In a March 20, 2015 Tax Court of Canada case (Presidential MSH Corporation vs. H.M.Q., 2014-94(IT)G), at issue was whether the RDTOH balance would be reduced by disallowed RDTOH claims relating to late-filed returns.
According to Subsection 129(1), the Minister cannot provide a dividend refund where the tax returns are not filed within three years of the respective year-end.
Court determined that the RDTOH balance should not be reduced by the amount of the disallowed claim due to late-filed returns.
For further information see VTN Monthly Tax Update Seminar, Issue No. 405