Joint Committee, "Reportable Transaction and Notifiable Transaction Proposals", 5 April 2022 Joint Committee Submission

Summary Under
Tax Topics - Income Tax Act - Section 237.3 - Subsection 237.3(5)

Most disclosure can await the return (p. 4)

  • The short reporting deadline should be restricted to information that warrants a short deadline,...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Summary Under
Tax Topics - Income Tax Act - Section 237.3 - Subsection 237.3(1) - Reportable Transaction

No de minimis safe harbor (pp. 5-6)

  • Consistent with the OECD approach, there should be a de minimis test or other filter to reduce the potential...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Summary Under
Tax Topics - Income Tax Act - Section 237.3 - Subsection 237.3(1) - Advisor

Advisors may not have exposure to the reporting triggers (pp. 6-7)

  • The proposals should take into account that some of the advisors involved in...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Summary Under
Tax Topics - Income Tax Act - Section 237.3 - Subsection 237.3(4)

S. 237.3(4) should be retained (pp. 7-8)

  • S. 237.3(4) should not be repealed, and a similar rule should be included for notifiable transactions...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Summary Under
Tax Topics - Income Tax Act - Section 237.3 - Subsection 237.3(1) - Avoidance Transaction

Expansion of “avoidance transaction” (pp. 8-10)

  • The change of the “avoidance transaction” test to refer to “one of the main...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Summary Under
Tax Topics - Income Tax Act - Section 237.3 - Subsection 237.3(1) - Reportable Transaction - Paragraph (a)

Breadth of fee hallmarks (pp. 10-11)

  • The fee hallmark could potentially be engaged by “value” billing (in this regard the OECD observed that...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Summary Under
Tax Topics - Income Tax Act - Section 237.3 - Subsection 237.3(1) - Reportable Transaction - Paragraph (b)

Breadth of confidential protection hallmark (pp. 11-12)

  • The confidential-protection hallmark should be revised so that it only applies where...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Summary Under
Tax Topics - Income Tax Act - Section 237.3 - Subsection 237.3(1) - Reportable Transaction - Paragraph (c) - Subparagraph (c)(i) - Clause (c)(i)(B)

Narrowness of (c)(i)(B) exclusion from contractual protection (pp. 12-13)

  • In a share sale, the vendor can be considered a “promoter” who has...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Summary Under
Tax Topics - Income Tax Act - Section 237.4 - Subsection 237.4(4)

Rules should be effective on royal assent (pp. 13-14)

  • The rules should apply only to transactions undertaken after enactment, and transactions...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Summary Under
Tax Topics - Income Tax Act - Section 237.4 - Subsection 237.4(3)

CRA website notification is insufficient (pp. 14-15)

  • The notification process should use multiple forms of publication including the CRA website,...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Summary Under
Tax Topics - Income Tax Act - Section 237.4 - Subsection 237.4(5)

Coordination with Quebec deadlines (p. 15)

  • Under the Quebec rules, a newly designated transaction need only be reported after the later of 120...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.

Summary Under
Tax Topics - Income Tax Act - Section 237.3 - Subsection 237.3(9)

Inappropriate joint and several liability (p. 18)

  • It is unclear why the penalty provisions for failing to file an information return for...

The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.