Bill 42, introducing a new mandatory disclosure mechanism for nominee agreements in Québec1 received assent on September 24, 2020.
As a result, nominee agreements entered into in the context of a transaction involving tax consequences must now be disclosed to Revenu Québec, in the form and manner prescribed for that purpose.
Nominee agreements entered into before September 24, 2020 must be disclosed by December 23, 2020, i.e. 90 days after Bill 42 received assent.
Failure to comply with the new disclosure requirement will result in penalties up to $5,000, as well as the suspension of the limitation period on assessments.
- The 90th day following the conclusion of the nominee agreement; or
- December 23, 2020, i.e.the 90th day following the day Bill 42 received assent.
Parties to such an agreement entered into before May 17, 2019 are also required to file a disclosure by these deadlines at the latest, to the extent that the tax consequences of the transaction or series of transactions in respect of which the agreement relates continue after May 16, 2019.
If you are a member of a partnership that is party to such an agreement, you are also subject to the disclosure requirement.
The disclosure must be made through a Form TP-1079.PN-V, sent under separate cover by registered mail. It shall include all information required therein, including the following:
- The date the nominee agreement was entered into;
- The identity of the parties to the nominee agreement;
- A full and sufficiently detailed description of the facts of the transaction or series of transactions to which the nominee agreement relates and the identity of any person or entity for which such transaction or series of transactions has tax consequences.
Do not hesitate to contact your Raymond Chabot Grant Thornton advisor who can help you determine which measures apply to your situation and assist you with the steps needed to comply with them.
1As announced by the Québec Ministry of Finance in Information Bulletin 2019-5 released on May 17, 2019.