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Tax
and Revenue Administration
Alberta
Corporate Tax Act
Information
Circular CT-8R3 |
| Released: |
May 2006 |
| Produced by: |
Alberta Finance and Enterprise, Tax
and Revenue Administration |
| For more information: |
tra.revenue@gov.ab.ca |
CT-8R3 / May 2008
ALBERTA
CORPORATE TAX ACT INFORMATION CIRCULAR:
OBJECTIONS AND APPEALS
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 information circular and governing legislation, the legislation takes precedence.
This information circular explains a corporation's right to object and appeal
when it disagrees with an assessment or determination made by Alberta Finance and Enterprise, Tax and Revenue Administration (TRA). Objections and appeals of TRA actions are administered
by the Tax Services division. The topics discussed include:
The information in this information circular applies to determinations and redeterminations
of losses and to assessments and reassessments. For simplicity, only the term
"assessment" will be used throughout this circular.
- A corporation that has questions or disagrees with an Alberta assessment should first
contact TRA for an explanation. Many disputes can be resolved through discussion or or exchange of additional information. For information on contacting the various sections
of TRA, please refer to Information Circular CT-1, An
Introduction to Tax and Revenue Administration.
- If the dispute cannot be resolved through discussion with TRA and the corporation still
disagrees with the basis of the assessment, the corporation may file a Notice of Objection. A corporation may not object to any issue that was not involved in the assessment.
- The Notice of Objection is then assigned to a tax analyst
with no previous involvement in the matter, to ensure an impartial and objective
review. Upon thorough review Tax Services determines the disposition of the objection and notifies the
corporation accordingly. If the corporation is not satisfied with the decision, it may
appeal the matter as far as the Supreme Court of Canada, in some cases.
- As the Alberta Corporate Tax Act (the Act) adopts the rules contained in
Part I of the federal Income Tax Act in determining taxable income, it is TRA's general
policy to accept taxable income as determined for federal purposes, then make
adjustments as provided by the Act. Due to the interrelationship between federal and
Alberta corporate tax legislation, TRA has two categories of objections:
a) Category 1 objections - relate to TRA assessments that are partially or entirely independent of the Canada Revenue Agency (CRA) assessment actions. This includes Alberta
assessments based on information received from Ontario, Quebec or a foreign jurisdiction.
b) Category 2 objections - relate strictly to assessments where TRA has
paralleled the federal actions.
Category 1 Objections
- A corporation must file a prescribed Notice of Objection (Form AT97) within 90 days from
the date of mailing of the Notice of Assessment. All notices relating to objections or appeals must be sent by certified or
registered mail to:
TAX SERVICES
TAX AND REVENUE ADMINISTRATION
ALBERTA FINANCE AND ENTERPRISE
9811 109 ST
EDMONTON AB T5K 2L5
A separate Notice of Objection should be filed for each disputed year, setting out the
reasons for objecting and all relevant facts. All applicable sections of the form must be
filled out. The form must be signed by an authorized officer or agent of the corporation.
Category 2 Objections
- A corporation may file either a Category 2 objection on Form AT97, or provide TRA with a
copy of the federal objection, in the manner and time noted in paragraph 5 above. If the corporation chooses
to send a copy of the federal form, it must include a statement containing all of the
information that would have been shown on the AT97, but is not included on the federal
form.
- For Category 2 objections, TRA will generally parallel the resolution
of the federal objection. Corporations must advise TRA when a federal objection has been
resolved. Corporations that have previously claimed different discretionary deductions
for Alberta tax purposes than for federal tax purposes, should advise TRA how they
wish any available discretionary deductions to be applied. A corporation retains the right to have the
Alberta objection considered independently, but not until the rights of objection and
appeal to the federal assessment have been exhausted.
Large Corporations
- A corporation is a large corporation as described in subsection
225.1(8) of the federal Income Tax Act for a particular taxation year under objection if:
a) its taxable capital employed in Canada at the end of the particular year; and
b) the taxable capital employed in Canada of any related corporation for the related corporation's taxation year ending during or concurrent with the particular year
exceeds $10 million.
For this purpose, whether or not corporations are related is determined according to subsection 251(2) and section 181.5 of the federal Income Tax Act.
- Effective September 1, 2007, a large corporation that objects to an Alberta assessment must file a Notice of Objection with TRA for category 1 and 2 objections. If TRA reassesses a large corporation in response to the resolution of a Notice of Objection filed with another jurisdiction and the corporation did not file a corresponding Notice of Objection with TRA, then the refund interest, if any, payable to the corporation as a result of the reassessment, will be reduced by the lesser of:
a) 5 per cent of the interest as otherwise calculated, or
b) $10,000.
- There are special rules for filing of objections by any corporation that is a large corporation. For assessments issued after April 30, 1996, a large corporation must fully describe the issues to which it is objecting, the reasons for the objection and provide an estimate of the dollar amount in dispute for each issue. Additional issues cannot be introduced at a later date, except as described below.
- A new assessment may be issued due to the resolution of an objection. A large corporation may object to the new assessment, but may not introduce additional issues that were not included in the previous objection. An exception is made to allow large corporations to include additional issues in a new objection only if those issues are part of the new assessment, but were not part of the earlier assessment.
