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ARTICLE · 06 MARCH 2018

Budget 2018: Reassessment Periods And Information Sharing Expanded

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Budget 2018 also proposes to extend the period during which the CRA may reassess a taxpayer in certain, defined circumstances.

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Budget 2018 proposes to amend the Income Tax Act (Canada) (the "Tax Act") to afford the Canada Revenue Agency (the "CRA") more time to reassess certain taxpayers and more latitude to share information with foreign authorities.

Extending Reassessment Periods

Budget 2018 proposes to expand the "stop-the-clock" rule in the Tax Act that suspends the reassessment period in respect of certain taxpayers. Currently, the rule provides that the reassessment period in respect of a taxation year is, in effect, paused during any period in which the taxpayer is contesting a requirement for foreign-based information issued by the CRA.  

Budget 2018 proposes to extend the scope of the rule to further suspend the applicable reassessment period where a taxpayer is contesting (1) general requirements for information issued by the CRA, and (2) CRA-issued compliance orders (which the CRA typically issues, pursuant to section 231.7 of the Tax Act, where a taxpayer has not complied

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