BILL 53 – 2004
INTERNATIONAL FINANCIAL ACTIVITY ACT

Contents

 
HER MAJESTY, by and with the advice and consent of the Legislative Assembly of the Province of British Columbia, enacts as follows:

 
Part 1 -- Definitions, Interpretation and Application

Definitions

1 In this Act:

"active business" has the same meaning as in section 248 (1) of the federal Act;

"assess", in respect of assessing a penalty against a person under section 29 [assessment of administrative penalty], includes reassess;

"business" has the same meaning as in section 248 (1) of the federal Act;

"claimant" means

(a) a registered corporation or a corporation that previously was a registered corporation,

(b) an IFA specialist or an individual who previously was an IFA specialist, or

(c) in the definition of "claimant information" and in sections 46 [attachment] and 58 [communication of information], any other person assessed a penalty under section 29 [assessment of administrative penalty] or a director liable to pay an amount under section 48 [liability of directors];

"claimant information" means information of any kind and in any form relating to one or more claimants

(a) that is obtained for the purposes of this Act by or on behalf of the minister, or

(b) that is prepared from information referred to in paragraph (a),

but does not include information that does not directly or indirectly reveal the identity of the claimant to whom the information relates;

"commissioner" means the Commissioner of Income Tax;

"determine", in respect of determining the amount of any tax refund, interest payable on a tax refund under section 33 [interest on tax refunds and refundable fee] or interest payable by a person under section 35 [interest on recoverable amount], includes redetermine;

"federal Act" means the Income Tax Act (Canada);

"IFA specialist" means an individual registered under section 14 [registration of IFA specialist];

"international financial activity" means an international financial activity under section 2;

"international financial business" means a business

(a) that is carried on by a corporation

(i) through a fixed place of business in British Columbia, and

(ii) as part of an active business of the corporation, and

(b) all the activities of which are international financial activities;

"non-resident" has the same meaning as in section 248 (1) of the federal Act;

"person" has the same meaning as in section 248 (1) of the federal Act and includes a partnership;

"property" has the same meaning as in section 248 (1) of the federal Act;

"recoverable amount" means

(a) the amount a person is liable to pay to the government under section 34 [liability for recoverable amount], or

(b) in sections 41 to 45, 47, 49, 50 and 58, the amount a director is liable to pay to the government under section 48 [liability of directors];

"registered corporation" means a corporation that is registered under section 10 [registration] and whose registration is not suspended or cancelled;

"report" means a report under section 26 [report respecting IFA specialists];

"return" means a return under section 24 [return];

"Society" means the IFC International Financial Centre Society of Vancouver;

"tax refund" means a tax refund under this Act;

"transaction" includes an arrangement or event.

International financial activity

2 (1) In this section:

"non-resident broker" means a non-resident person who

(a) is authorized under the laws of a foreign jurisdiction to trade in securities as principal or agent,

(b) is not registered under the Securities Act and is not authorized under a similar law of another province to trade in securities as principal or agent, and

(c) is not related to a corporation that is registered under the Securities Act or authorized under a similar law of another province to trade in securities as principal or agent;

"non-resident person" does not include a partnership unless all of the partners of the partnership are non-resident persons;

"securities corporation" means

(a) a savings institution, or

(b) a corporation registered under the Securities Act as a dealer or underwriter.

(2) Subject to subsections (3) to (5), any of the following is an international financial activity of a corporation:

(a) accepting deposits in any currency

(i) from a non-resident person, or

(ii) in respect of a prescribed business from a person carrying on the business;

(b) making deposits in any currency

(i) with a non-resident person, or

(ii) in respect of a prescribed business with a person carrying on the business;

(c) making loans in any currency

(i) to a non-resident person, or

(ii) in respect of a prescribed business to a person carrying on the business;

(d) borrowing in any currency

(i) from a non-resident person, or

(ii) in respect of a prescribed business, from a person carrying on the business;

(e) guaranteeing the payment of a debt if all of the debtors or creditors are non-resident persons;

(f) if the corporation is a savings institution,

(i) issuing and accepting letters of credit, or

(ii) handling documentary collections,

in respect of a transaction of which not more than one party is resident in Canada;

(g) acting

(i) if the corporation is a securities corporation,

(A) as principal in making or offering to make with a non-resident person an agreement for acquiring, disposing of, subscribing for or underwriting securities, or

(B) as agent for a person resident in Canada in making or offering to make with a non-resident person an agreement for acquiring, disposing of, subscribing for or underwriting securities, except securities that are listed on a stock exchange prescribed in section 3200 of the Income Tax Regulations (Canada),

(ii) if the corporation is not a securities corporation, as principal in making or offering to make with a non-resident person an agreement for acquiring or disposing of securities for a prescribed purpose, or

(iii) as agent for a non-resident person in making or offering to make with a person resident in Canada or another non-resident person an agreement for acquiring, disposing of, subscribing for or underwriting securities;

(h) insuring or reinsuring prescribed risks

(i) of, or relating to, non-resident persons, and

(ii) relating to property situated or events occurring outside of Canada;

(i) providing financial advice, other than prescribed financial advice, to non-resident persons;

(j) dealing in foreign exchange other than on the corporation's own account, if the corporation is

(i) a savings institution,

(ii) a corporation whose primary business is dealing in foreign exchange, or

(iii) a prescribed corporation;

(k) managing, for a fee or commission, foreign exchange activities for non-resident persons;

(l) managing, for a fee or commission, investments for non-resident persons;

(m) managing, for a fee or commission and for persons resident in Canada, investments in securities that are issued by a non-resident person and that are not listed with a stock exchange prescribed in section 3200 of the Income Tax Regulations (Canada);

(n) preparing stock market or other financial research, other than prescribed financial research, for the exclusive use of non-resident persons;

(o) collecting trade accounts that

(i) are receivable from a non-resident person, and

(ii) have been bought outright from the seller and without recourse to the seller;

(p) leasing property to a non-resident person by means of a direct financing lease, as defined in the Handbook of The Canadian Institute of Chartered Accountants, as amended from time to time;

(q) selling, assigning or licensing rights to a non-resident person

(i) to distribute outside of Canada a film or television production, other than a prescribed production, or

(ii) to exploit outside of Canada any thing related to the production;

(r) providing, to a non-resident person, administrative support services, other than prescribed administrative support services, that are directly related to a financial activity of the non-resident person;

(s) providing, to a non-resident person, services, equipment and premises for continuing the business operations of the non-resident person if primary equipment or premises used by the non-resident person becomes temporarily non-operational;

(t) any other prescribed financial activity that is conducted exclusively for non-resident persons and from which the corporation earns fee or commission income.

(3) An activity referred to in subsection (2) (f), (h) and (j) (ii) and (iii) is not an international financial activity unless the corporation carries on the activity for, with or on behalf of a person who is dealing at arm's length with and who is not affiliated with the corporation.

(4) Subsection (3) does not apply in respect of subsection (2) (h) if the corporation is registered as a captive insurance company under the Insurance (Captive Company) Act.

(5) An activity referred to in subsection (2) (g) is not an international financial activity if the corporation is acting in respect of securities of the capital stock of

(a) the corporation, or

(b) a person affiliated with the corporation.

(6) For the purposes of subsection (2) (g) (i) and (ii), if a corporation is acting as principal or agent in making or offering to make an agreement referred to in that subsection with a non-resident broker acting as agent for another person, the non-resident broker is deemed to be the non-resident person.

Amounts fixed by assessment or determination

3 A reference in this Act to an amount, in respect of a claimant, under the Income Tax Act or federal Act that is fixed, subject to variation on objection or on appeal, by assessment, reassessment, determination or redetermination in accordance with the Income Tax Act or federal Act is a reference to that amount as fixed in accordance with the applicable Act.

Dealing at arm's length and affiliated persons

4 Sections 251 and 251.1 of the federal Act apply for the purposes of this Act.

Resident in Canada

5 Section 250 of the federal Act applies for the purposes of this Act.

Series of transactions

6 For the purposes of this Act, a series of transactions is deemed to include any related transactions completed in contemplation of the series.

