| 24(1) | 901430 |
| Maureen Shea-DesRosierss | |
| (613) 957-8953 | |
| Attention: 19(1) | EACC9378 |
July 27, 1990
Dear Sirs:
Re: Paragraph 20(1)(s) of the Income Tax Act (the "Act")
This is in reply to your letter of June 25, 1990 concerning the above-mentioned subject.
Your enquiry concerns the meaning of the word "year" as used in paragraph 20(1)(s) of the Act in reference to the recommendation of the actuary made in the "year" or in one of the three immediately preceding "years". You point out that the word "year" is not defined in the Act. Your interpretation is that "year" as used in paragraph 20(1)(s) of the Act refers to a 365 day period.
Our Comments
It is the Department's policy to apply the meaning of "taxation year" as defined in subsection 249(1) of the Act to the three years referred to in said subsection. The employer's fiscal year end in which the actuarial valuation is made or one of the three payments are deductible in the taxation year in which payments are made. This is pointed out in paragraph 25 of Information circular IC-72-13R8.
In the situation described in your letter, the taxpayer is in his sixth taxation year following the date of the valuation report. In our opinion, since the period exceeds the time frame provided for in paragraph 20(1)(s) of the Act, a new approval is required to comply with the provisions of the Act.
We trust the above comments will be of assistance to you.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate