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RSNL1990 CHAPTER O-6

OFFSHORE AREA CORPORATE INCOME TAX ACT

Amended:

2001 cN-3.1 s2; 2004 c36 s28; 2006 c40 s21

CHAPTER O-6

AN ACT RESPECTING A REDUCTION IN THE NEWFOUNDLAND AND LABRADOR OFFSHORE AREA CORPORATE INCOME TAX

2001 cN-3.1 s2

Analysis



Short title

        1. This Act may be cited as the Offshore Area Corporate Income Tax Act.

1990 c11 s1

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Interpretation

        2. (1) In this Act

             (a)  "applicant" means an eligible corporation that makes an application to the minister under this Act;

             (b)  "eligible corporation" means a corporation that, at any time in a taxation year, has a permanent establishment in the offshore area and is not, at any time in the taxation year, by virtue of a statutory provision or otherwise, exempt from tax under the Federal Accord Act;

             (c)  "Federal Accord Act" means the Canada-Newfoundland Atlantic Accord Implementation Act , and the regulations and orders in force under that Act;

             (d)  "Federal Tax Act" means the Income Tax Act ( Canada ), and the regulations in force under that Act;

             (e)  "final determination date" means, in respect of a taxation year of a corporation, the later of

                      (i)  the last day under the Federal Accord Act that the Minister of National Revenue for Canada may reassess a corporation in respect of its taxable income earned in the year in the offshore area, or

                     (ii)  the effective date of a decision of a court or of an agreement finally resolving a dispute in respect of the taxable income earned in the year in the offshore area by the corporation;

              (f)  "minister" means the minister appointed under the Executive Council Act to administer this Act;

             (g)  " Newfoundland and Labrador Act" means the Income Tax Act, and the regulations in force under that Act;

             (h)  "offshore area" means offshore area as defined by paragraph 2(o) of the Provincial Accord Act;

              (i)  "payment" means an amount paid to an applicant under section 4;

              (j)  "prescribed" in the case of a form or the information to be given on a form means prescribed by order of the minister and, in other cases, means prescribed by regulations;

             (k)  "Provincial Accord Act" means the Canada-Newfoundland and Labrador Atlantic Accord Implementation Newfoundland and Labrador Act, and the regulations and orders in force under that Act;

              (l)  "recipient" means an applicant who has received all or a portion of a payment;

            (m)  "taxable income earned in the year in the offshore area" means that portion of a corporation's taxable income for the taxation year that is subject to tax by section 211 of the Federal Accord Act; and

             (n)  "undertaking" means an undertaking of an eligible corporation given to or for the benefit of the province in connection with an application for a payment under this Act.

             (2)  Except as otherwise provided, all words and expressions shall have the same meaning as in the Federal Tax Act.

1990 c11 s2; 2001 cN-3.1 s2; 2006 c40 s21

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Entitlement

        3. (1) Upon an application having been made to the minister in the prescribed form and manner and within the prescribed time, a corporation is entitled to an amount in respect of each taxation year in which it was an eligible corporation equal to the prescribed percentage of its taxable income earned in the year in the offshore area.

             (2)  Notwithstanding subsection (1), the entitlement of an applicant to an amount, as provided in subsection (1), is conditional upon the applicant entering into those undertakings that may be prescribed in respect of the administration and enforcement of this Act.

1990 c11 s3

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Application by corporation

        4. (1) Where an application by an eligible corporation in respect of a taxation year has been made in accordance with section 3, the minister shall determine the entitlement of the eligible corporation to an amount under this Act and shall pay to the eligible corporation the amount to which it is entitled under this Act in respect of the year.

             (2)  The minister may at any time, but not later than 2 years after receipt from a recipient of notice in the prescribed form and manner of the final determination date in respect of a taxation year, make a redetermination, in the prescribed form and manner, of the amount of the payment to which the recipient is entitled in respect of the taxation year.

