CRA will not accommodate "as of" eligible dividend designations

Although an eligible dividend designation by a non-public corporation normally is required to be made at the time of the dividend payment, s. 89(14.1) now gives CRA the discretion to allow the designation to be made up to three years late where this is "just and equitable."  Citing a desire to limit its administrative burden and to avoid eviscerating the legislative requirement of contemporaneous designations, CRA has stated that relief essentially will be limited to situations of honest and apparent mistake - for example, where subsidiaries of a public corporation (which were subject to tax at full corporate tax rates) failed to make timely designations.  However, CRA will not accommodate taxpayers who purport to declare dividends "as of" a preceding year end, and need CRA to grant an "as of" eligible dividend designation.

Neal Armstrong.  Summary of 29 May 2012 CTF Prairie Tax Conference 2012 Round Table Q. 18, 2012-0445661C6 under s. 89(14.1).