The Canada Revenue Agency’s interpretation bulletin IT-160R3 was literally its last word in how to calculate the taxable benefit of personal use of business aircraft.
News that the CRA was considering changes to its administrative policies on this calculation would be business as usual except for the possibility that they would apply the changes retroactively.
Why is this a matter for concern?
Taxpayers would reasonably have expected to have been able to rely on the guidance in IT-160R3 in calculating their taxable benefit, the letter says.
In 2012 IT-160R3 was archived online, along with more than 100 other interpretation bulletins. “Archiving” simply meant that the web pages did not meet new government standards and would not be altered or updated to meet those standards. The information on them was still applicable. The pages were later cancelled, but the CRA gave no notice that the information in IT-160R3 was no longer relevant.
“CRA’s website does not state that ‘cancelled’ and previously ‘archived’ bulletins no longer reflect the CRA’s position,” the CBA’s Taxation Law Section said in a letter to the CRA. “Indeed, when CRA cancels a bulletin because of a change in position, this is clearly stated … No relevant changes in law have occurred that would render IT-160R3 obsolete, and, unlike comments made on other bulletins, CRA did not state that its position on the subject matter of IT-160R3 had changed.”
“Our sole focus is on the potential retroactive nature of the changes,” the letter says. “As a matter of principle, the CBA Section believes that changes in the official administrative policies of the CRA should apply only on a prospective basis, to periods after public announcement of those changes.”