             (3)  A recipient shall notify the minister in the prescribed form and manner of the final determination date in respect of each taxation year with respect to which the corporation received a payment and

             (a)  where the minister makes a redetermination and the amount to which the recipient is entitled in respect of the taxation year is greater than the amount that has been paid to the recipient in respect of the taxation year, the minister shall notify the recipient of the redetermination and the minister shall pay the additional amount to the recipient; and

             (b)  where the minister makes a redetermination and the amount to which the recipient is entitled in respect of the taxation year is less than the amount that has been paid to the recipient in respect of the taxation year, the minister shall notify the recipient of the redetermination and of the amount that is payable by the recipient to the Crown.

1990 c11 s4

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Review of a determination

        5. (1) An applicant may apply to the minister for a review of a determination or redetermination made by the minister within 90 days of the determination or redetermination.

             (2)  The minister shall review the determination or redetermination and either confirm the determination or redetermination or make a further redetermination and shall give notice of it to the applicant.

             (3)  Where the determination or redetermination is confirmed, in whole or in part by the minister, the applicant may appeal to the Trial Division.

             (4)  Subsections 26(3) to (6) and sections 27 to 30 of the Newfoundland and Labrador Act shall apply to the appeal, with the necessary changes.

             (5)  A determination or redetermination by the minister may be redetermined by the minister to correct an error, defect or omission.

             (6)  Unless redetermined by the minister, a determination or redetermination by the minister under this Act shall be valid and binding.

1990 c11 s5; 2001 cN-3.1 s2

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Recovery of excess payments

        6. (1) Where a reassessment has been issued to a recipient under the Federal Accord Act in respect of a taxation year and, as a result of that reassessment, a payment in respect of the taxation year is in excess of the amount to which the recipient would have been entitled if its application for the payment had been based upon the reassessment

             (a)  the recipient shall, within 60 days of the date of the mailing of the notice of the reassessment, notify the minister in the prescribed form and manner; and

             (b)  the recipient shall immediately pay to the Crown the amount of the excess.

             (2)  Where the minister makes a redetermination under section 4 or 5 that the amount of the payment exceeds the amount to which the recipient is entitled

             (a)  the minister shall notify the recipient, in prescribed form and manner, of the amount of the excess; and

             (b)  the recipient shall, immediately after the receipt of the notice pay to the Crown the amount of the excess determined after taking into account amounts received from a recipient under subsection (1).

             (3)  An amount payable to the Crown under this Act is a debt due to the Crown and is recoverable with costs in a court or may be retained in whole or in part out of an amount payable to a corporation under this Act.

1990 c11 s6

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Interest

        7. (1) Interest shall be payable by the minister in respect of an amount payable by the minister from the date that is 60 days after

             (a)  the date of an application under subsection 3(1) for a payment; or

             (b)  the date of a redetermination under section 4 or 5,

to the date of the payment.

             (2)  Interest shall be payable in respect of an amount due to the Crown from the date that is 60 days after

             (a)  the date of a redetermination under section 4 or 5; or

             (b)  the date of a reassessment referred to in subsection 6(1),

to the date of the payment.

             (3)  For the purposes of subsections (1) and (2), interest shall be calculated at the prescribed rate for the period specified and shall be compounded monthly.

             (4)  The minister may direct that, notwithstanding subsection (2), interest shall not be payable on an amount due to the Crown.

1990 c11 s7

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Recipient to submit true copies

        8. (1) A recipient shall submit to the minister true and complete copies of each notice of assessment and notice of reassessment received by the recipient, each amended return filed by the recipient, each judgement rendered and each agreement entered into by the recipient with respect to each taxation year in respect of which the recipient received a payment.

             (2)  A recipient shall submit to the minister additional or other information and documentation that may be prescribed by regulation or that the minister may request for the purpose of verifying the accuracy and completeness of the information and documentation previously submitted by the recipient.

1990 c11 s8

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Recipient to keep records

        9. (1) A recipient shall keep documents, records and books of account at its place of business in Canada or other place of business that may be designated by the minister.

