Canada: 2011 Federal Budget Recap


In his speech to Parliament on March 22, 2011, the Minister of Finance emphasized the need for a stable government, while delivering a plethora of targeted tax incentives for families. Although Budget 2011 provides limited tax relief for businesses in certain sectors, the main theme of the business tax measures is protecting the integrity of the tax system. This is to be achieved by the introduction of new stop-loss rules on the disposition of shares, elimination of tax deferral obtained from the use of partnerships, curtailing donations of publicly listed flow-through shares, and other measures. The entire charitable sector is also targeted for change.

If passed into law, these tax measures will have a broad impact. However, with this Budget, more than most, questions are already being raised as to whether the Government will fall and hence whether the Budget proposals will be enacted. No doubt the weeks ahead will be filled with intense political debate, as well as uncertainty regarding the proposed tax changes.

Accelerated Recognition of Partnership Income

In many industries, business is commonly carried on through partnership structures, and the use of partnerships can, with a suitable choice of year end, result in the deferral of income. Eliminating this deferral has the potential to accelerate significant amounts of income, thereby accelerating the payment of tax. The temptation to increase tax revenues by eliminating this deferral has proven too difficult for the Government to resist. Budget 2011 proposes complex new rules to accelerate the recognition of partnership income by corporate partners. As a result, a $2.8 billion increase in tax revenue over the next five years is forecast. Aside from accelerating the payment of tax, these rules will be the source of increased cost and administrative inconvenience for the corporations affected.

Under current rules, partnership income earned by a corporation is included in the income of the corporation for the taxation year in which the fiscal period of the partnership ends. Deferral can arise where the partnership's fiscal period ends after the end of the corporation's taxation year. In that case, partnership income earned up to the end of the corporation's taxation year is not brought into the corporation's income until the following taxation year.

Under the proposed measures, partnerships will continue to be allowed to have fiscal periods that differ from that of its corporate partners, but doing so may result in accelerated taxation, administrative burden and the risk of additional income for one or more corporate partners. These proposals affect only corporate partners (other than professional corporations) that, together with affiliated and related parties, are entitled to more than 10% of the partnership's income (or assets in the case of wind-up) at the relevant time.

Income Accrual

Effective for taxation years ending after March 22, 2011, corporate partners affected by the new rules will be required to accrue partnership income for the portion of the partnership's fiscal period that falls within the corporation's taxation year (a Stub Period). The effect is to accelerate the recognition of partnership income for the Stub Period.

In the absence of relief, when the rules first apply the result could be the recognition of more than one year of partnership income by a corporate partner. To mitigate the initial impact of accruing Stub Period income, transitional relief will allow a corporate partner to bring the Stub Period amount into income over five taxation years. The transitional rules will apply to the corporation's first taxation year that ends after March 22, 2011, provided certain conditions are met and, in some cases, continue to be met throughout those five taxation years.

A corporate partner's Stub Period accrual is determined by formula. Generally, the Stub Period accrual will be the partner's share of the partnership's income, pro-rated for the period ending at the corporation's taxation year end. Alternatively, a corporation may designate a Stub Period accrual amount that is lower than the amount determined under the formulaic approach but, by doing so, will be exposed to the risk of an additional income inclusion (essentially a penalty). Corporate partners will want to ensure that the designated amount is at least equal to the lesser of: (a) the actual pro-rated income of the corporate partner from the partnership for the Stub Period; and (b) the Stub Period accrual determined under the formulaic approach. If the designated amount is less than this, the corporate partner will have an additional income inclusion generally equal to the amount of the shortfall multiplied by the appropriate prescribed interest rate. Where the shortfall exceeds 25% of the lesser of (a) and (b) above, the additional income inclusion is further increased by 50% of the excess. These rules are intended to be an incentive not to designate too low an amount.

In certain circumstances, relief from the additional income inclusion is available for the first taxation year of a corporate partner for which a Stub Period accrual is calculated. There is also a netting concept where a corporate partner is a member of more than one partnership. Under the netting rule, a shortfall in a Stub Period accrual for one partnership may be offset against an overstatement in respect of another partnership.

