Canada: Canada’s New Tax Avoidance Transaction Reporting Regime

Last Updated: January 26 2011
Article by Pamela L. Cross and Stephanie Wong

Most Read Contributor in Canada, November 2017

Following similar initiatives by Quebec, the U.S, the U.K. and Australia, Canada has proposed a regime of mandatory disclosure for certain tax avoidance transactions entered into after 2010, as well as transactions that are part of a series of transactions that began before 2011 but is completed after 2010. The government first announced the proposed reporting regime in the 2010 federal budget, and subsequently released a backgrounder and further details about the regime on May 7, 2010. After the expiry of a 60-day consultation period in which the public was invited to submit comments on the proposals, the Department of Finance (Finance) released draft legislation to implement the proposed mandatory reporting regime on August 27, 2010 (the Draft Legislation).

In Finance's explanatory notes to the Draft Legislation released on September 19, 2010 (the Explanatory Notes), Finance noted that many of the submissions it had received from the public sought clarification regarding particular aspects of the criteria upon which the reporting requirement is based and asked that the proposals be further clarified in the Explanatory Notes. According to Finance, the Draft Legislation addresses the concerns raised, "particularly when the proposed regime is considered as a whole". The purpose of this bulletin is to describe the new reporting rules and to highlight unresolved concerns about the new regime.

REPORTABLE TRANSACTIONS

A "reportable transaction" under the regime in proposed section 237.3 of the Income Tax Act (Canada) (the Act) is an "avoidance transaction", as defined for purposes of Canada's general anti-avoidance rule (GAAR), that is entered into by a taxpayer and that satisfies two of three specific hallmarks. An "avoidance transaction" under the GAAR is a transaction that would result, or is part of a series of transactions1 which would result, in a tax benefit (a reduction, avoidance or deferral of tax), unless the transaction has been undertaken or arranged primarily for bona fide purposes other than to obtain the tax benefit. An avoidance transaction is a reportable transaction where at least two of the following three hallmarks are satisfied in respect of the transaction or series of transactions:

  • Fee hallmark – An "advisor" or a "promoter", or any person who does not deal at arm's length with the advisor or promoter, was or is entitled (either now or in the future and either absolutely or contingently) to a "fee" that is to any extent either
    • based on the amount of a tax benefit from the transaction or series;
    • contingent upon obtaining a tax benefit from the transaction or series, or may be refunded, recovered or reduced in any waybased on the failure of the person to obtain a tax benefit from the transaction or series, or
    • attributable to the number of persons who participate in the transaction or series (or in a similar transaction or series), or who have been provided with advice or an opinion given by the advisor or promoter regarding the tax consequences from the transaction or series (or a similar transaction or series).
  • Confidential protection hallmark – An advisor or a promoter in respect of the transaction has "confidential protection" in respect of the transaction or series (generally, a prohibition against the disclosure of the details or structure of the transaction to any person).
  • Contractual protection hallmark – Any of the following persons had or have "contractual protection" (generally, any protection, other than standard professional liability insurance, in respect of a denial or dispute of the tax benefit) in respect of the transaction or series:
    • The person who entered into the avoidance transaction (the taxpayer);
    • Another person who entered into the avoidance transaction for the benefit of the taxpayer;
    • Any other person who does not deal
  • at arm's length with either the taxpayer or the person who entered into the transaction for the benefit of the taxpayer;
  • The advisor or promoter, or any person who does not deal at arm's length with the advisor or promoter (but, to avoid double counting, only if the contractual protection in respect of the transaction or series is not caught by the fee hallmark).

The defined terms "advisor", "promoter", "fee", "confidential protection" and "contractual protection" are discussed in more detail below.

The Explanatory Notes clarify that if a series of transactions includes more than one avoidance transaction, and one hallmark is satisfied in respect of one avoidance transaction in the series and a different hallmark is satisfied in respect of another avoidance transaction in the series, then cumulatively two hallmarks have been satisfied in respect of the series and each transaction (rather than just each avoidance transaction) in the series is a reportable transaction.

The mere presence of the hallmarks does not necessarily indicate an abuse of the Canadian income tax system but, in the Explanatory Notes, Finance contends that their presence "often indicates that the underlying transactions are ones that could be challenged under the existing provisions of the tax law". Nevertheless, proposed subsection 237.3(12) of the Draft Legislation explicitly states that the filing of an information return in respect of a reportable transaction is not an admission by the filer that the GAAR applies in respect of any transaction, or that any transaction is part of a series of transactions. However, the wording of subsection 237.3(12) does not provide any protection against a filing constituting an admission that a transaction is an avoidance transaction or part of a series that includes an avoidance transaction, which raises significant concerns as discussed below.