             (2)  The documents, records and books of account shall be in the form and shall contain the information that will enable the minister to redetermine the entitlement of the recipient to each payment and the amount of it and to verify the accuracy and completeness of the information and documentation that the recipient submitted to the minister.

             (3)  A recipient shall retain the documents, records and books until permission to dispose of them is granted by the minister in the prescribed form.

             (4)  A recipient may apply to the minister for permission to dispose of the documents, records and books, which permission shall be considered to have been granted unless the minister denies the application within 60 days of the receipt by the minister of the application.

1990 c11 s9

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Records to be available

     10. A person authorized by the minister for a purpose related to the administration or enforcement of this Act may at reasonable times inspect, audit or examine the documents, records and books of account kept under section 9 and, for the purposes of the audit, inspection or examination, a recipient shall

             (a)  make those documents, records and books of account available at reasonable times to a person authorized by the minister for that purpose;

             (b)  give reasonable help to a person authorized by the minister to carry out the audit or examination;

             (c)  provide access to relevant sites;

             (d)  answer, orally or in writing as required, questions relating to the audit or examination;

             (e)  provide relevant information, documentation and copies required for the purpose of the audit or examination; and

              (f)  provide access to relevant information and documentation to which the recipient has a right of access but which belong to a person related to the recipient.

1990 c11 s10

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Search and inspection

     11. (1) Where the minister or a person authorized by the minister for this purpose believes on reasonable grounds that a person has contravened this Act, the regulations or an undertaking, the minister, or a person authorized by the minister may, with a warrant issued under subsection (2), enter and search any premises, receptacle, motor vehicle, ship, boat, or aircraft to inspect books of account, records, financial statements including balance sheets and profit and loss statements or other documents and make those inquiries that are considered necessary.

             (2)  A Provincial Court judge who is satisfied by information upon oath or affirmation that there are reasonable grounds for believing that there has been a contravention of this Act, the regulations or an undertaking may issue upon an unilateral application, a warrant authorizing a person authorized by the minister for this purpose and named in the warrant, subject to those conditions that may be specified in the warrant, to

             (a)  enter and search premises, receptacles, motor vehicles, ships, boats or aircraft;

             (b)  make copies or abstracts of books of account, records, financial statements or other documents; and

             (c)  take away books of account, records, financial statements and other documents for the purpose of making copies of them, which books of account, records, financial statements and other documents shall be returned immediately after copies are made.

             (3)  The person occupying or in charge of the premises, receptacle, motor vehicle, ship or boat described in subsection (2) shall produce for inspection by the person named in the warrant books of account, records, financial statements or other documents and answer questions related to them.

             (4)  Where a document is seized, inspected, examined or provided under sections 8 to 11, the person by whom it is seized, inspected or examined or to whom it is provided or a person authorized by the minister may make 1 or more copies of it and a document purporting to be certified by the person by whom it is seized, inspected or examined or to whom it was provided or by a person authorized by the minister to be a copy is evidence of the nature and content of the original document and has the same probative force as the original document would have if it had been proven in the ordinary way.

             (5)  After a document has been certified under this section it shall be returned to the person from whom it was received.

1990 c11 s11; 2004 c36 s28

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Information not to be disclosed

     12. Information or documentation obtained under this Act shall not knowingly be or be permitted to be communicated, disclosed or made available without the written consent of the person from whom it was obtained.

1990 c11 s12

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Information may be disclosed

     13. Notwithstanding section 12, information or documentation obtained under this Act may be communicated, disclosed or made available for the purposes of the administration or enforcement of this Act or legal proceedings related to it or to an offence under this Act

             (a)  to a court or administrative or regulatory body; and

             (b)  to a person employed by the Crown, the Government of Canada or the government of a province in the administration of the Newfoundland and Labrador Act, the income tax legislation of Canada or another province, the Federal Accord Act or the Provincial Accord Act.