A corporate partner may reduce its Stub Period accrual by the amount of "Designated Resource Expenses" (Canadian exploration expenses, Canadian development expenses, Canadian oil and gas property expenses and foreign resource expenses) incurred by the partnership in the Stub Period. In order to make this adjustment, however, the corporate partner will need to obtain from the partnership written information evidencing the nature and amount of the expense and the corporate partner's share of that expense.

Election to Change Partnership's Fiscal Period

To address the administrative inconvenience resulting from these proposed measures, a single-tier partnership may make a one-time election to change its fiscal period if the following conditions are met:

  • the last day of the new fiscal period must be after March 22, 2011 and no later than the latest day that is the last day of the first taxation year of a corporate partner that ends after March 22, 2011, provided that the corporate partner has been a member of the partnership continuously since before March 22, 2011;
  • the election is in writing and filed on behalf of the partnership on or before the earliest of all filing due dates for the return of any income of any corporate partner for the taxation year in which the new fiscal period ends;
  • at least one corporate partner would, in the absence of the election, have an adjusted Stub Period accrual greater than nil in its first taxation year ending after March 22, 2011; and
  • all members of the partnership are corporations, other than professional corporations.

If a partnership has one or more partnerships as members, and the partnerships are not required under the existing rules to all have a December 31 fiscal period, the 2011 Budget proposals require that those partnerships adopt a common fiscal period. The partnerships are required, on a one-time basis, to choose a common fiscal period by filing an election in writing. The elected fiscal period must end before March 22, 2012 and must be no more than 12 months in duration. The election must be filed on behalf of the partnerships on or before the earliest of all filing-due dates for the return of income of any corporate partner of any of the partnerships for the corporate taxation year in which the new fiscal period ends. If no election is filed, the common fiscal period of the partnerships will end on December 31, 2011 and subsequent fiscal periods will end on December 31.

Modified Stub Period accrual rules and transitional relief will apply to income earned by each corporate partner in a tiered partnership structure whose taxation year is not aligned with the fiscal period of the partnership.

General Business Measures

Stop-Loss Rules on Redemption of Shares

Existing rules allow a Canadian corporation to deduct the amount of a dividend received from another Canadian corporation in many circumstances. The tax policy behind such "tax-free" inter-corporate dividends is to ensure that dividends are taxed only once as they are paid through a corporate chain and ultimately to individual shareholders.

To prevent abuse, these rules are complemented by certain "stop-loss rules" which, in certain circumstances, reduce the amount of loss otherwise realized by a corporation on a disposition of shares by the amount of previous tax-free dividends received. These stop-loss rules do not apply to all dispositions. There are certain carve-outs which prevent the stop-loss rules from applying to shareholders holding (together with all non-arm's length persons) less than 5% of the shares of a class where those shares were held for at least 365 days. According to the Government, however, these carve-outs have been exploited by some taxpayers, and the perceived loss of tax revenue was considered significant enough that Budget 2011 will curtail the carve-outs and extend the stop-loss rules.

Budget 2011 documents cite certain "tax avoidance arrangements" where corporations would claim a "double deduction" from the redemption of shares. For example, where shares held by a corporation were redeemed, if the stop-loss rules did not apply and if those shares had a paid-up capital (PUC) that was less than the redemption proceeds, the resulting deemed dividend would be "tax-free" and would also reduce the deemed proceeds of disposition on the redemption to result in a lower capital gain (or greater capital loss). In that situation, a capital loss could result even where there was no "real economic loss".

To counter the perceived tax avoidance, Budget 2011 proposes to extend the application of the stop-loss rules to any dividend deemed to be received on the redemption of shares held by a corporation, except only dividends deemed to be received on the redemption of shares of the capital stock of one private corporation that are held by another private corporation (other than a financial institution). These changes would apply to redemptions that occur on or after March 22, 2011.

Accelerated Capital Cost Allowance

In its 2007 Budget, the Government introduced temporary measures to help Canada's manufacturing and processing sector. These measures included accelerated deductions for capital cost allowance - 50% per year on a straight line basis, subject to the half-year rule - for machinery and equipment acquired before 2009 primarily for use in Canada for the manufacturing or processing of goods for sale or lease. Budget 2008 and Budget 2009 extended these temporary measures to machinery and equipment acquired before 2012. Budget 2011 proposes a further extension of the accelerated write-off for two additional years so that equipment and machinery acquired before 2014 would be eligible for this incentive.

