Principal Issues: Some Canadian multinationals have subsidiaries in Ukraine or Russia that continued operating during 2022 in those countries. Due to the war, financial reporting from these subsidiaries may not be available for 2022. Will CRA grant any administrative relief in relation to the reporting requirements of Canadian multinationals covering their subsidiaries in Ukraine or Russia in case of tax reporting covering international operations, such as country-by-country reporting, forms T1134, etc. What is the CRA’s position with respect to such cases.
Position: Relief will be granted in certain circumstances. See response below.
Reasons: It is the practice of the CRA to determine on a case-by-case basis whether relief is appropriate in respect of the filing obligations under sections 233.1 (T106), 233.2 (T1141), 233.3 (T1135), 233.4 (T1134), 233.6 (T1142), and 233.8 (RC4649) of the Income Tax Act (“Act”). In respect of information that is factually not available at the time form T1141 or form T1134 is due to be filed, the due diligence exception in section 233.5 is available provided a description of each of a) the unavailable information, b) the circumstances making the information unavailable, and c) an explanation of the steps taken to obtain the information are provided on the form. The application of section 233.5 would also relieve any potential penalty under subsection 162(5).
If the particular taxpayer’s specific facts and circumstances warrant, the CRA will also consider granting relief under subsection 220(2.1) from the obligation to provide prescribed information or additional documents (e.g., the unconsolidated financial statements of a Ukrainian foreign affiliate that otherwise must be filed with form T1134). Although the CRA may provide relief in respect of the provision of prescribed information normally required in foreign reporting forms, the forms must still be filed by the taxpayer on or before the respective form’s filing due date.
