The Honourable Jim Flaherty, Minister of Finance, today announced the Government’s intention to extend the time to file an alignment election for corporate partnerships under the corporate partnership deferral rules.
The corporate partnership tax deferral rules allow corporate partners to elect to align the fiscal period of their partnership with the taxation year of one of the corporate partners or, in the case of a tiered-partnership structure, to a common fiscal period for all partnerships in the structure. The time period provided in the Keeping Canada’s Economy and Jobs Growing Act for filing this election means that some corporate partners would have had to file the election as early as September 23, 2011.
The Government intends to recommend a change that treats late alignment elections as having been filed on time if the election is filed on or before January 31, 2012. In addition, the Government will recommend that paragraph 249.1(9)(b) of the Income Tax Act be clarified to refer to the year “2012” rather than “2011”.
For more information or clarification on how this will affect your business, please contact your Smythe Ratcliffe tax advisor.