S. 150.1(3) provides that the filing date for an electronically filed return is the day the Minister acknowledges acceptance of it. A return of income was filed electronically at 11:00pm PDT on April 30 from an office in Vancouver, and CRA instantly provided an e-file confirmation acknowledging receipt at 2:00 am EST on May 1.

Which time zone does CRA use when acknowledging receipt of an electronic transmission; and can it accept that all returns filed before 12PM PT are filed on time no matter where they were filed from?

CRA indicated that “[t]he acknowledgment of an electronically filed return is issued in Eastern Time” but that (in the case of an April 30 filing deadline) “a return will be considered filed on time if the CRA receives it on or before April 30 in the respective Canadian time zone.”

Neal Armstrong. Summary of 2023 Alberta CPA Roundtable, Q.10 under s. 150.1(3).

We have translated a CRA interpretation released last week and a further 6 CRA interpretations released in August of 2000. Their descriptors and links appear below.

These are additions to our set of 3,209 full-text translations of French-language Technical Interpretation and Roundtable items (plus some ruling letters) of the Income Tax Rulings Directorate, which covers all of the last 24 ½ years of releases of such items by the Directorate. These translations are subject to our paywall (applicable after the 5^th of each month).

The Supreme Court has agreed to hear the appeal of the Bank of Nova Scotia case.

In 2015, the Bank had requested the carryback of a non-capital loss from its 2008 taxation year to its 2006 taxation year to offset a transfer-pricing adjustment. CRA calculated interest on the increased balance of tax owing for the Bank’s 2006 year (before application of the loss carryback) for the period of approximately eight years ending, pursuant to s. 161(7)(b)(iv), with the date of the Bank’s carryback request, rather than (pursuant to s. 161(7)(b)(ii)) with the return filing date for the loss year. The Bank had unsuccessfully submitted that s. 161(7)(b)(iv) was inapplicable because the reassessment of its 2006 year did not occur “as a consequence of [its carryback] request” as required by s. 161(7)(b)(iv) but “[r]ather, the reassessment was made in order to process the audit adjustment”.

Summary of Bank of Nova Scotia v. Canada, 2024 FCA 192, leave granted 22 May 2025 (41643) under s. 161(7)(b)(iv).

On the closing date for the sale by Opco of the assets, being capital property with an ACB of $150,000, of one of its two businesses to an arm's length purchaser, it was agreed that the purchaser: would pay $3,500,000 on the closing date, plus an adjustment a few months later (based on the finalized financial statements), which turned out to be $150,000; and would pay two further deferred amounts 12 and 18 months after the closing date of $300,000 and $200,000 if, in each case, the purchased business achieved targeted customer retention rates.

The two deferred payments were not made on the agreed dates because of disagreements about the method for their computation. 21 months after the closing date, the parties agreed that a deferred payment of $50,000, rather than $200,000 + $300,000, would be paid.

CRA indicated that, based on IT-462, para. 9, s. 12(1)(g) would not apply to the maximum amount provided for in the contract (here, of $4,150,000), provided that it was equal to the FMV of the sold business’s assets on the closing date.

Accordingly, Opco realized a capital gain of $4,000,000 in its taxation year of the closing and therefore had appropriately paid a capital dividend of $2,000,000 shortly after the date of the payment of the $150,000 adjustment. Furthermore, when it was agreed that the deferred payments would be reduced to $50,000, at that point, Opco incurred a capital loss of $450,000. This reduced Opco's CDA by $225,000 at that time, but did not affect the validity of the $2,000,000 capital dividend previously paid (even if that capital loss was carried back).

No capital gains reserve could be claimed in the taxation year of the closing since the $4,150,000 sales proceeds were not “determinable” (i.e., were subject to a contingent reduction).

Neal Armstrong. Summaries of 2 April 2025 External T.I. 2019-0818321E5 F under s. 12(1)(g) and s. 40(1)(a)(iii).