Before concluding that the posting of security under s. 220(4.5) for departure tax can generate a refund of instalments paid in excess of regular tax (i.e., the Part I tax that would be payable but for the departure tax under s. 128.1(4), CRA stated:
[T]he refund of overpayments, as defined in subsection 164(7), is generally governed by section 164. Thus, for example, an excess of instalments for a year over the amount for which a taxpayer is liable may be refunded by the Minister under subparagraph 164(1)(a)(iii). …
In this respect, the provision of sufficient security does not constitute a payment. Thus, we have concerns with the technical treatment of the amount of sufficient security provided for the purposes of section 164 because of the wording of subsections 164(7) and 220(4.5) to 220(4.54). It should be noted that the presumption in paragraph 220(4.5)(b), providing in certain circumstances that the amount for which sufficient security is accepted is a paid amount, does not apply for the purposes of subsection 164(7).