Taxation year

7 The taxation year under this Act for a corporation or individual is the same as the taxation year under the federal Act for the corporation or individual.

Application

8 (1) If a corporation is a registered financial institution under the International Financial Business (Tax Refund) Act on August 31, 2004, this Act applies to the corporation only for taxation years beginning on or after September 1, 2004.

(2) This Act applies to an individual for taxation years beginning on or after January 1, 2005.

 
Part 2 -- Registration

 
Division 1 -- Corporations

Application for registration

9 (1) A corporation that meets all of the following requirements may apply to the commissioner for registration:

(a) the corporation was incorporated in Canada and, since that incorporation, has not been continued, amalgamated or otherwise transferred by a similar process into a foreign jurisdiction;

(b) the corporation must have in British Columbia a permanent establishment, as defined in section 400 (2) of the Income Tax Regulations (Canada);

(c) the corporation must not be exempt under section 27 [exemptions] of the Income Tax Act from paying tax under that Act;

(d) any other prescribed requirements.

(2) The corporation must submit to the commissioner

(a) an application for registration in the form and containing the information required by the commissioner,

(b) with the application, any other information or records required by the commissioner, and

(c) with the application, the prescribed fee.

(3) The commissioner may

(a) request any additional information or records, and

(b) make any inquiries,

the commissioner considers necessary for the evaluation of the application.

Registration

10 (1) Subject to section 12 (1) (b) and (c), if the commissioner is satisfied that the corporation meets the requirements of and complies with section 9, the commissioner must register the corporation and serve a notice of registration on the corporation.

(2) Subject to subsection (3), if 2 or more corporations amalgamate, within the meaning of section 87 (1) of the federal Act, and at least one of the predecessor corporations was, immediately before the amalgamation, a registered corporation, the commissioner may register the new corporation if

(a) within 90 days of the date of amalgamation, the new corporation submits to the commissioner

(i) a notice in the form and containing the information required by the commissioner, and

(ii) any other information or records required by the commissioner, and

(b) the commissioner is satisfied the new corporation meets the requirements of section 9 (1).

(3) If 2 or more corporations amalgamate, within the meaning of section 87 (1) of the federal Act, and all of the predecessor corporations were, immediately before the amalgamation, registered corporations, the commissioner must register the new corporation after the new corporation submits to the commissioner

(a) a notice in the form and containing the information required by the commissioner, and

(b) any other information or records required by the commissioner.

(4) Registration under this section is effective,

(a) if the corporation is registered under subsection (1), on the date the commissioner determines the corporation met the registration requirements, but that date must not be before the corporation applied for registration,

(b) if the corporation is registered under subsection (2), on the date the commissioner determines the corporation met the registration requirements, but that date must not be before the date of amalgamation, or

(c) if the corporation is registered under subsection (3), on the date of amalgamation.

(5) If the commissioner does not register a corporation that applies for registration or submits a notice under subsection (2), the commissioner must serve a notice of refusal of registration on the corporation.

Conditions of registration

11 (1) A registered corporation must do all of the following:

(a) continue to meet the requirements of section 9 (1) [application for registration];

(b) subject to subsection (2), continue to carry on an international financial business;

(c) subject to subsection (3), remain a member of the Society.

(2) If the corporation does not carry on an international financial business on the date the corporation is registered, the corporation must establish an international financial business within 90 days after the date the notice of registration is served on the corporation.

(3) If the corporation is not a member of the Society on the date the corporation is registered, the corporation must become a member of the Society within 90 days after the date the notice of registration is served on the corporation.

Suspension or cancellation of registration and refusal to register

12 (1) The commissioner may

(a) suspend or cancel the registration of a corporation if the commissioner is satisfied that the corporation has failed

(i) to remain a member of the Society,

(ii) to keep records of account in accordance with section 52 [records of account], or

(iii) to pay the amount payable under subsection (6),

(b) suspend or cancel the registration of a corporation or refuse to register the corporation if the commissioner is satisfied that the corporation or, except with respect to subparagraph (iii), an officer or director of the corporation has

(i) supplied false or misleading information or records to the commissioner,

(ii) failed to supply information or records when the information or records are required under this Act,

(iii) contravened section 11 (1) (a) or (b) [conditions of registration], or

(iv) committed an offence under section 62 [offences], or

(c) cancel the registration of a corporation or refuse to register the corporation if the corporation or an officer or director of the corporation

(i) engages or has engaged in a pattern of conduct that shows, in the commissioner's opinion, that the corporation is unfit to be registered, or

(ii) has been convicted of an offence under

(A) this Act or any other enactment, or

(B) a law enacted by the government of Canada, another province or a foreign jurisdiction

for conduct that shows, in the commissioner's opinion, that the corporation is unfit to be registered.

(2) If the commissioner suspends the registration of a corporation,

(a) the commissioner may

(i) impose conditions that the corporation must satisfy before the suspension is lifted, or

(ii) suspend the registration for a period of time

but, in any case, may not suspend the registration for more than 2 years, and

(b) the commissioner must serve a notice of suspension on the corporation.

(3) If a corporation fails to satisfy conditions imposed under subsection (2) within the 2 year period referred to in that subsection, the registration of the corporation is cancelled at the end of the 2 year period.

(4) If the commissioner cancels the registration of a corporation,

(a) the registration is deemed to have been cancelled on

(i) the first day of the taxation year in which the grounds for the cancellation occurred, or

(ii) the day the corporation was registered if the corporation was registered in the taxation year in which the grounds for the cancellation occurred, and

(b) the commissioner must serve a notice of cancellation on the corporation.

(5) If the commissioner refuses to register a corporation, the minister must pay, out of the consolidated revenue fund, the refundable amount of the fee referred to in section 9 (2) (c) [application for registration].

(6) If the commissioner's decision to refuse to register a corporation is overturned on appeal and the minister has refunded the refundable amount of the fee referred to in section 9 (2) (c), the corporation, within 60 days of the decision on appeal, must pay the amount of the fee that was refunded.

 
Division 2 -- Individuals

Application for registration

13 (1) A registered corporation or a corporation that has applied for registration may apply to the commissioner for the registration of an individual who meets all the following requirements:

(a) the individual is a specialist in an international financial activity other than an activity referred to in section 2 (2) (r) and (s) [international financial activity];

(b) the individual has entered into a written employment contract with the corporation that requires the individual to devote at least 70% of the individual's working time to performing, for the corporation's international financial businesses, international financial activities, other than activities referred to in section 2 (2) (r) and (s), in which the individual is a specialist;

(c) the individual was

(i) non-resident immediately before entering into the written employment contract with the corporation, or

(ii) previously an IFA specialist;

(d) the individual meets any other prescribed requirements.

(2) The corporation must submit to the commissioner on behalf of the individual

(a) an application for registration in the form and containing the information required by the commissioner, and

(b) with the application, any other information or records required by the commissioner.

(3) The commissioner may

(a) request any additional information or records, and

(b) make any inquiries,

the commissioner considers necessary for the evaluation of the application.

Registration of IFA specialist

14 (1) Subject to sections 15 (2) and 16, if the commissioner is satisfied that the individual meets the requirements of section 13 and the corporation complies with section 13, the commissioner must register the individual as an IFA specialist and serve a notice of registration on the individual and the corporation.

(2) An individual registered under subsection (1) is registered only in respect of employment with

(a) the corporation that applied to the commissioner to register the individual, and

(b) a corporation registered under section 10 (2) or (3) [registration -- corporations], if the corporation referred to in paragraph (a) of this subsection is a predecessor corporation to the corporation registered under section 10 (2) or (3).

(3) Registration under this section is effective on the later of

(a) the date the corporation applies for registration of the individual,

(b) the date the individual begins employment with the corporation, and

(c) the date the corporation becomes registered under section 10.

(4) If the commissioner does not register an individual for whom an application is made, the commissioner must serve a notice of refusal of registration on the individual and on the corporation.

Suspension or cancellation of registration and refusal to register

15 (1) The commissioner may cancel the registration of an individual if the commissioner is satisfied that the individual, or another person in respect of the individual, has

(a) supplied false or misleading information or records to the commissioner,

(b) failed to supply information or records when the information or records are required under this Act, or

(c) committed an offence under section 62 [offences].

