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.
Principal Issues: How will the CRA apply the proposed amendments to ss. 99(1) in order to prevent double-taxation
Position: While awaiting Royal Assent, the CRA has a policy to allow taxpayers to file their returns on the basis of proposed legislation.
Reasons: Stated position
XXXXXXXXXX 2009-034387
Katharine Skulski
December 23, 2009
Dear XXXXXXXXXX :
Re: Application Date of Amendments to Subsection 99(1) of the Income Tax Act (the "Act")
This is in reply to your letter of October 1, 2009 regarding the above-noted provision.
You have asked that we provide information on the Canada Revenue Agency's administrative policy on how the proposed amendments to subsection 99(1) of the Act will be applied.
The particular situation outlined in your letter relates to a factual one, involving specific taxpayers. As explained in Information Circular 70-6R5, it is not this Directorate's practice to comment on transactions involving specific taxpayers other than in the form of an Advance Income Tax Ruling. An Advance Income Tax Ruling is not issued where a transaction has completed or is significantly advanced. In those instances you should submit all relevant facts and documentation to the appropriate Tax Services Office for their views. However, we are prepared to offer the following general comments which may be of assistance.
The proposed amendment to subsection 99(1) is to come into force upon Royal Assent being given. It is the CRA's policy to allow a taxpayer to file their return on the basis of proposed legislation. In Income Tax Technical News No. 34 dated April 27, 2006, the CRA stated in response to question 1 on draft legislation:
It is the CRA's longstanding practice to ask taxpayers to file on the basis of proposed legislation. This practice eases both the compliance burden on taxpayers and the administrative burden on the CRA. However, where proposed legislation results in an increase in benefits (e.g. Canada child tax benefit) to the taxpayer or a significant amount of rebate or refund is at stake, generally, the CRA's past practice has been to wait until the measure has been enacted.
We trust that these comments will be of assistance.
Yours truly,
G. Moore
for Director
Business and Partnership Division
Income Tax Rulings Directorate
Legislative Policy & Regulatory Affairs Branch
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