On May 17, 2019, the Ministère des Finances du Québec (the Ministry) released Information Bulletin 2019-5 announcing, among other things, new mandatory disclosure requirements with respect to nominee agreements. Please refer to our Osler Update from May 29, 2019, “Québec Minister of Finance introduces additional measures to further counter aggressive tax planning.”
To comply with this new mandatory disclosure requirement, parties to a nominee agreement are required to file an information return in prescribed form (which has not been released yet) which includes: (i) the date of the nominee agreement, (ii) the identities of the parties to the nominee agreement, and (iii) a full description of the facts of the transaction or series of transactions to which the nominee agreement relates and the identity of any person or entity for which such transactions or series of transactions have tax consequences. The Information Bulletin 2019-5 provides that the information return relating to a nominee agreement is required to be filed within 90 days of the conclusion of the nominee agreement. In the event that a nominee agreement was concluded before May 17, 2019, having tax consequences that continue after that date, the parties to such nominee agreement are required to disclose their agreement on or before September 16, 2019.
On August 22, 2019, the Québec Revenue Agency announced that the deadline for filing the information return to disclose the requested information relating to a nominee agreement is extended to the later of (i) 90 days following the conclusion of the nominee agreement, or (ii) 90 days following the day of the enactment of the bill introducing the new measures. No bill has been tabled with the National Assembly to this date relating to the new mandatory disclosure requirements of nominee agreements. The National Assembly is set to resume its activities on September 17, 2019, and several weeks and months could lapse before a bill that includes the new mandatory disclosure is enacted.
We hope that by the time the bill introducing the new mandatory disclosure requirements is enacted, additional guidance will be provided on circumstances where nominee agreements entered prior to May 17, 2019, are considered to continue to have tax consequences after that date.
We will continue to closely follow developments regarding the future bill to be enacted.
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