The intended objective of the tax avoidance reporting regime is to identify to the Canada Revenue Agency (CRA) certain types of potentially abusive tax avoidance transactions that are not otherwise subject to any specific information reporting requirements under the Act. According to Finance, normal commercial transactions that do not pose an increased risk of abuse would not have to be reported under the new reporting regime, but Finance does not elaborate on what it considers to be "normal".

FEE HALLMARK

Defined Terms

An "advisor" is defined very broadly in proposed subsection 237.3(1) to mean each person who provides, directly or indirectly in any manner whatever, any contractual protection in respect of the transaction or series, or any assistance or advice with respect to creating, developing, planning, organizing or implementing the transaction or series, to any person (including any person who enters into the transaction for the benefit of another person).

A "promoter" is similarly widely defined to mean each person who:

  • promotes or sells (whether as principal or agent and whether directly or indirectly) an arrangement, plan or scheme, if it may reasonably be considered that the arrangement, plan or scheme includes or relates to the transaction or series,
  • makes a statement or representation (whether as principal or agent and whether directly or indirectly) that a tax benefit could result from an arrangement, plan or scheme if it may reasonably be considered that:
    • the statement or representation was made in furtherance of the promoting or selling of an arrangement, plan or scheme, and
    • the arrangement, plan or scheme includes or relates to the transaction or series, or
  • accepts (whether as principal or agent and whether directly or indirectly) consideration in respect of an arrangement, plan or scheme referred to above.

It is apparent from these definitions that more than one person may be an advisor or a promoter in respect of a transaction or series of transactions, although Finance has acknowledged that it is not intended that a person can be an advisor to him/herself. The Explanatory Notes also confirm that a person can be an advisor in respect of a transaction or series if that person provides contractual protection, assistance or advice to any promoter or any other advisor in respect of the transaction or series, even though the person does not provide such protection, assistance or advice directly to the person who entered into the transaction or series. However, a person or partnership that provides advice or representation to a person only in respect of an audit or tax dispute in relation to a particular transaction or series, and who was not involved in any of the creation, development, planning, organizing or implementation of, or the provision of contractual protection for, the transaction or series, is not an advisor in respect of that transaction or series.

A "fee" in respect of a transaction or series of transactions is also defined broadly in subsection 237.3(1) to mean any consideration that is, or could be, received or receivable, directly or indirectly in any manner whatever, by an advisor or a promoter, or any person who does not deal at arm's length with an advisor or promoter, for

  • providing advice or an opinion with respect to the transaction or series,
  • creating, developing, planning, organizing or implementing the transaction or series,
  • promoting or selling an arrangement, plan or scheme that includes, or relates to, the transaction or series,
  • preparing the documents supporting the transaction or series, including tax returns or any information returns to be filed under the Act, or
  • providing contractual protection.

Application

An example of the first type of fee envisioned by the fee hallmark is a fee based either in whole or in part on a percentage of the tax benefit from an avoidance transaction or series of transactions. Generally, whether a fee would be viewed as being based on the amount of a tax benefit would depend on all the relevant facts and circumstances relating to the fee. However, it is important to emphasize that this hallmark will be satisfied any time a fee is to any extent based on the amount of a tax benefit from a transaction or series. As noted by the Canadian Bar Association in its submissions to Finance on the Draft Legislation, the very broad test for this fee hallmark has serious implications for value-based billing arrangements, which are becoming increasingly more demanded and accepted, and for multi-service firm fee arrangements. Where multi-service firms provide tax and other advice, as well as other professional services in implementing a transaction, and the aggregate fee is to any extent based on the amount of a tax benefit, the fee hallmark will be met and the transaction will be a reportable transaction if a second hallmark is satisfied.

In such a case, the entire fee would be included for the purposes of calculating a subsection 237.3(8) penalty as described below, even though only a small portion of the fee may have been based on the amount of a tax benefit. In contrast to the Draft Legislation, the Quebec tax avoidance transaction reporting rules provide a reasonable exception from its fee hallmark to address this concern.2 It is hoped that Finance will add a similar exception to the fee hallmark in the Draft Legislation.

