Fiscal information

Do you disagree with the result of an assessment by the tax authorities ? Make sure you are familiar with the objection and appeal process

If you wish to contest a notice of assessment or a notice of decision that was sent to you under the Excise Tax Act, it is important to know the rules to follow in order to avoid losing your right to object to the decision.

The objection process begins with the filing of a notice of objection to an assessment or reassessment, which results in an impartial review by the Minister. If the person who filed the notice of objection disagrees with the review, they can file an appeal with the Tax Court of Canada (TCC), which could lead to appeals to the Federal Court of Appeal (FCA) and the Supreme Court of Canada (SC).

The Canada Revenue Agency (CRA) recently updated its GST/HST Memorandum 31-0 – Objections and Appeals, which recalls certain applicable rules.

Here are the general rules that apply

Filing of the notice of objection

The filing of the notice of objection must, usually, be presented within 90 days following the day on which the notice of assessment was sent. If you are late, you can request an extension of the deadline from the Minister, specifying the reasons why the notice of ojection was not presented on time. The Minister must then examine the request diligently and accept or reject it, then notify the person of his decision by certified or registered mail. In the event of refusal, the person may ask the TCC to grant their request, by sending their request within 30 days following the date on which the Minister sent notice of rejection of the extension request.

Specific information in the notice of ojection

If the person is a “specified person” in respect to an assessment or a notice of objection, he or she must provide, in detail:

  • a reasonable description of each issue to be decided
  • for each issue, the relief being sought, expressed as the change in any amount that is relevant for purposes of the assessment
  • the facts and reasons relied on by the person in respect of each issue

A person is a “specified person”, in respect of an assessment or a Notice of Objection to an assessment if either of the following apply:

  • the person is a listed financial institution described in any of subparagraphs 149(1)(a)(i) to (x) during that reporting period
  • the person is not a charity during that reporting period and the person’s threshold amounts, determined in accordance with subsection 249(1), exceed $6 million for both the person’s fiscal year that includes the reporting period and the person’s previous fiscal year.

The determination of whether a person is a specified person in a given year is based on those annual taxable supplies made in the two immediately preceding fiscal years.

Follow-up by tax authorities

A letter of acknowledgment r a letter informing that the objection is invalid (if it is sent after the deadline for example) is then sent by the tax authorities, to the person.

The Minister must then examine the assessment again and make a decision:

  • The assessment is vacated
  • The assessment is confirmed
  • A new assessment is made

Once this decision has been made, the person who submitted the notice of opposition is notified of this decision.

It should be noted that a new assessment may be higher than the initial assessment, so the objection process should not be taken lightly.

If the assessment is confirmed or a new assessment is established, a person may appeal to the TCC, by filing the appeal within 90 days after the day the Notice of Reassessment or additional assessment is sent by the Minister. If such request is not filed in time, a request for an extension of time may be submitted to the TCC within one year following the expiration of the time limit for appealing, subject to compliance with certain conditions.

Additionally, if a decision has not been rendered within 180 days of filing the notice of objection, a person may decide to appeal directly to the TCC instead of waiting for a decision by the Minister.

In the event of an unfavourable decision by the TCC, a person can appeal to the FCA within a period which is usually 30 days following the date of the TCC’s decision.

In the event of an unfavourable decision by the FCA, it is possible to request leave to appeal the judgment to the SC. Appeals for leave to appeal must be made within 60 days of the date of the FCA’s decision.

We strongly recommend that you be supported in this process, in order to be well aware of the various impacts of the opposition process and the legal process.

NEWS & EVENTS

Read also

The Senate adopts Bill C-78 – An Act respecting temporary cost of living relief (affordability). What products will be affected by the GST/HST holiday ?

New CRA bulletins on places of supply after more than 12 years of waiting

Are you familiar with the various exemptions and refunds for the federal fuel tax (carbon tax)?

Temporary extension of the deadline for refunding QST paid in error to suppliers

Do you disagree with the result of an assessment by the tax authorities ? Make sure you are familiar with the objection and appeal process