Mandatory Disclosure of a Confidential Transaction, a Transaction Involving Conditional Remuneration or a Transaction With Contractual Coverage
The following characteristics are typical of aggressive tax planning:
- an undertaking of confidentiality regarding a tax planning strategy that results in a tax benefit or affects income;
- adviser remuneration that is conditional on or proportional to a tax benefit obtained;
- contractual coverage (insurance or other protection for the taxpayer against certain consequences of the planning).
If any of these elements are present, you must disclose any transaction that has the following consequences for a given taxation year or fiscal period:
- a tax benefit of $25,000 or more for you; or
- an impact of $100,000 or more on your income (or on the income of the partnership of which you are a member).
Your mandatory disclosure must be filed by the deadline for filing your income tax return for the taxation year or fiscal period in which you obtained the tax benefit or for which your income was affected.
The disclosure must be made using form TP-1079.DI-V, Mandatory or Preventive Disclosure of Tax Planning.
You will have to provide a detailed description of the planning strategy and the tax consequences. They must be detailed enough that we can understand and analyze them.
If the duly completed copy of form TP-1079.DI-V is not filed by the deadline, an additional three years will be added to the prescribed period during which we can issue a reassessment under the general anti-avoidance rule (GAAR). Other consequences for you (or the members of the partnership that carried out the transaction) could also apply.
The GAAR-based penalties do not apply if form TP-1079.DI-V is filed by the deadline.