Principal Issues: [TaxInterpretations translation] Is a provincial Crown corporation required to file a T2 Corporation Income Tax Return and Form T106?
Position: No
Reasons: CRA position
2009-031430 XXXXXXXXXX Catherine Ayotte Notary, M.Fisc. June 8, 2009
Dear Madam,
Subject: Requirement to file a T2 for a provincial Crown corporation
This is further to your letter of February 27, 2009 requesting our opinion regarding the requirement to file a T2 Corporation Income Tax Return (and Form T106) for XXXXXXXXXX.
Please note that unless otherwise indicated, all legislative references herein are to the provisions of the Income Tax Act (the "Act"); all references to the "Regulations" are to the Income Tax Regulations.
It appears to us that the situation described in your letter could constitute an actual situation involving taxpayers. As explained in Information Circular 70-6R5, it is not this Directorate's practice to comment on proposed transactions involving specific taxpayers otherwise than in the form of an advance income tax ruling. If your situation involves a specific taxpayer and a completed transaction, you should provide all relevant facts and documents to the appropriate Tax Services Office for its views. However, we are prepared to provide the following general comments.
The Canada Revenue Agency (CRA) has taken a position with respect to provincial Crown corporations that they are not required to file a T2 Corporate Income Tax Return. This position also applies to the forms that must be filed with the T2 return, including Form T106: Information Return of Non-Arm's Length Transactions with Non-Residents. We understand that XXXXXXXXXX is designated as a provincial Crown corporation and would therefore be covered by the position stated above. With respect to wholly-owned subsidiaries of XXXXXXXXXX, we are of the view that it must be determined whether such subsidiaries for the Quebec public administration purposes are Crown corporations.
To obtain confirmation that a wholly-owned subsidiary XXXXXXXXXX is a Crown corporation, we suggest that you contact the Ministère des Ressources naturelles et de la Faune du Québec, which is responsible for XXXXXXXXXX.
We hope that our comments are of assistance.
Best regards,
Ghislain Martineau
Manager
Financial Sector and Exempt Entities Section
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch.