Excise Tax Act — E-15 285.03
Definitions 285.03 (1) The following definitions apply in this section. gross entitlements of a person at any time, in respect of a planning activity of the person, means all amounts to which the person, or another person not dealing at arm’s length with the person, is entitled, either before or after that time and either absolutely or contingently, to receive or obtain in respect of the activity. ( droits à paiement ) planning activity has the same meaning as in subsection 285.1(1). ( activité de planification ) section 325 avoidance planning , by a person, means a planning activity in respect of a transaction or series of transactions that meets the following conditions: (a) the transaction or series of transactions is, or is part of, a section 325 avoidance transaction; and (b) one of the purposes of the transaction or series of transactions is to (i) reduce a transferee’s joint and several, or solidary, liability under section 325 for an amount payable or remittable under this Part by a transferor or for an amount that would be payable or remittable by the transferor but for a transaction or series of transactions in which an amount, that is or may be relevant in determining any obligations or entitlements under this Part of a person that dealt at arm’s length with the transferor or transferee immediately before the transaction or series of transactions, is used directly or indirectly to provide a tax benefit for the transferor or transferee, or (ii) reduce the person or another person’s ability to pay any amount payable or remittable, or that may become payable or remittable, under this Part. ( planification d’évitement de l’article 325 ) section 325 avoidance transaction means a transaction or series of transactions in respect of which (a) the conditions in paragraph 325(5)(a) or (b) are met; or (b) if subsection 325(5) applied to the transaction or series of transactions, the amount determined under subparagraph 325(5)(c)(ii) would exceed the amount determined under subparagraph 325(5)(c)(i). ( opération d’évitement de l’article 325 ) tax benefit has the same meaning as in subsection 285.1(1). ( avantage fiscal ) transaction includes an arrangement or event. ( opération ) Penalty (2) Every person that engages in, participates in, assents to or acquiesces in a planning activity that they know is section 325 avoidance planning, or would reasonably be expected to know is section 325 avoidance planning, but for circumstances amounting to gross negligence, is liable to a penalty equal to the lesser of (a) 50% of the amount payable or remittable under this Part in respect of which the joint and several, or solidary, liability was sought to be avoided through the planning, and (b) the total of $100,000 and the person’s gross entitlements in respect of the planning at the time at which the notice of assessment of the penalty is sent to the person in respect of the planning. Clerical or secretarial services (3) Subsection (2) does not apply to a person solely because the person provided clerical services or secretarial services with respect to the planning. [NOTE: Application provisions are not included in the consolidated text; see relevant amending Acts and regulations.] 2022, c. 19, s. 61