4 August 1983 Income Tax Severed Letter

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.

August 4, 1983

TO: OTTAWA TAXATION CENTRE Petroleum and Gas Revenue Tax Section

ATTENTION: W. A. Garrioch Section Chief

FROM: HEAD OFFICE Corporate Rulings Directorate J.C. Clark Tel: 593-6201

RE: Application of subsection 100(3) of the PGRT Act in amalgamation situations

This is to advise you of our opinion on the application of subsection 100(3) of the PGRT Act in amalgamation situations.

Subsection 100(3) of the PGRT Act provides that:

(3) Every person who pays a resource royalty or an incremental resource royalty in a calendar year shall

(a) make an information return in prescribed form and containing prescribed information in respect of all such payments made in the year;

(b) file the return with the Minister, without notice or demand therefor,

i) in any case where the person discontinues his business or activity, within thirty days of the date of the discontinuance of the business or activity, or

ii) in any other case, on or before the last day of February of the next following year; and

(c) forward to each taxpayer, in respect of whose resource royalty or incremental resource royalty the return relates, at his latest known address or deliver to him in person, one copy of the portion of the return relating to the tax- payer on or before the date the return is required to be filed with the Minister.

Form PG5 has been prescribed for purposes of paragraph 100(3) (a) of the PGRT Act. We were recently asked whether a PG5 return is required to be filed within thirty days of an amalgamation, pursuant to subparagraph 100(3)(b)(i) on behalf of a predecessor or an amalgamated company. It is our opinion, based on the findings of the Supreme Court in The Queen v. Black & Decker Manufacturing Company, Limited ((1975) 1S.C.R. 411), that an amalgamated company continues the business of its predecessors. Therefore no early PG5 filing on behalf of the predecessor company pursuant to subparagraph 100(3)(b)(i) should be required. The amalgamated company is required to file on behalf of its predecessors pursuant to subparagraph 100(3) (b)(ii) of the PGRT Act.

This position has been reviewed with the Audit Applications and Industry Studies Sections of Policy & Systems Branch.

Chief Mines, Oil & Forest Industries Section Specialty Corporations Rulings Division Corporate Rulings Directorate Legislation Branch

c.c. D.L. Cumming, Chief, Industry Studies Section S.C. Lemelin, Chief, Audit Applications Section