Clean Energy Generation Equipment

The current rules in Class 43.2 allow accelerated deductions at a rate of 50% per year (on a declining balance basis) for capital cost allowance on specified clean energy generation and conservation equipment.

Recognizing the growing importance of thermal energy, Budget 2011 proposes to expand Class 43.2 to include equipment that is used to generate electrical energy in a process in which all or substantially all of the energy input is from waste heat. The changes will apply to eligible assets acquired on or after March 22, 2011 that have not been used or acquired for use before that day.

Mineral Exploration Tax Credit Extended Once Again

The mineral exploration tax credit, commonly known as a "super flow-through", is an added advantage in flow-through share offerings. Qualifying mineral exploration expenditures incurred and renounced by a principal-business corporation pursuant to a flow-through share agreement may be eligible for a 15% federal tax credit, in addition to the deduction from income which the subscriber obtains from the renunciation. Currently, the super flow-through is scheduled to expire at the end of March 2011.

Budget 2011 extends the availability of the super flow-through for one more year, to include flow-through share agreements entered into before March 31, 2012. Under the "look back" rule, funds raised and renounced in one year can be spent on qualifying expenditures in the following year. Because of the "look-back" rule, the effect of this extension is to support qualifying exploration expenditures until the end of 2013.

This extension is becoming a perennial feature of federal budgets.

Oil Sands

Budget 2011 proposes to align the treatment of current expenditures in the oil sands sector with analogous expenditures in the conventional oil sector. There are two main measures. First the Budget proposes to treat the cost of oil sands leases and other oil sands resource property as a Canadian oil and gas property expense, or "COGPE", which is deductible on a 10% per year declining balance basis. Previously, these costs had been treated as Canadian development expenses, or "CDE", deductible on a 30% per year declining balance basis. Second, the Budget proposes to treat development expenses in the oil sands sector as CDE, instead of, as currently, Canadian exploration expenses, which are currently deductible at 100%. Since these changes will adversely affect companies in this sector, there are transitional rules to phase in these measures over time.

Qualifying Environmental Trusts

The Qualifying Environmental Trust ("QET") rules have been in place for a number of years. Environmental regulation in many jurisdictions require owners of mines, quarries and waste disposal sites to set aside funds to pre-finance the eventual costs of the reclamation of the site. Under the normal rules for the calculation of income, expenditures to establish such a fund or trust would not be deductible by the owner on a current basis. The QET rules address this issue by allowing a current deduction for contributions to a QET. Income earned in the QET in the intervening years (pending expenditures on reclamation) is taxed in the trust but also reported by the owner who is entitled to a credit for the tax paid by the trust. When the reclamation expenses are incurred, funds paid from the trust to the owner are included in income, but the owner should be entitled to a corresponding deduction for the reclamation expenditures.

In May 2009, the National Energy Board ("NEB") announced that pipeline companies under its jurisdiction would be subject a requirement to set aside funds to pre-finance reclamation costs in respect of their pipelines. Budget 2011 extends the QET regime to trusts established by pipeline companies in compliance with these new NEB requirements.

Budget 2011 also makes changes to the rules governing the eligible investments of a QET. These are expanded to include certain debt obligations and securities, but not interests in a security issued by a person or partnership that has contributed property to the QET or that is a beneficiary of the QET or that is related to such persons or partnerships or by a person or partnership in which a contributor or beneficiary has a "significant interest".

Kiddie Tax

The Canadian income tax system applies progressive rates to the taxation of personal income. As a result, tax can be reduced by splitting income among several taxpayers, particularly low rate taxpayers who are minors. A number of rules attempt to restrict this type of personal tax planning. One of these rules, the "kiddie tax", was introduced a number of years ago to address tax planning involving minors.

