Collection Measures – Tax Debt
In the following cases, we can use a variety of administrative and legal measures in respect of your income and assets:
- You do not pay your tax debt on time in a lump-sum payment.
- You refuse to make a payment agreement.
- You fail to comply with our payment agreement.
- You fail to meet your tax obligations.
We may charge a collection fee equal to 10% of your tax debt (including duties, penalties, interest and charges) when collection measures are used. In addition, interest, compounded daily at the legal rate, accrues on any amount due until it is paid in full.
Collection fees range from $50 to $10,000.
You can call us at any time to find a solution for paying your debt. The number to call is shown on the collection notice.
Below are the main administrative and legal measures we can take to recover the amount due.
We can apply all or part of any amount owed to you by a government body (for example, a QST rebate or an amount owed to you if you are a government employee or supplier) to the payment of your tax debt.
We can register a legal hypothec on your movable or immovable property. Once the hypothec has been published in the appropriate register, we can exercise hypothecary recourse such as a sale under judicial authority.
If a debt must be recovered under one of Québec's tax laws, fees for registering or cancelling the hypothec may be added to your debt. Such fees, charged in accordance with tax legislation, bear interest at the legal rate (see Interest Rates on Debts).
Seizure by garnishment
In some cases, we can send a notice from the Minister of Revenue to a garnishee (or, in the case of GST debt, a requirement to pay) to a third party who owes you money. This party (the garnishee) could be your employer, your financial institution, a client, a tenant or any other physical or legal person who owes you money.
Upon receiving notice of the seizure, the garnishee must remit the amount you are owed to us. We can seize:
- the seizable portion of your income (through your employer);
- your bank account;
- your accounts receivable;
- your rental income (if you own rental property); or
- any other amount a third party owes you.
In some cases, we can hold a third party solidarily liable for all or part of your debt. This includes:
- a director of a corporation;
- a relative, such as your spouse, to whom you transferred property to the detriment of the creditor; and
- the liquidator of a succession.
For example, if a corporation has QST and source deductions debt, we can hold its directors solidarily liable for the corporation's debt and take recourse against them.
We can issue a certificate attesting that the debt is payable and specifying the amount owing. Once it has been filed at the office of the Court of Québec, the Superior Court or, in the case of GST debt, the Federal Court, we can obtain a judgment in our favour for the amount of your debt. The judgment is equivalent to a judgment rendered by a competent court. We can then take legal measures, including the seizure of your movable and immovable property and its sale under judicial authority.
Seizure and sale under judicial authority
In some cases, we can have your movable and immovable property seized and sold under judicial authority. Examples of property that can be seized and sold include:
- your rental property, car, jewellery or cottage;
- your business's assets and property, such as machinery, inventory or computers.
You will be responsible for paying all reasonable costs and fees arising from a sale under judicial authority.
The net proceeds of the sale will be applied to your debt.
Suspension of collection measures
Collection measures can be suspended for legal or administrative reasons. In accordance with our Charter of Taxpayers' and Mandataries' Rights, you are entitled to the suspension of measures to collect certain amounts, subject to the conditions set out either in legislation or an administrative decision.
In some cases, the law states that no collection measures can be taken until a set amount of time has elapsed. In the case of personal income tax debt, for example, we cannot take any collection measures while your objection or appeal is being processed or before the deadline for filing an appeal has passed.
We may also choose to suspend the collection of a debt. For example, if a mandatary who generally meets his or her tax obligations has filed an objection or appeal in respect of an assessment concerning uncollected QST or an ITR overpayment, we may opt to suspend collection of the amount in question at your request.
For more information about the suspension of collection measures for notices of assessment concerning the GST, see Collection of disputed amounts on the Government of Canada website.
Whether the suspension is administrative or legal, we can end it if there is a chance we will be unable to collect the debt. In addition, even if collection measures have been suspended regarding a notice of assessment, the amount due shown on the notice continues to bear interest at the rate provided by tax legislation unless you pay it in full. If the objection or appeal decision is favourable, we will refund the amount paid with interest.