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C.C.S.M. c. T2
The Tax Administration and Miscellaneous Taxes Act
| Table of Contents | Regulations |
HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Manitoba, enacts as follows:
PART I
TAX ADMINISTRATION
NOTE:
Former Part I (sections 1 to 25) "Tax on Electricity and Certain other Products" was amended and renumbered as Part I.1 (sections 96 to 110) by S.M. 2005, c. 40, Part 12. See the Table of Concordance at the end of this Act.
DIVISION 1
GENERAL
1(1) The following definitions apply in this Part.
"assessment" means an assessment made by the director under section 46. (« cotisation »)
"bulk fuel" means more than 200 litres of fuel that is not stored in a fuel tank as part of the fuel system of a vehicle or other machine. (« carburant en vrac »)
"carrier licence" means a licence that
(a) is issued under the law of a jurisdiction whose government is a party to the International Fuel Tax Agreement referred to in the fuel tax Acts; and
(b) is issued to a person who owns or operates one or more motor vehicles, as defined in The Highway Traffic Act, used for the interjurisdictional carriage of passengers or goods. (« licence de transporteur »)
"cigarette" has the same meaning as in The Tobacco Tax Act. (« cigarette »)
"collector" means
(a) a person who is required by or under a tax Act to collect and remit tax; and
(b) any other person who collects an amount as tax, otherwise than as a person employed under the minister. (« collecteur »)
"deputy collector" means a person appointed under a tax Act by a collector to collect and remit tax to the collector. (« collecteur adjoint »)
"director" means
(a) the Deputy Minister of Finance; or
(b) an Assistant Deputy Minister of Finance;
except where it refers to a director of a corporation. (« directeur »)
"financial institution" means a bank, credit union, trust company or other similar institution. (« établissement financier »)
"fuel" means gasoline as defined in The Gasoline Tax Act and motive fuel as defined in The Motive Fuel Tax Act. (« carburant »)
"fuel tax Act" means The Gasoline Tax Act and The Motive Fuel Tax Act. (« loi fiscale sur les carburants »)
"information return" includes a tax return under a tax Act. (« déclaration de renseignements »)
"marked fuel" means
(a) marked or coloured gasoline as defined in The Gasoline Tax Act; and
(b) marked or coloured motive fuel as defined in The Motive Fuel Tax Act. (« carburant marqué »)
"marked tobacco" means cigarettes or fine cut tobacco the packaging of which is marked or stamped for the tax purposes of Manitoba as required by The Tobacco Tax Act. (« tabac marqué »)
"minister" means the Minister of Finance. (« ministre »)
"person" includes a partnership, a trust and the Crown in right of Manitoba. (« personne »)
"Personal Property Registry" means the Personal Property Registry under The Personal Property Security Act. (« Bureau d'enregistrement »)
"reassessment" means a reassessment made by the director under section 46. (« nouvelle cotisation »)
"receiver, trustee or other like person" means a person who as assignee, liquidator, administrator, trustee, receiver, receiver-manager, secured or unsecured creditor, or as agent of any such person, takes control or possession of money or other property of another person. But it does not include a trustee in bankruptcy except in section 16. (« séquestre, fiduciaire ou autre personne exerçant des fonctions semblables »)
"record" means information that
(a) is recorded or stored by mechanical, electronic, magnetic, optical or any other means; and
(b) is recorded or stored in understandable form or is capable of being produced or reproduced in understandable form. (« document »)
"secured creditor"
(a) means a person who has a security interest in property of another person or who, in connection with a security interest, acts for or on behalf of the person who has the security interest; and
(b) includes a trustee appointed under a trust deed relating to a security interest, a receiver or receiver-manager appointed by a secured creditor or by a court on the application of a secured creditor, a sequestrator, and any other person performing a similar function. (« créancier garanti »)
"security interest"
(a) means an interest in property that secures payment or performance of an obligation; and
(b) includes an interest created by or arising out of a debenture, mortgage, lien, pledge, charge, deemed or actual trust, assignment or encumbrance of any kind. (« sûreté »)
"tangible personal property" means tangible personal property as defined in The Retail Sales Tax Act. (« biens personnels corporels »)
"tax" means a tax imposed under a tax Act. (« taxe »)
"taxable service" means a taxable service as defined in The Retail Sales Tax Act. (« service taxable »)
"tax Act" means any of the following enactments:
(a) The Corporation Capital Tax Act;
(b) The Gasoline Tax Act;
(c) The Health and Post Secondary Education Tax Levy Act;
(d) The Mining Tax Act;
(e) The Motive Fuel Tax Act;
(f) The Retail Sales Tax Act;
(g) The Tobacco Tax Act;
(h) this Part;
(i) a regulation made under any enactment referred to in clauses (a) to (h). (« loi fiscale »)
"Tax Appeals Commission" means the Tax Appeals Commission established under section 2 of The Tax Appeals Commission Act. (« Commission d'appel des impôts et des taxes »)
"tax authorization" means
(a) an RST number under The Retail Sales Tax Act; and
(b) a licence or permit under a tax Act. (« autorisation fiscale »)
"tax debt" of a person means the total of all amounts that the person is required to pay or remit under a tax Act, whether as tax, or as a penalty, interest, fee or other charge, other than a fine or surcharge payable upon conviction of an offence. (« dette fiscale »)
"tax debtor" means a person who is liable to pay or remit a tax debt. (« débiteur fiscal »)
"tax officer" means
(a) the director; and
(b) a person designated as a tax officer under section 4 or belonging to a class of persons designated as tax officers under that section;
and, except for the purposes of section 4, clauses 22(1)(b) to (d) and subsection 22(3), includes a peace officer. (« agent du fisc »)
"taxpayer" means
(a) a person on whom a tax is imposed;
(b) a collector; and
(c) a person who is liable under a tax Act for all or any part of another taxpayer's tax debt. (« contribuable »)
"tobacco" means tobacco or a tobacco product as defined in The Tobacco Tax Act. (« tabac »)
"unit", in relation to tobacco, means a unit as defined in The Tobacco Tax Act. (« unité »)
"unmarked tobacco" means cigarettes or fine cut tobacco the packaging of which is not marked or stamped for the tax purposes of Manitoba as required by The Tobacco Tax Act. (« tabac non marqué »)
1(2) Subject to subsections (3) and (4), nothing in this Part shall be construed to affect a solicitor-client privilege.
Process for dealing with solicitor-client privilege
1(3) Section 232 of the Income Tax Act (Canada) applies, with necessary changes, to
(a) any requirement to produce or make available for inspection, audit or examination; or
(b) any attempt to inspect, examine or seize;
any record in respect of which a solicitor-client privilege is claimed and has not been waived by the person entitled to waive it.
No privilege in respect of accounting record
1(4) For the purposes of this Part, no solicitor-client privilege exists or may be claimed in respect of an accounting record of a lawyer or any supporting voucher or cheque for such an accounting record.
1(5) For greater certainty, the tax Acts must be interpreted so as not to derogate from the exemption from taxation of property under subsection 87(1) or (2) of the Indian Act (Canada).
S.M. 2005, c. 40, s. 85; S.M. 2006, c. 24, s. 77; S.M. 2007, c. 6, s. 76.
2 This Act binds the Crown.
3(1) The director may delegate to a person, with or without conditions, any power or duty conferred or imposed on the director by a tax Act.
3(2) The director may continue to exercise a power or perform a duty that he or she has delegated.
4(1) The director may designate a person or class of persons, with or without conditions, as tax officers for the purpose of the administration and enforcement of any or all of the tax Acts.
4(2) For the purpose of The Summary Convictions Act, a tax officer for the purpose of the administration and enforcement of a tax Act is deemed to be a peace officer in relation to that tax Act.
Minister or director may approve forms
5 The minister or the director may approve forms, including electronic forms, for use under a tax Act, and may require them to be used.
6(1) No person employed in the administration of a tax Act may disclose any personal or confidential record or information obtained under a tax Act, except
(a) with the consent of the person to whom the record or information relates;
(b) in the case of personal information, as permitted by The Freedom of Information and Protection of Privacy Act;
(c) to the extent required for the administration or enforcement of a tax Act or any other Act that imposes a tax or levy or, with the approval of the minister, to the extent required for the administration or enforcement of any other enactment;
(d) as required or permitted under Part 5 of The Electronic Commerce and Information Act or under a regulation or an agreement made under that Part; or
(e) as permitted under subsection (2) or the regulations.
