Normal reassessment period
The normal reassessment period is the time after the CRA’s original notice of assessment in which it can reassess a return. For a corporation, the CRA’s T2 guidance gives three years if it was a Canadian-controlled private corporation at the end of the year and four years if it was not, subject to extensions.
The term is defined in subsection 152(3.1) of the Income Tax Act. For a T2 return, the CRA says it can reassess within three years of the date it sent the original notice of assessment if the corporation was a CCPC at the end of the year, and within four years if it was not.
It can be longer
The CRA says the period can be extended for various reasons, including an extra three years in several situations, and that a corporation can file Form T2029, a waiver, before the period expires. Subsection 152(4) of the Act sets out when an assessment can be made after the normal reassessment period, including where a waiver was filed.
For a share buyer
Ask which of the corporation’s tax years are still within the period, whether any waiver was filed, and what the notice of assessment for each year says. The answer on whether the CRA can challenge a price allocation years after closing looks at a related question.
Sources
This definition is checked against primary sources. Links were last confirmed on the dates shown.
- 01Canada Revenue AgencyGovernmentWhen we reassess your T2 return
- 02Government of CanadaGovernmentIncome Tax Act, R.S.C. 1985, c. 1 (5th Supp.)
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