift made in a subsequent taxation year or under section 111 in respect of a loss for a subsequent taxation year,
(e)the deduction of an amount under subsection 126(2) in respect of an unused foreign tax credit (within the meaning assigned by subsection 126(7)), or under subsection 126(2.21) or (2.22) in respect of foreign taxes paid, for a subsequent taxation year,
(f)the deduction of an amount under subsection 127(5) in respect of property acquired or an expenditure made in a subsequent taxation year,
(g)[Repealed, 2013, c. 34, s. 321]
(h)the deduction of an amount under section 125.3 in respect of an unused Part I.3 tax credit (within the meaning assigned by subsection 125.3(3)) for a subsequent taxation year,
(h.01)the deduction of an amount under subsection 147.2(4) in computing the taxpayer’s income for the year because of the application of subsection 147.2(6) as a result of the taxpayer’s death in the following taxation year,
(h.02)the deduction under any of subsections 128.1(6) to (8) of an amount from the taxpayer’s proceeds of disposition of a property, because of an election made in a return of income for a subsequent taxation year,
(h.1)the deduction of an amount in computing the taxpayer’s income for the year by virtue of an election for a subsequent taxation year under paragraph 164(6)(c) or 164(6)(d) by the taxpayer’s legal representative,
(h.2)the deduction of an amount under subsection 181.1(4) in respect of an unused surtax credit (within the meaning assigned by subsection 181.1(6)) of the taxpayer for a subsequent taxation year,
(h.3)the deduction of an amount under subsection 190.1(3) in respect of an unused Part I tax credit (within the meaning assigned by subsection 190.1(5)) of the taxpayer for a subsequent taxation year, or
(h.4)the reduction of the amount included under subsection 91(1) for the year because of a reduction referred to in paragraph 152(6.1)(b) in the foreign accrual property income of a foreign affiliate of the taxpayer for a taxation year of the affiliate that ends in the year,
is deemed to have arisen on the day that is 30 days after the latest of
(i)the first day immediately following that subsequent taxation year,
(j)the day on which the taxpayer’s or the taxpayer’s legal representative’s return of income for that subsequent taxation year was filed,
(k)if an amended return of a taxpayer’s income for the year or a prescribed form amending the taxpayer’s return of income for the year was filed under paragraph (6)(e) or subsection 49(4) or 152(6) or (6.1), the day on which the amended return or prescribed form was filed, and
(l)where, as a consequence of a request in writing, the Minister reassessed the taxpayer’s tax for the year to take into account the deduction or exclusion, the day on which the request was made.
Marginal note:Interest - disputed amounts
(5.1)Where a portion of a repayment made under subsection (1.1) or (4.1), or an amount applied under subsection (2) in respect of a repayment, can reasonably be regarded as being in respect of a claim made by the taxpayer in an objection to or appeal from an assessment of tax for a taxation year for a deduction or exclusion described in subsection (5) in respect of a subsequent taxation year, interest shall not be paid or applied on the portion for any part of a period that is before the latest of the dates described in paragraphs (5)(i) to (l).
Marginal note:Disposition by legal representative of deceased
(6)If in the course of administering the graduated rate estate of a taxpayer, the taxpayer’s legal representative has, within the first taxation year of the estate,
(a)disposed of capital property of the estate so that the total of all amounts each of which is a capital loss from the disposition of a property exceeds the total of all amounts each of which is a capital gain from the disposition of a property, or
(b)disposed of all of the depreciable property of a prescribed class of the estate so that the undepreciated capital cost to the estate of property of that class at the end of the first taxation year of the estate is, by virtue of subsection 20(16) or any regulation made under paragraph 20(1)(a), deductible in computing the income of the estate for that year,
notwithstanding any other provision of this Act, the following rules apply:
(c)such parts of one or more capital losses of the estate from the disposition of properties in the year (the total of which is not to exceed the excess referred to in paragraph 164(6)(a)) as the legal representative so elects, in prescribed manner and within a prescribed time, are deemed (except for the purpose of subsection 112(3) and this paragraph) to be capital losses of the deceased taxpayer from the disposition of the properties by the taxpayer in the taxpayer’s last taxation year and not to be capital losses of the estate from the disposition of those properties,
(d)such part of the amount of any deduction described in paragraph 164(6)(b) (not exceeding the amount that, but for this subsection, would be the total of the non-capital loss and the farm loss of the estate for its first taxation year) as the legal representative so elects, in prescribed manner and within a prescribed time, shall be deductible in computing the income of the taxpayer for the taxpayer’s taxation year in which the taxpayer died and shall not be an amount deductible in computing any loss of the estate for its first taxation year,
(e)the legal representative shall, at or before the time prescribed for filing the election referred to in paragraphs 164(6)(c) and 164(6)(d), file an amended return of income for the deceased taxpayer for the taxpayer’s taxation year in which the taxpayer died to give effect to the rules in those paragraphs, and
(f)in computing the taxable income of the deceased taxpayer for a taxation year preceding the year in which the taxpayer died, no amount may be deducted in respect of an amount referred to in paragraph 164(6)(c) or 164(6)(d).
Marginal note:Realization of deceased employees’ options
(6.1)Notwithstanding any other provision of this Act, if a right to acquire securities (as defined in subsection 7(7)) under an agreement in respect of which a benefit was deemed by paragraph 7(1)(e) to have been received by a taxpayer (in this subsection referred to as “the right”) is exercised or disposed of by the taxpayer’s legal representative within the first taxation year of the graduated rate estate of the taxpayer and the representative so elects in prescribed manner and on or before a prescribed day,
(a)the amount, if any, by which
(i)the amount of the benefit deemed by paragraph 7(1)(e) to have been received by the taxpayer in respect of the right
exceeds the total of
(ii)the amount, if any, by which the value of the right immediately before the time it was exercised or disposed of exceeds the amount, if any, paid by the taxpayer to acquire the right, and
(iii)where in computing the taxpayer’s taxable income for the taxation year in which the taxpayer died an amount was deducted under paragraph 110(1)(d) in respect of the benefit deemed by paragraph 7(1)(e) to have been received by the taxpayer in that year by reason of paragraph 7(1)(e) in respect of that right, 1/2 of the amount, if any, by which the amount determined under subparagraph 164(6.1)(a)(i) exceeds the amount determined under subparagraph 164(6.1)(a)(ii),
shall be deemed to be a loss of the taxpayer from employment for the year in which the taxpayer died;
(b)there shall be deducted in computing the adjusted cost base to the estate of the right at any time the amount of the loss that would be determined under paragraph 164(6.1)(a) if that paragraph were read without reference to subparagraph 164(6.1)(a)(iii); and
(c)the legal representative shall, at or before the time prescribed for filing the election under this subsection, file an amended return of income for the taxpayer for the taxation year in which the taxpayer died to give effect to paragraph 164(6.1)(a).
Definition ofoverpayment
(7)In this section,overpaymentof a taxpayer for a taxation year means
(a)where the taxpayer is not a corporation, the total of all amounts paid on account of the taxpayer’s liability under this Part for the year minus all amounts payable in respect thereof; and
(b)where the taxpayer is a corporation, the total of all amounts paid on account of the corporation’s liability under this Part or Parts I.3, VI or VI.1 for the year minus all amounts payable in respect thereof.
164.1[Repealed, 1994, c. 7, Sch