(2) The commissioner may cancel the registration of an individual or refuse to register an individual if the individual

(a) engages or has engaged in a pattern of conduct that shows, in the commissioner's opinion, that the individual is unfit to be registered, or

(b) has been convicted of an offence under

(i) this Act or any other enactment, or

(ii) a law enacted by the government of Canada, another province or a foreign jurisdiction

for conduct that shows, in the commissioner's opinion, that the individual is unfit to be registered.

(3) If the commissioner suspends the registration of the corporation that employs an individual registered under section 14,

(a) the registration of the individual is suspended at the time the corporation's registration is suspended until the suspension of the corporation ends or the registration of the individual is cancelled, and

(b) the commissioner must serve a notice of suspension on the individual.

(4) If the commissioner cancels the registration of the corporation that employs an individual registered under section 14, the commissioner must cancel the registration of the individual.

(5) If the commissioner cancels the registration of an individual under subsection (2) or (4),

(a) the registration is deemed to have been cancelled on

(i) the first day of the taxation year in which the grounds for the cancellation occurred, or

(ii) the day the individual was registered if the individual was registered in the taxation year in which the grounds for the cancellation occurred, and

(b) the commissioner must serve a notice of cancellation on the individual and the corporation that employs the individual.

Maximum registration period

16 (1) An individual

(a) who was previously an IFA specialist may not be registered under section 14 after, or

(b) if registered under section 14 ceases to be registered

5 years after the date the individual was first registered under that section.

(2) Subsection (1) applies despite any suspension or cancellation of the individual's registration.

 
Part 3 -- Tax Refund

 
Division 1 -- Registered Corporations

Tax refund

17 A corporation that was a registered corporation at any time in a taxation year may claim a tax refund for the taxation year in the amount calculated by the following formula:

tax refund = eligible proportion × net tax payable

where

Eligible proportion of income

18 (1) Subject to subsection (2), a corporation's eligible proportion of income for a taxation year is the lesser of one and the proportion calculated by the following formula:

where

(2) A corporation's eligible proportion of income for a taxation year is zero if the corporation's adjusted income, BC taxable income, federal taxable income or total adjusted IFB income is zero or less than zero.

Total adjusted IFB income

19 (1) A corporation's total adjusted IFB income for a taxation year is the total of all amounts, each of which is the corporation's adjusted IFB income, as calculated by the following formula, for the taxation year from a particular source that is an international financial business carried on by the corporation:

adjusted IFB income = IFB income – (adjusted interest + foreign dividends + inducements)

where

(2) If a corporation cancels its registration during a taxation year, the commissioner may calculate the corporation's total adjusted IFB income as if the corporation was registered throughout the taxation year.

(3) For the purpose of calculating the IFB income of a corporation's international financial business for a taxation year, the corporation must deduct all amounts for the taxation year that relate to the international financial business and that have been deducted by the corporation in determining the corporation's income or loss under Subdivision b of Division B of Part I of the federal Act for the purposes of that Act for the taxation year.

Transaction price

20 (1) In this section, "transaction price" means, in respect of a transaction or a series of transactions, an amount paid or an amount received or receivable, as the case may be, by a participant in the transaction or series of transactions as a price, rental, royalty, premium, interest or other payment

(a) for, or for the use, production or reproduction of, property, or

(b) as consideration for services, including services provided as an employee or officer and the insurance or reinsurance of risks,

as part of the transaction or series of transactions.

(2) For the purpose of calculating a corporation's IFB income, if the corporation participates in a transaction or a series of transactions for, with or on behalf of a person who is affiliated with or who is not dealing at arm's length with the corporation, any transaction price in respect of the transaction or series of transactions must be the amount that would have been the transaction price in respect of the transaction or series of transactions if the participants in the transaction or series of transactions had been dealing at arm's length with each other.

(3) If the commissioner is not satisfied that the transaction price is in accordance with subsection (2), the commissioner may set the transaction price, for the purpose of calculating the corporation's IFB income, as the amount that would have been the transaction price in respect of the transaction or series of transactions if the participants in the transaction or series of transactions had been dealing at arm's length with each other.

 
Division 2 -- IFA Specialists

Eligibility for tax refund

21 An individual is eligible to claim a tax refund for a taxation year if

(a) the individual was an IFA specialist at any time in the taxation year,

(b) the individual was

(i) under the Income Tax Act, resident in British Columbia on the last day of the taxation year, or

(ii) resident in British Columbia on the last day the individual was resident in Canada,

(c) a registered corporation has filed a report in respect of the individual for the taxation year, and

(d) the individual, for that part of the taxation year the individual was an IFA specialist, devoted at least 70% of the individual's working time to performing, for the corporation's international financial businesses, international financial activities, other than activities referred to in section 2 (2) (r) and (s) [international financial activity], in which the individual is a specialist.

Tax refund

22 An eligible individual may claim a tax refund for the taxation year in the amount calculated by the following formula:

tax refund = eligible proportion × net payable × 75%

where

Eligible proportion of income

23 (1) Subject to subsection (2), an individual's eligible proportion of income for a taxation year is the lesser of one and the proportion calculated by the following formula:

where

(2) An individual's eligible proportion of income for a taxation year is zero if the individual's IFB income or BC income is zero or less than zero.

(3) For the purpose of calculating an individual's IFB income for a taxation year, the individual must deduct all amounts for the taxation year that relate to the international financial business and that have been deducted by the individual in determining the individual's income or loss under Subdivision a of Division B of Part I of the federal Act for the purposes of that Act for the taxation year.

 
Part 4 -- Filings, Determinations, Assessments, Interest and Appeals

 
Division 1 -- Filings

Return

24 (1) If a claimant was at any time in a taxation year a registered corporation or an IFA specialist, the claimant may file a return for the taxation year with the commissioner within 18 months after the end of the taxation year or within a later period approved by the commissioner.

(2) On demand from the commissioner, a claimant must file a return with the commissioner within the time and for the taxation year specified in the demand.

(3) The return must be in the form and contain the information required by the commissioner.

(4) In addition to the return, the claimant must file with the return or within a later period approved by the commissioner, any other information or records required by the commissioner.

Notice to commissioner of subsequent assessment

25 If a claimant is issued a notice of assessment, reassessment or additional assessment under the Income Tax Act that changes an amount relevant to the calculation of the claimant's tax refund for a taxation year, the claimant must notify the commissioner, within 90 days after the notice under the Income Tax Act was issued or within a later period approved by the commissioner, by filing with the commissioner

(a) a notice in the form and containing the information required by the commissioner, and

(b) with the notice, any other information or records required by the commissioner.

Report respecting IFA specialists

26 (1) A corporation that was a registered corporation at any time in a calendar year must file a report with the commissioner in respect of each IFA specialist employed by the corporation during the calendar year

(a) subject to subsection (3), within 90 days after the end of the calendar year, and

(b) in the form and containing the information required by the commissioner in respect of the preceding calendar year.

(2) In addition to the report, the corporation must file with the report any other information or records required by the commissioner.

(3) If a registered corporation discontinues its international financial business, the corporation must file the report with the commissioner within 30 days after the day of the discontinuance of the business.

(4) On or before the date the report is required to be filed with the commissioner, the corporation must give 2 copies of the report to the IFA specialist to whom the report relates.

 
Division 2 -- Determination of Tax Refunds
and Assessment of Administrative Penalties

Definition

27 In this Division, "interest" means interest payable on the tax refund under section 33 [interest on tax refunds and refundable fee] or interest payable by a person under section 35 [interest on recoverable amount].

Determination of tax refund

28 (1) The commissioner must examine a return and other information or records filed under section 24 [return] and determine the amount of any tax refund that the claimant is entitled to for the taxation year.

(2) If the commissioner determines the amount of any tax refund or interest for a taxation year, the commissioner must serve on the claimant a notice of determination that specifies the amount of any tax refund and interest for the taxation year.

