Excise Tax Act (R.S.C., 1985, c. E-15)

Marginal note:Debt to Her Majesty

• 19 (1) Every person who, being required by or pursuant to this Part to collect an air transportation tax, fails to do so as required is liable to Her Majesty for the amount of the tax and that amount is recoverable in the Federal Court or in any other court of competent jurisdiction as a debt due to Her Majesty.

• Marginal note:Persons deemed agents

  (2) A person who, not being a licensed air carrier, sells in Canada transportation of a person by air that is to be provided in whole or in part by a licensed air carrier is, in respect of the payment for that transportation and for the purposes of this Part, the agent of the first licensed air carrier who provides the transportation by air or any part thereof, as the case may be, and that person shall levy and collect on behalf of that licensed air carrier the taxes imposed by this Part and transmit them to the licensed air carrier.

Penalty on Failure to File Return

Marginal note:Monthly return of taxes

• 20 (1) Every licensed air carrier that is required by this Part to collect tax shall make each month a true return, in the prescribed form and containing the prescribed information including statistical information relating to any tax not collected by the licensed air carrier during that period by reason of the prepayment thereof, of

  • (a) all amounts collected or collectible by the carrier by way of the tax imposed by this Part in the last preceding month; and

  • (b) all amounts collected, within or outside Canada by the carrier or the carrier’s agent in the last preceding month,

    • (i) by way of the tax imposed by this Part on amounts paid or payable outside Canada for the transportation of a person by air, and

    • (ii) before the time that the person is required by subsection 10(2) or 12(2), as the case may be, to pay the tax.

• Marginal note:Nil return

  (2) Every licensed air carrier shall, if no amounts have been collected or are collectible as described in subsection (1) in the last preceding month, make a return as required by that subsection stating that fact.

• Marginal note:Cessation of obligation

  (2.1) No return is required under subsection (2) if the last preceding month is a month after October 31, 1998.

• Marginal note:Alternate periods for making returns

  (3) Notwithstanding subsections (1) and (2), the Minister may, by regulation,

  • (a) authorize any licensed air carrier to make a return in respect of any accounting period of not less than twenty-one days and not more than thirty-five days;

  • (b) authorize any licensed air carrier to make a return in respect of any period longer than one month but not longer than six months, if the amounts collected or collectible by the carrier by way of the tax imposed by this Part in the last preceding calendar year did not exceed four thousand eight hundred dollars; or

  • (c) authorize any licensed air carrier whose passenger air transportation service is predominantly limited to a seasonal period of operation to make a return in respect of any period longer than one month but not longer than six months, if the amounts collected or collectible by the carrier by way of the tax imposed by this Part in the equivalent period in the last preceding calendar year did not exceed an average of four hundred dollars per month throughout that equivalent period.

• Marginal note:Date for filing and remittance

  (4) Subject to subsection (8) and sections 20.1 and 79.2, the return required by this section shall be filed and the taxes that are collected or collectible by a licensed air carrier shall be remitted

  • (a) in a case where the return is required to be made in accordance with subsection (1) or (2), not later than the last day of the first month following the month to which the return relates;

  • (b) in a case where the return is authorized to be made in accordance with a regulation made under paragraph (3)(a), not later than the last day of the first authorized accounting period following the end of the accounting period to which the return relates; and

  • (c) in a case where the return is authorized to be made in accordance with a regulation made under paragraph (3)(b) or (c), not later than the last day of the first month following the end of the period to which the return relates.

• Marginal note:Penalty and interest on default in remitting taxes

  (5) Subject to subsections (6) to (9), a licensed air carrier that defaults in remitting tax within the time prescribed by subsection (4), in addition to the amount in default, shall pay

  • (a) in the case of tax required to be remitted not later than the last day of a month, a penalty of one-half of one per cent and interest at the prescribed rate, in respect of each month or fraction of a month between that day and the day on which the total tax, penalty and interest outstanding is remitted, calculated on the total tax, penalty and interest outstanding in that month or fraction of a month; and

  • (b) in the case of tax required to be remitted not later than the last day of an accounting period, a penalty of one-half of one per cent and interest at the prescribed rate, in respect of each accounting period or fraction of an accounting period between that day and the day on which the total tax, penalty and interest outstanding is remitted, calculated on the total tax, penalty and interest outstanding in that accounting period or fraction of an accounting period.

• Marginal note:Minimum penalty and interest

  (6) No penalty or interest is payable under subsection (5) if the licensed air carrier remits all taxes collected or collectible by the carrier under this Part and, at the time of the remittance, the total penalty and interest payable is less than ten dollars.