The kiddie tax is assessed at the maximum federal rate, presently 29%, and applies to certain kinds of income earned by individuals under 18 years of age, namely (1) taxable dividends and shareholder benefits received directly, or indirectly through a partnership or a trust, in respect of unlisted shares, and (2) income from a partnership or trust if that income is derived from the provision of property or services to a business carried on by a person related to the minor. In essence, the kiddie tax is intended to discourage parents from splitting income earned in their private corporations or private businesses with their minor children.

Since the introduction of the kiddie tax, planning has developed to circumvent it. For example, if minor children receive their return as a capital gain from the sale of shares of a corporation, rather than as dividend income or income from the provision of property or services to an business, the kiddie tax may not apply. In typical planning, the minor would realize a capital gain on the sale of shares of a corporation to a non-arm's length party. Some strategies involved high-low shares and sourced the funds paid to the minors from the corporation, but in a way that avoided the deemed dividend rules. The Canada Revenue Agency ("CRA") was aware of the strategies and has been pursuing GAAR assessments.

Budget 2011 now addresses this type of planning by subjecting certain capital gains realized by minors on the sale of shares to the kiddie tax. Such a gain will be deemed to be a dividend, and hence subject to the kiddie tax, if a dividend in respect of the same shares would have been subject to the kiddie tax. Such a deemed dividend is not eligible for eligible dividend treatment, and the capital gains exemption will be lost.

Changes Affecting Registered Plans

Budget 2011 includes relieving provisions to enhance the flexibility of registered disability savings plans (RDSPs) and registered education savings plans (RESPs). However, it also includes new restrictions designed to address perceived abuse of registered retirement savings plans (RRSPs) and individual pension plans (IPPs). Substantial revenue is anticipated from these changes, so trustees of these plans will need to exercise caution to ensure they comply with the new rules. The perceived abuse of employee profit sharing plans (EPSPs) may be addressed subsequently, after public consultation.

RDSP Relieving Provision

Under Budget 2011 proposals, an RDSP beneficiary with a shortened life expectancy, of 5 years or less, will be permitted to make annual withdrawals from an RDSP without triggering the requirement to repay Canada Disability Savings Grants and Canada Disability Savings Bonds previously received.

RESP Relieving Provision

Budget 2011 proposes to allow transfers between individual RESPs for siblings, without tax penalties and without triggering repayment of Canada Education Savings Grants. This allows subscribers of separate individual plans the same flexibility to allocate assets among siblings as presently exists for subscribers of family plans. Transfers between plans are only available if the beneficiary of the receiving plan was less than 21 years of age when the plan was opened.

RRSP New Anti-Avoidance Rules

Budget 2011 includes proposals to address perceived abuse of RRSPs. The proposals introduce new measures that are similar to rules that currently apply to tax-free savings accounts (TFSAs). Over the next five years the Government expects to raise $500 million in additional revenue from these changes.

Under the new "advantage" rules, an RRSP annuitant will be subject to tax on certain "advantages" obtained from transactions that are designed to exploit the tax attributes of an RRSP. The amount of tax payable by an RRSP annuitant in respect of an RRSP advantage will be the fair market value of the advantage.

RRSP annuitants will be subject to a special tax if an RRSP holds a "prohibited investment". Prohibited investments will generally include debt of the RRSP annuitant and investments in entities in which the RRSP annuitant (or a non-arm's length party) has a significant interest (10% or more) or with which the RRSP annuitant does not deal at arm's length. The tax arising from a prohibited investment will be 50% of the fair market value of the investment. Any income derived from a prohibited investment will be treated as an advantage which is taxable to the annuitant.

Presently, non-qualified investments of an RRSP give rise to income to the RRSP annuitant, and a penalty tax of 1% per month of the fair market value of the investment applies to the RRSP. Budget 2011 proposes to replace these rules by imposing on the RRSP annuitant a special tax of 50% of the fair market value of the non-qualified investment. Investment income earned on a non-qualified investment will continue to be taxable to the RRSP.

IPP New Restrictions

Two new tax measures will apply to IPPs under Budget 2011. First, once a plan member attains the age of 72, annual minimum withdrawals will be required, similar to the minimum requirements for withdrawals from registered retirement income funds (RRIFs). Second, the cost of past service contributions must be funded by the plan member's existing RRSP assets, or by reducing the plan member's accumulated RRSP contribution room, before any new deductible contributions in relation to past service may be made.

