Failure to Make a Mandatory Disclosure by the Deadline

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If you do not make a duly completed mandatory disclosure by the deadline, you could face the following consequences:

Mandatory disclosure of a confidential transaction, a transaction involving conditional remuneration or a transaction with contractual coverage

If a duly completed copy of form TP-1079.DI-V, Mandatory or Preventive Disclosure of Tax Planning, is not filed by the deadline, an additional three years will be added to the prescribed period during which we can issue a reassessment based on the general anti-avoidance rule (GAAR).

Furthermore, the taxpayer or partnership that carried out the transaction is liable to a penalty of $10,000 or up to $100,000 after 91 days. The taxpayer or the members of the partnership that carried out the transaction are also liable to the following:

  • suspension of the prescribed period with respect to the undisclosed transaction until the duly completed prescribed disclosure form is filed;
  • a penalty equal to 50% of the cancelled tax benefit sought, if the GAAR applies to the transaction;
  • ineligibility for public contracts.

Concerning the last point, if the penalty was applied under the GAAR, the taxpayer or the members of the partnership that made the transaction may be listed in the Registre des entreprises non admissibles aux contrats publics (RENA).

The Autorité des marchés publics will take the penalty into consideration when deciding whether to authorize the taxpayer or partnership to enter into contracts with a public body.

Mandatory disclosure of a specified transaction

If a duly completed copy of form TP-1079.DI-V is not filed by the prescribed deadline, the taxpayer or the partnership that carried out the specified transaction is liable to a penalty of:

  • $10,000 or up to $100,000 after 91 days;
  • 50% of the tax benefit for the entire taxation year that resulted directly or indirectly from the transaction.

The taxpayer or the members of the partnership that carried out the specified transaction are also liable to:

  • an additional three years added to the prescribed period during which we can issue a GAAR-based reassessment;
  • suspension of the prescribed period with respect to the undisclosed specified transaction until the duly completed prescribed disclosure form is filed;
  • a penalty equal to 50% of the cancelled tax benefit sought, if the GAAR applies;
  • ineligibility for public contracts.

Concerning the last point, if the penalty was applied under the GAAR, the taxpayer or the members of the partnership that made the transaction may be listed in the Registre des entreprises non admissibles aux contrats publics (RENA).

The Autorité des marchés publics will take the penalty into consideration when deciding whether to authorize the taxpayer or partnership to enter into contracts with a public body.

Mandatory disclosure by an advisor or promoter of a transaction determined by the Minister

If an adviser or promoter (or, if it is a partnership, one of its members) does not file form TP-1079.CP-V, Mandatory Disclosure of Tax Planning by an Adviser or Promoter, by the prescribed deadline, the adviser or promoter will be liable to a penalty of $10,000 and, as of the second day the form is not filed, an additional penalty of $1,000 per day up to a maximum of $100,000.

In addition, the adviser or promoter will be liable to a penalty of 100% of the consideration it (or a person or partnership related to or associated with it) received or is entitled to receive directly or indirectly from any person or partnership for the implementation of the transaction it commercialized or promoted.

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