and Revenue Administration
||July 21, 2009
||Alberta Treasury Board and Finance, Tax and
|For more information:
CT-11R2 / July 2009
ALBERTA CORPORATE TAX
ACT INFORMATION CIRCULAR:
NOTE: This information circular 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.
This information circular explains the policies of Tax and Revenue Administration (TRA) regarding voluntary disclosures for the tax and incentive programs administered under the Alberta Corporate Tax Act (the Act). Topics include:
- TRA encourages self-assessment in tax and incentive programs administered in Alberta. Therefore, TRA welcomes submissions that show intent to voluntarily correct previous contraventions of the Act.
- Examples of situations where
voluntary disclosures may be made include:
- the discovery of a previously unnoticed discrepancy in the calculation of taxable income, tax payable, or refundable tax credits;
- finding an error in a taxpayer's understanding of a point in tax law; or
- reconsideration of a deliberate circumvention of tax law
- TRA does not accept anonymous voluntary disclosures.
- Subject to being found acceptable under paragraph 6, if a corporation:
- voluntarily files tax returns after not having filed returns for those years, the corporation will be required to pay only the tax owing on the reported incomes, and interest;
- has filed a return with inaccurate or incomplete information and subsequently submits the missing information, the corporation will be required to pay only the incremental tax owing on the adjusted income, and interest; and
- voluntarily files information about a refundable tax credit claimed by the corporation to which it was not entitled, the corporation will be required to repay the amount of the credit overpaid to the corporation, and interest.
- TRA will not prosecute corporations submitting acceptable voluntary disclosures, or charge any administrative penalties, including late-filing penalties for any amounts included in the voluntary disclosure.
- TRA considers a voluntary disclosure acceptable only when all the following conditions are met:
- the corporation initiates the disclosure. TRA does not consider a disclosure voluntary if it is made after compliance or audit action was started by TRA, the Canada Revenue Agency, or any other affected jurisdiction(s);
- the disclosure is complete, accurate and contains all information relating to the deficiency. Significant, unexplained errors or omissions in the disclosure may be treated as further attempts to mislead TRA. TRA does not consider disclosures that contain such errors or omissions voluntary and the corporation may be subject to the full consequences under the law, including prosecution and/or penalties;
- the disclosure is made subject to verification by TRA. Corporations making voluntary disclosures are required to make all books of account, records and documentation available on request to TRA staff, answer all questions that may arise, and be fully cooperative with TRA staff; otherwise, the corporations may be assessed penalties and related interest;
- the disclosure involves a penalty;
- voluntary disclosures are intended only to allow a corporation to correct a contravention of the Act and not to avoid late-filing or instalment penalties. Generally, disclosures must include information that is at least one year past-due;
- on submission of the return(s) or information, the corporation pays the total amount of any taxes owing from the disclosure and a reasonable estimate of the interest, or makes acceptable arrangements with TRA for payment before the disclosure will be considered valid. If a payment is not made when due, as set out in an agreement, the corporation will be assessed the necessary penalties.
- A corporation wishing to make a voluntary disclosure must notify TRA in writing prior to, or at the time of, filing or amending corporate income tax returns. A covering letter explaining the voluntary disclosure should accompany tax returns being filed or amended. Considering the requirement in paragraph 6 (a) above, it is in the corporation's best interests to advise TRA as soon as possible of its intention to make a full voluntary disclosure, even though detailed figures may not be available at the time of the initial contact. A corporation may contact the Corporate Tax Audit unit of TRA at the address, telephone or fax number below to obtain additional information about the process of making a voluntary disclosure. The corporation is responsible for providing all affected jurisdictions with complete details of the voluntary disclosure made to Alberta.
TAX AND REVENUE ADMINISTRATION
9811 - 109 STREET
EDMONTON AB T5K 2L5
Toll-free within Alberta: 310-0000-780-427-0540