EPSP Consultation

The Government considers that EPSPs are increasingly used to achieve income splitting, either with the intent of reducing or deferring taxes, or to avoid Canada Pension Plan contributions and Employment Insurance premiums. Therefore, the EPSP rules will be reviewed to determine whether technical changes are required, and the Government will undertake consultations with "stakeholders" before proceeding with any proposals.

Changes to the Charitable Sector

Extension of Charitable Regime to Other Organizations

There are many organizations, other than registered charities, that have the ability to issue official donation receipts. However, the regulatory regime that applies to registered charities generally does not apply to such organizations.

Budget 2011 proposes to apply certain aspects of the charitable regime to the following organizations:

  • registered Canadian amateur athletic associations (RCAAAs)
  • municipalities in Canada
  • municipal and public bodies performing a function of government in Canada (e.g., certain First Nations)
  • housing corporations that provide low-cost housing for seniors
  • certain universities outside Canada
  • certain foreign charitable organizations that have received a gift from Her Majesty in right of Canada.

When the Budget measures become effective, the above-mentioned organizations will be subject to the following:

  • they will be required to be listed on the public lists maintained by the CRA;
  • their receipting privileges may be suspended or their status may be revoked if they issue a donation receipt that is not in compliance with the tax rules; and
  • they will be required to maintain books and records to allow CRA to verify donations and failure to do so may be cause for a suspension of receipting privileges or revocation of the organization's status.

In addition, RCAAAs may also be subject to the monetary penalties applicable to registered charities for improper issuance of receipts and failure to file an information return.

Measures Specific to RCAAAs

The Budget increases the requirements specific to RCAAAs. RCAAAs will be required to have the promotion of amateur athletics in Canada on a nation-wide basis as their exclusive purpose and exclusive function, rather than their primary purpose and primary function. This introduces a standard similar to that which applies to charitable organizations (which are required to devote all of their resources exclusively to charitable activities). Breach of the requirement that RCAAAs be constituted and operated exclusively for the promotion of amateur athletics in Canada may be cause for a monetary penalty, suspension of receipting privileges or revocation. RCAAAs and other stakeholders may provide feedback to the Department of Finance regarding this proposed change by June 30, 2011.

RCAAAs will also be subject to the "undue benefit rules" which apply to registered charities. As a result, RCAAAs may be subject to a monetary penalty, suspension of their receipting privileges or revocation of their registration if they provide an undue benefit to any person. This would include situations where an RCAAA pays excessive compensation to staff, to a professional fundraising company or company with which it does business. They may also be subject to a monetary penalty, suspension of their receipting privileges or revocation of their registration if they carry on a business that is unrelated to their purpose and function.

Finally, as is currently the case with respect to registered charities, the public will be able to obtain certain information and documents relating to RCAAAs, such as incorporation documents, by-laws, annual information returns, applications for registration and the names of directors.

Criminal History or Misconduct

The Budget proposes to give CRA the ability to refuse to register or revoke the registration of a charity or an RCAAA if a member of the board of directors, a trustee, an officer or equivalent official or an individual who otherwise controls or manages the organization (an official) has been involved in certain kinds of misconduct. These sanctions may apply where an official has been found guilty of a criminal offence relating to financial dishonesty or any other criminal offence that is relevant to the operation of the organization, or was an official of a charity or RCAAA during a period in which the organization engaged in non-compliance for which its registration has been revoked within the past five years, or was at any time a promoter of a gifting arrangement or other tax shelter in which a charity or RCAAA participated and the registration of the charity or RCAAA has been revoked within the past five years for reasons that included or were related to its participation.

The proposed measures will not require a charity or RCAAA to obtain background checks on directors, officers and staff. However, once a charity or RCAAA has been made aware of concerns on the part of CRA in respect of an individual, failure to take remedial action could lead to the denial of an application for registration, suspension of receipting privileges or revocation of registered status.

Reassessment of Donors for Returned Gifts

Where a donor has received a charitable donation receipt, the CRA does not have the ability to reassess that donor outside the prescribed limitation period if the property donated is subsequently returned to the donor. Budget 2011 proposes to permit reassessments of donors where the donated property, an identical property or any other substituted property, is returned to a donor.

