In 2011, the taxpayer ("GMAC") filed an amended Ontario capital tax return for its calendar 2007 taxation year, which reduced the CCA claimed by it. This increased the Ontario capital tax payable by it. GMAC filed an amended federal tax return for the same year, in which it deducted the additional capital tax.
In rejecting the Minister's position that GMAC had no liability for the additional capital tax until 2011 when it amended its capital tax return, Graham J stated (at paras. 44-45):
[S.] 78(1) of the Corporations Tax Act …states that capital tax is "deemed to accrue proportionately as the days of each taxation year for which [it] is imposed pass". It appears from this subsection that GMAC's liability to pay the additional capital tax must have accrued in 2007. …
The idea that liability for capital tax would accrue in the relevant year regardless of when the tax was assessed… is consistent with the long established principle under the Income Tax Act that liability for tax arises not pursuant to the filing of a return or the issuing of an assessment or reassessment, but rather pursuant to the terms of the Income Tax Act itself [citing The Queen v. Simard-Beaudry Inc., 1971 CarswellNat 239 (FCTD); R. v. Riendeau¸ 91 DTC 5416 (FCA); and subsection 152(3).]