On January 30, 2009, the Québec Minister of Finance,
Monique Jérôme-Forget, released proposed legislative
changes in her fight against aggressive tax planning (ATP). A
132-page working paper serves as background to the public
consultation on these proposed measures.
Québec's goal is to discourage ATPs by tempering the
users' risk/return ratio and by discouraging the inception and
marketing by tax advisors of "off the shelf" tax
The proposed changes target tax avoidance transactions which
respect the letter of the law but abuse its spirit. These
transactions effectively reduce taxes payable to a level lower than
what is intended by tax policy. This global phenomenon is not new
in Québec, although its propagation to a growing number of
taxpayers is more recent. Québec believes that were it not
for the tax authorities' intervention in the last few years in
order to put an end to certain ATPs, Québec's financial
losses could have reached about half a billion dollars.
To counter ATPs, the Minister of Finance proposes the
a mandatory early disclosure regime compelling the taxpayer to
disclose either a transaction providing a tax advantage where the
contract between the taxpayer and the advisor includes a
confidentiality undertaking by the taxpayer, or a transaction where
the advisor's remuneration is conditional;
a penalty between $10,000 and $100,000 for failure to make the
disclosure within the required timeframe;
a suspension of the limitation period where transactions are
a tightening of the general anti-avoidance rule
("GAAR") by extending the limitation
period by three years where GAAR applies and by adding a penalty
regime where GAAR applies equal to 25% of the additional tax
arising from the application of GAAR where the taxpayer is
concerned and to 12.5% of the amounts received or to be received in
respect of the avoidance transaction where the promoter is
concerned. These new sanctions could be avoided by making a
preventive disclosure or a mandatory early disclosure.
The proposed new rules were inspired by legislative tools from
the United States, United Kingdom, Australia, New Zealand and
The Minister of Finance invites all interested persons to file a
submission to the proposed amendments with their comments before
April 1st, 2009.
The CRA provides new housing rebates for individuals who have purchased or built a new house or have substantially renovated a house or made a major addition to a house who plan on living in it personally or letting a relative live there.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).