Reciprocal exchange of information
6(2) The minister may permit records or information, including personal information, obtained under a tax Act to be given or shown to any person employed by the government of Canada or of another province, territory, country or state if
(a) there is an agreement or arrangement with that government for the reciprocal exchange of records or information relating to the administration or enforcement of laws that impose a tax or levy; and
(b) the minister is satisfied that the records or information provided are required for the administration or enforcement of laws that impose a tax or a levy and will be used by that government only for that purpose.
Notice of arrangements and agreements
6(3) When an agreement or an arrangement referred to in subsection (2) is entered into, the minister must publish in The Manitoba Gazette a notice summarizing its terms.
6(4) In the event of a conflict between this section and a provision of The Freedom of Information and Protection of Privacy Act, this section prevails. But nothing in this section shall be construed to limit or deny a person's right to access his or her own personal information.
7(1) A document to be served under a tax Act may be served
(a) in the case of a document to be served on the minister, by delivering it to the office of the minister or the deputy minister, or sending it by prepaid mail addressed to either office;
(b) in the case of a document to be served on the director, by delivering it to the office of the director, or sending it by prepaid mail addressed to that office;
(c) in the case of a document to be served on the Tax Appeals Commission, by delivering it to the office of the Tax Appeals Commission, or sending it by prepaid mail addressed to that office;
(d) in the case of a document to be served on a partnership,
(i) by giving it to a general partner of the partnership, or to an adult employed at a place of business of the partnership, or
(ii) by sending it by prepaid mail addressed to a general partner of the partnership, to the partnership or to a name under which the partnership carries on business, at the address of the partner or partnership last known to the director;
(e) in the case of a document to be served on any other person,
(i) by giving it to the person or to an adult employed at a place of business of the person, or
(ii) by sending it by prepaid mail addressed to the person or to a name under which the person carries on business, at the address of the person or the person's business last known to the director; or
(f) in any other manner prescribed by regulation.
7(2) If a document is sent to a person by mail in accordance with subsection (1), it is deemed to have been served on the person
(a) in the case of registered mail, when it is received by the person or by another person on the person's behalf; and
(b) in the case of certified or ordinary mail, when it is delivered by the post office to the address to which it was mailed.
7(3) Unless the contrary is shown, a document mailed by the director or the Tax Appeals Commission is deemed to have been
(a) mailed on the date of the document; and
(b) delivered to the address to which it was mailed on the third day after the day it was mailed, not including weekends and holidays.
7(4) A document delivered to the office of a person in accordance with subsection (1) is deemed to have been served on the person on the day it was delivered.
8 A statutory declaration as to how and when a document was served is proof of those facts unless the contrary is shown.
9(1) Despite any other provision of a tax Act, when the deadline for doing anything that is required or permitted to be done by or under a tax Act occurs on a weekend or a holiday, that deadline is deemed to occur on the last preceding day that does not fall on a weekend or a holiday.
9(2) Subsection (1) does not apply to the filing of a periodic return of information or the remittance of tax that is to accompany that return.
S.M. 2005, c. 40, s. 85; S.M. 2007, c. 6, s. 77.
DIVISION 2
COMPLIANCE
TAX AUTHORIZATIONS
Reasons not to issue tax authorization
10(1) The director may refuse to issue a tax authorization to a person who
(a) has been convicted of an offence under a tax Act;
(b) is not willing to undertake any duty or obligation he or she would have as the holder of a tax authorization;
(c) is in breach of, or has failed to comply with,
(i) a provision of a tax Act,
(ii) an order or demand made under a tax Act, or
(iii) the terms or conditions of a tax authorization or collector's agreement under a tax Act;
(d) provides incomplete, false, misleading or inaccurate information or records in support of his or her application for the tax authorization; or
(e) in the opinion of the director, does not require a tax authorization.
Additional reasons not to issue tax authorization
10(2) The director may also refuse to issue
(a) a licence or permit under The Tobacco Tax Act to a person who has been convicted of an offence under The Non-Smokers Health Protection Act;
(b) a permit under The Tobacco Tax Act for possessing unmarked tobacco, if the director is not satisfied that the tobacco will be dealt with in accordance with that Act or the regulations under that Act;
(c) a permit under The Tobacco Tax Act for producing Manitoba tear tape as defined under that Act, if the director is not satisfied that the person seeking the permit will
(i) take reasonable steps to ensure the security of the tear tape in the applicant's possession,
(ii) mark the tear tape produced by the applicant in a manner that allows it to be identified as tear tape produced by the applicant,
(iii) keep adequate records of the quantity of tear tape produced by the applicant, and
(iv) co-operate with an inspection, examination or audit;
(d) not in force until the day that The Public Health Amendment Act, S.M. 2002, c. 38, comes into force.
10(3) Subject to subsection (4), the director may, by written order, cancel a person's tax authorization for any reason for which he or she may refuse to issue such a tax authorization under subsection (1) or (2). But a carrier licence may be cancelled only if it was issued by the director.
Opportunity to make submission
10(4) Before cancelling a person's tax authorization or deciding to refuse to issue a tax authorization to a person, the director must notify the person in writing
(a) that he or she intends to cancel or refuse to issue the tax authorization, and why; and
(b) that the person may, within 14 days after the notice is served on the person, make a submission as to why the tax authorization should not be cancelled or refused.
10(5) If the director believes that a reason to cancel a person's tax authorization exists, the director may, by written order, suspend the tax authorization for up to 30 days. The tax authorization is not valid during the period of the suspension.
When cancellation or suspension becomes effective
10(6) Subject to subsection (7), an order to cancel or suspend a person's tax authorization becomes effective when it is served on the person or at the date and time specified in the order, whichever is later.
Automatic cancellation or refusal to issue
10(7) If a notice under subsection (4) states that the proposed decision or order will become effective at the end of the 14-day period for making a submission unless a submission is made to the director within that period, the decision or order becomes effective at the end of that period, without further notice, if no submission is received within that period.
Appeal of director's decision or order
10(8) The director's decision or order may be appealed to the Court of Queen's Bench under Division 4 (Appeals).
S.M. 2005, c. 40, s. 85; S.M. 2007, c. 6, s. 78.
11(1) The holder of a tax authorization issued by the director must return it immediately to the director, along with any additional copies of it in the holder's possession, when
(a) the tax authorization is cancelled or suspended under section 10; or
(b) the holder ceases to carry on the business or activity for which the tax authorization was issued.
In the case of an RST number, the holder must return all original copies of the document used to issue the number to the holder.
11(2) When the holder of a carrier licence is required to return it to the director, the holder must immediately remove from each motor vehicle operated under the licence any carrier decals that were issued in connection with the licence.
REPORTING AND PAYMENT OF TAX
12(1) The director may require a taxpayer or prospective taxpayer to provide the government with a bond to secure the performance of his or her obligation to pay or remit tax when it is due.
12(2) The terms, conditions and amount of the bond must be satisfactory to the director.
12(3) The director may accept a letter of credit or a deposit of cash or securities in lieu of a bond.
Payment by purchaser applied first to tax
13(1) A payment by a purchaser to a collector or deputy collector in respect of a purchase of property or services is deemed to be applied to the tax payable in respect of that purchase until the tax is paid in full and before any part of the payment is applied to the purchase price.
Payment by deputy collector applied first to tax
13(2) A payment by a deputy collector to a collector is deemed to be applied to the payment of any tax collected by the deputy collector and to be remitted to the collector before any part of the payment is applied to any amount otherwise payable by the deputy collector to the collector.
14(1) The following definitions apply in this section.
"extra-provincial contractor" means a person who has entered into a contract to be performed in Manitoba, but does not include a person who at the time of entering into the contract and during the immediately preceding 12 months,
(a) was an individual resident in Manitoba; or
(b) had a permanent place of business in Manitoba. (« entrepreneur extraprovincial »)
"principal" means a person with whom an extra-provincial contractor has entered into a contract to be performed in Manitoba. (« commettant »)
Contractor to provide information
14(2) An extra-provincial contractor who, in connection with a contract to be performed in Manitoba, sells property or services in Manitoba or brings into Manitoba, or receives in Manitoba, tangible personal property or taxable services acquired for the contractor's own use or consumption or for the use or consumption of others at the contractor's expense, must
(a) report the matter to the director; and
(b) provide the director with a copy of all relevant invoices and other information that the director requires in respect of the contract, the property or the services.
Extra-provincial contractor to provide security
14(3) For the purpose of securing an extra-provincial contractor's obligation to pay or remit tax under The Corporation Capital Tax Act, The Retail Sales Tax Act or The Health and Post Secondary Education Tax Levy Act in respect of a contract to be performed in Manitoba, including any tax to be paid or remitted in respect of the property or services referred to in subsection (2), the contractor must provide a bond that
(a) contains terms and conditions satisfactory to the director; and
(b) secures the payment of an amount determined by the director, which must not exceed 9.15% of the total value of the consideration payable under the contract.
