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

Full Document:  

Act current to 2022-11-28 and last amended on 2022-11-17. Previous Versions

PART IIncome Tax (continued)

DIVISION IReturns, Assessments, Payment and Appeals (continued)

Payment of Tax (continued)

Marginal note:Agreements providing for tax transfer payments

  •  (1) The Minister may, with the approval of the Governor in Council, enter into an agreement with the government of a province to provide for tax transfer payments and the terms and conditions relating to such payments.

  • Marginal note:Tax transfer payment

    (2) Where, on account of the tax for a taxation year payable by an individual under this Part, an amount has been deducted or withheld under subsection 153(1) on the assumption that the individual was resident in a place other than the province in which the individual resided on the last day of the year, and the individual

    • (a) has filed a return of income for the year with the Minister,

    • (b) is liable to pay tax under this Part for the year, and

    • (c) is resident on the last day of the year in a province with which an agreement described in subsection 154(1) has been entered into,

    the Minister may make a tax transfer payment to the government of the province not exceeding an amount equal to the product obtained by multiplying the amount or the total of the amounts so deducted or withheld by a prescribed rate.

  • Marginal note:Payment deemed received by individual

    (3) Where, pursuant to an agreement entered into under subsection 154(1), an amount has been transferred by the Minister to the government of a province with respect to an individual, the amount shall, for all purposes of this Act, be deemed to have been received by the individual at the time the amount was transferred.

  • Marginal note:Payment deemed received by Receiver General

    (4) Where, pursuant to an agreement entered into under subsection 154(1), an amount has been transferred by the government of a province to the Minister with respect to an individual, the amount shall, for all purposes of this Act, be deemed to have been received by the Receiver General on account of the individual’s tax under this Part for the year in respect of which the amount was transferred.

  • Marginal note:Amount not to include refund

    (5) In this section, an amount deducted or withheld does not include any refund made in respect of that amount.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • R.S., 1985, c. 1 (5th Supp.), s. 154
  • 1998, c. 19, s. 183

Marginal note:Farmers and fishermen

  •  (1) Subject to section 156.1, every individual whose chief source of income for a taxation year is farming or fishing shall, on or before December 31 in the year, pay to the Receiver General in respect of the year, 2/3 of

    • (a) the amount estimated by the individual to be the tax payable under this Part by the individual for the year, or

    • (b) the individual’s instalment base for the preceding taxation year.

  • Definition of instalment base

    (2) In this section, instalment base of an individual for a taxation year means the amount determined in prescribed manner to be the individual’s instalment base for the year.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • R.S., 1985, c. 1 (5th Supp.), s. 155
  • 1994, c. 7, Sch. II, s. 127, c. 8, s. 22

Marginal note:Other individuals

  •  (1) Subject to section 156.1, in respect of each taxation year every individual (other than one to whom section 155 applies for the year) shall pay to the Receiver General

    • (a) on or before March 15, June 15, September 15 and December 15 in the year, an amount equal to 1/4 of

      • (i) the amount estimated by the individual to be the tax payable under this Part by the individual for the year, or

      • (ii) the individual’s instalment base for the preceding taxation year, or

    • (b) on or before

      • (i) March 15 and June 15 in the year, an amount equal to 1/4 of the individual’s instalment base for the second preceding taxation year, and

      • (ii) September 15 and December 15 in the year, an amount equal to 1/2 of the amount, if any, by which

        • (A) the individual’s instalment base for the preceding taxation year

        exceeds

        • (B) 1/2 of the individual’s instalment base for the second preceding taxation year.

  • Marginal note:Payment by mutual fund trusts

    (2) Notwithstanding subsection 156(1), the amount payable by a mutual fund trust to the Receiver General on or before any day referred to in paragraph 156(1)(a) in a taxation year shall be deemed to be the amount, if any, by which

    • (a) the amount so payable otherwise determined under that subsection,

    exceeds

    • (b) 1/4 of the trust’s capital gains refund (within the meaning assigned by section 132) for the year.

  • Definition of instalment base

    (3) In this section, instalment base of an individual for a taxation year means the amount determined in prescribed manner to be the individual’s instalment base for the year.

