05 Aug 2019

Nominee agreements will now have to be disclosed to Revenu Québec. On August 22, 2019, Revenu Québec announced an extension of the production deadline in this regard.

Thus, required information returns will have to be filed on the later of the following dates:

  • the 90th day following the conclusion of the nominee agreement; or
  • the 90th day following the day the bill introducing the new measures receives assent. No bill has been published yet in this regard.

On May 17, 2019, the Québec Ministry of Finance released Information Bulletin 2019-5 in which it announced the introduction of a new mandatory disclosure mechanism for nominee contracts.

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.

Disclosure requirement

Information Bulletin 2019-5 provides that the disclosure must be made through a prescribed form that shall include the following information:

  • The date of the nominee agreement;
  • The identity of the parties to the nominee agreement;
  • A full 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;
  • Any other information requested in the prescribed form (when this becomes available).

Filing deadlines

The Bulletin provides that nominee agreements concluded on or after May 17, 2019 must be disclosed to Revenu Québec no later than 90 days after the date on which the nominee agreement was concluded and nominee agreements concluded prior to May 17, 2019 must be disclosed to Revenu Québec no later than September 16, 2019 where the tax consequences of the transaction (or series of transactions) to which the agreement relates continue after May 16, 2019.

However, to maximize compliance with the new obligation, Revenu Québec is extending the deadline for filing the information returns to the later of the following dates:

  • the 90th day following the conclusion of the nominee agreement; or
  • the 90th day following the day the bill introducing the new measures receives assent.

Until the prescribed form is made available by Revenu Québec, disclosure should be made by way of letter including such information. The disclosure made by one of the parties to the nominee agreement will be deemed to have been made by the other party as well.

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.

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31 Jul 2019

In a Presse+ feature on government assistance for Quebec businesses, Luc Lacombe, Tax Partner and Jean-Philippe Brosseau, Senior Manager, Management Consulting, helped demystify various types of assistance and their impacts. Luc Lacombe clarified the difference between a subsidy, a loan and a tax credit. He explained that a tax credit is, “like a subsidy, it’s an amount that’s paid to the organization, but via an existing structure, the tax return”.

The reporter ranked businesses’ government assistance preferences—subsidies are the most popular, followed by tax credits and loans. Investments are the least common option.

Jean-Philippe Brosseau stated: “The first two are interchangeable. The tax credit is more predictable, recurring and available to any business that satisfies the criteria. Subsidies are paid more quickly, but are more subjective.”

To find out more, read the article on Presse+ (in French).

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03 Jul 2019

The 2019 tax agreement between the provincial government and Quebec municipalities will soon be expiring. URBA, the Union des municipalités du Québec’s magazine asked Nicolas Plante, Management Consulting Partner, to shed some light on the situation and its impact on Quebec municipalities.

“A very large proportion of municipal income comes from property taxes, which places a considerable burden on residents. If you go back a few years, you’ll realize that municipal services have changed considerably. Before these services were limited to garbage removal, road maintenance, snow removal, etc. Today, they can include a cultural offering, mass transit, leisure activities and much more,” Nicolas Plante explained.

Beyond the growing reliance on property taxes, the shift to online retail sales also impacts municipalities significantly.

“E-commerce has extensive repercussions on municipal income, which depends extensively on new retail business and industrial tax income. The digital economy does not need new premises, leaving municipalities with a major challenge in terms of revenue sources,” Nicolas Plante added.

To read the full article on the tax agreement, consult the online version of URBA (page 14).

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25 Jun 2019

On June 18, Facebook unveiled details about the Libra, its new virtual currency slated for release next year.

Louis Roy, assurance partner and president of Catallaxy, was approached for comment by several media outlets. On the eve of the announcement, he told Radio-Canada that “the undertaking is particularly interesting due to its scope, given that Facebook has 2.4 billion users.”

Speaking to Kyk radio in Saguenay–Lac-Saint-Jean, Mr. Roy explained that “this digital currency has tremendous potential since there are more unbanked people in the world than banked people. The currency is available at very low cost thanks to blockchain technology and it enables users to carry out a wide range of transactions on their cell phone, without a bank account.”

Quoted in the Journal de Montréal, Mr. Roy added that “this is going to shake up the financial system. Facebook’s new currency has far-reaching implications and we can expect that, once it’s introduced next year, it will be here to stay—though it will almost certainly evolve over time.”

When interviewed for RDI économie and Le Téléjournal de Radio-Canada, Mr. Roy stated that the Libra project is unique in that “it’s the first cryptocurrency to be backed by major players from the financial sector, including Uber, Spotify, Visa, Mastercard and PayPal.”

He also explained to iHeartRadio’s Énergie Québec that the value of this “stablecoin” is closely linked to that of traditional currencies, such as the US dollar, which makes it less risky for users. “The Libra aims to be a global currency. It will be interesting to see how it will contend with different regulations in different countries.” During the interview, he also went into detail about blockchain technology and cryptocurrencies, including the difference between the upcoming Libra and Bitcoin.