14(4) The director may accept a letter of credit or a deposit of cash or securities in lieu of a bond.
14(5) If the extra-provincial contractor has not provided security as required by this section,
(a) the principal is liable, upon assessment under section 46, for the tax and any penalties and interest to be paid or remitted by the contractor in respect of the contract or the property and services referred to in subsection (2); and
(b) payment of that tax, and any related penalties and interest, may be enforced against the principal or the contractor, or both.
Principal entitled to recover amount paid
14(6) A principal who pays an amount under subsection (5) in respect of tax, penalties or interest owing by an extra-provincial contractor is entitled to recover that amount from the contractor, and may
(a) withhold that amount from money owing by the principal to the contractor; or
(b) recover it in a court of competent jurisdiction as a debt owing by the contractor to the principal.
Director may impose reporting or remittance requirements
15(1) Despite the reporting and remittance requirements of a tax Act, the director may, by written order, require a taxpayer to do one or more of the following:
(a) file an information return, whether or not the taxpayer has previously filed one;
(b) provide reports or file information returns in addition to, or earlier or more frequently than, those required by the tax Act;
(c) pay or remit tax, and any applicable interest and penalties, earlier or more frequently than required by the tax Act;
(d) pay or remit tax, and any applicable interest and penalties, by direct deposit to a government account at a financial institution;
(e) in the case of a collector, require the collector
(i) to establish a trust account for the amounts to be collected as tax under a tax Act, and
(ii) to deposit those amounts in the trust account until they are remitted to the minister.
Director may extend filing or payment deadline
15(2) The director may, with or without conditions, extend the deadline for a taxpayer to file a report or information return or to pay or remit tax that would otherwise apply under a tax Act or under an order under subsection (1).
Reporting by receiver, trustee, etc.
16(1) Every person who, as receiver, trustee or other like person, takes control or possession of any business or property of a taxpayer who is or was carrying on a business in Manitoba in relation to which any tax is payable must notify the director in writing, within 10 days after taking control or possession of the business or property, that the person has taken control or possession of it.
Receiver, trustee or other like person to file returns
16(2) The receiver, trustee or other like person, in addition to any other duty that he or she has in that capacity, must file reports and information returns that become due, and pay tax or remit tax that becomes due or payable,
(a) during or in respect of any period during which he or she is acting as a receiver, trustee or other like person in relation to the business or property of the taxpayer; or
(b) in respect of any taxable transaction in which he or she participates as a receiver, trustee or other like person in relation to the business or property of the taxpayer.
Director may issue certificate
16(3) The director, upon being satisfied that
(a) all reports and information returns to be filed under subsection (2) have been filed; and
(b) any tax to be paid or remitted under subsection (2) has been paid or remitted,
may issue a certificate to the receiver, trustee or like person stating he or she has no further liability under this section.
RECORDS
17(1) A taxpayer must maintain records in accordance with
(a) this section and any applicable regulations; and
(b) any order or agreement made under a tax Act;
(c) repealed, S.M. 2007, c. 6, s. 79.
17(2) The holder of a carrier licence issued by the director must maintain records in accordance with any applicable regulations and the terms and conditions of the licence, and must provide access to those records
(a) to a tax officer at his or her request; or
(b) to an official from a jurisdiction whose government is a party to the International Fuel Tax Agreement referred to in the definition "carrier licence" in section 1, at the request of the official or the director.
Holder of tax authorization to keep records
17(2.1) The holder of a tax authorization must maintain records in accordance with
(a) this section and any applicable regulation;
(b) any order or agreement made under a tax Act; and
(c) the terms and conditions of the tax authorization.
17(3) The records that a person is required to maintain must be adequate to enable the following to be determined or verified:
(a) the amount of any tax, interest and penalties to be paid or remitted by the person;
(b) the person's entitlement to any credit, commission, allowance or refund;
(c) the entitlement to a tax exemption claimed by the person or applied by the person in a transaction with another person;
(d) the person's compliance with the tax Acts and any applicable tax authorization, order or agreement.
Director may order records to be kept
17(4) If the director considers that records that are required to be maintained are inadequate for the proper administration and enforcement of a tax Act, the director may, by written order, require the person who is required to maintain them to do one or more of the following:
(a) to begin maintaining the types of records specified in the order, and to maintain them in the manner specified;
(b) to create or complete records for a specified period.
The order may specify a deadline for the person to comply with the order.
S.M. 2005, c. 40, s. 85; S.M. 2007, c. 6, s. 79.
18(1) The records that a person is required to maintain under a tax Act must be preserved by the person until
(a) he or she obtains a written authorization from the director allowing them to be destroyed; or
(b) they may be destroyed under subsection (2);
whichever occurs first.
18(2) Subject to subsections (3) and (4), records may be destroyed when all of the following conditions are met with respect to those records:
(a) they relate to a period for which all returns have been filed and for which the tax, including any related interest or penalty, has been paid or remitted as required by a tax Act;
(b) they relate to a fiscal year that ended more than six years before the beginning of the current fiscal year;
(c) there is no dispute as to the amount to be paid or remitted for the period to which the records relate;
(d) they do not relate to a period or matter that is currently the subject of an inspection, audit or examination.
Records requiring authorization to be destroyed
18(3) The following records may be destroyed only with the written authorization of the director:
(a) general ledgers;
(b) records required to determine tax payable under The Mining Tax Act and any interest or penalty payable in respect of that tax.
18(4) If the director has, by written notice, required a person to keep records for a specified period to enable an inspection, examination or audit to be carried out or completed, the person must not destroy the records until the end of that period or until authorized by the director in writing to do so, whichever occurs first.
18(5) If a person who is required to maintain records under a tax Act keeps them in electronic form, the person must ensure that, for as long as they are required to be preserved, they
(a) remain complete and unaltered, apart from any changes or additions made in the normal course of communication, storage or display, from the time they were first made in final form, whether as a paper document or otherwise;
(b) are accessible by the person who is required to retain them; and
(c) are capable of being printed and of being produced in electronically readable format for inspection, examination or audit by a tax officer.
S.M. 2005, c. 40, s. 85; S.M. 2007, c. 6, s. 80.
INSPECTIONS
Tax authorization to be produced for inspection
19 The holder of a tax authorization must produce it for inspection by a tax officer upon request by the tax officer.
Records to be made available for inspection, etc.
20 A person must
(a) make the records that he or she is required to maintain under a tax Act available for inspection, examination or audit by a tax officer at the place where they are maintained; and
(b) if the records are not maintained in Manitoba, pay to the minister, upon receipt of a statement from the director, the amount charged by the director for expenses incurred in inspecting, examining or auditing the records at the place where they are maintained.
S.M. 2005, c. 40, s. 85; S.M. 2007, c. 6, s. 81.
21(1) The director may, for any purpose relating to the administration or enforcement of a tax Act, by written order, require a person to
(a) provide any information; or
(b) make available or produce for inspection, examination, audit or testing any records or things in the person's possession or control that relate to the administration of the tax Act.
Who may be required to produce records, etc.
21(2) The order may be addressed and given to
(a) a taxpayer or other person required to maintain records under a tax Act;
(b) a person who deals with or has dealt with a person referred to in clause (a); or
(c) a director, officer, agent or employee of a person referred to in clause (a) or (b).
21(3) The order
(a) must state the name of
(i) the person to whom it is directed, and
(ii) if different, the name of the person to whom the records or other things to be produced or made available for inspection, audit, examination or testing relate;
(b) must specify or describe the information to be provided or the records or other things to be produced or made available and where to produce them or make them available;
(c) may direct the manner in which records or other things are to be produced or made available, including the format in which electronically maintained records are to be produced or made available; and
(d) may specify a deadline for the person to comply with the order.
21(4) Repealed, S.M. 2008, c. 3, s. 74.
S.M. 2005, c. 40, s. 85; S.M. 2007, c. 6, s. 82; S.M. 2008, c. 3, s. 74.
22(1) Subject to any conditions imposed by the director, a tax officer may carry out any inspection, examination, audit or test reasonably required to
(a) determine compliance with a tax Act or the terms and conditions of
(i) an order or agreement made under a tax Act, or
(ii) a tax authorization issued under a tax Act;
(b) determine the existence or amount of a tax debt;
(c) verify the accuracy or completeness of an information return or other report, record or information filed with or otherwise provided to the minister or the director;
(d) determine the value of a property, service or transaction in respect of which tax is payable; or
(e) perform any other duty or function the director or tax officer considers necessary or advisable in the administration of a tax Act.
