Subsection 150(1) - Filing returns of income — general rule
Cases
Coffen v. The Queen, 97 DTC 5552 (Ont. Ct. J. (G.D.))
Sheppard J. noted that there was no requirement on an individual taxpayer to file a return if no tax was payable by him for the year in question.
Paragraph 150(1)(a) - Corporations
Administrative Policy
10 October 2014 APFF Roundtable Q. 27, 2014-0538211C6 F
(e) Will CRA accept an estimate of the percentage of revenue generated in Sched. 88? (f) CRA responded (TaxInterpretations translation):
…(e)…[W]here after making reasonable efforts, the taxpayer is not in a position to provide the exact percentage of its revenue derived from all its internet business activities, a reasonable estimate of these will be acceptable.
…(f)…[I]n general, a taxpayer will not have to declare a website which does not directly generate income. For example, the following types of websites are not included:
- Telephone directory sites which list the web or site page of the business
- Web pages or sites which only provide information.
Generally, banks generate income through their websites, for example, from transaction, fund transfer and cheque order charges. Accordingly,…these sites must be declared.
25 April 2014 Memorandum 2014-0521541I7 - Requirement for Crown corporations to file T2
28 November 2011 November CTF Roundtable Q. , 2011-0426591C6
A US partnership (USFirm) subcontracts part of its contract, to perform consulting services to an arm's length Canadian customer (Canco), to an arm's-length Canadian professional firm (CanFirm) and Reg. 105 witholding is deducted by Canco on payments made to USFirm. In response to queries as to whether CRA require every partner of USFirm that is allocated income pertaining to the activities in Canada to file a Canadian tax return to claim its share of the withholding, and whether CRA requires every partner that is a corporation to file a Canadian corporate income tax return under the "carrying on business in Canada" criteria, CRA stated:
There is currently no administrative procedure whereby a refund can be issued in respect of a particular non-resident partner's share of the Regulation 105 withholding without that partner filing a tax return. However, where a partnership can demonstrate, based on treaty protection, that the normally required withholding is in excess of the ultimate tax liability, the partnership can make an application for a treaty-based waiver of Regulation 105 withholding on behalf of the partnership.
Corporate members of a partnership must file an income tax return pursuant to paragraph clause 150(1)(a)(i)(B) if they carry on business in Canada (i.e. including through a partnership).
Corporation income tax return
All resident corporations (except Crown corporations, Hutterite colonies and registered charities) have to file a corporation income tax (T2) return every tax year even if there is no tax payable. This includes:
- non-profit organizations;
- tax-exempt corporations; and
- inactive corporations.
T2 SCH88 Internet Business Activities
File this schedule if your corporation earns income from one or more webpages or websites.
Paragraph 150(1)(c) - Trusts or estates
See Also
Lussier v. The Queen, 2000 DTC 1677, Docket: 97-1928-IT-G (TCC)
In finding that a subsequently-filed letter request was a valid late designation under s. 104(13.1), Archambault J stated (at paras. 25, 26):
[A]lthough there is no general provision in the Act authorizing Canadian taxpayers to amend tax returns already filed, there is nothing to prevent them from doing so…[and] it is in the interest of tax administration to allow such amendments. …
…[T]he letter…was an amendment to the estate's tax return and its effect was to amend the initial return.
Administrative Policy
Undated, Rulings Division Summary (Tax Window, No. 3, p. 31, ¶1251)
A T3 return must be filed where a taxpayer has died, even where no trust is created by the deceased's will, the estate is liquidated within six or seven months and the beneficiaries are instructed by the executor to report their respective shares of the only income of the trust.
Paragraph 150(1)(d) - Individuals
Cases
Rezek v. The Queen, 2005 DTC 5373, 2005 FCA 227
After confirming the Minister's position that the taxpayer and his wife were engaged in spread transactions as a partnership, and therefore that losses generated by the taxpayer could not be exclusively allocated to him (see summaries under ss. 96 and 248(1) - "property"), Rothstein JA found that s. 39(4) elections that were made with late-filed returns were valid.
The Minister argued that the s. 150(1) requirement that returns be filed on 30 April of the year following the taxation year, and the s. 39(4) requirement that the election be filed with a return, established a 30 April deadline for the election. Rothstein JA stated (at para. 114):
Where the Act prescribes sanctions for late filing, those sanctions will apply. Where it does not, the Court will not read into the Act sanctions that do not appear.
See Also
Saunders v. The Queen, 2010 DTC 1099 [at 3025], 2010 TCC 114
A CRA office set up a deposit box for returns. The taxpayer's return was not late, given that the taxpayer's accountant testified that he delivered the return on the 29th of April, and that the CRA office had no timestamp process in place.
Subsection 150(2) - Demands for returns
Cases
R. v. Merkle, 80 DTC 6027, [1971] CTC 519 (Alta. C.A.)
(1) The use in s. 150(2) of the language "whether or not he is liable" (suggesting that Parliament "did not intend to rule out 'all' defences, only that one"), (2) the reference to a "reasonable" time for complying, and (3) the fact that taxpayers in remote locations or an incapacitated state might not be able to respond within the stipulated time, all indicate that s. 150(2) creates a strict liability rather than an absolute liability offence. The taxpayer accordingly was able to exculpate himself by establishing that he had exercised due diligence, i.e., he had provided an accountant with the requisite data and instructed him to complete and file a return, but the return was not filed until after the stipulated time.
Subsection 150(3) - Trustees, etc.
Administrative Policy
14 March 2013 Memorandum 2012-0451131I7 - Trustee's Rights & Obligations under the Act
Although s. 22 of the Bankruptcy and Insolvency Act requires a trustee to file only the return for the taxation year before the year of bankruptcy, and the return for the year of bankruptcy, s. 164(2.01) of the Act forbids the Minister from paying a refund where returns have not been filed under the Act. Therefore, unless the trustee complies with subsections 150(3) and 164(2.01) of the Act (i.e., filing all outstanding returns), the Minister cannot pay out any refunds otherwise payable to the taxpayer.