If you are not required to make a mandatory disclosure, you can avoid the consequences (penalties, extended deadline for Revenu Québec to make an assessment) of the general anti-avoidance rule (GAAR) being applied to a tax planning scheme undertaken by you or a partnership of which you are a member by making a preventive disclosure.
If you do so by the prescribed deadline, we will have the information necessary to determine whether the GAAR applies to your situation.
In cases where the GAAR applies, we must make an assessment within three years following the day the notice of original assessment is sent to the taxpayer. The deadline is extended to four years in the case of a mutual fund trust or a corporation other than a Canadian-controlled private corporation.
You must make a preventive disclosure no later than the deadline for filing the income tax return or information return for the taxation year or fiscal period, as the case may be, in which the tax planning scheme began.
You must make the preventive disclosure by completing form TP-1079.DI-V, Mandatory or Preventive Disclosure of Tax Planning.
You must provide the following:
- a complete and detailed description of the facts relating to the tax planning scheme
- a statement of the tax consequences resulting from the transaction
The description of the facts and tax consequences resulting from the planning must be sufficiently detailed so that we can understand and analyze them.
We do not apply penalties related to the GAAR if the disclosure form is duly completed and filed by the prescribed deadline.