1990 c11 s13; 2001 cN-3.1 s2

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No requirement to give evidence

     14. A person who obtains information or documentation under this Act shall not be required in connection with legal proceedings, other than proceedings relating to the administration or enforcement of this Act, criminal proceedings under this Act or another Act to give evidence relating to information or documentation that is subject to section 12 or to produce a statement, document, writing or portion of the preceding containing that information or documentation.

1990 c11 s14

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Minister may withhold

     15. Where a person contravenes this Act or the regulations, or is in default of an undertaking, the minister may, in addition to another remedy that may be available to him or her, withhold from, in whole or in part or refuse to pay an amount that might otherwise be payable, or reduce an amount that might otherwise be payable to that person, for so long as the contravention or default continues.

1990 c11 s15

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Offence

     16. A person who contravenes this Act or the regulations is guilty of an offence under this Act and is liable on summary conviction to a fine equal to 10% of the amount with respect to which the offence relates, which fine shall not exceed $25,000 or be less than $1,000.

1990 c11 s16

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Offence

     17. A person who, under this Act, submits information or documentation, makes a statement or answers a question, knowing that the information, documentation, statement or answer is false or misleading or misrepresents or fails to disclose a material fact, is guilty of an offence under this Act and is liable on summary conviction, to a fine of not less than 50% and not more than 200% of the amount with respect to which the offence relates, which fine shall not be less than $10,000 or more than $1,000,000, or to imprisonment for a term of not more than 2 years or to both a fine and imprisonment.

1990 c11 s17

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Director party to offence

     18. (1) Where a corporation is guilty of an offence under this Act and a director, officer, employee or agent of the corporation directed, authorized, participated in the commission of the offence or failed to exercise the degree of care, diligence or skill to prevent the offence that a reasonably prudent person would have exercised in comparable circumstances, that director, officer, employee or agent is a party to and guilty of the offence and is liable on summary conviction to the punishment provided for that offence whether or not the corporation has been prosecuted or convicted.

             (2)  Notwithstanding subsection (1) and section 20, an action or proceedings shall not be started against an employee, officer, director or agent of a corporation more than 4 years after that person last stopped being an employee, officer, director or agent of the corporation.

1990 c11 s18

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Proof of the offence

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

1990 c11 s19

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No limitation period

     20. Proceedings by way of summary conviction in respect of an offence under this Act may be instituted without a limitation of time.

1990 c11 s20

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Act to apply

     21. Sections 34 to 39 and 51 of the Newfoundland and Labrador Act are applicable to this Act with those modifications that the circumstances require.

1990 c11 s21; 2001 cN-3.1 s2

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Hibernia Agreement

     22. (1) Where a document is inspected, examined, obtained or provided under or in accordance with the Hibernia Development Project Corporate Income Tax Agreement entered into between the Crown in right of the province, Mobil Oil Canada Properties, Chevron Canada Resources, Gulf Canada Resources Limited and Petro-Canada Hibernia Partnership, the person by whom it is inspected, examined or obtained or to whom it is provided or a person authorized by the minister may make 1 or more copies of it and a document purporting to be certified by the person by whom it is inspected, examined or obtained or to whom it was provided or by a person authorized by the minister to be a copy is evidence of the nature and content of the original document and has the same probative force as the original document would have if it had been proven in the ordinary way.

             (2)  After a document has been certified under this section it shall be returned to the person from whom it was received.

1990 c11 s22

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Regulations

     23. The Lieutenant-Governor in Council may make regulations

             (a)  prescribing a matter or thing that is by this Act to be prescribed;

             (b)  specifying the time limits within which an application must be made and providing for the extension by the minister of those time limits;

             (c)  providing for the manner in which payments shall be made;

             (d)  specifying the time limit, with respect to the notice to be submitted to the minister by the persons who have received payments that are greater or lesser than the amounts to which they are entitled, within which those notices must be submitted and providing for the extension by the minister of those time limits;

             (e)  providing for the form and manner in which applications under section 9 may be made, granted or denied; and

              (f)  generally, to give effect to the purpose of this Act.

1990 c11 s23