  • Marginal note:Payments by SIFT trusts

    (4) Subsections (1) to (3) and section 156.1 do not apply to a SIFT trust.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • R.S., 1985, c. 1 (5th Supp.), s. 156
  • 1994, c. 7, Sch. II, s. 128, Sch. VIII, s. 92, c. 8, s. 23
  • 2013, c. 40, s. 68

Marginal note:Definitions

  •  (1) For the purposes of this section,

    instalment threshold

    instalment threshold of an individual for a taxation year means

    • (a) in the case of an individual resident in the Province of Quebec at the end of the year, $1,800, and

    • (b) in any other case, $3,000; (plafond des acomptes provisionnels)

    net tax owing

    net tax owing by an individual for a taxation year means

    • (a) in the case of an individual resident in the Province of Quebec at the end of the year, the amount determined by the formula

      A - C - D - F

    and

    • (b) in any other case, the amount determined by the formula

      A + B - C - E - F

    where

    A
    is the total of the taxes payable under this Part and Parts I.2, X.5 and XI.4 by the individual for the year,
    B
    is the total of all income taxes payable by the individual for the year under any law of a province or of an Aboriginal government with which the Minister of Finance has entered into an agreement for the collection of income taxes payable by individuals to the province or Aboriginal government under that law,
    C
    is the total of the taxes deducted or withheld under section 153 and Part I.2 on behalf of the individual for the year,
    D
    is the amount determined under subsection 120(2) in respect of the individual for the year,
    E
    is the total of all amounts deducted or withheld on behalf of the individual for the year under a law of a province or of an Aboriginal government with which the Minister of Finance has entered into an agreement for the collection of income taxes payable by individuals to the province or Aboriginal government under that law, and
    F
    is the amount determined under subsection 120(2.2) in respect of the individual for the year. (impôt net à payer)
  • Values of A and B in net tax owing

    (1.1) For the purposes of determining the values of A and B in the definition net tax owing in subsection 156.1(1), income taxes payable by an individual for a taxation year are determined

    • (a) before taking into consideration the specified future tax consequences for the year; and

    • (b) after deducting all tax credits to which the individual is entitled for the year relating to those taxes (other than tax credits that become payable to the individual after the individual’s balance-due day for the year, prescribed tax credits and amounts deemed to have been paid because of the application of either subsection 120(2) or (2.2)).

  • Value of D in net tax owing

    (1.2) For the purpose of determining the value of D in the definition net tax owing in subsection 156.1(1), the amount deemed by subsection 120(2) to have been paid on account of an individual’s tax under this Part for a taxation year is determined before taking into consideration the specified future tax consequences for the year.

  • Value of F in net tax owing

    (1.3) For the purpose of determining the value of F in the definition net tax owing in subsection (1), the amount deemed by subsection 120(2.2) to have been paid on account of an individual’s tax under this Part for a taxation year is determined before taking into consideration the specified future tax consequences for the year.

  • Marginal note:No instalment required

    (2) Sections 155 and 156 do not apply to an individual for a particular taxation year where

    • (a) the individual’s chief source of income for the particular year is farming or fishing and the individual’s net tax owing for the particular year, or either of the 2 preceding taxation years, does not exceed the individual’s instalment threshold for that year;

    • (b) the individual’s net tax owing for the particular year, or for each of the 2 preceding taxation years, does not exceed the individual’s instalment threshold for that year; or

    • (c) the individual is a graduated rate estate for the particular year.

  • Marginal note:Idem

    (3) Sections 155 and 156 do not require the payment of any amount in respect of an individual that would otherwise become due under either of those sections on or after the day on which the individual dies.

  • Marginal note:Payment of remainder

    (4) Every individual shall, on or before the individual’s balance-due day for each taxation year, pay to the Receiver General in respect of the year the amount, if any, by which the individual’s tax payable under this Part for the year exceeds the total of

    • (a) all amounts deducted or withheld under section 153 from remuneration or other payments received by the individual in the year, and

    • (b) all other amounts paid to the Receiver General on or before that day on account of the individual’s tax payable under this Part for the year.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • R.S., 1985, c. 1 (5th Supp.), s. 156.1
  • 1994, c. 7, Sch. II, s. 129, Sch. VI, s. 6, Sch. VIII, s. 93, c. 8, s. 24
  • 1996, c. 21, s. 40.1
  • 1997, c. 25, s. 48
  • 1998, c. 19, s. 44
  • 2000, c. 19, s. 45
  • 2001, c. 17, s. 152
  • 2007, c. 35, s. 50
  • 2012, c. 31, s. 40
  • 2014, c. 39, s. 56

Marginal note:Payment by corporation

  •  (1) Subject to subsections (1.1) and (1.5), every corporation shall, in respect of each of its taxation years, pay to the Receiver General

    • (a) either

      • (i) on or before the last day of each month in the year, an amount equal to 1/12 of the total of the amounts estimated by it to be the taxes payable by it under this Part and Parts VI, VI.1 and XIII.1 for the year,

      • (ii) on or before the last day of each month in the year, an amount equal to 1/12 of its first instalment base for the year, or

      • (iii) on or before the last day of each of the first two months in the year, an amount equal to 1/12 of its second instalment base for the year, and on or before the last day of each of the following months in the year, an amount equal to 1/10 of the amount remaining after deducting the amount computed pursuant to this subparagraph in respect of the first two months from its first instalment base for the year; and

    • (b) the remainder of the taxes payable by it under this Part and Parts VI, VI.1 and XIII.1 for the year on or before its balance-due day for the year.

