Petroleum and Gas Revenue Tax Act (R.S.C., 1985, c. P-12)

Marginal note:Appeals to the Tax Court of Canada

• 22 (1) Where a taxpayer has served a notice of objection to an assessment under section 19, he may appeal to the Tax Court of Canada to have the assessment vacated or varied after

  • (a) the Minister has confirmed the assessment or reassessed, or

  • (b) one hundred and eighty days have elapsed after service of the notice of objection and the Minister has not notified the taxpayer that he has vacated or confirmed the assessment or reassessed,

  but no appeal under this subsection may be instituted after the expiration of ninety days from the day notice has been mailed to the taxpayer under section 19 that the Minister has confirmed the assessment or reassessed.

• Marginal note:Notice of appeal

  (2) Where an appeal is made to the Tax Court of Canada, the Tax Court shall forthwith send a notice of the appeal to the office of the Commissioner of Revenue.

• Marginal note:Copies of material to be forwarded

  (3) Forthwith after receiving notice under subsection (2) of an appeal, the Commissioner of Revenue shall forward to the Tax Court of Canada copies of all returns, notices of assessment, notices of objection and notification, if any, that are relevant to the appeal.

• Marginal note:Disposition of appeal

  (4) The Tax Court of Canada may dispose of an appeal by

  • (a) dismissing it; or

  • (b) allowing it and vacating the assessment, varying the assessment or referring the assessment back to the Minister for reconsideration and reassessment.

• (5) [Repealed, R.S., 1985, c. 51 (4th Supp.), s. 19]

• Marginal note:Copy of decision

  (6) On the disposition of an appeal, the Tax Court of Canada shall forthwith forward, by registered mail, a copy of the decision and any written reasons given therefor to the Minister and the appellant.

23 [Repealed, R.S., 1985, c. 51 (4th Supp.), s. 20]

Marginal note:Application of Income Tax Act provisions

24 Sections 173 and 174 of the Income Tax Act apply in respect of the tax imposed under this Part except that references therein to subsection 152(4) and sections 165 and 169 of that Act shall be read, respectively, as references to subsection 13(4) and sections 19 and 22 of this Act.

Marginal note:When proceedings held in camera

25 Proceedings under sections 22 and 23 shall be held in camera on request made to the Federal Court by the taxpayer.

PART IIRoyalties Tax

Tax and Computation

Marginal note:Tax payable by non-resident persons

• 26 (1) A tax shall be payable by every non-resident person, in this section referred to as the “recipient”, on every amount received by the recipient as, on account of or in lieu of payment of, or in satisfaction of a resource royalty, computed by reference to the amount or value of production of petroleum or gas after 1985 and before October 1986, unless the recipient, at the time of the receipt of the resource royalty, carries on a business described in subparagraph 66(15)(h)(i) of the Income Tax Act through one or more fixed places of business in Canada.

• Marginal note:Computation of tax

  (2) The tax payable by a person under this Part in respect of

  • (a) a resource royalty, other than a resource royalty on synthetic production, shall, where the royalty is computed by reference to the amount or value of production of petroleum or gas, be 13.33% of the amount of such royalty; and

  • (b) a resource royalty on synthetic production shall, where the royalty is computed by reference to the amount or value of production of petroleum or gas, be 12% of the amount of such royalty.

• (3) and (4) [Repealed, R.S., 1985, c. 2 (2nd Supp.), s. 13]

• Marginal note:Deduction or withholding required

  (5) A person who pays a resource royalty on which a tax is payable under this Part shall, notwithstanding any agreement or law to the contrary, deduct or withhold therefrom the tax payable under this Part and the amount so deducted or withheld shall be deemed to have been paid on behalf of the recipient on account of the recipient’s tax.

• Marginal note:Amount to be remitted

  (6) A person who has deducted or withheld tax from a royalty as required by subsection (5) shall, on or before the fifteenth day of the month next following the month in which the royalty was paid, remit the amount deducted or withheld, accompanied by a return in prescribed form, to the Receiver General.

• (7) to (9) [Repealed, R.S., 1985, c. 2 (2nd Supp.), s. 13]

• Marginal note:Where no tax is payable

  (10) Notwithstanding subsection (1), no tax shall be payable under this Part by a taxpayer on

  • (a) any portion of the amount received by the taxpayer as a production royalty or resource royalty, computed by reference to the amount or value of production in a period after March 31, 1985 from an approved recovery project, that is the exempt percentage of the amount for that period in respect of that project;

  • (b) any portion of the amount received by the taxpayer as a production royalty or resource royalty, computed by reference to the amount or value of production of petroleum or gas from a deepened well that is attributable to the new deep production from the well; or

  • (c) an amount received by the taxpayer as a production royalty or resource royalty computed by reference to the amount or value of production from a prescribed oil or gas well.

General

Marginal note:When tax deemed received

• 27 (1) When tax has been deducted or withheld from a royalty as required by subsection 26(5), it shall be deemed to have been received at that time by the person to whom the royalty was paid.

• Marginal note:Trustee, etc.