22(2) In order to perform a duty or function under subsection (1) (in this section referred to as an "inspection"), a tax officer may at any reasonable time, without a warrant, enter
(a) any business premises; or
(b) any other premises or place where the tax officer has reasonable grounds to believe records relevant to the administration or enforcement of a tax Act are kept.
Officer to show identification
22(3) A tax officer must show his or her tax officer identification card if requested to do so in the context of an inspection.
22(4) The owner or person in charge of the place of inspection or having custody or control of the relevant records must
(a) produce or make available to the tax officer all records and property that the tax officer requires for the inspection;
(b) provide any assistance or additional information, including personal information, that the tax officer reasonably requires to perform the inspection; and
(c) upon request, provide written answers to the tax officer's questions.
22(5) In order to inspect records that are maintained electronically at the place of inspection, the tax officer may require the owner or person in charge of the premises or of the relevant records to produce the records in the form of a printout or to produce them in an electronically readable format.
22(6) The tax officer may use equipment at the place of inspection to make copies of relevant records, and may remove the copies from the place of inspection for further examination.
Tax officer may remove records to make copies
22(7) A tax officer who is not able to make copies of records at the place of inspection may remove them from the place of inspection to make copies. The tax officer must make the copies as soon as practicable and return the original records to the person or place from which they were removed.
23 A document certified by the minister or a tax officer to be a printout or copy of a record obtained under a tax Act
(a) is admissible in evidence without proof of the office or signature of the person purporting to have made the certificate; and
(b) has the same probative force as the original record.
24(1) A justice, upon being satisfied by information on oath that
(a) a tax officer has been refused entry to any premises or place to carry out an inspection under section 22; or
(b) there are reasonable grounds to believe that
(i) a tax officer will be refused entry to any premises or place to carry out an inspection under section 22, or
(ii) if a tax officer were to be refused entry to any premises or place to carry out an inspection under section 22, delaying the inspection in order to obtain a warrant on the basis of the refusal could be detrimental to the inspection;
may at any time issue a warrant authorizing a tax officer and any other person named in the warrant to enter the premises or place and carry out an inspection under section 22.
24(2) A warrant under this section may be issued upon application without notice.
25(1) When making an inspection under section 22 in relation to a fuel tax Act, a tax officer may, without a warrant, examine the fuel in any tank, container or other receptacle, or in the fuel system of a motor vehicle or other machine.
Stopping vehicle to examine fuel
25(2) For any purpose relating to a fuel tax Act, a tax officer may, without a warrant, signal or request the operator of a vehicle to stop the vehicle to enable the officer to examine its fuel and take a sample of it
(a) when the operator is a regular purchaser of marked fuel;
(b) when the officer has reasonable grounds to believe that the operator is using marked fuel for an unlawful purpose; or
(c) when the vehicle is being operated in an area of Manitoba where marked fuel is ordinarily used or made available for use.
The operator must immediately bring the vehicle to a safe stop and allow the officer to examine the fuel and take a sample of it.
Stopping vehicle operated under carrier licence
25(3) A tax officer may, without a warrant, signal or request the operator of a vehicle that appears to be operated under a carrier licence to stop the vehicle to enable the officer to inspect the licence and any related carrier decals affixed to the vehicle. The operator must immediately bring the vehicle to a safe stop and allow the officer to carry out the inspection.
Operator to provide proof of identity
25(4) The operator of a vehicle stopped under subsection (2) or (3) must produce for inspection by the tax officer, upon request, his or her driver's licence or any other proof of identity acceptable to the officer.
S.M. 2005, c. 40, s. 85; S.M. 2006, c. 24, s. 78.
INVESTIGATION, SEARCH AND SEIZURE
General authority of tax officer
26 Subject to any conditions imposed by the director, a tax officer may carry out any investigation reasonably required for the enforcement of a tax Act.
Warrant for search and seizure
27(1) A justice, upon being satisfied by information on oath that there are reasonable grounds to believe that
(a) an offence under a tax Act is being or has been committed; and
(b) there is in a building, vehicle, receptacle or place any thing that there are reasonable grounds to believe will afford evidence of an offence under a tax Act;
may at any time issue a warrant authorizing a tax officer, and any other persons named in the warrant, to enter and search the building, vehicle, receptacle or place for any such thing, and to seize it and as soon as practicable bring it before a justice, or report on it to a justice, to be dealt with according to law.
Warrant re unmarked tobacco held by common carrier
27(2) A justice, upon being satisfied by information on oath that there are reasonable grounds to believe that unmarked tobacco
(a) is to be found in a building, vehicle, receptacle or place in Manitoba that is occupied or controlled by a common carrier;
(b) is not in the possession or apparent possession of a person, other than the common carrier or an agent or employee of the common carrier acting on the common carrier's behalf; and
(c) is not addressed or directed for delivery to a person who is lawfully entitled to possess it;
may at any time issue a warrant authorizing a tax officer, and any other persons named in the warrant, to enter and search the building, vehicle, receptacle or place for the unmarked tobacco, and to seize it and as soon as practicable bring it before a justice, or report on it to a justice, to be dealt with according to law.
27(3) A warrant under this section may be issued upon application without notice.
Tax officer may secure evidence
27(4) A tax officer who believes on reasonable grounds that conditions exist for obtaining a warrant under this section to enter and search a building, vehicle, receptacle or place may do anything reasonably necessary to secure the building or place — or to secure or remove the vehicle, receptacle or other thing — pending the application for such a warrant.
Search and seizure without warrant
28(1) If a tax officer believes on reasonable grounds that the conditions for obtaining a warrant under section 27 exist, but by reason of exigent circumstances it would be impracticable to obtain one, the tax officer may exercise any of the powers he or she would be able to exercise under such a warrant.
28(2) A tax officer who is lawfully present in a place under the authority of a warrant or otherwise in the execution of his or her duties may, without a warrant, seize any thing that the officer believes on reasonable grounds will afford evidence in respect of an offence under a tax Act.
Seizure of vehicle or container
28(3) If a thing to be seized by a tax officer, either with or without a warrant, is found in a vehicle or container and it is impracticable in the circumstances to remove the thing from the vehicle or container in order to seize it, the tax officer may also seize the vehicle or container.
29 A tax officer may, without a warrant, seize tobacco found in a building, vehicle, receptacle or place in Manitoba where no person has a reasonable expectation of privacy, if the officer believes on reasonable grounds that the tobacco is
(a) abandoned; or
(b) not in the possession or apparent possession of any person in Manitoba.
Stopping vehicle on suspicion of tobacco offence
30 A tax officer who believes on reasonable grounds that a vehicle contains any thing that affords evidence that an offence relating to The Tobacco Tax Act is being or has been committed, may, without a warrant, signal or request the operator of the vehicle to stop. The operator must immediately bring the vehicle safely to a stop, and must not proceed until permitted to do so by the officer.
Tax officer may seize bulk fuel, vehicle, etc.
31(1) A tax officer who believes on reasonable grounds that a person who has not been appointed a collector under a fuel tax Act
(a) has imported bulk fuel into Manitoba or acquired bulk fuel otherwise than from a licensed dealer or collector under a fuel tax Act, and has not reported it and paid tax as required; or
(b) is in possession of bulk fuel that has been imported into Manitoba or acquired otherwise than from a licensed dealer or collector under a fuel tax Act, and for which the tax has not been paid as required;
may, without a warrant, seize the bulk fuel and any vehicle, trailer or container being used to transport or store the fuel.
Stopping vehicle to seize bulk fuel
31(2) If the bulk fuel that a tax officer may seize under this section is being transported, the tax officer may, without a warrant, signal or request the operator of the vehicle to stop. The operator must immediately bring the vehicle safely to a stop, and must not proceed until permitted to do so by the tax officer.
Operator to provide proof of identity
31.1 The operator of a vehicle stopped under section 30 or subsection 31(2) must produce for inspection by the tax officer, upon request, his or her driver's licence or any other proof of identity acceptable to the officer.
DISPOSITION OR RELEASE OF SEIZED ITEMS
Property seized without a warrant
32 Except as otherwise provided in sections 33 to 36, a tax officer who seizes any thing under the authority of this Act without a warrant must, as soon as practicable,
(a) return the seized thing, upon being issued a receipt for it, to the person lawfully entitled to possess it, if the officer is satisfied that
(i) the person is entitled to possess it, and
(ii) the continued detention of the thing is not required for the purpose of an investigation or a trial or other proceeding; or
(b) if the officer is not satisfied as described in clause (a), bring the seized thing before a justice, or report on it to a justice, to be dealt with according to law as if it had been seized under the authority of a warrant.