  • Marginal note:Special case

    (1.1) A small-CCPC may, in respect of each of its taxation years, pay to the Receiver General

    • (a) one of the following:

      • (i) on or before the last day of each three-month period in the taxation year (or if the period that remains in a taxation year after the end of the last such three-month period is less than three months, on or before the last day of that remaining period), an amount equal to 1/4 of the total of the amounts estimated by it to be the taxes payable by it under this Part and Part VI.1 for the taxation year,

      • (ii) on or before the last day of each three-month period in the taxation year (or if the period that remains in a taxation year after the end of the last such three-month period is less than three months, on or before the last day of that remaining period), an amount equal to 1/4 of its first instalment base for the taxation year, or

      • (iii) on or before the last day

        • (A) of the first period in the taxation year not exceeding three months, an amount equal to 1/4 of its second instalment base for the taxation year, and

        • (B) of each of the following three-month periods in the taxation year (or if the period that remains in a taxation year after the end of the last such three-month period is less than three months, on or before the last day of that remaining period), an amount equal to 1/3 of the amount remaining after deducting the amount computed pursuant to clause (A) from its first instalment base for the taxation year; and

    • (b) the remainder of the taxes payable by it under this Part and Part VI.1 for the taxation year on or before its balance-due day for the taxation year.

  • Marginal note:Small-CCPC

    (1.2) For the purpose of subsection (1.1), a small-CCPC, at a particular time during a taxation year, is a Canadian-controlled private corporation

    • (a) for which the amount determined under subsection (1.3) for the taxation year, or for the preceding taxation year, does not exceed $500,000;

    • (b) for which the amount determined under subsection (1.4) for the taxation year, or for the preceding taxation year, does not exceed $10 million;

    • (c) in respect of which an amount is deducted under section 125 of the Act in computing the corporation’s tax payable for the taxation year or for the preceding taxation year; and

    • (d) that has throughout the 12-month period that ends at the time its last remittance under this section is due,

      • (i) remitted, on or before the day on or before which the amounts were required to be remitted, all amounts that were required to be remitted under subsection 153(1), under Part IX of the Excise Tax Act, under subsection 82(1) of the Employment Insurance Act or under subsection 21(1) of the Canada Pension Plan; and

      • (ii) filed, on or before the day on or before which the returns were required to be filed, all returns that were required to be filed under this Act or under Part IX of the Excise Tax Act.

  • Marginal note:Taxable income — small-CCPC

    (1.3) The amount determined under this subsection in respect of a corporation for a particular taxation year is

    • (a) if the corporation is not associated with another corporation in the particular taxation year, the amount that is the corporation’s taxable income for the particular taxation year; or

    • (b) if the corporation is associated with another corporation in the particular taxation year, the amount that is the total of all amounts each of which is the taxable income of the corporation for the particular taxation year or the taxable income of a corporation with which it is associated in the particular taxation year for a taxation year of that other corporation that ends in the particular taxation year.

  • Marginal note:Taxable capital — small-CCPC

    (1.4) The amount determined under this subsection in respect of a corporation for a particular taxation year is

    • (a) if the corporation is not associated with another corporation in the particular taxation year, the amount that is the corporation’s taxable capital employed in Canada (for the purpose of this subsection, within the meaning assigned by section 181.2 or 181.3, as the case may be) for the particular taxation year; or

    • (b) if the corporation is associated with another corporation in the particular taxation year, the amount that is the total of all amounts each of which is the taxable capital employed in Canada of the corporation for the particular taxation year or the taxable capital employed in Canada of a corporation with which it is associated in the particular taxation year for a taxation year of that other corporation that ends in the particular taxation year.