  (2) For the purposes of subsections 26(5) and (6), where a trustee who is administering, managing, distributing, winding-up, controlling or otherwise dealing with the property, business, estate or income of another person authorizes or otherwise causes a resource royalty or a production royalty to be paid on behalf of that other person, the trustee shall be deemed to be a person making the payment and the trustee and that other person shall be jointly and severally liable in respect of the amount required by subsection 26(6) to be remitted on account of any amount required by subsection 26(5) to be deducted or withheld from the payment.

• Marginal note:Returns required

  (3) Every person who pays a resource royalty or production royalty in a calendar year shall

  • (a) make an information return in prescribed form and containing prescribed information in respect of all such payments made in the year;

  • (b) file the return with the Minister, without notice or demand therefor,

    • (i) in any case where the person discontinues his business or activity, within thirty days of the date of the discontinuance of the business or activity, or

    • (ii) in any other case, on or before the last day of February of the next following year; and

  • (c) forward to each taxpayer, in respect of whose resource royalty or production royalty the return relates, at the taxpayer’s latest known address or deliver to the taxpayer in person, one copy of the portion of the return relating to the taxpayer on or before the date the return is required to be filed with the Minister.

• Marginal note:Returns by trustees

  (4) Every trustee who is administering, managing, winding-up, controlling or otherwise dealing with the property, business, estate or income of a person who has not filed a return as required by subsection (3) shall file that return.

• Marginal note:Definition of “trustee”

  (5) In subsections (2) and (4), trustee includes a liquidator, receiver, receiver-manager, trustee in bankruptcy, assignee, executor, administrator, sequestrator or any other person performing a function similar to that performed by any such person.

Marginal note:Actions for deducting, etc., prohibited

• 28 (1) No action lies against any person for deducting or withholding any sum of money in compliance or intended compliance with this Part.

• Marginal note:Deduction, etc., deemed held in trust

  (2) Every person who deducts or withholds any amount that is required under this Part to be remitted shall be deemed to hold that amount in trust for Her Majesty in right of Canada and all such amounts shall be kept separate and apart from that person’s own moneys and, in the event of any liquidation, assignment or bankruptcy, those amounts shall remain apart and form no part of the estate in liquidation, assignment or bankruptcy.

• Marginal note:Payment by Minister where no liability for tax

  (3) Where a person on whose behalf an amount has been deducted or withheld under this Part is not liable to pay any tax under this Part or the amount deducted or withheld is in excess of the tax that the person is liable to pay, the Minister shall, on application in writing by or on behalf of the person made to the Minister within two years from the end of the calendar year in which the amount was so deducted or withheld, pay to that person the amount or such part thereof as he was not liable to pay, unless he is otherwise liable or about to become liable to make a payment under this Act, in which case the Minister may apply the amount otherwise payable under this subsection to that payment and notify the person of that fact.

• Marginal note:Assessment in certain cases

  (4) Where, on application by or on behalf of a person pursuant to subsection (3) in respect of an amount that was deducted or withheld under this Part, the Minister is not satisfied

  • (a) that the person was not liable to pay any tax under this Part, or

  • (b) that the amount was in excess of the tax that the person was liable to pay,

  the Minister shall assess that person for any amount payable by him under this Part and send a notice of assessment to that person, whereupon subsections 13(3), (4) and (7) and sections 18 to 25 apply, with such modifications as the circumstances require, in respect of the assessment of that person.

• Marginal note:Liability

  (5) Any person who fails to deduct or withhold tax as required by this Part is liable to pay to Her Majesty the amount that should have been deducted or withheld together with interest thereon at the rate per annum prescribed for the purposes of subsection 227(8) of the Income Tax Act.

• Marginal note:Penalty

  (6) Every person who fails to remit as required by this Part the amount of tax deducted or withheld under this Part is liable to a penalty of ten per cent of that amount or ten dollars, whichever is the greater, in addition to the amount itself, together with interest on the amount at the rate per annum referred to in subsection (5).

• Marginal note:Assessment generally

  (7) The Minister may assess any person for any amount payable by that person under this Part and send a notice of assessment to that person, whereupon subsections 13(3), (4) and (7), 14(6), (7), (9) and (10) and sections 18 to 25 apply, with such modifications as the circumstances require, in respect of the assessment of that person.

• Marginal note:Certain agreements void

  (8) Where under this Part an amount is required to be deducted or withheld, an agreement by the person on whom the obligation is imposed not to deduct or withhold is void.

• Marginal note:Receipt of Minister sufficient

  (9) The receipt of the Minister for tax deducted or withheld by any person as required by this Part is a good and sufficient discharge of the liability of any debtor to his creditor with respect thereto to the extent of the amount referred to in the receipt.

PART IIIAdministration and Enforcement

General

Marginal note:Minister’s responsibilities and powers

• 29 (1) The Minister shall administer and enforce this Act and the Commissioner of Revenue may exercise the powers and perform the duties of the Minister under this Act.

• Marginal note:Officers, etc.

  (2) Such officers, clerks and employees as are necessary for the proper administration and enforcement of this Act shall be appointed or employed in the manner authorized by law.

• Marginal note:Idem

  (3) The Minister may authorize an officer or class of officers to exercise the powers or perform the duties of the Minister under this Act.