Principal Issues: (1) In the given fact situation, where two associated corporations share the business limit for the purpose of the SBD, both corporations were reassessed to allow a loss carry-back to the same year, pursuant to 152(6) (as a consequence of which part of the business limit of one of the corporations (the first corporation) is unused), and, the amount of the loss-carry back by the second corporation must be reduced, whether the tax payable by the second corporation can be reassessed after the normal reassessment period has expired, pursuant to 152(4)(b)(i), to reduce the loss carry-back and to allow it the amount of the unused business limit of the first corporation? (2) In a case where tax payable by a corporation in a particular year is reassessed as a consequence of a loss carry-back request made pursuant to 152(6), whether the Minister in reassessing the corporation's tax pursuant to 152(6) includes recalculating the corporation's abatement under 124(1) and M&P credit under 125.1(1) using the revised taxable income?
Position: (1) Yes. (2) Yes.
Reasons: (1) The requirement under 152(4)(b)(i) is not met with respect to increasing the business limit and the SBD as such reassessment is not required pursuant to 152(6). However, the CRA`s administrative practice, in such circumstances, could apply provided the corporations file a revised T2 SCH 23. (2) Once taxable income is determined or revised the deductions in the computation of tax under 124(1) and 125.1(1) are mechanical.
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May 2, 2005 |
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Ms. Christiane Desroches, Policy and Planning Branch |
Income Tax Rulings Directorate |
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Technical Advisor |
Marc LeBlond |
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Section number 443-1-0 |
(613) 946-3261 |
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Quebec Tax Services Office |
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Audit Division |
2005-011394 |
Subsections 152(4), 152(4.01) and 152(6) of the Income Tax Act
This is in response to your email of January 28, 2005 in which you requested our comments on the application of the provisions of the Income Tax Act referred to above in general and in the situation described below in particular. In this regard, you have provided us with a copy of Mr. François Rheault's request from your office. We have also taken into account the additional information you have provided to us by telephone.
Unless otherwise indicated, all statutory references herein are to provisions of the Income Tax Act (the "Act").
The Situation
- XXXXXXXXXX (Ainc.) and XXXXXXXXXX. (Binc.) are "Canadian-controlled private corporations" as defined in subsection 125(7). Their "fiscal year", as defined in subsection 249.1(1), ends on XXXXXXXXXX. During their 2000 to 2003 taxation years, Ainc. and Binc. were "associated", as defined in subsection 256(1).
- The CRA has reassessed the tax payable for each of Ainc. and Binc.'s 2000 taxation year as a result of a request to carry non-capital loss(s) to a subsequent taxation year(s) pursuant to subsection 152(6). The taxable income for the 2000 taxation year was revised as follows:
Taxation year 2000
Ainc.
Binc.
Date of initial assessment
2001-05-07
2001-01-25
- Taxable income
$XXXXXXXXXX
$XXXXXXXXXX
Dates of reassessments
2002-09-11
2003-10-09
2003-10-06
- Loss carried back from 2002
XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX
- Loss carried back from 2003
XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX - Adjusted taxable income
XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX
- In Form T2013 - "Agreement Among Associated Corporations” for allocation of the business limit, which they filed, duly completed and signed, with their income tax return for the 2000 taxation year, Ainc. and Binc. allocated the $200,000 business limit amount for the year between them in the amounts of $XXXXXXXXXX and $XXXXXXXXXX respectively.
- The reassessment for Binc.'s 2000 taxation year resulted in a portion ($XXXXXXXXXX) of the business limit for the year not being used by Ainc. or Binc. To date, Ainc. and Binc. have not filed an amended T2013 (since 2003, the T2 SCH 23).
- As a result of a recent audit of the 2002 and 2003 tax returns, the CRA has determined that Ainc.'s 2002 loss of $XXXXXXXXXX must be reduced by $XXXXXXXXXX (thus, to $XXXXXXXXXX), the 2003 loss of $XXXXXXXXXX must be disallowed in its entirety, and taxable income of $XXXXXXXXXX must be recognized for that year. Ainc.'s tax return for the 2000 taxation year must therefore be reassessed to increase the taxable income by $XXXXXXXXXX, i.e. from $XXXXXXXXXX to $XXXXXXXXXX.
- The "normal reassessment period" ("NRP"), as defined in subsection 152(3.1), applicable to Ainc. and Binc. for the 2000 taxation year has expired.