(3) The commissioner

(a) is not bound by a return or other information or records supplied by or on behalf of a claimant, and

(b) may determine the amount of a tax refund for a taxation year despite the supply of the return or other information or records by or on behalf of the claimant.

(4) The commissioner may determine that the amount of a claimant's tax refund for a taxation year is nil if the claimant does not file

(a) a return

(i) within 18 months after the end of the taxation year or within a later period approved by the commissioner, or

(ii) within the time specified in the demand under section 24 (2), or

(b) satisfactory proof that the amounts payable referred to in section 32 (2) [payment of tax refund] for the taxation year have been paid within the applicable period under that subsection.

Assessment of administrative penalty

29 (1) The commissioner may assess a penalty against a person who is liable to a penalty under section 36 [administrative penalties].

(2) If the commissioner assesses a penalty against a person, the commissioner must serve on the person a notice of assessment that specifies the amount of the penalty assessed.

Determination and assessment period

30 (1) The commissioner may determine the amount of any tax refund or interest in respect of a taxation year or assess a penalty in respect of a taxation year

(a) at any time

(i) if any person has made any misrepresentation or committed any fraud in filing the claimant's return or supplying information under this Act for the taxation year,

(ii) if the claimant has filed a waiver under subsection (2) for the taxation year,

(iii) if the claimant has not filed a waiver in accordance with subsection (3) for the taxation year,

(iv) to carry out the effect of a waiver or cancellation under section 37 [waiver or cancellation of penalty or interest], or

(v) to carry out the effect of a decision of the minister under section 38 [appeal to minister] or a decision of the court under section 39 [appeal to court],

(b) within one year after the end of a claimant's reassessment period under section 29 [returns of income and assessments of tax] of the Income Tax Act for the taxation year, or

(c) if a claimant is issued a notice of assessment, reassessment or additional assessment referred to in section 25 [notice to commissioner of subsequent assessment], before the later of

(i) the last day on which a determination may otherwise be made under this Act, and

(ii) one year after the earlier of

(A) the day that the commissioner receives notification from the claimant under section 25, and

(B) the day that the commissioner receives notification from the taxing authority under the Income Tax Act.

(2) A claimant may file with the commissioner a waiver for the taxation year, in the form and containing the information required by the commissioner, within one year after the end of the claimant's reassessment period for the taxation year referred to in subsection (1) (b).

(3) If the claimant has

(a) filed a waiver under section 152,

(b) served a notice of objection under section 165, or

(c) filed an appeal under section 169

of the federal Act, as those sections apply for the purposes of the Income Tax Act, for a taxation year, the claimant must file with the commissioner a waiver for the taxation year, in the form and containing the information required by the commissioner, within 90 days of the applicable filing or service under paragraphs (a) to (c).

(4) A waiver filed

(a) under subsection (2) continues in effect until 6 months after the claimant files with the commissioner a notice, in the form and containing the information required by the commissioner, revoking the waiver, and

(b) under subsection (3) continues in effect until 6 months after the claimant files with the commissioner

(i) a notice, in the form and containing the information required by the commissioner, that the waiver, objection or appeal referred to in subsection (3) has been terminated, and

(ii) a copy of any resulting reassessment under the Income Tax Act.

Determination and assessment valid and binding

31 Subject to being varied on appeal or by redetermination or reassessment, a determination or assessment under this Act is valid and binding despite any error, defect or omission in the determination or assessment or in procedure.

Payment of tax refund

32 (1) Subject to subsection (2), the minister must pay, out of the consolidated revenue fund, the tax refund payable to a claimant for a taxation year in the amount specified in the notice of determination served on the claimant.

(2) A tax refund is not payable to a claimant for a taxation year unless the claimant files with the commissioner proof satisfactory to the commissioner that the following amounts payable by the claimant for the taxation year have been paid within 3 years after the end after the taxation year or a later period approved by the commissioner:

(a) any amount payable under section 158 of the federal Act, as that section applies for the purposes of the Income Tax Act;

(b) any amount payable under section 158 of the federal Act.

Division 3 -- Interest, Recoverable Amounts and Administrative Penalties

Interest on tax refunds and refundable fee

33 (1) In this section, "interest date" means, in respect of a taxation year, the later of

(a) the earlier of

(i) the day that is 61 days after the date the claimant complied with section 24 [return] for the taxation year, and

(ii) the date the initial notice of determination for the taxation year was served, and

(b) the date the claimant files proof satisfactory to the commissioner under section 32 (2) [payment of tax refund].

(2) If the minister has not paid a tax refund for a taxation year to the claimant by the interest date, the minister must pay interest, out of the consolidated revenue fund, on the unpaid amount, calculated at the prescribed rate and in the prescribed manner beginning on the interest date.

(3) If registration of a corporation is refused and the minister has not paid the refundable amount of the prescribed fee referred to in section 9 (2) (c) [application for registration] within 61 days after the date the corporation applied for registration, the minister must pay interest, out of the consolidated revenue fund, on the refundable amount, calculated at the prescribed rate and in the prescribed manner beginning 61 days after the date the corporation applied for registration.

Liability for recoverable amount

34 A person is liable to pay to the government

(a) if the person is a claimant, the amount by which the tax refund and interest for a taxation year that was paid to the claimant or set-off under the Financial Administration Act exceeds the tax refund and interest for the taxation year that the claimant is entitled to receive,

(b) the amount of any penalties assessed against the person under section 29 [assessment of administrative penalty], and

(c) the amount of any interest payable by the person under section 35 [interest on recoverable amount].

Interest on recoverable amount

35 (1) In this section, "loss carryback" means

(a) a deduction of an amount under section 111 of the federal Act that relates to a subsequent taxation year, or

(b) a deduction of an amount referred to in section 99 (3) (c) of the Income Tax Act.

(2) A person must pay to the government interest calculated at the prescribed rate and in the prescribed manner on any recoverable amount

(a) subject to paragraphs (b) and (c), from the date the initial notice of determination for the taxation year was served until the amount is paid,

(b) for any portion of the recoverable amount arising from a loss carryback, from the date the claimant's tax payable under the Income Tax Act for the taxation year is reassessed as a consequence of the loss carryback, or

(c) for any portion of the recoverable amount that is a penalty,

(i) if the penalty is for a failure referred to in section 36 (2) or (5), from the date the filing was due or the information or records were to be provided, or

(ii) in any other case, from the date the notice of assessment that assessed the penalty was served.

Administrative penalties

36 (1) In this section, "excess refund" means the amount by which the tax refund that would have been claimed by the claimant, if the tax refund had been calculated on the basis of the information provided in the return, report, notice or other record, exceeds the claimant's tax refund for the taxation year.

(2) A person who fails to

(a) file a return in accordance with section 24 (2) [return],

(b) file a notice with the commissioner in accordance with section 25 [notice to commissioner of subsequent assessment] in respect of a taxation year, if the notice results in an increase to the person's tax refund for that taxation year,

(c) file a report in accordance with section 26 [report respecting IFA specialists] for a calendar year,

(d) file a waiver in accordance with section 30 (3) [determination and assessment period], or

(e) provide any information or document within the time stated in a notice under section 55 [requirement to provide documents or information]

is liable, in respect of each failure, to a penalty equal to the greater of

(f) $100, and

(g) the product obtained by multiplying $25 and the number of days, not exceeding 100, during which the failure continues.

(3) If the commissioner sets a transaction price under section 20 (3) [transaction price] and the commissioner is satisfied that the corporation did not make reasonable efforts to set the transaction price in accordance with section 20 (2), the corporation is liable to a penalty equal to 10% of the amount by which the corporation's IFB income calculated with the transaction price that is not set in accordance with section 20 (2) exceeds the corporation's IFB income calculated with the transaction price set by the commissioner.

(4) If a person

(a) is acting or purporting to act on behalf of a claimant, and

(b) knowingly or under circumstances amounting to gross negligence in the carrying out of any duty or obligation imposed under this Act, makes, or participates in, assents to or acquiesces in the making of, a statement or omission in a return, report, notice or other record supplied to the commissioner that results in an excess refund,

the claimant is liable to a penalty equal to 25% of the excess refund.

