Terms of the Reward Program for Informants of Transactions Covered by the General Anti-Avoidance Rule and Sham Transactions
To be eligible, information must:
- concern a transaction or series of transactions that leads to the application of the general anti-avoidance rule (GAAR) or constitutes a sham; and
- lead to the recovery of at least $100,000 in duties under Québec tax legislation.
In order for the GAAR to apply, the following elements must be present:
- the transaction results in a tax benefit;
- the transaction constitutes an avoidance transaction, in that it was not conducted for bona fide purposes (obtaining a tax benefit is not a bona fide purpose); and
- the avoidance transaction is abusive.
The three elements must be present for a tax benefit to be denied.
The law states that when the GAAR applies, the taxpayer's tax consequences must be determined as is reasonable in the circumstances in order to deny a tax benefit that, if the GAAR did not apply, would result directly or indirectly from an avoidance transaction.
The following information is not eligible:
- any information that has already been brought to the attention of Revenu Québec or the CRA through:
- a voluntary, mandatory or preventive disclosure,
- a reportable transaction information return filed with the CRA, or
- an audit or investigation conducted by of Revenu Québec or the CRA;
- any information concerning international tax non-compliance covered by the CRA's Offshore Tax Informant Program (OTIP).
If you have detailed, credible information you think could be eligible, complete form LM-8-V, Denunciation – Reward Program for Informants of Transactions Covered by the General Anti-Avoidance Rule and Sham Transactions, and send it by mail or courier to the following address:
Direction de l'intégrité et de la recherche en matière de planification fiscale agressive
Complexe Desjardins, tour Nord, secteur D254LC
C. P. 5000 succ. Desjardins
Montréal (Québec) H5B 1A7
To ensure confidentiality, do not send any information by fax or email. Likewise, do not send us any documents that are protected by attorney-client privilege.
For more information about the program, see interpretation bulletin ADM. 8, Reward Program for Informants of Transactions Covered by the General Anti-Avoidance Rule and Sham Transactions, or call us, toll-free, at 1 855 208-1131. All calls are confidential.
We will ensure the protection of all confidential information and, subject to the applicable legislation, will protect informants' identities. In some cases, however, such as if an informant is called as a witness in public legal proceedings, it may be impossible to protect his or her identity. In such cases, we will notify the informant before deciding whether to continue the proceedings.
Rewards can reach up to 15% of the duties (not including interest or penalties) recovered under Québec tax legislation as a result of the information submitted. The exact percentage of an informant's reward is based on criteria such as the quality and usefulness of the information and the informant's level of cooperation.
If the information is considered eligible, a contract will be signed with the informant to define the parties' respective commitments. The reward will be paid only once the duties in question have been recovered and all deadlines for objection or appeal by the taxpayer(s) in question have elapsed.
Rewards must be included in the informant's income for the year they were received and are subject to the applicable source deductions of income tax.