Budget 2013 - Extended Reassessment Period - Tax Shelters and Reportable Transactions
Notice to the reader
This measure received Royal Assent on December 12, 2014.
The budget proposes to extend the reassessment period if either a tax shelter or a reportable transaction information return was not filed, late-filed or included incorrect information.
When is a Tax Shelter Information Return (Form T5003) required to be filed?
A tax shelter promoter must file a Tax Shelter Information Return (Form T5003) in respect of the acquisition of an interest in a tax shelter for the calendar year of sales designated on Form T5001, Application for Tax Shelter Identification Number and Undertaking to Keep Books and Records. Form T5003 must be filed on or before the last day of February of the following calendar year.
Refer to Tax Shelter Information Return Form T5003SUM for further information on the definition of a tax shelter promoter and on what information needs to be provided on the return.
What is a reportable transaction?
Following the consultation process announced in Budget 2010, legislative proposals have been tabled to introduce a new information return related to certain tax avoidance transactions (reportable transactions). Refer to the October 24, 2012 Department of Finance News Release for further information on what is a reportable transaction and on what information needs to be provided. Please note that the Reportable Transaction Information Return (Form RC312) is presently not available on the CRA Web site but will be available in the near future.
When is a Reportable Transaction Information Return (Form RC312) required to be filed?
The Reportable Transaction Information Return (RC312) must be filed on or before June 30 following the calendar year in which a transaction first became a reportable transaction for a person. As a transitional provision, the RC312 is considered to be filed on time if it is filed 120 days after the day on which the reportable transaction changes receive Royal Assent.
What is the normal reassessment period?
Generally, the CRA is prevented from processing a reassessment for additional tax after the normal reassessment period, which is three years after the day a notice of an original assessment is sent to a taxpayer (four years for a mutual fund trust or a corporation that is not a Canadian-controlled private corporation).
How is the reassessment period changing related to taxpayers who must file a Tax Shelter Information Return or a Reportable Transaction Information Return?
For taxation years ending after March 20, 2013, the budget proposes to extend the reassessment period for a taxation year of a taxpayer. If the Tax Shelter Information Return (Form T5003) or the Reportable Transaction Information Return (Form RC312) has not been filed as and when required, the reassessment period is extended by three years after the date, if any, that the information return has been filed.
Where can I get more information about the changes to the Extended Reassessment Period in regards to Tax Shelters and Reportable Transactions?
The CRA is committed to providing taxpayers with up-to-date information. The CRA encourages taxpayers to check its Web pages often. All new forms, policies, and guidelines will be posted as they become available.
In the meantime, please see the Department of Finance Canada's Budget 2013 documents for details.
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