(5) A claimant who fails to file with the commissioner a notice in accordance with section 25 [notice to commissioner of subsequent assessment] is liable, in respect of each failure, to a penalty equal to 25% of the amount by which the tax refund that would have been claimed by the claimant, if the tax refund had been calculated without reference to the information included or that should have been included in the notice, exceeds the claimant's tax refund for the taxation year.

(6) Section 163.2 of the federal Act applies for the purposes of this Act except that, without limiting the necessary changes,

(a) that section must be read without reference to the definition of "excluded activity" in subsection (1) of that section and without reference to subsections (7), (8) (b) (i) and (ii) and (15) (b) of that section,

(b) a reference to "tax benefit" must be read as a reference to "tax refund",

(c) the reference to "subsection 163 (2)" in section 163.2 (5) (b) (i) must be read as a reference to section 36 (4) of this Act,

(d) the reference to "return filed for the purposes of this Act" in section 163.2 (5) (b) (i) must be read as a reference to "return, report, notice or other record supplied to the commissioner", and

(e) the reference to section 163 (3) in section 163.2 (10) must be read as a reference to subsection (7) of this section.

(7) In an appeal to the court, the burden is on the minister to establish the facts justifying the assessment of a penalty under subsection (6).

Waiver or cancellation of penalty or interest

37 The commissioner may at any time waive or cancel all or part of any assessed penalty or interest otherwise payable under this Act by a person.

Division 4 -- Appeals

Appeal to minister

38 (1) A person may appeal the following to the minister:

(a) a refusal to register the person under section 12 or 15;

(b) a suspension or cancellation of the person's registration under section 12 or 15;

(c) a determination of tax refund or interest under section 28 [determination of tax refund];

(d) an assessment of a penalty under section 29 [assessment of administrative penalty];

(e) a decision by the commissioner that satisfactory proof has not been filed under section 32 [payment of tax refund].

(2) The appellant must serve a notice of appeal on the minister within 90 days after the date on the notice in respect of the matter being appealed.

(3) The appellant must set out in the notice of appeal a statement of all material facts and the reasons in support of the appeal.

(4) On receipt of all relevant information from the commissioner and the notice of appeal, the minister must

(a) confirm, reverse or vary the commissioner's decision or determination, and

(b) notify the appellant in writing of the minister's decision.

Appeal to court

39 (1) A decision of the minister under section 38 [appeal to minister] may be appealed to the Supreme Court by way of an originating application.

(2) The Rules of Court relating to originating applications apply, but Rule 49 [Appeals] does not apply.

(3) A petition must be filed in the court registry within 90 days after the date on the minister's notification of decision.

(4) An appeal under this section is a new hearing that is not limited to the evidence and issues that were before the minister.

(5) The court may dismiss the appeal, allow the appeal, vary the decision from which the appeal is made or refer the decision back to the commissioner for reconsideration.

(6) An appeal lies from a decision of the Supreme Court to the Court of Appeal with leave of a justice of the Court of Appeal.

Irregularities

40 A determination of a tax refund or interest under section 28 [determination of tax refund] or an assessment of a penalty under section 29 [assessment of administrative penalty] by the commissioner must not be varied or disallowed by a court because of an irregularity, informality, omission or error on the part of a person in the observation of any directory provision before the notice of determination or assessment was served.

 
Part 5 -- Collection of Recoverable amount

Payment not affected by appeal

41 (1) Neither an appeal to the minister or to a court by any person nor any delay in the hearing of the appeal in any way

(a) affects any liability for payment of a recoverable amount that is the subject matter of the appeal, or

(b) delays the collection of the recoverable amount.

(2) If the recoverable amount is set aside or reduced on appeal, the minister must refund to the person, out of the consolidated revenue fund, the amount of the recoverable amount or excess paid by the person.

Recoverable amount to constitute a lien

42 (1) A recoverable amount that is not paid

(a) is a lien and charge in favour of the government on the entire assets of the person, or the entire assets of the person in the hands of a trustee, effective as of the date the notice of determination or assessment is served on the person, and

(b) has priority over all other claims of every person except claims secured by liens, charges or encumbrances registered before that date.

(2) The liens and charges created by this section and their priority are not lost or impaired by any of the following:

(a) the neglect, omission or error of the commissioner or any agent or person acting under the commissioner;

(b) the taking of or failure to take proceedings to recover the recoverable amount;

(c) the tender or acceptance of any partial payment of the recoverable amount;

(d) want of registration.

Notice of proceedings

43 Before taking any proceedings for the recovery of a recoverable amount, the commissioner must give to the person notice of the intention to enforce payment, but failure to give notice does not affect the validity of any enforcement proceedings taken.

Recovery by action

44 A recoverable amount may be recovered by action in a court as a debt due to the government.

Filing of certificate

45 (1) If a recoverable amount payable by a person has not been paid, the commissioner may

(a) issue a certificate stating

(i) the recoverable amount is due,

(ii) the amount remaining unpaid, and

(iii) the name of the person required to pay it, and

(b) file the certificate with the Supreme Court.

(2) A certificate filed under subsection (1) (b) is of the same effect, and proceedings may be taken, as if it were a judgment of the Supreme Court for the recovery of a debt in the amount stated against the person named.

Attachment

46 (1) If the commissioner has knowledge or suspects that a person is or is about to become indebted or liable to make a payment to a claimant, the commissioner may demand that the person pay to the government on account of the claimant's liability under this Act all or part of the money otherwise payable to the claimant.

(2) Without limiting subsection (1), if the commissioner has knowledge or suspects that a person is about to advance money to, make a payment on behalf of or make a payment in respect of a negotiable instrument issued by a claimant, the commissioner may demand that that person pay to the minister on account of the claimant's liability under this Act that money that would otherwise be advanced or paid.

(3) If, under this section, the commissioner demands that a person pay to the government, on account of the liability under this Act of a claimant, money otherwise payable by that person to the claimant as interest, rent, remuneration, a dividend, an annuity or other periodic payment, the demand

(a) applies to all of those payments to be made by the person to the claimant until the liability under this Act is satisfied, and

(b) operates to require payments to the commissioner out of each payment of the amount stipulated by the commissioner in the demand.

(4) Money or a beneficial interest in money in a savings institution

(a) on deposit to the credit of a claimant at the time a demand is served, or

(b) deposited to the credit of a claimant after a demand is served

is money for which the savings institution is indebted to the claimant, but money on deposit or deposited to the credit of a claimant as described in paragraph (a) or (b) does not include money on deposit or deposited to the credit of a claimant in the claimant's capacity as a trustee.

(5) A demand under this section continues in effect until the earlier of

(a) the demand being satisfied, and

(b) the expiration of 90 days after the demand is served.

(6) Despite subsection (5), a demand made in respect of a periodic payment referred to in subsection (3) continues in effect until satisfied unless no periodic payment is made or is liable to be made within 90 days after the demand is served, in which case the demand ceases to have effect on the expiration of that period.

(7) Money demanded from a person by the commissioner under this section becomes payable

(a) as soon as the person is served with the demand, if the person is indebted or liable to make a payment to the claimant at the time the demand is served, or

(b) in any other case, as soon as the person becomes indebted or liable to make a payment to the claimant.

(8) A person who fails to comply with a demand under subsection (1) or (3) is liable to pay to the government an amount equal to the amount that the person was required to pay under subsection (1) or (3).

(9) A person who fails to comply with a demand under subsection (2) is liable to pay to the government an amount equal to the lesser of

(a) the aggregate of the money advanced or paid, and

(b) the amount that the person was required to pay under subsection (2).

(10) The receipt of the minister for money paid under this section is a good and sufficient discharge of the original liability to the extent of the payment.

(11) Money paid by any person to the government in compliance with a demand under this section is deemed to have been paid by that person to the claimant in respect of whom the demand was made.

Recovery by distress

47 (1) The commissioner or the commissioner's agent may levy the amount of the recoverable amount payable by a person, with costs, by distress of

(a) the goods and chattels of the person liable to pay the recoverable amount,

(b) any goods and chattels in that person's possession, wherever they may be found in British Columbia, or

(c) any goods and chattels found on that person's premises that are the property of or in the possession of any other occupant of the premises and that would be subject to distress for arrears of rent due to a landlord.

