8 July 2009 GST/HST Interpretation 115461 - Due Date of the Return for the Period Ending on the Date of Bankruptcy

Please note that the following document, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence.

DATE
July 8, 2009
TO
À
XXXXX
XXXXX
XXXXX
XXXXX
XXXXX
XXXXX
XXXXX
FROM
DE
Dwight Kostjuk
Rulings Officer
Specialty Tax, FIRP
Canada Revenue Agency
FILE
DOSSIER
115461

SUBJECT :

_GST/HST Interpretation

OBJET :

Due date of the return for the period ending on the date of bankruptcy

Thank you for your query concerning the due date of a registrant's return for the period ending on the date of bankruptcy where the registrant is an annual filer with a calendar year-end.

Paragraph 265(1)(g) of the ETA clarifies the rules for determining reporting periods for the activities of the bankrupt. This paragraph provides that such reporting periods begin and end at the time they otherwise would have begun and ended had the bankruptcy not occurred. However, the reporting period during which bankruptcy occurs will be deemed to end on the day of bankruptcy and a new reporting period is deemed to begin on the day immediately following bankruptcy. As a result, once a registrant is put into bankruptcy, the registrant's current reporting period is terminated. Further, as the registrant's current reporting period is terminated by virtue of the bankruptcy, the reporting period at issue is no longer the fiscal year.

The consequence is that the bankruptcy creates a new reporting period that ends on the day the registrant became bankrupt. This reporting period is not a reporting period for a fiscal year to which paragraph 238(1)(a) of the ETA applies. As a result, subsection 238(1)(b) applies to require the registrant to file the return within one month after the end of the reporting period. Similarly, the reporting period that begins on the day after the registrant became bankrupt and ends on the last day of the registrant's fiscal year is not a reporting period for a fiscal year to which paragraph 238(1)(a) applies. The registrant is required to file this return within one month after the end of the reporting period according to paragraph 238(1)(b) of the ETA.

Should you have any questions or wish to discuss further, please call me at 613-957-1175.

XXXXX.

UNCLASSIFIED