Your Questions
Your first question is whether, in the situation presented, the CRA may, pursuant to subparagraph 152(4)(b)(i), reassess Ainc.'s tax payable for the 2000 taxation year taking into account both revised amount of losses carried back to that year and a reallocation of the section 125 business limit for 2000 between Ainc. and Binc. of $XXXXXXXXXX and $XXXXXXXXXX, respectively.
You brought to our attention Technical Interpretation E 9336616 of March 10, 1994 (the "Technical Interpretation") in which we answered a question similar to your first question in a similar situation. With respect to the "Technical Interpretation", you asked whether our position in it is still valid given that since the "Technical Interpretation" the relevant provisions of the Act have been amended and the passages of IT-64R3 on which it is based are no longer in that Bulletin, although they have been reproduced in part in IT-73R6. If the answer to this question is yes, you wish to know whether the position taken in the "Technical Interpretation" could apply in the situation you have presented to us.
Your third question is regarding the following passage in subsection 152(6):
... the Minister shall reassess the taxpayer’s tax for any relevant taxation year (other than a taxation year preceding the particular taxation year) in order to take into account the deduction claimed.
[Emphasis added]
In that regard, in the case of a claim by a corporation for a deduction for a particular taxation year under paragraph 111(1)(a) in respect of a non-capital loss incurred in a subsequent taxation year, you asked whether the CRA, in reassessing the tax to take into account the loss deducted in computing the corporation's taxable income for the particular year claimed by virtue of subsection 152(6), is also required to take into account:
(i) the taxable income as revised for the purpose of computing the amount of the 10% abatement that may be deducted from the particular corporation's tax otherwise payable for that year pursuant to subsection 124(1); and
(ii) the effect of the reduction in taxable income, if any, for the purpose of computing the manufacturing and processing profits credit that the corporation may deduct from its tax otherwise payable for the particular year pursuant to section 125.1.
In addition, you asked whether our answer would be different if the tax payable for the particular taxation year of the corporation were to be reassessed to adjust the subsequent loss carried back to that year and the "NRP" [normal reassessment period] had expired.
Our Comments
Response to Question 1
In our view, the CRA may, under subparagraph 152(4)(b)(i), reassess the tax payable by Ainc. for its 2000 taxation year. However, a reassessment under subparagraph 152(4)(b)(i) could technically only reflect the revised loss carrybacks; and thus, any changes to the allocation of the business limit between Ainc. and Binc. could not be taken into account. Our conclusion is based on the following observations.
Paragraph 152(4)(b) allows the CRA to reassess tax payable for a taxation year, in certain circumstances, up to three years after the end of the "NRP" (i.e., the "extended reassessment period", the "ERP"). The circumstances in which the "ERP" applies are set out in subparagraphs 152(4)(b)(i) to (vi). In the situation you have submitted, the relevant parts of subsection 152(4) read as follows:
152(4) The Minister may at any time make an assessment, reassessment or additional assessment of tax for a taxation year, interest or penalties, if any, payable under this Part by a taxpayer or notify in writing any person by whom a return of income for a taxation year has been filed that no tax is payable for the year, except that an assessment, reassessment or additional assessment may be made after the taxpayer’s normal reassessment period in respect of the year only if
[...]
(b) the assessment, reassessment or additional assessment is made before the day that is 3 years after the end of the normal reassessment period for the taxpayer in respect of the year and
(i) is required pursuant to subsection 152(6) or would be so required if the taxpayer had claimed an amount by filing the prescribed form referred to in that subsection on or before the day referred to therein,
(ii) is made as a consequence of the assessment or reassessment pursuant to this paragraph or subsection 152(6) of tax payable by another taxpayer,
[Emphasis added]
In general, a reassessment of tax payable by a taxpayer for a particular year pursuant to subparagraph 152(4)(b)(i) differs from a reassessment pursuant to subparagraph 152(4)(b)(ii) in that in the case of subparagraph (i), the reassessment can only be made in respect of an amount that was or could have been claimed for that year by the taxpayer under subsection 152(6); whereas in the case of subparagraph (ii), the reassessment may be made only as a result of a reassessment of tax payable by another taxpayer under subsection 152(6).
