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 a penalty under 162(7) would be assessed to individual entities for failure to file T5 return when info is provided by means of a consolidated t5 return
Position TAKEN:
no but if it is late or deficient, it is the individual entities and not the agent filing the consolidated return which are liable for penalties
Reasons FOR POSITION TAKEN:
an entities obligation can be fulfilled by an agent but the entity remains liable
A. Humenuk
XXXXXXXXXX 941512
Attention: XXXXXXXXXX
September 6, 1994
Dear Sirs:
Re: Consolidation of Information Returns
We have been asked to respond to your inquiry of March 29, 1994 concerning the application of penalties where the XXXXXXXXXX and its affiliates consolidate the reporting of investment income on a single T5 information return. We apologize for the delay in our response.
In the comments that follow, unless otherwise stated, all statute references are to the Income Tax Act S.C. 1970-71-72, c.63 as amended, consolidated to June 10, 1993 (the "Act").
As we understand your concern, you would like our assurance that a penalty under subsection 162(7) of the Act will not be assessed to the individual corporations within a corporate group for failure to make separate information returns where the information required therein is included in a consolidated information return prepared for the entire corporate group.
The liability for filing an information return in respect of the investment income rests with the entity upon whom an obligation has been placed under section 201 of the Income Tax Regulations (the "Regulations"). However, as stated in the May 24, 1994 letter to you from our Information Returns Section, we have no objection to a corporate group filing such information on a consolidated basis.
In our view, the act of filing an information return as and when required, whether by the entity or an agent, whether consolidated or not, fulfils the obligation so imposed by the Regulations. Consequently, where an information return in prescribed form has been filed by an agent for the consolidated group within the required timeframe, no penalty will be assessed under subsection 162(7) of the Act. If, however, the information return is not filed within the prescribed time or is missing information in respect of a particular payment or other amount described in section 201 of the Regulations, a penalty under subsection 162(7) of the Act will be imposed on each entity within the corporate group to which the failure applies.
We trust our comments will be of assistance to you.
Yours truly,
P.D. Fuoco
for Director
Business and General Division
Rulings Directorate
Policy and Legislation Branch
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