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

Act current to 2017-06-05 and last amended on 2017-05-01. Previous Versions

Offset of Refund Interest and Arrears Interest

Marginal note:Definitions
  •  (1) The definitions in this subsection apply in this section.

    accumulated overpayment amount

    trop-payé accumulé

    accumulated overpayment amount, of a corporation for a period, means the overpayment amount of the corporation for the period together with refund interest (including, for greater certainty, compound interest) that accrued with respect to the overpayment amount before the date specified under paragraph (3)(b) by the corporation in its application for the period. (trop-payé accumulé)

    accumulated underpayment amount

    moins-payé accumulé

    accumulated underpayment amount, of a corporation for a period, means the underpayment amount of the corporation for the period together with arrears interest (including, for greater certainty, compound interest) that accrued with respect to the underpayment amount before the date specified under paragraph (3)(b) by the corporation in its application for the period. (moins-payé accumulé)

    arrears interest

    intérêts débiteurs

    arrears interest means interest computed under paragraph (5)(b), 129(2.2)(b), 131(3.2)(b), 132(2.2)(b), 133(7.02)(b) or 160.1(1)(b), subsection 161(1) or (11), paragraph 164(3.1)(b) or (4)(b) or subsection 187(2). (intérêts débiteurs)

    overpayment amount

    trop-payé

    overpayment amount, of a corporation for a period, means the amount referred to in subparagraph (2)(a)(i) that is refunded to the corporation, or the amount referred to in subparagraph (2)(a)(ii) to which the corporation is entitled. (trop-payé)

    refund interest

    intérêts créditeurs

    refund interest means interest computed under subsection 129(2.1), 131(3.1), 132(2.1), 133(7.01) or 164(3) or (3.2). (intérêts créditeurs)

    underpayment amount

    moins-payé

    underpayment amount, of a corporation for a period, means the amount referred to in paragraph (2)(b) payable by the corporation on which arrears interest is computed. (moins-payé)

  • Marginal note:Concurrent refund interest and arrears interest

    (2) A corporation may apply in writing to the Minister for the reallocation of an accumulated overpayment amount for a period that begins after 1999 on account of an accumulated underpayment amount for the period if, in respect of tax paid or payable by the corporation under this Part or Part I.3, II, IV, IV.1, VI, VI.1 or XIV,

    • (a) refund interest for the period

      • (i) is computed on an amount refunded to the corporation, or

      • (ii) would be computed on an amount to which the corporation is entitled, if that amount were refunded to the corporation; and

    • (b) arrears interest for the period is computed on an amount payable by the corporation.

  • Marginal note:Contents of application

    (3) A corporation’s application referred to in subsection (2) for a period is deemed not to have been made unless

    • (a) it specifies the amount to be reallocated, which shall not exceed the lesser of the corporation’s accumulated overpayment amount for the period and its accumulated underpayment amount for the period;

    • (b) it specifies the effective date for the reallocation, which shall not be earlier than the latest of

      • (i) the date from which refund interest is computed on the corporation’s overpayment amount for the period, or would be so computed if the overpayment amount were refunded to the corporation,

      • (ii) the date from which arrears interest is computed on the corporation’s underpayment amount for the period, and

      • (iii) January 1, 2000; and

    • (c) it is made on or before the day that is 90 days after the latest of

      • (i) the day of sending of the first notice of assessment giving rise to any portion of the corporation’s overpayment amount to which the application relates,

      • (ii) the day of sending of the first notice of assessment giving rise to any portion of the corporation’s underpayment amount to which the application relates,

      • (iii) if the corporation has served a notice of objection to an assessment referred to in subparagraph (i) or (ii), the day of sending of the notification under subsection 165(3) by the Minister in respect of the notice of objection,

      • (iv) if the corporation has appealed, or applied for leave to appeal, from an assessment referred to in subparagraph (i) or (ii) to a court of competent jurisdiction, the day on which the court dismisses the application, the application or appeal is discontinued or final judgment is pronounced in the appeal, and

      • (v) the day of sending of the first notice to the corporation indicating that the Minister has determined any portion of the corporation’s overpayment amount to which the application relates, if the overpayment amount has not been determined as a result of a notice of assessment sent before that day.

  • Marginal note:Reallocation

    (4) The amount to be reallocated that is specified under paragraph (3)(a) by a corporation is deemed to have been refunded to the corporation and paid on account of the accumulated underpayment amount on the date specified under paragraph (3)(b) by the corporation.

  • Marginal note:Repayment of refund

    (5) If an application in respect of a period is made under subsection (2) by a corporation and a portion of the amount to be reallocated has been refunded to the corporation, the following rules apply:

    • (a) a particular amount equal to the total of

      • (i) the portion of the amount to be reallocated that was refunded to the corporation, and

      • (ii) refund interest paid or credited to the corporation in respect of that portion

      is deemed to have become payable by the corporation on the day on which the portion was refunded; and

    • (b) the corporation shall pay to the Receiver General interest at the prescribed rate on the particular amount from the day referred to in paragraph (a) to the date of payment.

  • Marginal note:Consequential reallocations

    (6) If a particular reallocation of an accumulated overpayment amount under subsection (4) results in a new accumulated overpayment amount of the corporation for a period, the new accumulated overpayment amount shall not be reallocated under this section unless the corporation so applies in its application for the particular reallocation.

  • Marginal note:Assessments

    (7) Notwithstanding subsections 152(4), (4.01) and (5), the Minister shall assess or reassess interest and penalties payable by a corporation in respect of any taxation year as necessary in order to take into account a reallocation of amounts under this section.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 2000, c. 19, s. 48;
  • 2010, c. 25, s. 41.
Marginal note:Period where interest not payable

 Notwithstanding any other provision of this Act, if the Minister notifies a taxpayer that the taxpayer is required to pay a specified amount under this Act and the taxpayer pays the specified amount in full before the end of the period that the Minister specifies with the notice, interest is not payable on the specified amount for the period.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 2003, c. 15, s. 117.

Small Amounts Owing

Marginal note:Interest and penalty amounts of $25 or less

 If, at any time, a person pays an amount not less than the total of all amounts, other than interest and penalty, owing at that time to Her Majesty in right of Canada under this Act for a taxation year of the person and the total amount of interest and penalty payable by the person under this Act for that year is not more than $25.00, the Minister may cancel the interest and penalty.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 2003, c. 15, s. 117.
Marginal note:Taxpayer
  •  (1) If the Minister determines, at any time, that the total of all amounts owing by a person to Her Majesty in right of Canada under this Act does not exceed two dollars, those amounts are deemed to be nil.

  • Marginal note:Minister

    (2) If, at any time, the total of all amounts payable by the Minister to a person under this Act does not exceed two dollars, the Minister may apply those amounts against any amount owing, at that time, by the person to Her Majesty in right of Canada. However, if the person, at that time, does not owe any amount to Her Majesty in right of Canada, those amounts payable are deemed to be nil.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 2003, c. 15, s. 117;
  • 2006, c. 4, s. 162.
 
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