33(1) Subject to subsection (2), any records seized by a tax officer must be returned as follows:
(a) if information in the records is reasonably required for the conduct of a person's business, the records, or copies of them, must be provided to the person within a reasonable time after the person requests the director in writing for them;
(b) the original records must be returned, within 180 days after they were seized or within any longer period of time allowed by subsection (2), to the person from whom they were seized.
Justice may extend time to return records
33(2) The director may apply to a justice for an order extending the 180-day period for original records to be returned. The justice may
(a) dismiss the application, in which case the records must be returned within 30 days after the date of the court order; or
(b) extend the time for returning the records, subject to any conditions the court sees fit, if the extension is necessary for
(i) existing or anticipated proceedings relating to an alleged contravention of a tax Act, or
(ii) a continuing investigation into a suspected contravention of a tax Act.
33(3) The decision of the justice is final and cannot be appealed.
34(1) Bulk fuel and any vehicle, trailer or container seized under section 31 are to be released to the person from whom they were seized upon payment to the minister, within seven days after the date of the seizure, of an amount equal to three times the tax that would be payable on a purchase of the bulk fuel by a purchaser.
34(2) If the bulk fuel is not released under subsection (1), the minister must
(a) cause the fuel to be sold and the proceeds to be held in trust for payment or distribution in accordance with subsection (4); and
(b) as soon as practicable, release any vehicle, trailer or container that was seized to the person from whom it was seized.
34(3) While the proceeds are held in trust, they are to be credited with interest at the rate established by the minister to be the government's average cost of borrowing during the relevant period.
Disposition of proceeds and interest
34(4) The proceeds and accrued interest are to be paid or applied as follows:
(a) if no person is found guilty of an offence under section 79 in connection with the bulk fuel, the proceeds and interest are to be paid to the person who was lawfully entitled to the fuel at the time it was seized;
(b) if a person is found guilty of an offence under section 79 in connection with the bulk fuel, the proceeds and interest are to be paid or applied as follows:
(i) first, to pay any fine imposed in respect of the offence,
(ii) second, to pay the costs of the seizure, storage and sale of the bulk fuel, and
(iii) the balance, if any, to the person;
(c) despite clause (b), if a person charged with an offence under section 79 in connection with the bulk fuel agrees, before entering a plea to the charge, to pay the amount referred to in subsection (1), the proceeds and interest may be paid or applied as follows:
(i) first, to pay the amount referred to in subsection (1),
(ii) second, to pay the costs of the seizure, storage and sale of the bulk fuel, and
(iii) the balance, if any, to the person.
Compensation where cost of fuel exceeds proceeds
34(5) If a person entitled to proceeds under clause (4)(a) establishes to the satisfaction of the director that his or her cost of the seized fuel exceeds those proceeds, the minister must pay to the person an additional amount equal to the excess plus an amount equal to interest on the excess at the rate that applies to the proceeds.
34(6) Upon payment of the amount referred to in subsection (1), any tax payable under a fuel tax Act in respect of the bulk fuel is deemed to have been paid.
34(7) A person who pays the amount referred to in subsection (1) is entitled to a refund of that amount, plus interest at the rate established by the minister to be the government's average cost of borrowing during the relevant period, if he or she
(a) is not charged with an offence under section 79 in connection with the bulk fuel; or
(b) having been charged, is not found guilty of the offence.
Disposition of perishable or dangerous items
35 Subject to section 34, when a tax officer seizes any perishable or dangerous thing as evidence of the commission of an offence, it may be disposed of in accordance with the regulations or, in the absence of regulations, as instructed by the director.
36(1) Up to five units of seized tobacco may be released to the person from whom they were seized upon payment, within seven days after they were seized, of an amount equal to three times the tax that would be imposed under section 2 of The Tobacco Tax Act on a purchase of those units by a purchaser. Upon payment of that amount, the tax payable under The Tobacco Tax Act in respect of the units released is deemed to have been paid.
36(2) Any tobacco that is seized under this Act and not released under subsection (1) may be disposed of in accordance with the regulations or, in the absence of regulations, as instructed by the director.
Release or payment — no conviction
36(3) If no person is found guilty of an offence under this Part in connection with the seized tobacco, the director must, upon application by the person entitled to the tobacco,
(a) release the tobacco to the person, unless
(i) the tobacco has been disposed of under subsection (2), or
(ii) any tax to be paid or remitted in respect of the tobacco has not been paid, remitted or accounted for; or
(b) if the tobacco cannot be released under clause (a), pay compensation to the person in an amount equal to
(i) the person's cost of the tobacco, if it is established by the person to the satisfaction of the director, or
(ii) if the person's cost of the tobacco is not established to the satisfaction of the director, the price of the tobacco at the time of seizure as determined by the director,
plus interest on that amount from the date of the seizure, calculated at the rate established by the minister to be the government's average cost of borrowing during the relevant period.
Application for release or compensation
36(4) An application for the release of tobacco under clause (3)(a) or for compensation under clause (3)(b) must be made to the director in writing within 90 days after
(a) the resolution of a prosecution for an offence in connection with the seized tobacco; or
(b) the person is notified by the director that no person will be charged with an offence in connection with the seized tobacco.
If the application is not made within the 90-day period, the tobacco and any proceeds of disposition of the tobacco are forfeited to the Crown.
Tobacco to be marked before release
36(5) Before any cigarettes or fine cut tobacco is released under subsection (1) or clause (3)(a), the packaging of the cigarettes or fine cut tobacco must be marked or stamped for the tax purposes of Manitoba.
36(6) If a person is found guilty of an offence under this Part in connection with the seized tobacco, the tobacco and any proceeds of disposition of the tobacco are forfeited to the Crown.
Forfeiture of abandoned or unmarked tobacco
36(7) When tobacco is seized in the following circumstances, it is forfeited to the Crown and subsections (1) and (3) to (6) do not apply:
(a) a seizure of tobacco under section 29 (abandoned tobacco);
(b) a seizure of unmarked tobacco under the authority of a warrant issued under subsection 27(2) or under the authority of subsection 28(1) where the tax officer had reasonable grounds to believe that the conditions for obtaining such a warrant existed.
S.M. 2005, c. 40, s. 85; S.M. 2006, c. 24, s. 80.
DIVISION 3
TAX DEBT
LIABILITY FOR TAX DEBT
37(1) A tax debt is a debt due to the government by the tax debtor.
Tax debt not affected by offence
37(2) A person's liability for a tax debt is not affected by the fact that a person is prosecuted or convicted for an offence in relation to the tax debt.
38(1) A tax debt bears interest in accordance with the regulations made under The Financial Administration Act until it is paid in full.
When interest begins to accrue
38(2) Interest on a tax debt accrues
(a) in the case of tax that was not paid or remitted when it was due, and any penalty imposed in respect of the failure to pay or remit the tax when it was due, from the day the tax was due; and
(b) in the case of a fee or charge, or any other penalty imposed under this or any other tax Act, from the day it was imposed or, if it was not due immediately, from the day it was due.
Interest on deficient instalments
38(3) In calculating the interest payable in relation to instalments payable by a corporation under clause 17(4.2)(a) of The Corporation Capital Tax Act or by an operator under section 14 of The Mining Tax Act, the interest must be calculated on the whole, or part, as the case may be, of any required instalment that is not paid by the due date. For that purpose,
(a) the amount of a required instalment under The Corporation Capital Tax Act for a fiscal year is the lesser of
(i) 25% of the corporation's actual tax payable for the fiscal year, and
(ii) 25% of the total tax payable by the corporation for the corporation's immediately preceding fiscal year; and
(b) the amount of a required instalment under The Mining Tax Act for a fiscal year is the lesser of
(i) the tax payable for the fiscal year divided by the lesser of 10 and the number of complete months in the fiscal year, and
(ii) the tax payable for the operator's immediately preceding fiscal year divided by the lesser of 10 and the number of complete months in that preceding fiscal year.
No interest on refund of instalments
38(4) No interest is payable on a refund of an amount paid or payable as an instalment of tax under a tax Act.
39(1) A taxpayer who does not pay or remit tax on or before the day it is due is liable to pay a penalty equal to 10% of the tax that was not paid or remitted when it was due.
Director may impose additional penalty
39(2) If the director is satisfied that
(a) a taxpayer has refused to pay or remit tax when it was due; or
(b) tax was not paid or remitted when it was due because of the taxpayer's neglect or carelessness;
the director may impose a penalty not greater than 50% of the tax that was not paid or remitted when it was due.
39(3) The director may charge a fee of $20. for a cheque or other negotiable instrument that is dishonoured.
