and Revenue Administration
Corporate Tax Act
Special Notice Vol. 5 No. 47
||July 26, 2017
||Alberta Treasury Board and Finance, Tax and
|For more information:
5 No. 47 / July 2017
TAX STATUTES AMENDMENT ACT, 2017
NOTE: This special notice is intended to explain legislation and provide specific information. Every effort has been made to ensure the contents are accurate. However, if a discrepancy should occur in interpretation between this special notice and governing legislation, the legislation takes precedence.
Bill 15, Tax Statutes Amendment Act, 2017, received Royal Assent on June 7, 2017. The bill included various amendments to the Alberta Corporate Tax Act (the Act). The more significant changes are explained below.
Electronic Filing of Returns by Tax Preparers
Section 36.1 of the Act has been amended for consistency with the federal provisions added in 2012 requiring a tax preparer to electronically file returns in circumstances where the tax preparer accepts consideration to prepare more than 10 returns. Like the federal rules, tax preparers may continue to file up to 10 returns other than by way of electronic filing.
Section 37.3 has been added to the Act to impose a penalty on a corporation that fails to file a return electronically when required to do so. The penalty is $1,000 and is consistent with the federal penalty imposed under section 162(7.2) of the Income Tax Act (Canada).
Section 37.4 has been added to the Act to impose a penalty on a tax preparer that fails to file a return electronically when required to do so. The penalty is $100 for each such failure and is consistent with the federal penalty imposed under section 162(7.3) of the Income Tax Act (Canada).
The amendments to section 36.1 of the Act in respect of tax preparers and new sections 37.3 and 37.4 imposing penalties are effective in respect of returns for taxation years ending after December 31, 2017.
Amendments to the Alberta Corporate Tax Regulation prescribing the corporations required to electronically file returns are currently under consideration and additional information will be made available in the future.
Electronic Filing of Notices of Objection
Section 48 of the Act has been amended to permit taxpayers to serve notices of objection by way of “electronic filing”, which is defined to mean using electronic media in a manner specified in writing by the President of Treasury Board, Minister of Finance.
The manner for serving notices of objection by way of electronic filing is currently under consideration. Full details and additional information will be specified in writing at the time the process is ready to be implemented. Until then, taxpayers continue to be required to serve notices of objection by registered letter.
Federal Bill C-29 Amendments Paralleled by Alberta
The Act has been amended to parallel certain amendments to the Income Tax Act (Canada) passed by the federal government as part of Bill C-29, Budget Implementation Act, no. 2, which received Royal Assent on December 15, 2016. This bill implemented certain provisions of the federal budget tabled in Parliament on March 22, 2016 and other measures. In general, Alberta parallels federal effective dates for technical amendments in order to remain consistent with the dates that corporations would have made the respective reporting changes.
- Prevention of multiplication of access to the small business tax rate
Section 22 of the Act has been amended to parallel the federal provisions that amended the anti-avoidance rules that prevent the multiplication of access to the small business deduction and the avoidance of the business limit and taxable capital limit.
The amendments to section 22 of the Act apply to taxation years beginning after March 21, 2016, and to each taxation year beginning before March 22, 2016 and ending after March 21, 2016 in a manner consistent with the timing of the federal provisions.
- Alternative basis for assessment
Section 45(3) of the Act enables the President of Treasury Board, Minister of Finance to advance alternative arguments in support of an assessment after the normal reassessment period has expired. Consistent with amendments made to section 152(9) of the Income Tax Act (Canada), section 45(3) of the Act has been amended to clarify that the President of Treasury Board, Minister of Finance may advance alternative arguments in support of all or any portion of the total amount determined on assessment to be payable or remittable by a taxpayer at any time where the assessment is under objection or appeal. However, the President of Treasury Board, Minister of Finance is not permitted to advance an alternative argument that would prejudice the right of the taxpayer to introduce rebuttal evidence.
The amendment to section 45(3) of the Act applies to appeals commenced on or after December 31, 2016.