(2) The costs of the commissioner or the commissioner's agent for a distress under this section are chargeable against the person referred to in subsection (1) and are those payable as between landlord and tenant.

(3) If distress is made, the commissioner or the commissioner's agent, by advertisement posted in at least 3 conspicuous public places in the locality where the sale of the distrained property is to be made, must give at least 10 days' public notice of the time and place of the sale and of the name of the person in default.

(4) At the time given in the notice, the commissioner or the commissioner's agent must sell at public auction the distrained property, or as much of it as may be necessary.

(5) If the distrained property is sold for more than the amount of the recoverable amount and costs, and if no claim to the surplus is made by any other person on the ground that the property sold belonged to the person, or that the person was entitled by lien or other right to the surplus, the surplus must be paid over to the person who had possession of the property when the distress was made, and a receipt must be taken.

(6) If a claim is made by the person for whose recoverable amount the property was distrained, and the claim is admitted, the surplus must be paid to the person, and a receipt must be taken.

(7) If the claim is contested, the surplus must be retained by the commissioner until the rights of the parties have been determined in court or otherwise.

Liability of directors

48 (1) If a corporation has failed to pay a recoverable amount, the directors of the corporation at the time the corporation was liable to pay the amount are jointly and severally liable, together with the corporation, to pay that amount to the government.

(2) A director is not liable under subsection (1) unless

(a) a certificate for the amount of the corporation's liability referred to in that subsection has been filed under section 45 [filing of certificate] with the Supreme Court and execution for that amount has been returned unsatisfied in whole or in part, or

(b) the corporation has commenced liquidation or dissolution proceedings or has been dissolved and a claim for the amount of the corporation's liability referred to in that subsection has been proved within 6 months after the earlier of the date of commencement of the proceedings and the date of dissolution.

(3) A director is not liable for a failure under subsection (1) if the director exercised the degree of care, diligence and skill to prevent the failure that a reasonably prudent person would have exercised in comparable circumstances.

(4) If execution referred to in subsection (2) (a) has issued, the amount recoverable from a director is the amount remaining unsatisfied after execution.

(5) If a director pays an amount in respect of a corporation's liability referred to in subsection (1) that is proved in liquidation or dissolution proceedings,

(a) the director is entitled to any preference that the government would have been entitled to had that amount not been paid, and

(b) if a certificate that relates to that amount has been filed, the director is entitled to an assignment of the certificate to the extent of the director's payment.

(6) A director who has satisfied a claim under this section is entitled to contribution from the other directors who were liable for the claim.

Powers may be exercised separately

49 (1) The powers conferred by this Act for the recovery of a recoverable amount by action in court, by filing a certificate, by distress and by demand may be exercised separately, concurrently or cumulatively.

(2) The liability of a person for the payment of a recoverable amount is not affected in any way by the fact that a fine has been paid or a penalty assessed for a contravention of this Act.

Limitation period

50 (1) In this section, "proceeding" means

(a) an action for the recovery of a recoverable amount,

(b) the filing of a certificate,

(c) the making of a demand, and

(d) the registration or enforcement of a lien

under this Act.

(2) A proceeding may be commenced at any time within 7 years after the date of a determination or assessment of the amount claimed in the proceeding.

(3) Despite subsection (2), a proceeding to recover any amount payable by a director of a corporation under section 48 (1) [liability of directors] may be commenced at any time within 5 years after the date the director last ceased to be a director of the corporation.

(4) Despite subsections (2) and (3), a proceeding that relates to a contravention of this Act or the regulations and that involves wilful default or fraud may be commenced at any time.

 
Part 6 -- General

Anti-avoidance rule

51 (1) In this section:

"avoidance transaction" means a transaction

(a) that, but for this section, would result, directly or indirectly, in an increase in a tax refund, or

(b) that is part of a series of transactions that, but for this section, would result, directly or indirectly, in an increase in a tax refund,

but does not include a transaction that may reasonably be considered

(c) to have been undertaken or arranged primarily for the purpose of carrying on a bona fide international financial activity of an international financial business, or

(d) to be a transaction that would not result, directly or indirectly, in a misuse of the provisions of this Act or an abuse having regard to the provisions of this Act, other than this section, read as a whole;

"tax consequences to a person" means any amount that is payable or refundable to the person under this Act or that is relevant for the purposes of calculating that amount.

(2) If a transaction is an avoidance transaction, the tax consequences to a person must be determined in a manner that is reasonable in the circumstances in order to deny an increase in a tax refund that, but for this section, would result, directly or indirectly, from that transaction or from a series of transactions that includes that transaction.

(3) Without limiting subsection (2),

(a) any amount included in calculating a registered corporation's total adjusted IFB income may be allowed or disallowed in whole or in part,

(b) any amount included in calculating an individual's IFB income may be allowed or disallowed in whole or in part,

(c) the nature of any payment or other amount may be recharacterized, and

(d) the tax effects that would otherwise result from the application of other provisions of this Act may be ignored,

in determining the tax consequences to a person in a manner that is reasonable in the circumstances in order to deny an increase in a tax refund that, but for this section, would result, directly or indirectly, from an avoidance transaction.

(4) If a notice of determination reflecting the application of subsection (2) to a transaction has been served on a person, any other person is entitled, within 180 days after the date of the service of that notice, to request in writing that the minister make a determination applying subsection (2) with respect to the transaction.

(5) On receipt of a request under subsection (4), the commissioner must make a determination under section 28 [determination of tax refund] despite the expiry of any time limit under section 30 [determination and assessment period], except that a determination may be made under this subsection only to the extent that the determination may be reasonably regarded as relating to a transaction referred to in subsection (4).

(6) The tax consequences to a person, after the application of this section, must only be determined through a notice of determination.

Records of account

52 (1) A corporation that claims a tax refund for a taxation year must keep records of account

(a) in the manner specified by the commissioner,

(b) at the corporation's place of business in British Columbia or at any other place designated by the commissioner, and

(c) in the form and containing the information that will enable the determination of

(i) the corporation's eligibility for registration,

(ii) the corporation's tax refund, including the adjusted IFB income for each international financial business carried on by the corporation,

(iii) the eligibility for registration of any individuals employed by the corporation, and

(iv) the tax refund of any individuals employed by the corporation

until one year after the latest date that the corporation must keep records for that taxation year under section 58 (2) [books and records] of the Income Tax Act.

(2) An individual who claims a tax refund for a taxation year must keep records of account

(a) in the manner specified by the commissioner,

(b) at the individual's place of residence or employment in British Columbia or at any other place designated by the commissioner, and

(c) in the form and containing the information that will enable the determination of the individual's tax refund

until one year after the latest date that the individual must keep records for that taxation year under section 58 (2) of the Income Tax Act.

Execution of records by corporations

53 A return, a report or, if required by the commissioner, any other record made by a corporation that is to be supplied under this Act must be signed on the corporation's behalf by

(a) the president, secretary or treasurer of the corporation, or

(b) any other officer or person duly authorized by the board of directors or other governing body of the corporation.

Administration and enforcement

54 (1) In this section:

"authorized person" means the commissioner or a person authorized by the commissioner;

"private dwelling" means

(a) a structure that is occupied as a private residence, or

(b) if only part of a structure is occupied as a private residence, that part of the structure.

(2) For any purpose related to the administration or enforcement of this Act and the regulations, an authorized person may

(a) enter any business premises during normal business hours,

(b) inspect, audit or examine any record on the premises, and

(c) remove any record from the premises for the purpose of making copies.

(3) If any business premises referred to in subsection (2) (a) is a private dwelling, an authorized person may not enter the dwelling except with the consent of the occupant or under the authority of a warrant under subsection (4).

(4) If satisfied by evidence given under oath that entry into a private dwelling is necessary for any purpose related to the administration or enforcement of this Act, a justice may issue a warrant, subject to any conditions the justice considers appropriate, authorizing an authorized person to enter the dwelling.

(5) The commissioner may make an application for a warrant under subsection (4) without notice to any other person.

