A taxpayer applying to the CAP Program for the first time must submit a MITT with the application. This MITT should be based on the last filed tax return and it will be used to determine suitability for the Program. This MITT is only required for new CAP applicants.
For example, for the CAP year ending December 31, 2020, taxpayer should submit a MITT based on the 2018 return with the 2020 CAP application.
Initial Prior Year MITT
A taxpayer must submit the initial prior year MITT by the 90th day after the end of the prior tax year using the information from that year. Timing for filing this MITT may necessitate the use of estimates and this should be noted on the form. This MITT will be used by the Transfer Pricing Risk Assessment (TPRA) Team to conduct the initial transfer pricing risk assessment for the current CAP year.
For example, the Initial 2019 MITT using information from the CAP year ending December 31, 2019 is due March 31, 2020. This MITT will be used by the TPRA Team to conduct the initial transfer pricing risk assessment for the 2020 CAP year.
Interim Current Year MITT (if necessary)
If a new material transaction or a material change to an existing transaction has taken place in the current year, a taxpayer must submit the interim current year MITT for that transaction within 30 days of the occurrence.
For example, if on June 30, 2020 there is a material change to a transaction that was reported on the Initial 2019 MITT, the Interim 2020 MITT with that transaction is due on July 30, 2020. This MITT will be used to update the TPRA Team’s prior risk assessment.
Final Prior Year MITT
A taxpayer must submit the final prior year MITT when the tax return for the prior year is filed. This MITT will be used by the CAP Team to conduct the post-filing review for the prior year tax return and serves as the equivalent of an application MITT for returning CAP taxpayers.
For example, if the 2019 tax return is filed on October 15, 2020, the Final 2019 MITT based on that return is due on October 15, 2020. This MITT will be used by the CAP Team to conduct the compliance check of the 2019 tax return.
Note: Not submitting a MITT by the due date without an extension approved by the case and issue DFO or submitting an inaccurate or incomplete MITT may be treated as a significant or material failure to adhere to the terms of the CAP Program and result in the issuance of a Termination Letter.