Tax wiki
s. 185
PART III — Additional Tax on Excessive Elections
Assessment of tax
Not yet annotated · Text current to 2026-06-21 · section last amended 2013-06-26
Current text
The Minister shall, with all due dispatch, examine each election made by a corporation in accordance with subsection 83(2), 130.1(4) or 131(1), assess the tax, if any, payable under this Part in respect of the election and send a notice of assessment to the corporation.
Payment of tax and interest
(2)Where an election has been made by a corporation in accordance with subsection 83(2), 130.1(4) or 131(1) and the Minister mails a notice of assessment under this Part in respect of the election, that part of the amount assessed then remaining unpaid and interest thereon at the prescribed rate computed from the day of the election to the day of payment is payable forthwith by the corporation to the Receiver General.
Provisions applicable to Part
(3)Subsections 152(3), 152(4), 152(5), 152(7) and 152(8) and 161(11), sections 163 to 167 and Division J of Part I are applicable to this Part with such modifications as the circumstances require.
Joint and several, or solidary, liability from excessive elections
(4)Each person who has received a dividend from a corporation in respect of which the corporation elected under subsection 83(2), 130.1(4) or 131(1) is jointly and severally, or solidarily, liable with the corporation to pay that proportion of the corporation’s tax payable under this Part because of the election that
the amount of the dividend received by the person
is of
the full amount of the dividend in respect of which the election was made,
but nothing in this subsection limits the liability of any person under any other provision of this Act.
Assessment
(5)The Minister may, at any time after the last day on which a corporation may make an election under subsection 184(3) in respect of a dividend, assess a person in respect of any amount payable under subsection 185(4) in respect of the dividend, and the provisions of Division I of Part I apply, with such modifications as the circumstances require, to an assessment made under this subsection as though it were made under section 152.
Rules applicable
(6)If under subsection (4) a corporation and another person have become jointly and severally, or solidarily, liable to pay part or all of the corporation’s tax payable under this Part in respect of a dividend described in that subsection,
a payment at any time by the other person on account of the liability shall, to the extent of the payment, discharge their liability after that time; and
a payment at any time by the corporation on account of its liability shall discharge the other person’s liability only to the extent of the amount determined by the formula
(A - B) × C/D
where
is the total of
the amount of the corporation’s liability, immediately before that time, under this Part in respect of the full amount of the dividend, and
the amount of the payment,
is the amount of the corporation’s liability, immediately before that time, under this Act,
is the amount of the dividend received by the other person, and
is the full amount of the dividend.
Source: Justice Laws Website. Not an official version.
Historic text
Immediately preceding version, in force from 2004-08-31 to 2013-06-25:
Show the text in force 2004-08-31 to 2013-06-25
Assessment of tax
185 (1) The Minister shall, with all due dispatch, examine each election made by a corporation in accordance with subsection 83(2), 130.1(4) or 131(1), assess the tax, if any, payable under this Part in respect of the election and send a notice of assessment to the corporation.
Payment of tax and interest
(2) Where an election has been made by a corporation in accordance with subsection 83(2), 130.1(4) or 131(1) and the Minister mails a notice of assessment under this Part in respect of the election, that part of the amount assessed then remaining unpaid and interest thereon at the prescribed rate computed from the day of the election to the day of payment is payable forthwith by the corporation to the Receiver General.
Provisions applicable to Part
(3) Subsections 152(3), 152(4), 152(5), 152(7) and 152(8) and 161(11), sections 163 to 167 and Division J of Part I are applicable to this Part with such modifications as the circumstances require.
Joint and several liability from excessive elections
(4) Each person who has received a dividend from a corporation in respect of which the corporation elected under subsection 83(2), 130.1(4) or 131(1) is jointly and severally liable with the corporation to pay that proportion of the corporation’s tax payable under this Part because of the election that
(a) the amount of the dividend received by the person
is of
(b) the full amount of the dividend in respect of which the election was made,
but nothing in this subsection limits the liability of any person under any other provision of this Act.
Assessment
(5) The Minister may, at any time after the last day on which a corporation may make an election under subsection 184(3) in respect of a dividend, assess a person in respect of any amount payable under subsection 185(4) in respect of the dividend, and the provisions of Division I of Part I apply, with such modifications as the circumstances require, to an assessment made under this subsection as though it were made under section 152.
Rules applicable
(6) Where under subsection 185(4) a corporation and another person have become jointly and severally liable to pay part or all of the corporation’s tax payable under this Part in respect of a dividend described in subsection 185(4),
(a) a payment at any time by the other person on account of the liability shall, to the extent of the payment, discharge the joint liability after that time; and
(b) a payment at any time by the corporation on account of its liability shall discharge the other person’s liability only to the extent of the amount determined by the formula
(A - B) × C/D
where
Ais the total of(i) the amount of the corporation’s liability, immediately before that time, under this Part in respect of the full amount of the dividend, and
(ii) the amount of the payment,
- [NOTE: Application provisions are not included in the consolidated text
- see relevant amending Acts and regulations.]
- R.S., 1985, c. 1 (5th Supp.), s. 185
- 1994, c. 7, Sch. II, s. 153
Earlier versions: Justice Laws point-in-time versions of the Act (from 31 August 2004), and CanLII (under “Versions”). On Justice Laws, each version of section 185 links to the one before it.
Enacting and amending legislation
- R.S., 1985, c. 1 (5th Supp.), s. 185; 1994, c. 7, Sch. II, s. 153; 2013, c. 34, s. 150
Text before 2004 is found in the annual Statutes of Canada cited above. Application and coming-into-force provisions are not part of the consolidation; see the amending Acts.
Cross-references
Citation
Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), s. 185.