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: What is the effective interest date for a penalty imposed under s. 162(7.02)?
Position: Interest is charged from the day immediately following the day that the return was required to be made until the day of payment.
Reasons: S. 161(11)(a)(ii).
October 18, 2010
Business Relations Directorate HEADQUARTERS
Business Relations and Services Income Tax Rulings
Division Directorate
Lindsay Frank
Attention: Ron Droeske, Manager (613) 948 - 2227
Information Returns Systems
Development Section
2010-038064
Interest on Subsection 162(7.02) Penalty
This is in reply to an email from Sandra Helmes. At issue is the question what is the effective interest date for the penalty imposed under subsection 162(7.02) of the Income Tax Act (the "Act").
Pursuant to subsection 162(7.02) of the Act, a person, other than a registered charity, who fails to electronically file a prescribed information return as required by the regulations, is liable to a penalty. Under subparagraph 161(11)(a)(ii), interest is payable on that penalty from the day the return was required to be made to the day of payment.
It should be noted, however, that subsection 27(4) of the Interpretation Act, R.S.C. 1985, c. I-21, provides that "where a time is expressed to begin after or to be from a specified day, the time does not include that day." Accordingly, interest on the penalty would be imposed under subsection 162(7.02) on the day immediately following the day on which the return was due.
Please note that this interpretation is provided without indicating which information returns will be governed by subsection 162(7.02). XXXXXXXXXX .
Should you have any questions or require additional information, please do not hesitate to contact Lindsay Frank at the number provided above.
B.J. Skulski
Manager
Insolvency and Administrative Law Section
Ontario Corporate Tax Division
Income Tax Rulings Directorate
c.c. Sandra Helmes
Information Returns Systems Development Section
Business Relations and Services Division
Cornelis Rystenbil
Legislative Policy Directorate
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