Failure to comply with director's order
39(4) If a person fails to comply with an order under
(a) clause 15(1)(a) or (b) (information returns and reports);
(b) clause 15(1)(e) (trust accounts); or
(c) subsection 21(1) (order to produce records, etc.);
the director may, by assessment under section 46, impose a penalty of not more than $200. for each day that the failure continues.
Penalty in addition to other fine or penalty
39(5) Each fee or penalty under this section is in addition to any other fee, fine or penalty that may be imposed under this Act.
S.M. 2005, c. 40, s. 85; S.M. 2007, c. 6, s. 83; S.M. 2008, c. 3, s. 75.
Director may waive interest or penalty or allow commission
40(1) If the director is satisfied that exceptional circumstances prevented a taxpayer from paying or remitting tax when it was due, the director may
(a) waive all or any part of
(i) the interest accruing on that tax, or
(ii) a penalty or fee imposed under section 39; and
(b) allow the payment of all or any part of the commission to which a vendor under The Retail Sales Tax Act has ceased to be entitled because of a late remittance of tax under that Act.
40(2) Within 60 days after giving the waiver or allowing the commission to be paid, the director must provide the minister with a written report setting out
(a) the name of the person to whom the waiver was granted or the commission was allowed to be paid;
(b) the reasons for the director's decision;
(c) the amount waived or paid; and
(d) the type of tax to which the waiver or payment relates.
S.M. 2005, c. 40, s. 85; S.M. 2007, c. 6, s. 84.
Sale or assignment of account receivable
41 When a collector or a deputy collector sells or assigns, otherwise than as security for an obligation of the collector or deputy collector, an account receivable arising from a transaction in respect of which the collector or deputy collector was required to collect and remit tax,
(a) the collector or deputy collector is deemed to have collected the tax remaining unpaid in respect of the transaction; and
(b) any amount collected by the purchaser or assignee on that account receivable is deemed not to be an amount collected as or on account of tax.
Tax debt not dependent on assessment
42(1) A person's liability for a tax debt exists and may be enforced against the person, whether or not it has been assessed under this Act.
Liabilities arising only by assessment
42(2) Despite subsection (1), the following liabilities arise only when they are assessed under section 46:
(a) a penalty imposed by the director under subsection 39(2) (failure to pay or remit tax) or (4) (failure to comply with director's order);
(b) a person's liability for a tax debt, or that part of a tax debt, that arises from the application of section 51 (general anti-avoidance rule) to a transaction or series of transactions;
(c) a person's liability under any of the following provisions for all or part of the tax debt of another person:
(i) subsection 14(5) (extra-provincial contractor),
(ii) section 43 (corporate director),
(iii) section 44 (non-arm's length transferee),
(iv) section 45 (purchaser on bulk sale),
(v) section 68 or 69 (failure to comply with third party demand),
(vi) section 73 (deemed trust),
(vii) subsection 2.3(9) of The Retail Sales Tax Act (interjurisdictional fleet vehicle).
Exception — liability not acknowledged by debtor
42(3) Despite subsection (1), a tax debt may not be enforced against a person until it has been assessed against the person under section 46, unless the person has acknowledged his or her liability for the tax debt or for the tax that resulted in the tax debt. For this purpose, a person acknowledges his or her liability for tax or a tax debt when the person, or the person's agent or legal representative,
(a) reports the tax liability;
(b) promises, in writing, to pay the tax or the tax debt;
(c) acknowledges the tax liability or tax debt in writing, whether or not a promise to pay can be inferred from the acknowledgment and whether or not it contains a refusal to pay; or
(d) pays or purports to pay an amount on account of the tax or the tax debt, even if it is by way of a negotiable instrument that is dishonoured.
S.M. 2005, c. 40, s. 85; S.M. 2008, c. 3, s. 76.
Corporate directors liable for corporation's tax debt
43(1) If a corporation fails to pay or remit when it is due
(a) any tax that it is required to collect and remit; or
(b) any tax payable by it under The Retail Sales Tax Act, if the tax was first assessed after May 10, 2000;
the persons who are directors of the corporation at that time are liable to pay the corporation's tax debt in respect of that failure. Subject to subsections (2) to (4), the tax debt may be enforced against any or all of those persons.
43(2) A person is not liable under subsection (1) if he or she exercised the degree of care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances to prevent the corporation's failure to pay or remit tax.
Limitation period for assessment
43(3) A person is not liable under subsection (1) unless an assessment is made under section 46 against the person while he or she is still a director of the corporation or within two years after he or she last ceased to be a director of the corporation.
43(4) A person is not liable under subsection (1) unless one of the following has occurred:
(a) the corporation, having been required to provide a bond under section 12, has failed to provide it or, having provided one, has failed to maintain it;
(b) the corporation has failed to remit tax or make reports as required by an order made under section 15;
(c) a tax debt warrant issued in respect of the tax debt has been executed by a sheriff, and the tax debt has not been fully paid;
(d) the corporation has been dissolved or has started liquidation or dissolution proceedings in any jurisdiction, and still has a tax debt after the director makes a claim for the payment of it;
(e) a receiver, trustee or other like person has taken control or possession of the corporation's property and the corporation's tax debt remains unpaid after the director makes a claim for the payment of it;
(f) the corporation has made an assignment, or a receiving order has been made against it, under the Bankruptcy and Insolvency Act (Canada), and the corporation's tax debt remains unpaid after the director makes a claim for the payment of it;
(g) a compromise or arrangement has been proposed under the Companies' Creditors Arrangement Act (Canada) or a proposal has been made under the Bankruptcy and Insolvency Act (Canada) in respect of the corporation;
(h) the corporation has failed to comply with an agreement for the payment of the tax debt;
(i) the corporation has been found guilty of an offence under subsection 76(2) (evasion) or (3) (refusal or neglect to pay or remit tax) that occurred while the person was a director of the corporation;
(j) the person has been found guilty of an offence under subsection 76(2) or under subsection 82(2) (director liable for offence by corporation) in relation to an offence by the corporation under subsection 76(2) or (3).
Director may allocate payments
43(5) For the purposes of this section, the director may apply
(a) a payment by the corporation to any tax debt of the corporation; and
(b) a payment by a director or former director of the corporation in respect of a tax debt of the corporation to that tax debt or to any part of it.
Rights of corporate director on payment of corporation's tax debt
43(6) A director or former director of a corporation who pays an amount on account of the corporation's tax debt, or makes a contribution to another director or former director of the corporation who paid such an amount, is entitled to recover the amount or contribution in one or more of the following ways:
(a) in a court of competent jurisdiction as a debt owing to the person by the corporation;
(b) by withholding that amount from any amount owing by the person to the corporation;
(c) by way of a contribution from the other directors or former directors of the corporation who are liable for the tax debt or would be liable for it if it were assessed against them under section 46.
43(7) Except to the extent that a corporation's tax debt is reduced by a payment by a director or former director of the corporation in respect of that debt, nothing in this section affects the corporation's liability for the tax debt.
Non-director functioning as corporate director
43.1(1) If the director has reason to believe that a person performed some or all of the functions of a director of a corporation, the director may, by written notice, request the person and the corporation to provide the records and information required by the director to confirm or rebut that belief.
43.1(2) Subject to subsection (3), the director may decide that a person performed some or all of the functions of a director of a corporation if
(a) the person or the corporation that has been requested to provide records or information to the director under subsection (1) fails or refuses to comply with the request within 30 days after being served with the request; or
(b) the records or information provided to the director under this section confirm that the person performed some or all of the functions of a director of the corporation.
Restrictions on director's decision
43.1(3) A decision under clause (2)(b) that a person performed some or all of the functions of a director of the corporation must not be based solely on
(a) the person's participating in the corporation's management under the direction or control of a shareholder, one or more directors or a senior officer of the corporation;
(b) the person's being a lawyer, accountant or other professional whose primary participation in the management of the corporation was the provision of professional services to the corporation;
(c) the corporation's being bankrupt and the person being a trustee in bankruptcy who participates in the management of the corporation or exercises control over its property, rights and interests primarily for the purposes of the administration of the bankrupt's estate; or
(d) the person's being a receiver, receiver manager or secured creditor who participates in the management of the corporation or exercises control over any of its property, rights and interests primarily for the purposes of enforcing a debt obligation of the corporation.
43.1(4) If the director decides under subsection (2) that a person performed some or all of the functions of a director of a corporation, the person is deemed to be a director of the corporation for the purposes of this Part for the period during which he or she performed those functions.
43.1(5) Immediately after making a decision under subsection (2), the director must serve a written notice of the decision on the corporation and the person to whom the decision relates.
