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: Whether the effective interest date of a request for a loss carry back to a previous year would be determined based on the date the return of the loss year was filed.
Position: No.
Reasons: The effective interest date of the loss carry back is the date the taxpayer made the request to carry back the losses.
April 19, 2013
Toronto East Tax Services Office HEADQUARTERS
Income Tax Rulings Directorate
Attention: Ivan Pereira Lindsay Frank
Appeals Division (613) 960-7919
2012-045279
Effective Interest Date of Loss Carry-Back
Further to our conversations with you (Frank, Young / Pereira) and with representatives of the taxpayer, we are writing to confirm our verbal comments. Our discussions were further to a request made by the taxpayer to reconsider our position presented in technical interpretation 2012-0445061I7.
It is our understanding that the taxpayer made a request to carry back losses to a previous taxation year after the CRA reassessed the previous year to increase taxable income. The CRA determined that the effective interest date of the loss carry back was based on the date the request was made to carry back the losses because the request was a new request.
In its submission, the taxpayer takes the position that the effective interest date for the carry back should be based on the date the return of the loss year was filed. In support of this position, the taxpayer relies on the decision in Methanex Corp. v. Alberta (Provincial Treasurer), 2004 ABCA 304.
As we discussed, we disagree with the taxpayer's position. This court decision would not apply to Ontario corporate income tax, as the wording of subparagraph 79(7)(b)(iii) of the Ontario Corporations Tax Act is different from that of paragraph 39(3)(b) of the Alberta Corporate Income Tax Act, R.S.A. 1980, as amended at that time.
We trust these comments will be of assistance.
Terry Young, CPA, CA
Manager, Administrative Law Section
International Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 2013
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 2013
Email this Content