• Marginal note:Time for paying penalty or interest

  (7) A licensed air carrier that is liable to pay penalty or interest under subsection (5) shall pay the penalty or interest not later than the last day of the month or accounting period in respect of which the penalty or interest was calculated.

• Marginal note:Extension

  (8) The Minister may, before or after the expiration of the time prescribed by subsection (4), extend in writing the time for filing a return or remitting any tax, and where the Minister so extends the time,

  • (a) the return shall be filed or the tax shall be remitted within the time as so extended;

  • (b) interest accrues under subsection (5) in respect of the tax as if the time had not been so extended;

  • (c) no penalty accrues or shall be deemed to have accrued under subsection (5) in respect of the tax before the expiration of the time as so extended; and

  • (d) penalty accrues under subsection (5) in respect of a default in remitting the tax or any portion thereof within the time as so extended as if the default were a default referred to in that subsection.

• Marginal note:Security

  (9) Where the Minister holds security under section 80.1 for the remittance of any tax under this Part that is not remitted within the time prescribed by subsection (4),

  • (a) interest accrues under subsection (5) in respect of the tax from the expiration of that time; and

  • (b) penalty accrues under subsection (5) only if the total tax, penalty and interest outstanding, as calculated in respect of each month or accounting period or fraction of a month or accounting period during which the default continues, exceeds the value of the security at the time it is accepted by the Minister and, if accruing, the penalty shall be calculated only on the amount of the excess.

Marginal note:Interpretation

• 20.1 (1) For the purposes of this section,

  • (a) a licensed air carrier’s “instalment base”

    • (i) for a month is the lesser of

      • (A) the tax imposed by this Part that was collected or collectible by that carrier in that month, and

      • (B) the tax so collected or collectible in the last preceding month,

    • (ii) for an accounting period is the lesser of

      • (A) the tax imposed by this Part that was collected or collectible by that carrier in that accounting period, and

      • (B) the tax so collected or collectible in the last preceding accounting period, and

    • (iii) for any other period to which a return relates is the lesser of

      • (A) the tax imposed by this Part that was collected or collectible by that carrier in that period, and

      • (B) the tax so collected or collectible in the last preceding period multiplied by the ratio that the number of days in the period to which the return relates is to the number of days in the last preceding period; and

  • (b) a licensed air carrier is a “large taxpayer” at any particular time if

    • (i) the aggregate amount of taxes payable under Parts II.1, III, IV and VI, other than taxes payable in accordance with the Customs Act, and collected or collectible under this Part and Part II.2 by that licensed air carrier in the last preceding calendar year ending at least ninety days, or ninety-one days where that time falls in a leap year, before that time exceeded twelve million dollars, or

    • (ii) the licensed air carrier

      • (A) was, at any time in the last preceding calendar year ending at least ninety days, or ninety-one days where that time falls in a leap year, before that time, a member of a group of associated corporations (within the meaning of section 256 of the Income Tax Act) and the aggregate amount of taxes payable under Parts II.1, III, IV and VI, other than taxes payable in accordance with the Customs Act, and collected or collectible under this Part and Part II.2 by the group in that year exceeded twelve million dollars, and

      • (B) is not, at that time, authorized to make a return in accordance with a regulation made under paragraph 20(3)(b) or (c).

• Marginal note:Instalment payments by large taxpayers

  (2) A large taxpayer that is required to file a return and remit tax within the time prescribed by subsection 20(4) shall pay instalments on account of the tax in accordance with the following rules:

  • (a) in the case where the return is required to be made in accordance with subsection 20(1), the large taxpayer shall pay two instalments, each equal to one-half of the taxpayer’s instalment base for the month in which the tax was collected or became collectible, the first to be paid not later than the last day of that month and the second not later than the fifteenth day of the next following month; and

  • (b) in the case where the return is authorized to be made in accordance with a regulation made under paragraph 20(3)(a), the large taxpayer shall pay two instalments, each equal to one-half of the taxpayer’s instalment base for the accounting period to which the return relates, the first to be paid not later than the last day of that accounting period and the second not later than the fifteenth day of the next following accounting period.

