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EH 23: Refund on bankruptcy
or “What happens to your income equalisation account if you go bankrupt”
You could also call this:

“Refunds received before bankruptcy are taxable income”

If you get a refund under section EH 23 when you go bankrupt, it counts as income. This income is considered to have been earned right before your bankruptcy starts. The law that says this is section CB 27, which is about income equalisation schemes. Income equalisation schemes are ways to help smooth out your income over time, especially if it changes a lot from year to year.

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Next up: EH 25: Refund on liquidation

or “Getting your income equalisation account money back if your business is liquidated”
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Part E Timing and quantifying rules
Income equalisation schemes: Refunds: on application

EH 24Income when refund given on bankruptcy

  1. A refund under section EH 23 is income, under section CB 27 (Income equalisation schemes), derived by the person immediately before the bankruptcy starts.

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