Examples given in the Explanatory Notes of the second type of fee, which may be either contingent upon obtaining a tax benefit from the transaction or series, or refunded, recovered or reduced in any way based on the failure of the person to obtain a tax benefit from the transaction or series, could arise in situations including where:

  • the entitlement of the advisor or promoter to the fee under the relevant legal agreement arises upon the filing of an income tax return of a person that reflects the tax benefit, when the tax benefit is confirmed after audit, if any court confirms the tax benefit in whole or in part, or upon the expiration of the applicable assessment periods that apply to the taxation year;
  • the fee arises after the expiration of a given period of time agreed to by the advisor or promoter and the person for whom a tax benefit could result from the avoidance transactions or series (which period could be shorter than the applicable assessment periods for the tax benefit); or
  • the fee may be refunded to the payer, recovered by the payer, or reduced for the payer if the tax benefit that was expected to result from the avoidance transaction or series is denied to a person because of the application of any provision of the Act, including the GAAR.

The third type of fee encompassed by the fee hallmark is a fee attributable to the number of persons who enter into, or who have been provided access to advice or an opinion given by the adviser or promoter regarding the tax consequences from, an avoidance transaction or series (or a similar avoidance transaction or series). The Explanatory Notes describe the concept of "similar" avoidance transactions or series of transactions as broadly including those with the same or a similar structure that are entered into by different taxpayers, when the objective of those transactions or series is to result in similar tax benefits for each of the taxpayers, even if those transactions or series may involve different properties or obligations. For example, Finance indicates that in a broadly marketed scheme in which different taxpayer acquire and finance property separately, but where the property that each taxpayer acquires is similar in nature and where the financing structure that each taxpayer enters into is similar, the taxpayers' transactions may be considered to be similar avoidance transactions for the purpose of the fee hallmark.

CONFIDENTIAL PROTECTION HALLMARK

The concept of confidential protection in respect of a transaction or series of transactions is defined in proposed subsection 237.3(1) to mean anything that prohibits disclosure to any person or to the Minister of National Revenue (the Minister) of the details or structure of the transaction or series under which a tax benefit results (or would result but for the GAAR).

However, the definition expressly excludes the disclaiming or restricting of an advisor's liability from being considered to be confidential protection if it does not prohibit the disclosure of the details or the structure of the transaction or series. For example, the Explanatory Notes acknowledge that the disclaiming or restricting of an advisor's liability, such as the standard provision in tax opinions limiting the advisor's liability solely to the advisor's client and disclaiming liability to any third parties, would not be considered to be "confidential protection" for purposes of the rules, as long as there is no prohibition on the disclosure of the transaction or series. Further, Finance has confirmed that the rights of confidentiality of a person who has entered into a transaction against the person's advisors would not satisfy one of the hallmarks required for reporting since the definition of "reportable transactions" requires that an advisor or promoter (not the person entering into the transaction) have confidential protection in respect of the avoidance transaction or series. No further details on the intended scope of the concept of "confidential protection" have been provided by Finance.

CONTRACTUAL PROTECTION HALLMARK

"Contractual protection" in respect of a transaction or series of transactions is defined in proposed subsection 237.3(1) to mean any of the following:

  • Any form of insurance (other than standard professional liability insurance) or other protection, including an indemnity, compensation or a guarantee that, either immediately or in the future and either absolutely or contingently,
    • protects a person against a failure of the transaction or series to achieve any tax benefit from the transaction or series, or
    • pays for or reimburses any expense, fee, tax, interest, penalty or similar amount that may be incurred by a person in the course of a dispute in respect of a tax benefit from the transaction or series, and
  • Any form of undertaking provided by a promoter, (or by any person who does not deal at arm's length with a promoter), that provides, either immediately or in the future and either absolutely or contingently, assistance, directly or indirectly in any manner whatever, to a person in the course of a dispute in respect of a tax benefit from the transaction or series.

The first form of contractual protection is intended to encompass tax result protection under which a taxpayer is compensated or indemnified if the tax benefit for the taxpayer from the avoidance transaction or series cannot be achieved. The Explanatory Notes confirm that this form of contractual protection in respect of an avoidance transaction (or series of transactions that includes an avoidance transaction) does not include an advance income tax ruling obtained from the CRA by a person for whom a tax benefit could result from the transaction or series. However, it could include situations in which a taxpayer would be entitled to be compensated for any fees incurred in the course of an audit, an objection to an assessment, reassessment or determination, or a court appeal of an assessment in respect of a tax benefit which could result from an avoidance transaction or series of transactions.