• Marginal note:Instalment payments by other licensed air carriers

  (3) A licensed air carrier, other than a large taxpayer, that is required to file a return and remit tax within the time prescribed by subsection 20(4) shall pay an instalment on account of the tax in accordance with the following rules:

  • (a) in the case where the return is required to be made in accordance with subsection 20(1), the carrier shall pay an instalment, equal to the carrier’s instalment base for the month in which the tax was collected or became collectible, not later than the twenty-first day of the next following month;

  • (b) in the case where the return is authorized to be made in accordance with a regulation made under paragraph 20(3)(a), the carrier shall pay an instalment, equal to the carrier’s instalment base for the accounting period to which the return relates, not later than the twenty-first day of the next following accounting period; and

  • (c) in the case where the return is authorized to be made in accordance with a regulation made under paragraph 20(3)(b) or (c), the carrier shall pay an instalment, equal to the carrier’s instalment base for the period to which the return relates, not later than the twenty-first day of the month next following the end of that period.

• Marginal note:Penalty and interest on default by large taxpayer in paying instalment

  (4) Subject to subsections (6) to (8), a large taxpayer that defaults in paying an instalment within the time prescribed by subsection (2) shall, in addition to the amount in default, pay in respect of the period between the end of that time and the end of the time prescribed for remittance of the tax on account of which the instalment was payable

  • (a) in the case of an instalment required to be paid not later than the last day of a month or an accounting period, a penalty of one-half of one per cent and interest at the prescribed rate, calculated on the amount by which

    • (i) one-half of the taxpayer’s instalment base for that month or accounting period

    exceeds

    • (ii) the aggregate of all taxes on account of which the instalment was payable that were remitted not later than that day; and

  • (b) in the case of an instalment required to be paid not later than the fifteenth day of a month or an accounting period, a penalty of one-quarter of one per cent and interest at one-half of the prescribed rate, calculated on the amount by which

    • (i) one-half of the taxpayer’s instalment base for the last preceding month or accounting period

    exceeds

    • (ii) the amount by which the aggregate of all taxes on account of which the instalment was payable that were remitted not later than that day exceeds the lesser of

      • (A) the aggregate of all taxes on account of which the instalment was payable that were remitted not later than the last day of the last preceding month or accounting period, and

      • (B) one-half of the taxpayer’s instalment base for the last preceding month or accounting period.

• Marginal note:Penalty and interest on default by other licensed air carriers in paying instalment

  (5) Subject to subsections (6) to (8), a licensed air carrier that defaults in paying an instalment within the time prescribed by subsection (3) shall, in addition to the amount in default, pay in respect of the period between the end of that time and the end of the time prescribed for remittance of the tax on account of which the instalment was payable

  • (a) in the case of an instalment required by paragraph (3)(a) or (b) to be paid not later than the twenty-first day of a month or an accounting period, a penalty of one-sixth of one per cent and interest at one-third of the prescribed rate, calculated on the amount by which

    • (i) the carrier’s instalment base for the last preceding month or accounting period

    exceeds

    • (ii) the aggregate of all taxes on account of which the instalment was payable that were remitted not later than that day; and

  • (b) in the case of an instalment required by paragraph (3)(c) to be paid not later than the twenty-first day of a month next following the end of a period, a penalty of one-sixth of one per cent and interest of one-third of the prescribed rate, calculated on the amount by which

    • (i) the carrier’s instalment base for that period

    exceeds

    • (ii) the aggregate of all taxes on account of which the instalment was payable that were remitted not later than that day.

• Marginal note:Minimum penalty and interest

  (6) No penalty or interest is payable under subsection (4) or (5) if the large taxpayer or other licensed air carrier liable to pay the instalment remits all taxes collected or collectible by the taxpayer or carrier under this Part and, at the time of the remittance, the total penalty and interest payable in respect of the instalment is less than five dollars and in respect of all those taxes is less than ten dollars.

• Marginal note:Time for paying penalty or interest

  (7) A large taxpayer or other licensed air carrier that is liable to pay penalty or interest under subsection (4) or (5) in respect of a default in paying an instalment shall pay the penalty or interest within the time prescribed by subsection 20(4) for the remittance of the tax on account of which the instalment is payable.

• Marginal note:Extension

  (8) The Minister may, before or after the expiration of the time prescribed by subsection (2) or (3), extend in writing the time for paying an instalment, for any period within the time prescribed by subsection 20(4) for the remittance of the tax on account of which the instalment is payable, and where the Minister so extends the time

  • (a) the instalment shall be paid within the time as so extended;

  • (b) interest accrues under subsection (4) or (5), as the case may be, in respect of the instalment as if the time had not been so extended;

  • (c) no penalty accrues or shall be deemed to have accrued under subsection (4) or (5), as the case may be, in respect of the instalment before the expiration of the time as so extended; and

  • (d) penalty accrues under subsection (4) or (5), as the case may be, in respect of a default in paying an instalment within the time as so extended as if the default were a default referred to in that subsection.