Liability of transferee after non-arm's length transfer
44(1) If a tax debtor has, after March 8, 2005, transferred money or other property directly or indirectly, by means of a trust or by any other means, to or for the benefit of a person (referred to in this section as the "transferee")
(a) with whom the tax debtor, at the time of the transfer, is not dealing at arm's length; or
(b) who is under the age of 18 years;
the transferee is liable, upon assessment under section 46, for the transferor's tax debt to the extent provided for in subsection (2).
Limit of transferee's liability
44(2) The limit of the transferee's liability under subsection (1) is the total of
(a) the lesser of
(i) the transferor's tax debt at the time of the transfer, and
(ii) the amount, if any, by which the fair market value of the transferred property — including any transferred money — at the time of the transfer exceeds the fair market value at that time of the consideration given by the transferee for the transfer; and
(b) interest payable on that amount, calculated at the same rate that applies to the transferor's tax debt, from the date of the transfer to the date of payment.
44(3) For the purpose of this section,
(a) persons are deemed not to be dealing at arm's length with each other when they are deemed for the purposes of the Income Tax Act (Canada) not to be dealing at arm's length with each other; and
(b) despite clause (a), a person and his or her spouse or common-law partner, as defined in the Income Tax Act (Canada), are deemed to be dealing with each other at arm's length while they are living separate and apart by reason of a breakdown in their relationship, if they have been living separate and apart for that reason for a continuous period of at least 90 days.
44(4) A payment by the transferee in respect of the transferor's tax debt reduces the transferor's and the transferee's liability for the transferor's tax debt. A payment by the transferor reduces the transferee's liability only to the extent that it reduces the transferor's tax debt below the amount for which the transferee is liable.
44(5) Except to the extent that the transferor's tax debt is reduced by a payment by the transferee, nothing in this section affects the transferor's liability for the tax debt.
45(1) The following definitions apply in this section.
"buyer" means a person who acquires property from a seller on a sale in bulk. (« acheteur »)
"sale in bulk" means a sale, barter or exchange by a person (referred to as the "seller") of
(a) inventory outside the ordinary course of business of the seller; or
(b) tangible personal property used by the seller to carry on business, if it is sold, bartered or exchanged in connection with the seller ceasing to carry on the business or part of the business in which the property was used. (« vente en bloc »)
Seller to obtain tax certificate before sale in bulk
45(2) Before disposing of property through a sale in bulk, the seller must apply to the director for a certificate verifying that
(a) the seller has no tax debt; or
(b) arrangements satisfactory to the director for the payment of the seller's tax debt have been made.
45(3) When applying for the certificate, the seller must pay an application fee of $50.00.
45(4) The director must issue the certificate, in duplicate, upon
(a) being satisfied that the seller has no tax debt; or
(b) being satisfied with the arrangements made for the payment of the seller's tax debt.
Seller to provide certificate to buyer
45(5) The seller must provide one of the duplicate certificates to the buyer.
45(6) The buyer is liable, upon assessment under section 46, for the seller's tax debt as at the date of sale unless the buyer obtains the duplicate certificate from the seller. The debt may be enforced against the buyer, the seller or both.
45(7) If the buyer pays an amount in respect of the seller's tax debt, the buyer
(a) is entitled to recover the amount from the seller; and
(b) may withhold that amount from money owing to the seller, or recover it in a court of competent jurisdiction as debt owing by the seller to the buyer.
Tax debt discovered after certificate is issued
45(8) If after issuing a certificate to a seller under subsection (4) the director discovers, based on new information, a tax debt that was owing by the seller when the certificate was issued, the debt may be enforced against the seller but not against the purchaser who obtained a copy of the certificate.
S.M. 2005, c. 40, s. 85; S.M. 2006, c. 24, s. 82; S.M. 2007, c. 6, s. 85.
ASSESSMENT OF TAX DEBT
Assessment or reassessment of tax debt
46(1) The director may at any time make an assessment or reassessment of a person's tax debt or any part of a person's tax debt, which may consist of one or more of the following:
(a) the tax that a taxpayer is liable to pay or remit under a tax Act;
(b) interest;
(c) the 10% penalty imposed by subsection 39(1) (failure to pay or remit tax);
(d) any additional penalty imposed by the director under subsection 39(2) (failure to pay or remit tax by reason of neglect or carelessness);
(e) a penalty imposed by the director under subsection 39(4) (failure to comply with director's order);
(f) any fee or charge that has been or may be imposed under this Act or the regulations in respect of
(i) a dishonoured cheque or other negotiable instrument,
(ii) expenses incurred to collect a tax debt,
(iii) expenses incurred to inspect, audit or examine books and records at a place outside Manitoba;
(g) the tax debt or portion of the tax debt of a taxpayer for which another person is liable under one of the provisions referred to in clause 42(2)(c).
46(2) For greater certainty, an amount may be added to a taxpayer's tax debt without the amount being assessed under this section unless the provision under which it is charged or imposed only allows it to be charged or imposed by an assessment under this section.
Determination of taxable amount
46(3) In making an assessment or reassessment in respect of a purchase of tangible personal property or a taxable service under The Retail Sales Tax Act, the director may estimate the amount on which tax is payable if no purchase price or rental was paid or if, in the opinion of the director,
(a) the amount taken as the basis for calculating the tax was
(i) less than the fair market value of the property, service or product, or of the consideration given for it, or
(ii) in the case of tangible personal property or a taxable service, less than the fair value determined in accordance with that Act or the regulations under that Act; or
(b) the actual purchase price or rental cannot be determined.
46(4) In making an assessment or reassessment of a tax debt in respect of a matter or a period, if
(a) the taxpayer has failed to file an information return or to provide information on the basis of which the tax can be calculated; or
(b) in the opinion of the director, the return or information provided by the taxpayer is not substantiated by his or her records;
the director may estimate the amount of tax to be paid or remitted for that matter or period.
Tax deemed to have been collected
46(5) Subject to an appeal under Division 4, an amount included in an assessment or reassessment as an estimate under subsection (4) of tax collected and not remitted in respect of taxable transactions is deemed for the purposes of this Part to have been collected and not remitted, except to the extent that the tax debtor satisfies the director that
(a) the tax was remitted;
(b) the transactions did not occur or were not taxable; or
(c) the amount received by the tax debtor in respect of a taxable transaction is less than the tax required to be collected in respect of the transaction.
S.M. 2005, c. 40, s. 85; S.M. 2007, c. 6, s. 86; S.M. 2008, c. 3, s. 77.
Limits on assessment or reassessment
47(1) Subject to subsection (2), nothing prevents the director from
(a) making an assessment in respect of a period that includes another period in respect of which an assessment or reassessment was previously made; or
(b) making a reassessment in respect of a period or matter in respect of which an assessment or reassessment was previously made.
Limit on reassessment after appeal
47(2) After a taxpayer has served a notice of appeal of an assessment or reassessment on the Tax Appeals Commission, the director may only make a reassessment in respect of any matter or period covered by the assessment or reassessment under appeal if it is made on the basis of information that was not
(a) in any information return filed by the taxpayer; or
(b) otherwise provided by the taxpayer to the director;
before the date of the assessment or reassessment under appeal.
Notice of assessment or reassessment
48(1) Upon making an assessment or reassessment under section 46, the director must issue a notice of assessment or reassessment that states
(a) the name and address of the taxpayer in respect of whom the assessment or reassessment is made;
(b) a reference number and the date of the assessment or reassessment;
(c) the particulars of the tax debt, including
(i) the period or matter in respect of which the assessment or reassessment is made, and
(ii) the tax, interest and penalties comprising the tax debt;
(d) that the tax debt is payable within 30 days after the notice of assessment or reassessment is served on the taxpayer; and
(e) information about the taxpayer's right to appeal the assessment or reassessment under Division 4 (Appeals).
48(2) The director must cause the notice of assessment or reassessment to be served on the affected taxpayer or
(a) if the taxpayer is deceased or mentally incompetent, on his or her executor, committee or other legal representative;
(b) if the taxpayer is bankrupt, on the trustee in bankruptcy;
(c) if the taxpayer is a corporation that has been amalgamated with another corporation, on the amalgamated corporation; or
(d) if the taxpayer is a corporation that has been dissolved, on a person who was an officer or director of the corporation immediately before it was dissolved.
49 An assessment or reassessment is deemed to be correct unless
(a) it is rescinded or revised on appeal under Division 4; or
(b) it is replaced by a reassessment.