The right to reassess within the "ERP", provided for in paragraphs 152(4)(a) and (b), is restricted by subsection 152(4.01) to the purpose that gave rise to the right to reassess outside the "NRP". In the situation you have submitted, the relevant portions of subsection 152(4.01) read as follows:
152(4.01) Notwithstanding subsections 152(4) and 152(5), an assessment, reassessment or additional assessment to which paragraph 152(4)(a) or 152(4)(b) applies in respect of a taxpayer for a taxation year may be made after the taxpayer’s normal reassessment period in respect of the year to the extent that, but only to the extent that, it can reasonably be regarded as relating to,
[...]
(b) where paragraph 152(4)(b) applies to the assessment, reassessment or additional assessment,
(i) the assessment, reassessment or additional assessment to which subparagraph 152(4)(b)(i) applies,
(ii) the assessment or reassessment referred to in subparagraph 152(4)(b)(ii),
[Emphasis added]
Historically, our Directorate has strictly applied the Minister's right under paragraph 152(4)(b) and the restriction under subparagraph 152(4.01)(b)(i). For example, in Technical Interpretation E 2001-0072127, the taxpayer requested that the CRA reassess his income tax return for a particular year, within the "ERP", in order to allow him to deduct an amount in respect of expenses that were allegedly overlooked in the computation of his net income for that year and to reduce by the same amount a loss carried back from a subsequent year that had been deducted in computing taxable income for that year. We concluded that the taxpayer's income tax return could be reassessed only with respect to an adjustment for the loss carried back, for the following reason:
However, subsection 152(4.01) of the Act states that where a reassessment of a taxation year is allowed pursuant to subparagraph 152(4)(b)(i) of the Act in respect of a loss carry back, and is made after the normal reassessment period applicable to the taxation year (as in this case), the reassessment can only be made to the extent that it relates to the loss carry back request. It follows that no further adjustment can be made to the computation of the income, loss or any other item of addition or deduction in such situation, even if requested by the taxpayer to do so.
[Emphasis added]
In Agazarian v. Canada, [2003] T.C.C. 95-2570(IT)G, 2004 FCA. 32, the taxpayer was reassessed twice for the 1987 taxation year. The first reassessment was issued to give effect to the taxpayer's loss carryback claim pursuant to subsection 152(6), and the second reassessment, which was issued in the "ERP", was issued to deny that loss pursuant to former subparagraph 152(4)(b)(i). Agazarian objected to the second reassessment on the basis that the CRA did not have the authority to reassess the same tax return twice in respect of the loss. In the Federal Court of Appeal's judgment in this case, Justice Pelletier in giving reasons for judgment, for the majority, stated the following with respect to the limitation on the Minister's right under former paragraph 152(4)(b):
Justice Pelletier:
[16] The power to reassess within the extended assessment period found in paragraph 152(4)(b) is then curtailed in the last words of subsection 152(4). Where such a reassessment occurs, it is limited to the subject matter of the specific power which authorizes its exercise. In this case, the power to reassess following a request for a reassessment to claim a loss carry-back, is limited to the loss carry-back itself. It does not open up the taxation year for reassessment on any other ground.
[Emphasis added]
Justice Pelletier, in the same case, confirmed that the restriction in subsection 152(4.01) on the Minister's right under paragraphs 152(4)(a) and (b) is essentially the same as that found at the end of former subsection 152(4), as follows:
[31] Subsection 152(4.01) restricts the right of reassessment within the extended reassessment period to the subject matter which gave rise to the right to reassess outside the normal reassessment period. It is therefore to the same effect as the final paragraphs of the former subsection 152(4).
[Emphasis added]
In our view, it is clear from Justice Pelletier reasons in Agazarian that the restriction in subsection 152(4.01), which provides for reassessment within the "ERP" only "to the extent that, it can reasonably be regarded as relating to …", limits reassessment strictly to the purpose that gave rise to the right to reassess outside the "NRP".
Thus, in the situation presented, we are of the view that the CRA is entitled, as you are about to do, to reassess a third time the tax payable by Ainc. for the 2000 taxation year within the "ERP" pursuant to subparagraph 152(4)(b)(i). However, this right to reassess tax for that year is restricted by subparagraph 152(4.01)(b)(i) to the purpose that gave rise to the right to make the first and second reassessments of Ainc.'s tax payable for the 2000 taxation year pursuant to subparagraph 152(4)(b)(i), i.e., the carryback of losses from the 2002 and 2003 years to the 2000 year, as requested by Ainc. pursuant to subsection 152(6). Consequently, this reassessment (pursuant to subparagraph 152(4)(b)(i)) cannot technically consider or take into account a reallocation of the business limit between Ainc. and Binc. for the 2000 taxation year.
