CRA does not require the filing of amended returns if a late PLOI election is made

When a Canadian corporation (a CRIC) and a (non-resident) "subject corporation" file a late "PLOI" election to have imputed interest accrue on a loan owing to the CRIC by the subject corporation rather than having Part XIII tax apply to the loan amount, CRA will assess the additional imputed interest income for the years for which CRIC returns already have been filed on the basis of the election particulars required at Pertinent loans or indebtedness, rather than expecting the CRIC to file amended returns.

However, if the late election has not yet been filed by the technical triggering of the Part XIII tax, CRA does not consider that it can wait and see if a late election is filed within the three-year period specified in s. 15(2.12), and considers itself obligated to assess the withholding tax – and will reassess if the late election subsequently is filed.

Neal Armstrong. Summary of 6 August 2014 T.I. 2014-0519431E5 under s. 15(2.11).