A corporation resident in Canada (“CRIC”) has balances of accounts receivable reflecting the accumulation of hundreds of sales including to related non-resident companies such that within the past two taxation years s. 15(2) or 212.3(10)(c) became applicable. PLOI elections will now be late-filed. Does an “amount” arise for each intercompany sale and, if so, would CRA administratively accept that there was one accumulated “amount” for the year (or some shorter period) for penalty-computation purposes? CRA responded:
[E]ach intercompany transaction resulting in a receivable…and therefore, each incremental increase in the total accounts receivable balance should be treated as a unique amount of indebtedness.
As a result, the PLOI election will have to be made in respect of each such amount, notwithstanding that a taxpayer may prepare and file a single written communication for the various amounts owing. It follows then that, based on the language of subsections 15(2.13) and 212.3(13), the penalty calculations should also be done separately for each such amount. …
We have consulted with the International, Large Business and Investigations Branch (formerly the Compliance Programs Branch) to determine whether an administrative position could be taken in the situation described above to aggregate certain amounts receivable for purposes of the PLOI elections penalty calculation and, if so, whether such aggregation should be made on an annual, quarterly, or monthly basis.
The possibility of providing administrative relief in this regard is currently under review.