Response to Question 2
Our position in the "Technical Interpretation" is still valid despite the changes to the relevant provisions of the Act. Furthermore, we believe that the CRA's administrative practice in paragraph 49 of Interpretation Bulletin IT-64R3 regarding the receipt of an amended Form T2013 (now paragraph 30 of Interpretation Bulletin IT-73R6) referred to in the "Technical Interpretation" may be applicable in the situation you have presented to us. Our conclusion is based on the following observations.
Amendments to former subsection 152(4) and Interpretation Bulletin IT-64R3
In our view, the reasoning in the "Technical Interpretation" is not affected by the amendments to the relevant parts of former subsection 152(4) and paragraph 49 of IT-64R3. Our conclusion is based on the following observations.
Former subsection 152(4) was replaced by S.C. 1998, c. 19, s. 181(4), effective April 28, 1989. The relevant passages of the current subsection 152(4) are quoted on page 5 and are not reproduced here.
The relevant passages of the former section 152(4) read as follows:
152.(4) Assessment.- Subject to subsection (5), the Minister may at any time assess tax for a taxation year, interest or penalties, if any, payable under this Part by a taxpayer or notify in writing any person by whom a return of income for a taxation year has been filed that no tax is payable for the taxation year, and may
[...]
(b) before the day that is 3 years after the expiration of the normal reassessment period for the taxpayer in respect of the year, if
[...]
(ii) there is reason, as a consequence of the assessment or reassessment of another taxpayer's tax pursuant to this paragraph or subsection (6), to assess or reassess the taxpayer's tax for any relevant taxation year,
[...]
(c) within the normal reassessment period for the taxpayer in respect of the year, in any other case,
reassess or make additional assessments, or assess tax, interest or penalties under this Part, as the circumstances require, except that a reassessment, an additional assessment or an assessment may be made under paragraph (b) after the normal reassessment period for the taxpayer in respect of the year only to the extent that it may reasonably be regarded as relating to
(d) the assessment or reassessment referred to in subparagraph (b)(i) or (ii),
(e) the transaction referred to in subparagraph (b)(iii), or
(f) the additional payment or reimbursement referred to in subparagraph (b)(iv).
[Emphasis added]
Section 152(4.01) was added at the same time as former section 152(4) was replaced and also applies from April 28, 1989.
The Explanatory Notes to Bill C-28 (Royal Assent: June 18, 1998, S.C. 1998, c. 19) [Published: December 1997] on subsection 152(4.01) make it clear that the restriction on the power to reassess within the "ERP" that was at the end of former subsection 152(4) is reflected in subsection 152(4.01), as follows:
New subsection 152(4.01) of the Act limits the matters in respect of which the Minister of National Revenue can reassess, where a reassessment to which paragraph 152(4)(a) or (b) applies is made beyond the normal reassessment period for a taxpayer in respect of a taxation year. In general terms, such a reassessment can be made only to the extent that it can reasonably be regarded as relating to a misrepresentation, fraud or waiver, or a matter specified in any of subparagraphs 152(4)(b)(i) to (v), because of which the Minister is able to reassess beyond the normal reassessment period.
[Emphasis added]
Furthermore, Justice Pelletier of the FCA in Agazarian drew a parallel between the latter part of former section 152(4) and section 152(4.01), as follows:
[31] Subsection 152(4.01) restricts the right of reassessment within the extended reassessment period to the subject matter which gave rise to the right to reassess outside the normal reassessment period. It is therefore to the same effect as the final paragraphs of the former subsection 152(4).
[Emphasis added]
Consequently, as there are no substantive changes but only minor drafting changes to the relevant provisions of the Act applicable in this case, the CRA's administrative position as applied in the "Technical Interpretation" is still valid.
In addition, as you stated, the administrative practice set out in paragraph 49 of Interpretation Bulletin IT-64R3 relating to the amended Form T2013 was essentially the same as that now set out in paragraph 30 of Interpretation Bulletin IT-73R6 – The Small Business Deduction (dated March 25, 2002) (the "CRA Practice").
Technical interpretation E 9336616
In the situation submitted in the "Technical Interpretation", to which you refer, the facts were as follows:
-
- Corp. A and Corp. B were "associated" with each other within the meaning of subsection 256(1).
- Corp. A requested a carryback pursuant to subsection 152(6) of a 1992 loss to its 1989 taxation year. The CRA granted Corp. A's request and reassessed its tax payable for the 1989 year, prior to the expiry of the "NRP" applicable for the 1989 year (the "First Reassessment").
