Richter bulletin | Deadline to disclose nominee agreements extended

On May 17, 2019, Finances Québec announced measures expanding the General Anti-Avoidance Rule (GAAR) disclosure rules and penalties to aggressive tax planning involving shams. These measures include a requirement to disclose the use of nominees, such as prête-noms.

  • This is not an annual filing requirement.
  • It is sufficient that one of the parties to the agreement disclose the following information:
    • the date of the agreement;
    • the parties to the agreement;
    • the transactions to which the agreement relates; and
    • the identity of any persons for whom the transactions have tax consequences.
  • Non-disclosure can result in penalties and the suspension of the prescription (statue barring) period for any transactions subject to the nominee agreement.

The deadline to disclose nominee agreements that were in existence on May 16, 2019 that continue to have tax consequences after May 16, 2019 and those entered into after May 16, 2019 was changed in August.

The deadline is now the later of the following dates:

  • the 90th day after the nominee agreement was entered into;
  • or the 90th day following the day the legislation introducing the new measures receives assent.

As always, your Richter team will keep you updated with further developments and is available to assist you or your legal counsel in meeting these new compliance requirements.