Where property is returned to the donor, the organization that issued the receipt must issue to the donor a revised receipt and must send a copy of the revised receipt to CRA, provided that the change is more than $50.

Gifts of Non-Qualifying Securities

At present, recognition of the donation of certain non-qualifying securities may be deferred until the charity has disposed of the property. Thus, where a donor donates a share, debt obligation or other security issued by the donor or by a person not dealing at arm's length with the donor to a qualified donee, entitlement to a charitable donation tax credit or deduction is deferred until such time, within five years of the donation of the non-qualifying security, as the qualified donee has disposed of the non-qualifying security.

The Budget has introduced certain anti-avoidance rules regarding gifts of non-qualifying securities. These anti-avoidance rules are in response to the Remai case, where Remai's $10.5 million donation to his private foundation of promissory notes issued by his own company was allowed once the foundation sold the notes to his nephew's company (which was held to deal at arm's length with Remai). The new rules essentially provide that the recognition of a gift of a non-qualifying security will be deferred until such time, within five years of the donation of the non-qualifying security, as the qualified donee has disposed of the non-qualifying security to any person, for consideration that is not another non-qualifying security.

Granting of Options to Qualified Donees

The Budget proposes to clarify that a charitable donation tax credit or deduction will not be available to a donor for granting an option to a qualified donee to acquire a property until the qualified donee acquires the property. At that time, the donor will be allowed a credit or deduction based on the amount by which the fair market value of the property at that time exceeds the amounts, if any, paid by the qualified donee for the property and the option. Consistent with previously introduced measures concerning split receipting, a charitable donation tax credit or deduction will not be available to the donor if the amount paid by the qualified donee for the property and the option exceeds 80% of the fair market value of the property at the time of acquisition by the qualified donee.

Donations of Publicly Listed Flow-Through Shares

Capital gains from the donation of publicly listed securities (including flow-through shares) to a registered charity are not taxable to the donor. This provides an incentive to donors to donate listed securities that have appreciated in value.

Flow-through shares are attractive because they allow corporations in the oil and gas, mining and renewable energy sectors to renounce certain tax expenses associated with eligible exploration, development and project start-up to investors, who can deduct these expenses in calculating their own taxable income. Flow-through shares are treated as having a nil cost for tax purposes. As a result, when an investor holding flow-through shares sells them, the full amount of the proceeds received is recognized as a capital gain for tax purposes. This is intended to provide partial recovery of the tax benefit from the deduction of the expenses renounced by the corporation.

Where a taxpayer donates publicly listed flow-through shares, however, the exemption from tax on the resulting capital gain allows taxpayers to avoid the partial recovery, as a capital gain, of the tax benefit provided by the flow-through share rules.

A number of rulings have been issued by CRA confirming this favourable treatment, however, Budget 2011 now proposes that if a flow-through share is issued to a taxpayer under a flow-through share agreement entered into on or after March 22, 2011, the exemption from tax in respect of capital gains on donations of publicly listed securities will be limited. In that case, the exemption will only be available on a subsequent donation by the taxpayer of the flow-through share to the extent that the capital gain on the donation exceeds a threshold amount (the "exemption amount") at the time of the donation. The exemption threshold is determined by a formula based on the original cost (determined without regard to the deemed zero-cost of flow-through shares) of flow-through shares of the particular class issued to the taxpayer on or after March 22, 2011 and the amount of the capital gain realized by the taxpayer on dispositions of shares of that class. In effect, a capital gain will have to be recognized for tax purposes to the extent that the taxpayer's capital gain on a flow-through share (determined on the basis of a deemed zero cost base) is equal to or less than the original cost of the flow-through share. For example, if an investor acquires a flow-through share for $120 and donates the share to a registered charity when the fair market value of the share is $100, the investor will now be required to recognize a capital gain of $100 for tax purposes. However, if the fair market value of the share at the time it is donated was $140, the investor would be required to recognize a capital gain of $120 for tax purposes, with the balance ($20) being treated as an exempt capital gain.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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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.


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.


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.


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

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

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

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