Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues: Whether the operator of a landfill site must file under the new contract reporting system pursuant to section 238 of the Income Tax Regulations.
Position: No.
Reasons: Although the landfill operator is involved in excavation, this activity cannot be described as the excavation "of all or any part of a building, structure, surface or sub-surface construction, or any similar property."
XXXXXXXXXX 2000-001305
J. Gibbons
Attention: XXXXXXXXXX
May 25, 2000
Dear XXXXXXXXXX:
Your letter of March 3, 2000, which you faxed to the XXXXXXXXXX Tax Services Office, was forwarded to us for reply. In your letter, you requested clarification of the Agency's new Contract Payment and Reporting System.
According to your letter, your company works primarily in the waste disposal industry as an operator of regional landfill sites. From time to time, you hire other companies to haul your company's equipment from site to site and/or in for repair, and you also hire welders to repair your equipment. In a telephone conversation on April 20, 2000, you explained that your activities as an operator of a landfill site consist of preparing trenches (by excavating and installing liners at the bottom to catch the leech), screening waste, compacting waste, and filling in the site afterwards.
The requirement to file an information return under the new Contract Payment and Reporting System is found in section 238 of the Income Tax Regulations. According to the Regulations, the requirement to file under this new system applies to a taxpayer whose business income for the reporting period is derived primarily from "construction activities." For this purpose, subsection 238(1) of the Regulations states that "construction activities" include the erection, excavation, installation, alteration, modification, repair, improvement, demolition, destruction, dismantling or removal of all or any part of a building, structure, surface or sub-surface construction, or any similar property. Although your company is involved in excavation, this activity cannot be described as the excavation "of all or any part of a building, structure, surface or sub-surface construction, or any similar property." Accordingly, based on our understanding of the facts, it is our view that your company would likely not be subject to the new Contract and Reporting System.
We trust that these comments will be of assistance.
Yours truly,
John Oulton
for Director
Business and Publications Division
Income Tax Rulings Directorate
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