The second form of contractual protection deals with situations where a promoter provides an undertaking to assist a person in the course of a dispute in respect of a tax benefit from a transaction or series of transaction, even if the promoter does so for free. Finance has indicated that this kind of contractual protection would include situations where the promoter offers to provide relevant documentation and guidance to challenge an assessment or to file an appeal of a court decision in respect of the transaction or series.

REPORTING AND FILING REQUIREMENTS

The requirement to file a prescribed information return containing full and accurate information about each reportable transaction is imposed pursuant to proposed subsection 237.3(2) on:

  • every person for whom a tax benefit arises from a reportable transaction (i.e., the taxpayer(s));
  • every person who enters into a reportable transaction for the benefit of the taxpayer(s); and
  • every advisor or promoter (and non-arm's length persons) who is or was entitled to a fee that is caught by either the fee hallmark or the contractual protection hallmark.

The CRA has yet to issue the prescribed information return.

An exemption from filing is provided under proposed subsection 237.32(14) for a transaction (that would otherwise be a reportable transaction) that is, or is part of a series that includes, the acquisition of a tax shelter or the issuance of a flow-through share, but only if the appropriate information return under the tax shelter or flow-through share regime has been filed with the Minister. Subsection 237.3(16) contains an anti-avoidance rule which denies the application of this exemption where it is reasonable to conclude that one the main reasons for the acquisition of a tax shelter or the issuance of a flow-through share is to avoid the application of the tax avoidance reporting requirements in section 237.3.

While the reporting obligation under subsection 237.3(2) applies on a transaction-by-transaction basis, subsection 237.3(3) deems a person's filing obligation to have been satisfied in respect of each transaction in a series of transactions if the person files a single information return reporting the entire series of transactions.

The filing deadline for the information return is on or before June 30 of the calendar year following the year in which the transaction first became a reportable transaction in respect of the person. However, for a transaction that is part of a series of transactions that began before 2011 but is completed after 2010, the information return will be deemed to be filed by the filing due-date as long as it is filed before the end of 2011.

There are several important points to note about the filing requirements. First, different participants in a series of transactions may have different reporting obligations. For example, although a taxpayer would have a reporting obligation in respect of each transaction that is part of a series of transactions that includes a reportable transaction, an advisor or promoter may have an obligation to report only part of the transactions in the series, depending on the circumstances.

Second, different participants in a series of transactions may have reporting obligations in different years. An example given in the Explanatory Notes is where a series of transactions is implemented over two calendar years, but an advisor provided assistance or advice only in the second year and only in respect of transactions that occurred in the second year. In that case, the transactions become reportable transactions to the advisor only in the second year and, therefore, the advisor's filing obligation would be triggered for the second year only, while the taxpayer must report for both years.

Third, pursuant to subsection 237.3(4), the filing of an information return in respect of a transaction by one person will satisfy the reporting obligation of any other person in respect of that transaction. However, where the reporting obligation involves a series of transactions, the filing of an information return by one person may or may not satisfy other persons' reporting obligations for the reasons just described. Therefore, persons involved in a series of transactions that includes a reportable transaction must carefully consider their individual reporting obligations to ensure that they are properly satisfied. This is especially important since any penalty for failure to file in respect of a reportable transaction is jointly imposed on taxpayers who benefit from the transaction, persons acting for (or for the benefit of) such taxpayers, and promoters and advisors in certain circumstances.

FAILURE TO FILE

The potential consequences of failing to file an information return are set out in subsections 237.3(6) to (10).

In general, every person who fails to file an information return in respect of a reportable transaction as required under subsection 237.3(2) within the prescribed time period will be jointly and severally, or solidarily, liable to pay a late-filing penalty equal to the total of all fee entitlements of all advisors and promoters (and persons who do not deal at arm's length with the advisors or promoters) in respect of the transaction or series to the extent that such fees meet the conditions of either the fee hallmark or the contractual protection hallmark. Liability for the penalty will be subject to a due diligence defence (see below), which Finance included in the Draft Legislation to try to address some of the concerns about the potentially wide net cast by the reporting regime. Further, in the case of advisors and promoters, there is a monetary limit on the penalty equal to the total fee entitlement of that particular advisor or promoter (and any non-arm's length person to that advisor or promoter) in respect of the reportable transaction or series of transactions. However, a taxpayer failing to file is not so fortunate and would be liable to pay as a penalty the total fees to which all advisors and promoters in respect of the reportable transaction are entitled. It is possible that the resulting penalty could in certain circumstances exceed the amount of the taxpayer's tax benefit from the transaction.

