Words and Phrases - "matter"

22 June 2017 Interpretation 180966

Summary Under

Tax Topics - Excise Tax Act - Section 262 - Subsection 262(2)

where a rebate claimant has underclaimed, it can request an assessment of the claim

Meaning of matter

Does “matter” refer to a claim period or the substance of what is being claimed? CRA stated:

[W]e consider what would give rise to the particular rebate being applied for; in other words, what is the object or matter of the rebate. … In general, any eligible rebate under Division VI will be for all or part of the tax paid or payable in respect of a particular transaction or deemed supply… .

CRA referred to the statement in Fanshawe College, 2006 TCC 652, at para. 58 (foll’d Ottawa Hospital, 2010 TCC 53) that “The word "matter" in section 262…relates to a transaction” – but then stated:

There are instances where a particular transaction can give rise to more than one rebate. As such, there may be two objects (or matters) of reimbursement in respect of a single transaction but there may only be one rebate application for each object or matter. For example, a person may be eligible to claim a new housing rebate for the federal part of the HST payable in respect of new housing as well as a new housing rebate for the provincial part of the HST payable… .

Underclaimed rebate

When a PSB rebate amount is claimed in an incorrect claim period, can CRA reassess and reduce the claim period it was incorrectly claimed in and process a reassessment to add the amount into the correct period? CRA responded:

The legislation, as it currently reads, does not allow a person to file a second PSB rebate application under section 259 for the same claim period to claim missed amounts or to claim differences due to misstated amounts in the initial application [for the prior claim period]. However, CRA could exercise its discretion and reassess the prior rebate claim to add the amount to the PSB rebate claim for the correct claim period.

Alternatively, an applicant can file an objection to the assessment of its initial rebate application requesting that a missed amount be allowed and/or an adjustment be made for a misstated amount. If the time limit for objecting has passed, the person can write in and ask for a reassessment of the rebate claim for the particular claim period. …

As another example, a selected PSB filed a rebate application claiming a PSB rebate of 50% of the non-creditable tax charged in respect of a particular transaction for a particular claim period. It then considers that it could have claimed a rebate of 83% of that non-creditable tax charged and files a second rebate application to claim the 33% difference for that claim period. Under subsection 262(2), the selected PSB is prohibited from filing a second PSB rebate claim for the difference of 33% in respect of that same matter and is also prohibited from filing a second rebate application for the same claim period under subsection 259(6). As noted above, the person can object to the assessment of the initial rebate or ask for a reassessment of that rebate to recover the 33% (if eligible).

Words and Phrases

matter

Locations of other summaries		Wordcount
Tax Topics - Excise Tax Act - Section 296 - Subsection 296(2)	discretion to assess a previously filed rebate application to increase rebate	88
Tax Topics - Excise Tax Act - Section 296 - Subsection 296(2.1)	required inclusion in assessment can include a rebate claim that was underclaimed	162
Tax Topics - Excise Tax Act - Section 297 - Subsection 297(4)	interest on missed rebate claim	102
Tax Topics - Excise Tax Act - Section 261.4 - Subsection 261.4(1) - Paragraph 261.4(1)(c)	second rebate application accepted for different transaction	145

Canada v. Honeywell Limited, 2007 DTC 5073, 2007 FCA 22

Summary Under

Tax Topics - Income Tax Act - Section 152 - Subsection 152(4.01)

The Minister took the position on audit that a loan made by a Netherlands Antilles subsidiary of the taxpayer ("Honeywell N.V.") to a Netherlands subsidiary ("B.V.") of the taxpayer's U.S. parent violated the policy underlying clause 95(2)(a)(ii)(b) because that clause was intended only to avoid fapi treatment of loans made to foreign affiliates of a Canadian based multinational corporation. The Minister received a waiver respecting "interest income being reassessed under paragraph 12(1)(c) of the Income Tax Act, by reason of the application of section 245 of the Income Tax Act."

The Minister was precluded from amending his Reply (well after the expiry of the normal reassessment period) to allege that the funds lent by Honeywell N.V. to B.V. were not used in an active business of B.V., so that the exemption in clause 95(2)(a)(ii)(B) was not available irrespective of the general anti-avoidance rule in section 245. Noël J.A. stated (at p. 5077) that:

"Including interest in Honeywell's income under paragraph 12(1)(c) because of a GAAR re-characterization is entirely different from including the interest income of Honeywell N.V., its foreign affiliate, in Honeywell's income pursuant to the FAPI rules as the Crown now tries to assert ... ."