Tax services

Proposed mandatory disclosure rules

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As announced in Budget 2021, the government proposes to expand the mandatory disclosure rules contained in the Income Tax Act (the Act) to require taxpayers, advisors and promoters (and certain other parties) to disclose relevant information on aggressive tax planning or transactions to the Canada Revenue Agency (the CRA).

On February 4, 2022, the Department of Finance released draft legislation for public comment, which included the following changes to the mandatory disclosure rules:

  1. An expansion of the Act’s reportable transaction rules, along with a significantly reduced reporting deadline;
  2. A new requirement to report notifiable transactions;
  3. A new requirement for certain corporations to report uncertain tax treatments;
  4. An extension of the normal reassessment period in non-compliance situations; and
  5. New related penalties.

The compliance burden for taxpayers, advisors and promoters is anticipated to be significantly increased if the proposals are enacted in their current form.

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