50 Within 30 days after a notice of assessment or reassessment is served on a taxpayer, the taxpayer must
(a) pay or remit the tax debt to the minister; or
(b) if the assessment or reassessment was based on an estimate,
(i) pay or remit the tax debt to the minister, or
(ii) pay or remit to the minister any other amount that the director, based on additional information provided by the taxpayer, accepts as being the amount of the tax debt.
ANTI-AVOIDANCE
51(1) The following definitions apply in this section.
"avoidance transaction" means a transaction
(a) that, but for this section, would result, directly or indirectly, in a tax benefit; or
(b) that is part of a series of transactions that, but for this section, would result, directly or indirectly, in a tax benefit,
but does not include a transaction that may reasonably be considered
(c) to have been undertaken or arranged primarily for bona fide purposes other than to obtain the tax benefit; or
(d) not to result directly or indirectly in a misuse of the provisions of any tax Act or an abuse having regard to the provisions of a tax Act read as a whole. (« opération d'évitement »)
"tax benefit" means a reduction, avoidance or deferral of tax or other amount payable under a tax Act or an increase in a refund of tax or other amount under a tax Act. (« avantage fiscal »)
"transaction" includes an arrangement or event. (« opération »)
51(2) The director may, by assessment or reassessment under section 46, determine or redetermine the tax consequences of an avoidance transaction, or of a series of transactions that includes an avoidance transaction, as is reasonable in the circumstances in order to deny a tax benefit that, but for this section, would result, directly or indirectly, from that transaction or from a series of transactions that includes that transaction.
51(3) Within 180 days after an assessment or reassessment in respect of a transaction or series of transactions is served on a person, any other person involved in the same transaction or series may, by written notice to the director, request the director to adjust, under subsection (2), tax consequences to the person of that transaction or series.
51(4) On receipt of the request, the director must consider the request and determine the tax consequences under subsection (2) to the person who made the request.
51(5) Without limiting the generality of subsection (2), in determining or redetermining the tax consequences to a person of a transaction or series of transactions under that subsection, the director may do one or more of the following:
(a) determine or redetermine the value or fair value of any thing;
(b) allow or disallow the deduction of an amount in computing a taxable amount, an exempt amount or the tax payable or refundable;
(c) recharacterize the nature of a payment, amount or transaction;
(d) ignore the tax effects that would otherwise result under a tax Act.
51(6) This section applies with respect to
(a) a tax benefit under The Retail Sales Tax Act or The Corporation Capital Tax Act that was obtained or sought to be obtained after March 10, 1992;
(b) a tax benefit under The Health and Post Secondary Education Tax Levy Act that was obtained or sought to be obtained after 1991; and
(c) a tax benefit that is obtained or sought to be obtained under any other tax Act after March 8, 2005.
52(1) The director may, upon written application, make an advance ruling regarding the application of section 51 in respect of a proposed transaction or series of transactions.
52(2) A person who applies for an advance ruling regarding the application of section 51 must pay the following fees:
(a) at the time of applying for the ruling, a minimum non-refundable fee of $300.;
(b) upon receiving the ruling or withdrawing the application for it, an additional fee of $60. per hour for time in excess of five hours spent in considering the application and, where applicable, preparing the ruling.
REFUND OF OVERPAYMENT
Refund of overpayment by taxpayer
53(1) A person is entitled to a refund, without interest, of an amount paid by the person as tax if
(a) the amount was not payable as tax and is not otherwise refundable under a tax Act; and
(b) the person applies to the director for the refund within two years after the day the amount was paid.
Refund of overpayment by collector
53(2) Subject to the provisions of a tax Act, a collector or deputy collector is entitled to a refund, without interest, of an amount remitted by him or her to the minister as or on account of tax if
(a) the amount was not required to be remitted by or under a tax Act and is not otherwise refundable under a tax Act; and
(b) the collector or deputy collector applies to the director for the refund within two years after the day the amount was remitted.
53(3) Subsections (1) and (2) do not apply to amounts paid or remitted as tax under The Retail Sales Tax Act.
53(4) No person has a right of action or other remedy against the government for the recovery of an amount paid or remitted as tax, unless the person is entitled under a tax Act to a refund of the amount.
Amounts under $10. not refundable
53(5) Despite subsections (1) and (2) and any other provision of a tax Act, no person is entitled to a refund of an amount that is less than $10.
S.M. 2005, c. 40, s. 85; S.M. 2006, c. 24, s. 83.
BAD DEBTS
53.1(1) The following definitions apply in this section.
"applicable tax Act" means the tax Act under which an amount was remitted by a collector on account of tax in relation to a sale or lease by the collector. (« loi fiscale applicable »)
"bad debt" means an amount that
(a) is owing to a collector as proceeds of a sale or lease by the collector to a person with whom the collector would be considered, in relation to that sale or lease, to be dealing at arm's length for the purposes of the Income Tax Act (Canada); and
(b) the collector has written off, in accordance with generally accepted accounting principles, as a bad debt in his or her books of account. (« créance irrécouvrable »)
"collector" includes a deputy collector. (« collecteur »)
"proceeds", in relation to a sale or lease by a collector, means the total of
(a) the consideration paid or payable by the buyer or lessee to the collector;
(b) the amount paid or remitted by the collector on account of tax under the applicable tax Act in respect of the sale or lease; and
(c) all levies, duties and taxes — other than taxes under the tax Acts — imposed by any level of government and paid or payable by the buyer to the collector in respect of the sale or lease.
It does not include interest or costs incurred to collect the proceeds. (« produit »)
Deduction for tax remitted in respect of bad debt
53.1(2) Subject to subsections (4) and (7), after an amount owing to a collector becomes a bad debt, the collector may deduct from the tax that he or she is otherwise required to remit under the applicable tax Act the amount determined by the following formula:
D = (T × B / P) − A
In this formula,
D
is the amount deductible by the collector;
T
is the amount remitted on account of tax under the applicable tax Act by the collector in respect of the sale or lease to which the bad debt relates;
B
is the amount of the bad debt;
P
is the total proceeds of the sale or lease to which the bad debt relates;
A
is the total of all amounts previously deducted or refunded under this section or under the applicable tax Act in respect of the bad debt.
Refund of tax remitted in respect of bad debt
53.1(3) The minister may, on application by a collector entitled to deduct an amount under subsection (2), refund all or any part of the amount to the collector.
Time limit for deduction or application for refund
53.1(4) A deduction under subsection (2) or an application for a refund under subsection (3) in respect of a bad debt cannot be made more than two years after the day the amount became a bad debt.
53.1(5) If at any time all or part of a bad debt owing to a collector is recovered, the collector must report and remit to the minister on account of tax under the applicable tax Act, on or before the 20th day of the month after the month in which the recovery is made, the amount determined by the following formula:
R = A × B / C
In this formula,
R
is the amount to be remitted;
A
is the total of all amounts previously deducted or refunded under this section or the applicable tax Act in respect of the bad debt;
B
is the amount of the bad debt that was recovered at that time;
C
is the amount of the bad debt that was owing before the recovery.
53.1(6) For the purpose of subsection (5), any amount recovered by a collector in relation to a bad debt — even if it is recovered as interest or as a late payment fee, a charge for debt collection or any other fee or charge — must be applied first as a payment on account of the bad debt.
53.1(7) If an amount owing to a collector became a bad debt before April 4, 2007, no amount is deductible under subsection (2) in respect of that debt unless it would have been deductible under the applicable tax Act before that date.
DIVISION 4
APPEALS
Appeals do not affect tax debt obligations
54 Neither the making of an appeal under this Division nor any delay in the conduct of an appeal in any way affects or limits
(a) the liability of a person to pay tax or to collect and remit tax;
(b) the date by which tax becomes payable or is required to be paid or remitted;
(c) the accrual of interest on a tax debt;
(d) the imposition of a penalty; or
(e) any action or right to take any action to collect a tax debt under Division 5 (Tax Debt Recovery).
Appeal to Tax Appeals Commission
55 A taxpayer may appeal an assessment or reassessment made under section 46 to the Tax Appeals Commission. The right of appeal is limited to the amounts assessed or reassessed under clauses 46(1)(a), (d), (e) and (g).
56(1) An appeal to the Tax Appeals Commission must
(a) be in writing and signed by the taxpayer;
(b) state the name of the taxpayer and include a copy of the assessment or reassessment being appealed;
(c) state which amounts are in dispute and, in each case, how much of the amount is in dispute;
(d) state the reasons for the appeal and provide documentary evidence substantiating the taxpayer's position; and
(e) be served on the Tax Appeals Commission and the director within 90 days after the notice of assessment or reassessment was served on the appellant.
56(2) If authorized to do so by the taxpayer in writing, another person may act on behalf of the taxpayer