Requirement to provide documents or information

55 (1) Section 231.2 of the federal Act applies for the purposes of this Act except that, without limiting the necessary changes,

(a) a reference to "judge" must be read as a reference to a judge of the Supreme Court,

(b) a reference to "Minister" must be read as a reference to "commissioner", and

(c) the reference in subsection (1) to "a return of income or a supplementary return" must be read as a reference to a return under this Act.

(2) Nothing under subsection (1) affects solicitor-client privilege.

Foreign based information

56 Section 231.6 of the federal Act applies for the purposes of this Act except that, without limiting the necessary changes,

(a) a reference to "judge" must be read as a reference to a judge of the Supreme Court,

(b) a reference to "Minister" must be read as a reference to "commissioner", and

(c) the words in subsection (7) "an assessment may be made pursuant to subsection 152 (4)" must be read as a reference to a determination under this Act.

Evidence

57 A record certified by the commissioner or a person authorized by the commissioner to be a copy of a record obtained under sections 54 to 56 is evidence of the nature and content of the original.

Communication of information

58 (1) In this section:

"authorized person" means a person who is engaged or employed, or who was formerly engaged or employed, by or on behalf of the government of British Columbia to assist in carrying out the provisions of this Act;

"official" means any person

(a) who is employed in the service of, who occupies a position of responsibility in the service of, or who is engaged by or on behalf of the government of British Columbia, another province or Canada, or

(b) who was formerly employed or engaged or who formerly occupied a position as described in paragraph (a),

and, for the purposes of subsections (2) and (3), the portion of subsection (6) before paragraph (a) and section 241 (5) of the federal Act as applied by this section, "official" includes any person

(c) who is employed in the service of, who occupies a position of responsibility in the service of, or who is engaged by or on behalf of,

(i) a municipality in Canada, or

(ii) a public body performing a function of government in Canada, or

(d) who was formerly employed or engaged or who formerly occupied a position as described in paragraph (c).

(2) Except as authorized by this section, an official must not

(a) knowingly provide, or knowingly allow to be provided, to any person any claimant information,

(b) knowingly allow any person to have access to any claimant information, or

(c) knowingly use any claimant information otherwise than in the course of the administration and enforcement of this Act or for a purpose for which the claimant information was provided under this section.

(3) Despite any other enactment or law, an official must not be required, in connection with any legal proceedings, to give or produce evidence relating to any claimant information.

(4) Subsections (2) and (3) do not apply in respect of legal proceedings referred to in section 241 (3) of the federal Act.

(5) The commissioner may provide the following claimant information to the Society:

(a) the name of a corporation that applies for registration;

(b) the registration status and any changes to the registration status of a corporation.

(6) Subject to subsection (7), an official may

(a) provide to any person claimant information that can reasonably be regarded as necessary for the purposes of the administration or enforcement of this Act, solely for those purposes,

(b) provide to any person claimant information that can reasonably be regarded as necessary for the purposes of determining

(i) any recoverable amount that is payable by the person under this Act,

(ii) any tax refund to which the person is or may become entitled under this Act, or

(iii) any other amount that is relevant for the purposes of a determination under subparagraph (i) or (ii),

(c) provide claimant information

(i) to an official of the Department of Finance of the government of Canada, solely for the purposes of the formulation or evaluation of fiscal policy,

(ii) to an official solely for the purposes of the initial implementation of a fiscal policy or for the purposes of the administration or enforcement of an Act of the Parliament of Canada that provides for the imposition and collection of a tax or duty,

(iii) to an official solely for the purposes of the administration or enforcement of an enactment of British Columbia or another province that provides for the imposition or collection of a tax or duty,

(iv) to an official of the Ministry of Finance, solely for the purposes of the formulation or evaluation of fiscal policy, or

(v) to an official solely for the purposes of setting off against any sum of money that may be due or payable by the government of British Columbia, a debt due to that government or to the government of another province or of Canada,

(d) provide claimant information, or allow the inspection of or access to claimant information, as the case may be, under, and solely for the purposes of, sections 15, 16 and 17 of the Auditor General Act,

(e) provide claimant information solely for the purposes of sections 17 to 19 of the Financial Administration Act,

(f) use claimant information to compile information in a form that does not directly or indirectly reveal the identity of the claimant to whom the information relates,

(g) use, or provide to any person, claimant information solely for a purpose relating to the supervision, evaluation or discipline of an authorized person by the government in respect of a period during which the authorized person was employed by, or engaged by or on behalf of, the government to assist in the administration or enforcement of this Act, to the extent that the information is relevant for the purpose,

(h) use claimant information relating to a claimant to provide information to the claimant,

(i) provide claimant information to a police officer, as defined in section 462.48 (17) of the Criminal Code, solely for the purpose of investigating whether an offence has been committed under the Criminal Code, or the laying of an information or the preferring of an indictment, if

(i) the claimant information can reasonably be regarded as being necessary for the purpose of ascertaining

(A) the circumstances in which an offence under the Criminal Code may have been committed, or

(B) the identity of the person who may have committed an offence,

with respect to an official, or with respect to any person related to that official,

(ii) the official was or is engaged in the administration or enforcement of this Act, and

(iii) the offence can reasonably be considered to be related to that administration or enforcement, and

(j) provide, or allow inspection of or access to, claimant information to or by any person otherwise legally entitled to it under an enactment of British Columbia solely for the purposes for which that person is entitled to the information.

(7) An official must not under subsection (6) (a) to (c) or (e) to (j) provide claimant information to, or allow inspection of or access to claimant information by, an official of

(a) a public body, as defined in the Freedom of Information and Protection of Privacy Act, other than the ministry of the minister or, under subsection (6) (c) (iv), the Ministry of Finance,

(b) the government of Canada, or

(c) the government of another province,

except in accordance with an agreement entered into under section 59 [information-sharing agreements].

(8) Section 241 (3.1), (4.1) and (5) of the federal Act applies for the purposes of this Act except that, without limiting the necessary changes, a reference to "taxpayer" must be read as a reference to "claimant".

Information-sharing agreements

59 (1) In this section, "information-sharing agreement" means an agreement or arrangement to exchange, by electronic data transmission, electronic data matching or any other means, information for a purpose referred to in section 58 [communication of information].

(2) With the prior approval of the Lieutenant Governor in Council, the minister may enter into an information-sharing agreement with

(a) the government of Canada or an agency of that government,

(b) the government of another province or other jurisdiction in Canada or an agency of that government, or

(c) a public body as defined in the Freedom of Information and Protection of Privacy Act.

(3) Claimant information obtained by the minister under an information-sharing agreement may only be used or disclosed for the purpose for which it was obtained under the applicable agreement.

(4) The Lieutenant Governor in Council may prescribe terms and conditions that are to be included in information-sharing agreements entered into by the minister.

Service of documents

60 (1) All documents that are required or permitted under this Act to be given to or served on a person must be given or served in one of the following ways:

(a) by leaving the document with the person;

(b) by sending the document

(i) by ordinary mail or registered mail to the person's address,

(ii) by electronic mail to the person's electronic mail address, or

(iii) by facsimile to the person's facsimile number

as provided in the person's last return or as last known to the commissioner or other sender.

(2) Despite subsection (1), the commissioner may not give or serve a notice under section 55 [requirement to provide documents or information] under subsection (1) (b) (ii) or (iii).

(3) A document given or served in accordance with subsection (1) (b) is deemed to have been received on the date the document was sent.

(4) If a person carries on business under a name or style other than the person's own name, the document may be addressed to the name or style under which the person carries on business and, in the case of leaving the document with a person, the document is deemed to have been validly served if left with an adult person employed at the place of business of the addressee.

(5) If persons carry on business in partnership, the document may be addressed to the partnership name and, in the case of leaving the document with a person, the document is deemed to have been validly served if served on one of the partners or left with an adult person employed at the place of business of the partnership.

(6) Proof of the receipt by a person of any document may be established in any court by showing that the document was given or sent in accordance with this section, and the burden of proof is on the person seeking to establish the fact that the document was not received by the person.