- After the tax payable by Corp. A for the year 1989 was reassessed, Corp. A and Corp. B filed an amended Form T2013 amending the allocation of the 1989 business limit so that the amount of the limit unused by Corp. A, resulting from the "first reassessment", would be used by Corp. B.
- Corp. B requested that the CRA reassess tax for its 1989 taxation year in accordance with amended Form T2013. The "NRP" applicable to Corp. B for the 1989 taxation year had expired.
The question posed in the "Technical Interpretation" related to the application of the CRA's administrative practice in paragraph 49 of Interpretation Bulletin IT-64R3 (Archived March 9, 1992) - Corporations : Association and Control - After 1988, which reads as follows:
Revised Form T2013
49. After associated corporations filing their income tax returns for a particular taxation year, circumstances may arise e.g. income tax reassessments or losses incurred in the following taxation year) which result in a change in the taxable income for that particular taxation year of one or more of the associated corporations. The Department will accept a revised Form T2013 for the associated corporations and assess accordingly provided that
(a) the Form T2013 is filed within 90 days from the day of mailing a notice of assessment or a notification that no tax is payable for the particular taxation year of any of the associated corporations, and
(b) in the event that an associated corporation's return for the particular taxation year is statute-barred for the purposes of reassessment because of subsection 152(4), the revised form T2013 does not change the amounts allocated to that corporation for that taxation year.
[Emphasis added]
The CRA practice described above is an administrative practice (the "CRA Practice") because the Act does not provide for the filing of an amended Form T2013 (T2 SCH 23).
The question we were asked in the "Technical Interpretation" about the "CRA practice" was as follows:
You have questioned whether the associated corporations would be subject to a reassessment period as determined by subparagraph 152(4)(b)(ii) [i.e. within the "ERP"] or paragraph 152(4)(c) [i.e. within the “NRP”] of the Act. This would in turn determine whether or not the return of the particular associated corporation (Corp. B) is statute-barred for the purpose of the Department's practice as outlined in paragraph 49 of Interpretation Bulletin IT-64R3 Corporations: Association and Control - After 1988.
[Additions]
In the "Technical Interpretation", we suggested that it was possible that the amended Form T2013 filed by Corp. A could be accepted because of "CRA practice" and that it was then possible to reassess the tax payable by Corp. B within the "ERP", by virtue of former subparagraph 152(4)(b)(ii), as follows:
… If an amended T2013 is accepted for Corp. A for a reallocation of the business limit for the 1989 taxation year, this will also result in a reassessment. It could then be argued that this subsequent reassessment [for Corp. A] does provide the reason to reassess Corp. B's tax for the 1989 taxation year if Corp. B's business limit allocation is changed as a result of the amended T2013 filed by Corp. A.
Therefore, in our opinion, the extended period provided for in subparagraph 152(4)(b)(ii) of the Act would be applicable in the circumstances outlined above in determining the time within which Corp. B can be reassessed as a result of the filing of an amended T2013 by Corp. A.
[Emphasis added]
Application of Technical Interpretation E 9336616 to the particular situation
The situation you have submitted to us is similar to the one described in the "Technical Interpretation":
-
- A portion of the business limit amount originally allocated to Binc. is unused by Binc. due to a loss carryover and Ainc. has sufficient taxable income to use the business limit amount unused by Binc.
- Ainc's "NRP" for the 2000 taxation year has expired.
- Ainc. and Binc. did not file an amended Form T2013 at the time of Binc.'s October 6, 2003 reassessment of tax payable.
- In order to apply the "CRA's practice", it must be determined that the 2000 taxation year of both Ainc. and Binc. is not statute-barred under paragraph 30 of Interpretation Bulletin IT-73R6.
By analogy, we are of the view that the "CRA's practice" may apply in the situation you have referred to us if Ainc. and Binc. file an amended T2 SCH 23 for Ainc.'s 2000 taxation year that you are about to reassess to disallow a portion of the loss carryforward amount pursuant to subparagraph 152(4)(b)(i). In this case, the CRA may administratively accept the filing of the amended T2 SCH 23 and compute Ainc.'s taxes for its 2000 taxation year based on the new business limit allocation.