Late-filed
Objections
- If a corporation has not filed a Notice of Objection within the required 90 days, it may
apply to TRA for an extension of time. The application, accompanied by a copy of the
Notice of Objection, must be served on TRA within one year after the expiry of the 90 day
period for objecting. Tax Services will consider the application, grant or refuse it and
advise the corporation of the decision, in writing. The Act allows an extension to be
granted only if the corporation can demonstrate that:
a) within the 90 day period for objecting,
(i) it was unable to act or instruct another person to act in its behalf; or
(ii) it intended, in good faith, to object to the assessment;
b) given the reasons set out in the application and the circumstances of the case, it
would be just and equitable to grant the application; and
c) the application was made as soon as circumstances permitted.
- If the application is refused, or 90 days have elapsed after the application was served
and no decision has been rendered, the corporation may apply to the Alberta Court of
Queen's Bench to have the application granted. A copy of the application and Notice of
Objection must be filed with the court and be served on TRA. The court will consider the
application under the same criteria as in paragraph 12 and grant or dismiss the
application.
- On receipt, the objection is appropriately categorized and assigned to a tax analyst within Tax Services. Upon thorough review of the assessment and any taxpayer representations, the tax analyst makes a recommendation on the disposition of the objection.
If necessary, the corporation may be asked to provide additional information or
documentation. A meeting may be scheduled to discuss the matter.
- After considering the recommendations of the tax analyst, Tax Services may decide
that the objection should be settled on the basis of an agreement reached with the
corporation. As part of the agreement, the corporation may waive its right to object or
appeal to any resulting reassessment. If no agreement can be reached, Tax Services will
confirm, vary or vacate the assessment, and notify the corporation accordingly. If the
decision involves a reassessment, the corporation will also receive a reassessment notice.
Alberta Court of Queen's Bench
- If the assessment is confirmed or varied by Tax Services, the corporation may appeal to
the Court of Queen's Bench within 90 days from the date the notice confirming or varying the assessment was mailed. A corporation may not appeal an issue if it has previously
waived, in writing, the right to object or appeal. It also may not appeal with respect to
issues that did not give rise to the assessment in dispute, nor to issues that were
already ruled on by the courts.
- If TRA reassesses a taxation year for which a Notice of Objection was served,
the corporation may appeal to the Court of Queen's Bench without first serving another
Notice of Objection on the Minister of Finance and Enterprise. The appeal must be served within 90 days
of the date of the reassessment. If an appeal had already been instituted with respect to
the original assessment, the corporation may amend the appeal to reflect the reassessment,
subject to any direction from the Court.
- A corporation may also institute an appeal if 90 days have elapsed since the corporation
served a Notice of Objection on TRA and a decision has not been provided.
- A corporation's Notice of Objection may request waiver of
reconsideration of its assessment by Tax Services, and request an appeal directly to the
Alberta Court of Queen's Bench. If Tax Services consents to the request, it will file a
copy of the Notice of Objection with the clerk of a judicial district in
which the corporation has a permanent establishment. If Tax Services does not consent to
the request, the Notice of Objection is dealt with as previously
described. A notification of the decision is sent to the corporation.
- An appeal is instituted by serving two copies of a Notice of Appeal on TRA by certified
or registered mail, together with a copy of the Notice of Objection. A copy of each
document must also be filed with the clerk of the court in the judicial district in
Alberta where the corporation has a permanent establishment. For administrative purposes,
the Notice of Appeal is deemed by the court to be a statement of claim.
- If an appeal to the Alberta Court of Queen's Bench has not been instituted by the
deadline set out in paragraphs 16 to 18 above, an application may be made for an extension of
time. The application, together with a copy of the Notice of Appeal, must be filed with
the clerk of the court within one year from the deadline date. The application must set out the reasons
why the appeal was not instituted within the required time limits. A copy of the
application and of the Notice of Appeal must be served on TRA. The court will consider the
criteria in paragraph 12 above to grant or refuse the application.
Large
Corporations
- Special rules relating to large corporations apply in the filing of an appeal. Except as
described below, a large corporation may appeal an issue only if it complied with the
rules described in "Large Corporations" section above when filing the Notice of Objection. The corporation
may only appeal for the estimated dollar amount specified in the objection.
- As discussed in paragraph 15, a new assessment may be issued on the settlement of an objection. A large corporation may appeal an issue that was not part of
that objection only if the issue was included in the new assessment, but was not included
in the previous assessment that resulted in the objection.
Alberta Court of Appeal
- A corporation may appeal a decision of the Court of Queen's Bench to the Alberta Court
of Appeal. Notice of the appeal must be filed with the clerk of the judicial district where the proceedings were held and with the appropriate office of Registrar of the
Court of Appeal. Notice of the appeal must be filed within 20 days after service of the
judgment of the Court of Queen's Bench and must be served on TRA at that time.
Supreme Court of
Canada
- An appeal can only be made to the Supreme Court of Canada if leave to appeal is granted
by that court.
LEGAL SERVICES
- The legal services required by TRA are supplied by Alberta Justice or external lawyers. They provide legal opinions and may participate in
interviews with taxpayers and their representatives. They also represent the Crown in
appeal cases before the Alberta Court of Queen's Bench, the Alberta Court of Appeal, and
the Supreme Court of Canada.
PRESCRIBED FORMS
- Notice of Objection forms (AT97) are available online, or by telephone or by mail by contacting TRA at:
780-427-3044 (Edmonton calling area)
310-0000/780-427-3044 (Alberta toll free)
TAX SERVICES
TAX AND REVENUE ADMINISTRATION
ALBERTA FINANCE AND ENTERPRISE
9811 109 ST
EDMONTON AB T5K 2L5
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