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: When is a T2 return due when 249(3) has application? Does 249(3) apply to change the start of a fiscal period?
Position: Within 6 months form the end of the deemed taxation year established under 249(3). There is no deemed change to the beginning of the fiscal period that follows the deemed taxation year end.
Reasons: Subsection 249(3) applies for all purposes of the Act. The definition of fiscal period in 249.1(1) is not affected by the deeming provision of 249(3).
Business Returns and Payments HEADQUARTERS
Processing Directorate Jacques E. Grisé
Mr. R.G. Quiney 957-2059
Director General
982345
Subsection 249(3)
This is in reply to your memorandum of September 3, 1998 concerning the interpretation of subsection 249(3) of the Income Tax Act (the Act).
You relate a situation where a corporation has a fiscal period of December 29, 1996 to January 3, 1998. Subsection 249(3) of the Act deems the corporation to have a taxation year ending on the last day of 1997 for all purposes of the Act. Accordingly, in accordance with paragraph 150(1)(a) of the Act, an income tax return would need to be filed by the corporation in respect of its 1997 taxation year within six months from December 31, 1997. A penalty pursuant to subsection 162(1) of the Act is applicable where the corporation fails to file the return as and when required by paragraph 150(1)(a) of the Act. Interest on the tax owing by a corporation runs from the day after a corporation’s balance due day for a taxation year rather than its filing due date.
Paragraph 249.1(1)(a) of the Act permits a corporation to have a 53 week fiscal period. This would be the case whether or not the provisions of subsection 249(3) of the Act apply. Subsection 249(3) of the Act deems a taxation year to end on a day other than the end of its fiscal period; it does not reduce the length of the fiscal period. For this reason the fiscal period of the corporation would commence on January 4, 1998 and not January 1, 1998.
Please call Jacques Grisé should you wish to discuss the above.
Roy C. Shultis
Director General
Income Tax Rulings and
Interpretations Directorate
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