and Revenue Administration
Fuel Tax Act
Information Circular FT-8
||February 9, 2017
||Alberta Treasury Board and Finance,
Tax and Revenue Administration
|For more information:
FUEL TAX ACT INFORMATION CIRCULAR:
(Effective April 1, 2007)
NOTE: This Information Circular is intended to explain
legislation and provide specific information. Every effort has been
made to ensure the contents are accurate. However, if a discrepancy
should occur in interpretation between this Information Circular
and governing legislation, the legislation takes precedence.
The Government of Alberta recognizes that many First Nations people and communities in the province prefer not to describe themselves as Indians/Indian bands. These terms have been used where necessary to reflect their legal meaning in the federal Indian Act.
This Information Circular explains Tax and
Revenue Administration's (TRA) collection process for assessed fuel
tax balances and other amounts owing under the Alberta Fuel
Tax Act (the Act). Topics include:
- ”Person” includes an individual, corporation, partnership, trust
or an Indian band.
- TRA normally sends a reminder notice to a person that does not
make payment within 30 days of assessment. If TRA does not receive
an appropriate response, a demand for payment may be mailed to
the person. This demand will inform the person that legal action
may result if payments, or satisfactory arrangements for payment,
are not made within the time period stated in the demand.
- Persons who are unable to pay as required and seek a time extension
must contact the Collections Unit of TRA. An extension will not
usually be granted unless TRA is convinced that immediate payment
would cause extreme hardship. Interest continues to accrue on
the unpaid balance.
- If a person 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 person from the obligation to pay
amounts owing according to any arrangements agreed to by TRA.
The full cost of providing security is borne by the person and
interest continues to accrue on the unpaid balance.
- Requests for return of security held by TRA must be made in
writing. Security may be returned to the extent that its value
exceeds amounts owing by the person.
- If, pursuant to the Act, a person has a refund due from TRA,
and that person also has a debt with TRA, or with another Alberta
government department, TRA may apply the whole, or any part of,
the refund due to the person against the debt, instead of providing
a refund to the person.
Certificate of amount not paid
- TRA may 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 person's assets.
Costs related to the action, and interest, are recoverable from
the person, in addition to the amount of the debt registered.
- TRA may register a certificate before the 30 days allowed for
payment of an assessment elapses. To do so, TRA must file an application
with the Court of Queen's Bench demonstrating that there are reasonable
grounds to believe that the collection of all, or any, amount
assessed against a person would be jeopardized by a delay in collection.
Generally, TRA must serve an authorization granted on the person
within 72 hours of it being granted. The authorization must be
served personally or in accordance with the directions, if any,
of a judge.
Third party demands
- Where TRA has knowledge or suspects that a third party is, or
will be, liable within one year to make a payment to a person,
TRA may intercept payments the third party makes to the person.
- If TRA has knowledge or suspects that within 90 days an institution
will lend or advance money to, make payment on behalf of, or make
a payment for a negotiable instrument issued by, a person, TRA
may intercept amounts lent, advanced, or paid by the institution
to the person. For this purpose institution means a bank, credit
union, trust corporation, loan corporation, or other similar entity.
- If TRA has knowledge or suspects that within 90 days a person,
other than an institution (lender), will lend or advance money
to, or make payment on behalf of, a person, and the person is:
- employed by, or is engaged in providing services
or property to, the lender, or was or will be, within 90 days,
so employed or engaged; or
- in the case of a corporate lender, not dealing
at arm's length with the corporate lender,
TRA may intercept amounts lent, advanced or paid by the lender
to the person.
- To intercept amounts, TRA must serve a notice, in writing, on
the third party, institution or lender requiring that the funds
be sent to TRA rather than to the person. A third-party demand
may be served on the person by personal service, fax, registered
or regular mail.
- Whereas the funds under a garnishee issued under a judgment
are paid to the court, under a third party demand the funds must
be paid directly to TRA and TRA does not share the funds received
with judgment creditors. If a third party, institution or lender
fails to pay the funds to TRA and makes payment to someone else,
then the third party, institution or lender becomes liable for
the amount that should have been paid to TRA and will have to
retrieve the money paid in error to the other party.
- After service of a notice, the institution is not permitted
to set off amounts owing from the person to the institution against
the person's assets held by the institution.
THIRD PARTY LIABILITY
Transfers by insolvent person
- If a person who owes an amount under the Act (debtor) transfers
property to a person (transferee) with whom the debtor does not
deal at arm's length at the time of the transfer, and the debtor
- insolvent, or
- becomes insolvent as a result of the transfer,
- becomes insolvent because of the transfer together
with one or more other transactions with the transferee,
the transferee is jointly and severally liable with the debtor
to pay the amount owing to TRA, to the extent that the fair market
value of the property transferred exceeds the consideration given
for the property.
- Back to back transfers of property amongst non-arm's length
persons are included under these provisions as well. However,
it must be reasonable to conclude that a subsequent transfer was
undertaken to prevent the enforcement of these provisions. A transferee
cannot avoid liability under these provisions by simply transferring
the property on to another non-arm's length person. Each non-arm's
length person in the series of transfers will become jointly and
severally liable with the debtor to pay the amount owing to TRA.
- Where a corporation does not remit tax payable by it, the directors
of the corporation (at the time the corporation was required to
remit the tax) are jointly and severally liable, together with
the corporation, to pay the tax owing and any related penalties
and interest (the debt).
- If a director exercised due diligence to ensure that the corporation
remitted the tax, that director is not liable for the debt.
- TRA may not take action to collect a debt from a director until:
- TRA has made all reasonable attempts to collect
the amount from the corporation; and
- the director has been notified in writing, within
two years after ceasing to be a director, of that director's
- To demonstrate its inability to recover a debt from a corporation,
- show that a certificate for the corporation's liability
has been filed in the Court (see paragraph 7) and after execution
of the certificate the debt remains unsatisfied, in whole
or in part;
- prove a claim against the corporation in dissolution
- prove a claim against the corporation in bankruptcy;
- show that a compromise or an arrangement has been
proposed under the Companies' Creditors Arrangement Act
(Canada) in respect of the corporation.
- A “responsible representative” is a person who administers,
winds up, controls, or otherwise deals with the property or business
of another person. A responsible representative can be a trustee
in bankruptcy, assignee, liquidator, administrator, receiver,
receiver-manager or any similar person.
- Under the Act, a responsible representative has to obtain a
clearance certificate from TRA before distributing property that
the responsible representative controls as a responsible representative.
A clearance certificate certifies that all amounts for which a
person is, or can reasonably be expected to become, liable under
the Act at, or before the time of distribution, have been paid,
or that TRA has accepted security for payment.
- If a responsible representative distributes property without
a certificate, that responsible representative is personally liable
for a penalty equal to the value of the property distributed and
TRA may assess that responsible representative for this amount.
- The certificate applies to amounts for which the responsible
representative is, or may become, liable for payment. This includes
all fuel taxes and/or other amounts owing, along with any interest