Tax and Revenue Administration Alberta Corporate Tax Act Special Notice Vol. 5 No. 25

Vol. 5 No. 25 / December 2008

ALBERTA CORPORATE TAX ACT SPECIAL NOTICE:
Municipalities' Requirement to File

NOTE: This special notice is intended to explain legislation and provide specific information. Every effort has been made to ensure the contents are accurate. However, if a discrepancy should occur in interpretation between this special notice and governing legislation, the legislation takes precedence.

In general, municipalities are exempt from federal and Alberta corporate income tax, but are required to file a federal T2 return for information purposes.  Canada Revenue Agency has not previously enforced this requirement for municipalities.  The Alberta Corporate Tax Act (the Act) does not require an Alberta AT1 corporate income tax return to be filed when an entity is exempt from the payment of tax.

CRA will begin enforcing the requirement for municipalities to file a corporate income tax return for taxation years ending on or after April 1, 2008, and will withhold the GST refund if the federal T2 corporate income tax return is not filed as required.

Enforcing federal filing requirements is a policy implemented by CRA.  Please contact CRA directly for details of the implementation of their administrative policy.  TRA does not require the filing of a separate Alberta corporate income tax return for municipalities.