Delegation

61 The commissioner may delegate, with or without conditions, any of the commissioner's powers, functions or duties under this Act to a person or a class of persons.

Offences

62 (1) Section 5 of the Offence Act [general offence] does not apply to this Act or the regulations.

(2) A person commits an offence if the person does any of the following:

(a) supplies false or misleading information to a person acting under this Act;

(b) obstructs, hinders or interferes with the commissioner or a person authorized by the commissioner exercising powers under section 54 [administration and enforcement];

(c) contravenes section 58 (2) [communication of information];

(d) knowingly contravenes an order made under section 241 (4.1) of the federal Act, as that section applies for the purposes of this Act;

(e) if the person

(i) is a person to whom claimant information has been provided for a particular purpose under section 58 (6) (b), (d), (g) or (j) [communication of information], or

(ii) is an official to whom claimant information has been provided for a particular purpose under section 58 (6) (a), (c) or (e) [communication of information]

and who for any other purpose knowingly uses, provides to any person, allows the provision to any person of, or allows access to, that information;

(f) obtains or claims a tax refund to which the person is not entitled or obtains or claims a tax refund in an amount that is greater than the amount to which the person is entitled

(i) by making or participating in, assenting to or acquiescing in the making of, a false or misleading statement in a return, report, notice or other document required to be made or filed under this Act,

(ii) by destroying, altering, mutilating, hiding or otherwise disposing of a record of the person,

(iii) by making, or assenting to or acquiescing in the making of, a false or misleading entry in a record of the person,

(iv) by omitting, or assenting to or acquiescing in an omission to enter a material particular in a record of the person,

(v) wilfulling in any manner, or

(vi) by conspiring with any person to do anything described in subparagraphs (i) to (v).

(3) A person does not commit an offence under subsection (2) (a) if, at the time the information was supplied, the person did not know that it was false or misleading and, with the exercise of reasonable diligence, could not have known that it was false or misleading.

(4) If a corporation commits an offence under this Act, an employee, officer, director or agent of the corporation who authorizes, permits or acquiesces in the commission of the offence also commits an offence, whether or not the corporation is prosecuted for the offence.

(5) In a prosecution for an offence under this Act, it is sufficient proof of the offence to establish that it was committed by an employee, officer, director or agent of the defendant, whether or not the employee, officer, director or agent is identified or has been prosecuted for the offence.

(6) Subsection (5) does not apply if the defendant establishes that the defendant exercised due diligence to prevent the commission of the offence.

(7) If a person is convicted of committing an offence under this section, the person is not liable to pay a penalty assessed under this Act for the same contravention or failure unless the penalty is assessed before the information giving rise to the conviction was laid.

Penalty

63 (1) Subject to subsection (2), an individual who commits an offence under this Act is liable to

(a) a fine of not more than $100 000,

(b) imprisonment for not more than 12 months, or

(c) both the fine and imprisonment referred to in paragraphs (a) and (b).

(2) An individual who commits an offence under section 62 (2) (c), (d) or (e) is liable to

(a) a fine of not more than $5 000,

(b) imprisonment for not more than 12 months, or

(c) both the fine and imprisonment referred to in paragraphs (a) and (b).

(3) Subject to subsection (4), a corporation that commits an offence under this Act is liable to a fine of not more than $100 000.

(4) A corporation that commits an offence under section 62 (2) (d) or (e) is liable to a fine of not more than $5 000.

(5) In addition to any penalty under subsection (1) or (3), a person who commits an offence under section 62 (2) (f) is liable to a fine of not less than 50% and not more than 200% of the amount by which the amount of the tax refund obtained or claimed exceeds the amount, if any, of the tax refund to which the person is entitled.

Limitation period

64 The time limit for laying an information for an offence under this Act is 8 years after the time when the subject matter of the proceedings arose.

Power to make regulations

65 (1) The Lieutenant Governor in Council may make regulations referred to in section 41 of the Interpretation Act.

(2) Without limiting subsection (1), the Lieutenant Governor in Council may make regulations as follows:

(a) defining a word or expression used but not defined in this Act;

(b) prescribing an amount of the prescribed fee referred to in section 9 (2) (c) [application for registration] that is not refundable if registration is refused.

(3) In making regulations under this Act, the Lieutenant Governor in Council may do one or more of the following:

(a) define classes of persons, matters or things;

(b) make different regulations for different classes of persons, matters or things;

(c) delegate a matter to a person;

(d) confer a discretion on a person.

(4) Regulations made under sections 2 (2) [international financial activity], 9 (1) (d) [application for registration -- corporations] and 13 (1) (d) [application for registration -- individuals] may be made retroactive to a date on or after September 1, 2004 and if made retroactive are deemed to have come into force on the date specified in each regulation.

Review of Act

66 Within 5 years after the date this Act receives Royal Assent, the government must initiate a review of this Act to determine what changes, if any, should be made.

 
Part 7 -- Transitional Provisions, Repeals and Consequential Amendments

 
Transitional Provisions

Transitional -- registration of corporations and individuals

67 (1) Despite section 10 (4) (a) [registration -- corporations], registration is effective on the first day of a corporation's taxation year that begins on or after September 1, 2004, if the corporation

(a) was a registered financial institution under the International Financial Business (Tax Refund) Act on the last day of the corporation's taxation year under that Act that ends on or after August 31, 2004, and

(b) applies for registration under section 9 [application for registration] of this Act no later than 90 days after the beginning of the corporation's first taxation year that begins on or after September 1, 2004.

(2) Despite section 9 (2) (c), a corporation whose registration is effective under subsection (1) is not required to pay the prescribed fee.

(3) For the purposes of the registration of and the calculation of a tax refund for an individual under this Act, a corporation that is a registered financial institution under the International Financial Business (Tax Refund) Act is deemed to be a registered corporation until the last day of the corporation's taxation year under that Act that ends on or after August 31, 2004.

Transitional -- International Financial Business (Tax Refund) Act

68 (1) Despite this Act, the International Financial Business (Tax Refund) Act and the regulations under that Act, as they read on August 31, 2004 but subject to subsections (2) to (4), continue to apply to

(a) a financial institution, as defined in that Act, for a taxation year that began before September 1, 2004, and

(b) a specialist and eligible employee, as those terms are defined in that Act, for a taxation year that ends before January 1, 2005.

(2) For the purposes of subsection (1) and despite the definition of "international financial activity" in the International Financial Business (Tax Refund) Act, in that Act "international financial activity" includes any activity that is an international financial activity under this Act.

(3) A reference to "the Greater Vancouver Regional District" in the International Financial Business (Tax Refund) Act must be read as a reference to "British Columbia".

(4) A registered financial institution under the International Financial Business (Tax Refund) Act may not designate an individual as an eligible employee after August 31, 2004.

 
Repeals

Repeals

69 The following are repealed:

(a) the International Financial Business Act, R.S.B.C. 1996, c. 234;

(b) the Supplement to the International Financial Business Act;

(c) the International Financial Business (Tax Refund) Act, R.S.B.C. 1996, c. 235;

(d) the Supplement to the International Financial Business (Tax Refund) Act.

 
Consequential Amendments

 
Business Corporations Act

70 Section 24 (1) of the Business Corporations Act, S.B.C. 2002, c. 57, is amended by striking out ' "incorporée", "corporation" or "international financial business"' and substituting ' "incorporée" or "corporation"'.

71 Section 29 (3) is repealed.

 
Income Tax Act

72 Section 18 (5) of the Income Tax Act, R.S.B.C. 1996, c. 215, is amended by striking out "section 20 of the International Financial Business (Tax Refund) Act applies." and substituting "section 20 of the International Financial Business (Tax Refund) Act, as it read on August 31, 2004, applies."

73 Section 65 (3.1) (a) is amended by striking out "tax," and substituting "tax or for the purpose of administering and enforcing the International Financial Business (Tax Refund) Act and the International Financial Activity Act,".

 
Amendment to this Act

74 Section 2 (1) of this Act is amended in the definition of "securities corporation" by striking out "or underwriter".

Commencement

75 The provisions of this Act referred to in column 1 of the following table come into force as set out in column 2 of the table: