Section 231.8

Table of Contents

Section 231.8
Articles(1)
Subsection 231.8(1)
Articles(1)

Articles

Nick Pantaleo, Marisa Wyse, "Power to Lengthen Assessment Period", Canadian Tax Highlights, Vol. 26, No. 5, May 2018, p. 1

S. 231.8 to extend the reassessment period for the time during which an s. 231.2 requirement or an s. 231.7 compliance order is being contested (p. 1)

[T]he stop-the-clock period begins (1) in respect of a requirement, when the taxpayer applies for judicial review; and (2) in respect of a compliance order, when the taxpayer opposes the application. The period ends on the day the relevant application is “finally disposed of.”…

Chilling effect of s. 231.8

[T]he stop-the-clock suspension operates in respect of all audit issues, not just those to which the requirement or compliance application relates. In effect, proposed section 231.8 may deter taxpayers from challenging a requirement through the judicial review process because the challenge would result in extending the life of all issues to which the reassessment period relates.

Subsection 231.8(1)

Articles

Joint Committee, "Submission regarding proposed audit powers in Budget 2024 included in the August 2024 Draft Legislation", 11 September 2024 Joint Committee Submission

Inappropriate scope of tolling (pp. 14-17)

The revised version of s. 231.8 would generally expand the circumstances in which the running of the normal reassessment period for a taxpayer was suspended (“tolling”) for notices of non-compliance (“NNCs”) or compliance procedures regarding a person who does not deal at arm’s length with the taxpayer “in respect of the taxation year of the taxpayer.” In this regard:

  • It is unclear how the quoted phrase is to be applied as a connecting factor;
  • It is unclear how to apply the test of a factually non-arm’ length relationship given that this test is generally applied in relation to a particular transaction;
  • Furthermore, the normal reassessment period is not stopped when the NNC is vacated by the Minister but is stopped for the period of time it takes for the Federal Court to vacate the NNC; there should be no such tolling if the Court vacates the NNC.

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