I have a corporate client that was originally based in Alberta, but moved to Saskatchewan in 2016. They found me in early 2018, and I filed their T2 for Dec 2017 with no AT1 because it had not operated in Alberta since 2016. A few days ago, the client got a letter from Alberta Tax and Revenue, saying they haven’t received the AT1 for 2017.
I work in Saskatchewan, and I have filed the occasional AT1 for clients, but am not familiar with all of the Alberta tax requirements. How do you tell Alberta Tax and Revenue that the corporation moved?
Perhaps you don’t realize that the corporation (having been registered in Alberta) is always going to be an Alberta corporation no matter where mind and management is located. This means it must always file an Alberta corporate income tax return (AT1). This also brings in the preparation of Schedule 5 on the federal return which would essentially report the mind and management issue so that SK gets their pound of flesh.
Unless it is exempt, a corporation is required to file an Alberta corporate income
tax return if it had a permanent establishment in Alberta at any time during the
taxation year. “Permanent establishment” is explained in paragraphs 4 and 5 of:
@hudson
Thanks, but there was no permanent establishment in Alberta. The sole shareholder moved to Saskatchewan in 2016, and the corporation owned no tangible assets. The “head office” is the shareholder’s home, and the mailing address is the shareholder’s PO box. The shareholder performs electrical consulting services through the corporation, and this work is performed at clients’ places of business all over the world (very little, if any, in Alberta).
I’m sure there is no reason to file an AT1 when the corporation does not RESIDE nor OPERATE in Alberta. I just need to know how to report that to the Alberta tax authority. Any idea?
Perhaps I should mention that the shareholder used the New West Partnership (NWP) agreement to transfer jurisdiction from AB to SK. In doing so, the corporate name registered in AB was not available in SK, so the legal name in SK is different than it was in AB. As such, in SK, the corporation is only “operating as…” the original AB name.
CRA said that under the NWP, the “legal name” for CRA purposes remains the original AB name, even though the corporate addresses are all in Saskatchewan, and that no Alberta address needs to be maintained.
I think this should be a letter to Alberta Tax and Revenue Admin, unless you can put comments on the back of the “request to file.” Did the client give you both front and back of the form?
I don’t think that there is any other form.
@hudson
Oh, wow. No, he just sent a cell phone pic of the front of the letter. I now asked him if there was anything on the back, and there it is! He just has to fill out part A to declare that the corporation did not operate in Alberta.