In addition, tax consequences may result if the liability to pay a penalty in respect of a reportable transaction is not satisfied. If the penalty (or any penalty interest) is not fully paid and any taxpayer for whom a tax benefit arises from the reportable transaction has not satisfied the required reporting obligation, then the GAAR will be deemed to apply to the reportable transaction as a result of the rule in proposed subsection 237.3(6). This means that if several taxpayers are involved in a reportable transaction, the GAAR will deny the tax benefits of the transaction unless all of the taxpayers comply with their filing obligations or all penalty liability in respect of the reportable transaction is fully satisfied. However, to the extent that the tax benefit sought would otherwise be permitted under the GAAR, a taxpayer may still obtain the tax benefit if the taxpayer late files the required information return with the Minister and pays any outstanding penalty and interest.

A simple example of how to determine the filing obligations of various persons involved in a series of transactions as well as the penalty resulting from a failure to file is provided by the Explanatory Notes.

Due Diligence Defence

To address some of the concerns regarding the reporting regime, Finance has introduced a due diligence defence in proposed subsection 237.1(11) of the Draft Legislation which exempts a person from liability for a penalty for failing to file the required information return if the person has exercised the degree of care, diligence and skill to prevent the failure to file that a reasonably prudent person would have exercised in comparable circumstances. The wording of the due diligence defence is identical to the defence provided for corporate directors' liability for unremitted source deductions under subsection 227.1(3) of the Act and for unremitted GST/HST under section 323 of the Excise Tax Act (Canada). As such, Finance has confirmed that the application of the due diligence defence in subsection 237.1(8) will be based on the jurisprudence that applies for the purposes of these other statutory provisions. In very general terms, the existing jurisprudence applies a reasonable person test, taking into account all of the relevant facts and circumstances. The CRA's views on the application of the due diligence test in the context of subsection 227.1(3) is summarized in Information Circular IC89-2R2 as follows:

18. The due diligence test is subjective as well as objective. It is objective in that there has to be a standard against which to judge a director, i.e., a reasonable person; it is subjective in the sense that the director must have done what a reasonably prudent person would have done in the circumstances. What constitutes due diligence, then, would vary with the circumstances of each case.3

The Explanatory Notes provide little valuable guidance on what would constitute due diligence in the context of the tax avoidance reporting regime. Persons for whom a tax benefit could result from a reportable transaction or series are required to make "reasonable and good faith efforts" to determine whether a transaction is an avoidance transaction, and whether any two of the three hallmarks are applicable to the transaction or series. Persons who enter into a reportable transaction for the benefit of a taxpayer are required to exercise the same degree of care, diligence and skill as if they had entered into the transaction on their own behalf. Advisors and promoter are not only required to exercise "adequate care, diligence and skill" to determine whether any two of the three hallmarks are applicable to the avoidance transaction or series, but also to determine whether a tax benefit could result for a person from the avoidance transaction or series.

More helpful is Finance's commentary on a situation where an advisor, acting reasonably, determines that a reportable transaction, in respect of which the advisor provided advice and is entitled to a fee that satisfies either the fee hallmark or the contractual protection hallmark, is part of a series of three transactions. In such case, Finance states that the advisor will have satisfied his/her reporting obligation if a full and accurate report is filed in respect of the three transactions that make up that series even if, unknown to that advisor, those three transactions were actually part of a larger series of transactions. Thus, it appears that ignorance can be an adequate excuse, provided that the advisor has acted reasonably in the particular circumstances.

CONCERNS

Despite Finance's assertion in the Explanatory Notes that the Draft Legislation addresses the issues raised by the tax community regarding the proposed tax avoidance reporting regime "particularly when the proposed regime is considered as a whole", significant concerns remain. The proposed regime has very wide application as a result of the use of broadly drafted defined terms which determine its application to a particular transaction or series of transactions. Although Finance has attempted to assuage some of the concern by commenting in the Explanatory Notes that normal commercial transactions that do not pose an increased risk of abuse would not have to be reported under the new reporting regime, that statement is of little practical benefit without further guidance on the kinds of transactions that Finance would consider to be "normal".

