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I-3 - Taxation Act
Section 1082.0.3
Disposition versions
1082.0.3. Where the Minister determines or redetermines the tax payable under this Act by a particular person for a taxation year for which tax consequences under this Act result from a sham transaction and makes an assessment, a reassessment or an additional assessment in respect of the taxation year concerned, the promoter of the transaction, or the adviser in respect of the transaction, incurs a penalty equal to 100% of
(a) if the transaction is carried out by the particular person, the aggregate of all amounts each of which is a consideration that the promoter or adviser, or a person or partnership related to or associated with the promoter or adviser, has received or is entitled to receive, directly or indirectly, from any person or partnership in respect of the transaction; or
(b) if the transaction is carried out by a partnership of which the particular person is a member, the amount that is the agreed proportion of the aggregate referred to in subparagraph a in respect of the particular person for the partnership’s fiscal period in which the transaction is carried out.
Where an assessment, a reassessment or an additional assessment referred to in the first paragraph is cancelled in consequence of an objection, an appeal or a summary appeal, as the case may be, the Minister shall, despite the expiry of the time limits provided for in section 1010, make a reassessment and redetermine the interest and penalties payable by the promoter or the adviser of the transaction, under the first paragraph, in order to take the decision or judgment into account.
Section 1079.13.3 applies, with the necessary modifications, to the determination of a penalty incurred under this section in respect of a sham transaction.
Where a partnership incurs a penalty under this section, sections 1005 to 1014, 1034 to 1034.0.2, 1035 to 1044.0.2 and 1051 to 1055.1 apply, with the necessary modifications, in respect of the penalty as if the partnership were a corporation.