  • Marginal note:No longer a small-CCPC

    (1.5) Notwithstanding subsection (1), where a corporation, that has remitted amounts in accordance with subsection (1.1), ceases at any particular time in a taxation year to be eligible to remit in accordance with subsection (1.1), the corporation shall pay to the Receiver General, the following amounts for the taxation year,

    • (a) on or before the last day of each month, in the taxation year, that ends after the particular time, either

      • (i) the amount determined by the formula

        (A - B)/C

        where

        A
        is the total of the amounts estimated by the corporation to be the taxes payable by it under this Part and Parts VI, VI.1 and XIII.1 for the taxation year,
        B
        is the total of all payments payable by the corporation in the taxation year in accordance with subsection (1.1), and
        C
        is the number of months that end in the taxation year and after the particular time, or
      • (ii) the total of

        • (A) the amount determined by the formula

          (A - B)/C

          where

          A
          is the corporation’s first instalment base for the taxation year,
          B
          is the total of all payments payable by the corporation in the taxation year in accordance with subsection (1.1), and
          C
          is the number of months that end in the taxation year and after the particular time; and
        • (B) the amount obtained when the estimated tax payable by the corporation, if any, under Parts VI and XIII.1 for the taxation year is divided by the number of months that end in the taxation year and after the particular time; and

    • (b) the remainder of the taxes payable by it under this Part and Parts VI, VI.1 and XIII.1 for the taxation year on or before its balance-due day for the year.

  • Marginal note:Application to SIFT trusts

    (2) Subsections (1), (2.1) and (4) apply to a SIFT trust with any modifications that the circumstances require.

  • Marginal note:$3,000 threshold

    (2.1) A corporation may, instead of paying the instalments required for a taxation year by paragraph (1)(a) or by subsection (1.1), pay to the Receiver General, under paragraph (1)(b), the total of the taxes payable by it under this Part and Parts VI, VI.1 and XIII.1 for the taxation year, if

    • (a) the total of the taxes payable under this Part and Parts VI, VI.1 and XIII.1 by the corporation for the taxation year (determined before taking into consideration the specified future tax consequences for the year) is equal to or less than $3,000; or

    • (b) the corporation’s first instalment base for the year is equal to or less than $3,000.

  • Marginal note:Reduced instalments

    (3) Notwithstanding subsection (1) and (1.5), the amount payable under subsection (1) or (1.5) for a taxation year by a corporation to the Receiver General on or before the last day of any month in the year is deemed to be the amount, if any, by which

    • (a) the amount so payable as determined under that subsection for the month

    exceeds

    • (b) where the corporation is neither a mutual fund corporation nor a non-resident-owned investment corporation, 1/12 of the corporation’s dividend refund (within the meaning assigned by subsection 129(1)) for the year,

    • (c) if the corporation is a mutual fund corporation, 1/12 of the total of

      • (i) the corporation’s capital gains refund (within the meaning assigned by section 131) for the year, and

      • (ii) the amount that, because of subsection 131(5) or (11), is the corporation’s dividend refund (within the meaning assigned by section 129) for the year,

    • (d) where the corporation is a non-resident-owned investment corporation, 1/12 of the corporation’s allowable refund (within the meaning assigned by section 133) for the year, and

    • (e) 1/12 of the total of the amounts each of which is deemed by subsection 125.4(3), 125.5(3), 125.6(2) or (2.1), 127.1(1) or 127.41(3) to have been paid on account of the corporation’s tax payable under this Part for the year.

  • Marginal note:Amount of payment — three-month period

    (3.1) Notwithstanding subsection (1.1), the amount payable under subsection (1.1) for a taxation year by a corporation to the Receiver General on or before the last day of any period in the year is deemed to be the amount, if any, by which

    • (a) the amount so payable as determined under that subsection for the period

    exceeds the total of

    • (b) 1/4 of the corporation’s dividend refund (within the meaning assigned by subsection 129(1)) for the taxation year, and

    • (c) 1/4 of the total of the amounts each of which is deemed by subsection 125.4(3), 125.5(3), 125.6(2) or (2.1), 127.1(1) or 127.41(3) to have been paid on account of the corporation’s tax payable under this Part for the taxation year.

  • Marginal note:Definitions

    (4) In this section, first instalment base and second instalment base of a corporation for a taxation year have the meanings prescribed by regulation.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • R.S., 1985, c. 1 (5th Supp.), s. 157
  • 1994, c. 7, Sch. II, s. 130, Sch. VI, s. 7, Sch. VIII, s. 94
  • 1995, c. 3, s. 47
  • 1996, c. 21, s. 41
  • 1997, c. 25, s. 49
  • 1998, c. 19, s. 184
  • 2001, c. 17, s. 153
  • 2002, c. 9, s. 41
  • 2003, c. 15, s. 115
  • 2007, c. 35, s. 51
  • 2009, c. 2, s. 59
  • 2013, c. 34, s. 311, c. 40, s. 69
  • 2019, c. 29, s. 34
  • 2021, c. 23, s. 42
 
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