Concerns have also been raised about the imposition of the reporting requirements on legal advisors, particularly its potential to adversely affect the protection afforded to a client by solicitor-client privilege and to conflict with the duty of undivided loyalty owed by a lawyer to his/her client. This is a serious issue that Finance should address.

Further, as noted above, the wording of subsection 237.3(12) does not provide any protection against a filing constituting an admission that a transaction is an avoidance transaction. Requiring taxpayers to determine whether a transaction is an avoidance transaction would appear to run contrary to the GAAR itself, which cannot be self-assessed by the taxpayer. As the rules are currently drafted, could a taxpayer's ability to dispute a subsequent GAAR assessment in court be prejudiced merely by virtue of filing, since the taxpayer could be considered to have admitted that a transaction is an avoidance transaction, i.e., it had no bona fide purpose other than to obtain a tax benefit? Also, taxpayers who are uncertain about whether a transaction satisfying two of the hallmarks constitutes an avoidance transaction may feel compelled to file under threat of a significant monetary penalty and disallowance of the tax benefit. Presumably a taxpayer could include an explicit statement with the information return that the filing is for protective purposes only and does not constitute an admission that a transaction is an avoidance transaction, but explicit protection in that regard should be added to subsection 237.3(2). Similarly, it is not clear that the due diligence defence in subsection 237.3(11) would be of any benefit where a person reasonably concludes that the transaction is not a reportable transaction since it expressly applies only to reasonable efforts to "prevent a failure to file".

It is hoped that Finance will resolve these and other outstanding concerns by revising the Draft Legislation prior to its enactment. We will continue to monitor the progress of the Draft Legislation and will send an update bulletin describing any significant developments in this area.

PRACTICAL IMPLICATIONS OF THE NEW REPORTING RULES

The introduction of the tax avoidance transaction reporting regime will likely increase the costs associated with planning and implementing transactions for taxpayers. Some of the main issues taxpayers and their advisors will now need to think about in the course of planning and implementing transactions include:

  • whether there are any reportable transactions or series of transactions that include a reportable transaction;
  • what specific reporting obligations do the taxpayer, advisors and promoters have in respect of the transactions or series;
  • whether reporting is required under one or both of the federal and Quebec legislation;
  • how to ensure the adequate disclosure of information among taxpayers, advisors and promoters to enable them to make the foregoing determinations;
  • whether to obtain an agreement among taxpayers, advisors and promoters to ensure complete and consistent reporting of a reportable transaction or series; and
  • whether to obtain additional legal opinions, e.g., as to whether there is a reportable transaction, whether there is a series that includes a reportable transaction, or whether a particular person has a reporting obligation.

Footnotes

1. Generally, it is a question of fact in the particular circumstances as to what constitutes the relevant series of transactions for purposes of the GAAR. In Canada Trustco Mortgage Co. v. The Queen, the Supreme Court of Canada accepted jurisprudence from the English courts which provided that a series under the common law was preordained in order to produce a given result with no practical likelihood that the pre-planned events would not take place in the order ordained. Subsection 248(10) of the Act expands that notion of series under the common law to include "related transactions or events completed in contemplation of the series". In the appeal of the Federal Court of Appeal decision applying the GAAR in Copthorne Holdings Ltd. v. The Queen, which was heard on January 21, 2011, the Supreme Court of Canada has been asked to clarify the scope of the term "series" as it may apply for purposes of the GAAR.

2. Section 1079.8.1 of the Québec Taxation Act excludes the following type of transaction from its fee hallmark: "a transaction in respect of which an agreement has been entered into with a person who is a member of a professional order and under which the result obtained by the person is one of the factors taken into consideration in determining the person's remuneration, in accordance with a provision of the code of ethics adopted by the professional order under the authority of which the person practices the profession".

3. Information Circular IC 89-2R2, "Director's Liability Section 227.1 of the Income Tax Act, Section 323 of the Excise Tax Act, Section 81 of the Air Travellers Security Charge Act, and Subsection 295(1) of the Excise Act, 2001, dated March 24, 2006, paragraph 18.

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    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

    Cookies

    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

    Links

    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

    Mail-A-Friend

    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

    Emails

    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

    Security

    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions