|
Tax
and Revenue Administration
Alberta
Corporate Tax Act
Information
Circular CT-9 |
| Last Reviewed: |
January 1996 |
| Produced by: |
Alberta Finance and Enterprise, Tax
and Revenue Administration |
| For more information: |
tra.revenue@gov.ab.ca |
CT-9 / January 1996
ALBERTA
CORPORATE TAX ACT INFORMATION CIRCULAR:
ALBERTA CORPORATE INCOME TAX COLLECTIONS
This Information Circular discusses the collections policies and procedures of Alberta Finance and Enterprise, Tax and Revenue Administration ("TRA") relating to assessed income tax balances
due. The topics discussed include:
- Section 46 of the Alberta Corporate Tax Act (the "Act") states that amounts
owing after the assessment of a return must be paid without delay by the corporation to
the Provincial Treasurer. For details on disputed assessments see paragraph 12.
- Interest accrues on any outstanding balance from the date of assessment to the date it
is satisfied. If the corporation pays the amount owing in full within 35 days of
the date the notice of assessment was mailed, no further interest charges will accrue. If
the assessed balance is not paid in full within 35 days, interest is charged from the date
of assessment on the account balance. (For a discussion of interest charges prior to
assessment, see Information Circular CT-4, "Interest and
Penalties".)
- For taxation years ending after June 30, 1994, certain corporations are exempt from
filing an Alberta Corporate Income Tax Return. (For details, please refer to Information Circular CT-2, "Filing Requirements".) If a
corporation does not file a return and is ultimately found to be taxable for a taxation
year, interest will be charged from the date the tax should have been paid.
- If payment is not received within 35 days following assessment, TRA will normally send a
reminder notice to the corporation. If TRA does not receive an appropriate response, a
demand for payment will be mailed to the corporation. This demand will inform the
corporation that legal action may result if payment, or satisfactory arrangements for
payment, are not made within the time period stated in the demand.
- Failure by a corporation to pay the amount owing may result in action by TRA to seize
assets or "garnishee" amounts owing to the corporation. As set out below, this
action can be taken without first having a court hearing.
- Section 58 of the Act allows TRA to register a certificate of the amount owing with the
Court of Queen's Bench. The certificate has the same force and effect as a judgment of the
court. Once a certificate is registered, TRA can register a writ and proceed to seize the
corporation's assets. Costs related to the action and interest are recoverable from the
corporation in addition to the amount of the debt registered.
- Section 60(1) of the Act allows TRA to intercept monies owed to the corporation by a
third party. This is done by serving a third-party notice on the person who owed the funds
to the corporation, requiring that the funds be sent to TRA instead of to the corporation.
Whereas the funds under a garnishee issued pursuant to a judgment are paid to the court,
under this provision the funds must be paid directly to TRA and TRA does not share the
funds received with judgment creditors. If the third party fails to pay the funds to TRA,
and makes payment to someone else instead, then the third party becomes liable for the
amount it should have paid to TRA and it will have to try to retrieve the money it paid in
error to the other party. A third-party demand may be served personally or by registered
mail on that person.
- Corporations that are unable to pay as required and that seek a time extension must
contact the Collections Unit of Tax and Revenue Administration. TRA may grant a short-term
arrangement for payment if it is satisfied that immediate payment in full is not feasible
and the amount owing is for the corporation's most recently completed taxation year. An
extension will not be granted unless TRA is convinced that immediate payment would cause
extreme hardship. Interest continues to accrue on the unpaid balance.
- If a corporation is unable to make immediate full payment, TRA may request security for
the amount owing. The acceptance of security by TRA does not relieve the corporation of
the obligation to pay amounts owing in accordance with any arrangements agreed to by TRA.
The full cost of providing security is borne by the corporation and interest continues to
accrue on the unpaid balance.
- If a corporation requests the surrender of security held by TRA, it must do so in
writing. Security accepted may be surrendered to the extent that its value exceeds amounts
owing by the corporation.
- If a corporation's account for a particular taxation year is in a credit balance, the
overpayment will be applied against any amounts owing for other taxation years, including
amounts under collection arrangements, amounts for which security has been provided and
amounts under objection. Only the remainder of the overpayment after all liabilities are
cleared will be refunded to the corporation.
- Formal collection action (as discussed below) to collect an amount in dispute may not
be started until the corporation has had the benefit of an impartial hearing, if it wants
it. Formal collection action will not normally be started:
a) within 90 days of mailing the Notice of Assessment respecting an unpaid amount;
b) during the period an objection is under consideration by the
Minister of Finance;
c) within 90 days of mailing the notice that the
Minister of Finance has confirmed or
varied the assessment respecting the amount in dispute; and
d) if the corporation has appealed to the Court, before the day on which the judgment
of the Court takes effect.
Any undisputed amounts are subject to normal collection action.
- The formal collection actions which are precluded during these periods are:
a) commencement of legal proceedings in a court;
b) garnishments or third-party demands; and
c) certifications of amounts owing.
- An exception may occur if, in the Minister of Finance's opinion, the collection of the
amount in dispute would be jeopardized by delay. In such a case, the Minister of Finance
will request authorization from the court to proceed with collection action. Upon approval
of the court, the collection of any amount assessed may then be enforced.
- For taxation years ending after June 30, 1994, the federal resolution of objections and
appeals will be binding on Alberta in respect to Alberta assessments, or the portions
thereof, that are strictly parallel to federal assessment action. This means that, in such
a case, a corporation is no longer required to file a notice of objection or appeal with
Alberta when it has filed a federal objection or appeal. However, a copy of the federal
notice of objection or appeal may have to be submitted to TRA to forestall any possible
legal action to collect unpaid balances that relate to the items under objection or
appeal. TRA will then not take legal action to collect the disputed portion of the
assessment unless the amount is in jeopardy as described in paragraph 12.
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