Revenu Quebec Nominee Agreements
This measure applies to any nominated agreement that is as follows: there is no time limit in the past for the application of this measure. This disclosure is also necessary when Revenue Quebec has already been informed of the existence of the Nominee contract in a corporate tax return. According to the turnover, “tax consequences” are interpreted as consequences of income tax when tax sovereignty is Quebec. The advertising rules apply to many joint nominary agreements, including: most commercial transactions; Real estate transactions in the province and nominee agreements for real estate located outside Quebec, where one of the parties is subject to Quebec income tax. As the Bulletin`s requirements are essentially confirmed by law, our clients should disclose all nominatable agreements affecting income tax and be concluded on May 17, 2019 of: (i) 90 days after the date of execution of the Nominee contract and (ii) December 23, 2020. According to RQ, these would be typical nominating agreements used in the real estate sector. In the event of non-supply of the information prescribed by the applicable deadline, the parties to the corresponding nominating agreement are jointly fined USD 1,000, plus an additional penalty of USD 100 per day, from the second day of the omission, up to a maximum of USD 5,000. In accordance with the bill, the publication of the turnover applies to new nominating agreements concluded on May 17, 2019 or after May 17, 2019 with a 90-day delay after the implementation of the agreement or December 23, 2020 (depending on what is later). However, according to RQ, the tax consequences of the agreement would have been suspended on that date if the parties to the Nominee agreement had surrendered the land by May 17, 2019 and no disclosure of the Nominee agreement would have been required. Let`s take the example of a rental property purchased on July 17, 2019, subject to a Nominee agreement. Disclosure of the agreement must take place no later than October 15, 2019, otherwise the tax period is suspended for rental income collected by the economic beneficiary for the year 2019 and all subsequent tax years until disclosure. A Nominee agreement must be disclosed within the following time frame: the information that must be disclosed to sales includes the date the Nominee contract was entered into; The identity of the parties to the Nominee contract; A description of the facts of the transaction, with sufficient detail to allow for an analysis of the tax consequences; The identity of another person or entity for whom the transaction has tax consequences; and a copy of the Nominee agreement. The prescribed form states that there is no obligation to disclose a nominatory agreement if it has been entered into by a person with a person linked to a financial institution`s application to finance the purchase of a property for the personal use of the person, provided that the related person has not co-signed more than 50% of the fair market value of the building.
Under the bill, mandatory disclosure must be made by a mandatory form. The information to be disclosed is: (a) the date of the conclusion of the contract, b) the identity of the parties to the Nominee contract, c) a complete description of the facts of the transaction, which is sufficiently detailed to allow the Minister to analyze it and to have an adequate understanding of the tax consequences; (d) the identity of another person or entity for whom the transaction has tax consequences; and (e) other information that is required in the prescribed form, including a copy of the Nominasian agreement.