| 24(1) | File No. 5-9440 |
| G. Arsenault | |
| (613) 957-2126 |
19(1)
June 18, 1990
Dear Sirs:
Re: Section 216 of the Income Tax Act (the "Act")
You have requested our views as to whether a penalty is payable under subsection 162(1) of the Act if a non-resident elects pursuant to subsection 216(1) to file a return of income under Part I of the Act within two years from the end of the taxation year in respect of Canadian rental income but does not file the return within the time specified by subsection 150(1).
In our opinion no penalty would be payable under subsection 162(1). Subsection 162(1) applies to impose a penalty in respect of the failure to file a return of income for a taxation year as and when required by subsection 150(1). Provided the income is rental income, e.g. income from property, and not business income of the non-resident, there is no requirement for the non-resident taxpayer to file a return under subsection 150(1) in respect of such income.
You have also asked whether interest is payable under subsection 161(1) if the tax payable for a year by a non-resident individual pursuant to the return filed under subsection 216(1) exceeds the amounts withheld and remitted during the year and such excess is not paid by April 30 of the following year.
Under subsection 216(1) a non-resident receiving rental income on real property in Canada may elect to pay tax under Part I of the Act for a taxation year by filing a return of income under Part I within 2 years from the end of the taxation year. Upon making such election and filing a return under Part I the non-resident will thereupon be liable to pay tax under Part I for the taxation year in respect of which the return is filed. Under subsection 161(1) interest accrues after the day on or before which the taxpayer is required to pay the remainder of his tax payable under Part I for a taxation year, e.g. the date of filing of the Part I return pursuant to subsection 216(1). However, this is without prejudice to interest payable in respect of any shortfalls in withholdings required pursuant to section 215 prior to the filing of the Part I return pursuant to subsection 216(1) as liability under Part I only arises in lieu of liability under Part XIII on and from the date of filing the Part I return under subsection 216(1).
The opinions expressed herein are not advance income tax rulings and are not considered binding on the Department in accordance with paragraph 24 of Information Circular 70-6R dated December 18, 1978.
Yours truly,
for DirectorReorganization and Non-Resident DivisionSpecialty Rulings DirectorateLegislative and Intergovernmental Affairs Branch