Response to Question 3
When reassessing a corporation's tax payable for a particular taxation year to grant a non-capital loss carryback requested by the corporation under subsection 152(6), or when reassessing a second time a corporation's tax payable for a particular year to adjust the amount of the loss carried back to the particular year, where the first and second reassessments are within the "NRP" or the "ERP" applicable to that corporation, the CRA must, in determining the corporation's tax payable for the particular year, adjust the amount of the abatement for that year under subsection 124(1) and the amount of the manufacturing and processing profits credit for that year under section 125. 1 on the basis of the corporation's revised taxable income for the particular year. Our conclusion is based on the following observations.
Section 152(6) states that:
“…the Minister shall reassess the taxpayer’s tax for any relevant taxation year (other than a taxation year preceding the particular taxation year) in order to take into account the deduction claimed.”
[Emphasis added]
In Stone Container (Canada) Inc. v. Canada, [1998] T.C.C. 95-4122-IT-G, the issue was whether the CRA was entitled to reassess within the "ERP" a matter other than that specifically described in the waiver for that period pursuant to subparagraph 152(4)(a)(ii), having regard to the test in subparagraph 152(4.01)(a)(ii). Rip J. of the Tax Court of Canada, in his reasons for judgment in this case, indicated the existence of a link between the calculation of revised taxable income and the calculation of a corporation's tax for the purposes of, inter alia, subsection 124(1), as follows:
[34] Both sections 124 and 127 do not permit deductions from income of a taxpayer, but from a tax otherwise payable under Part I of the Act to the federal fisc. This is a mechanical application of calculating tax once the taxable income of the taxpayer’s income has been determined. This is what the Minister did once he concluded that the shareholder benefit ought not to be included in income. He deleted the amount from income, the amount of calculated income and taxable income and then proceeded to calculate the tax to be assessed. …
[Emphasis added]
Rip J., in his reasons for judgment in Moon Mah v. Canada, 2003 DTC 1312, elaborated on his comments in Stone Container, on the existence of a link between the calculation of revised taxable income and the calculation of a corporation's revised tax with respect to the application of subsection 124(1), as follows:
[12] In Stone Container I disagreed with the taxpayer and held that the phrase "in respect of" limited the application related to the matter specified and the calculation for any items that necessarily flow from, or are normally connected to, the matter specified. Taxable income is connected to the federal abatement by virtue of the mechanical application of section 124 and a recalculation of the abatement is connected with, and necessary flows from, a recalculation of taxable income. This is not the situation in the appeal at bar.
[Emphasis added]
Stone Container and Moon Mah highlight, inter alia, that section 124 permits the deduction of amounts from the taxpayer's tax otherwise payable under Part I of the Act and that the deduction of amounts permitted by section 124 in computing the taxpayer's tax otherwise payable is a mechanical application of the calculation of tax after determining the taxpayer's taxable income or revised taxable income.
Therefore, we are of the view that when the CRA redetermines the tax payable by a corporation for a particular taxation year, in order to grant a non-capital loss carryover requested by a corporation pursuant to subsection 152(6) or to adjust the amount of the loss carried back to the particular year, whether within the taxpayer's "NRP" or "ERP", the tax must be determined taking into account the revised taxable income for the particular year. In this context, the tax is the amount of tax payable by the corporation for the particular taxation year under Part I of the Act determined in accordance with the provisions of subdivisions b and c of Division E of Part I of the Act. Consequently, in such circumstances, the CRA must, in determining the corporation's tax payable for the particular year, adjust the amount of the deduction for that year under subsection 124(1) and the amount of the manufacturing and processing profits deductions for that year under section 125.1 by the revised amount of the corporation's taxable income for the particular year.
For your information, unless exempted, a copy of this memorandum will be severed using the Access to Information Act criteria and placed in the Canada Revenue Agency's electronic library. A severed copy will also be distributed to the commercial tax publishers for inclusion in their databases. The severing process will remove all material that is not subject to disclosure, including information that could disclose the identity of the taxpayer. Should your client request a copy of this memorandum, the electronic library version can be provided. Alternatively, the client may request a severed copy using the Privacy Act criteria, which does not remove client identity. Requests for this latter version should be made by you to Ms. Jackie Page at (819) 994-2898. A copy will be sent to you for delivery to the client.
Should you require further information on this subject, please do not hesitate to contact us.
We hope that these comments are of assistance.
Best regards,
Maurice Bisson, CGA
Manager
Corporation Reorganizations and Resource Industries Section
Corporation Reorganizations and Resource Industries Division
Income Tax Rulings Directorate
Policy and Planning Branch