Businessman

by Gary Mandel
(Ashqelon, Israel)

When are Corporate Income Taxes and GST Statute Barred. ie
how many years from what date?

Hi Gary,

D. Laurence Armstrong, of Armstrong Wellman, is an experienced tax litigator. I have taken this exerpt from his website www.loophole.ca.

Pursuant to the Income Tax Act the normal period of assessment is three years. If a Return was filed for the 1999 tax year, for example in April of 2000, and assessed (received and acknowledged by Revenue Canada) a couple of months later, say by July 1st, then the three years would run from July 1, 2000. After July 1, 2003 CRA cannot reassess the file unless they allege that the taxpayer was guilty of some misconduct or gross negligence in preparing the Return, in which case they are able to bypass the three-year limitation.



The CRA often seek a waiver if they require more time and the taxpayer's return is about to become statute-barred. Here is Mr. Armstrong's information on Requests for Waivers that might be of interest to you.

The normal period for reassessment is 3 years. As that time approaches, Taxpayers are often requested to provide a Waiver, allowing the Statute Bar period to be extended indefinitely. CRA threatens they will reassess unless the Waiver is signed. In almost every instance, they are going to reassess anyway - the Waiver just gives them more time to gather information to be used against you. The decision as to whether to provide a waiver or not should be made in consultation with your lawyer.



The Canadian Tax Highlights newsletter from March 2205 deals with statute-barred amendments that might also interest you. The article is titled No Duty to Amend Return and can be found at

http://mail.ctf.ca/articles/News.asp?article_ID=2622