The applicant acquires a rental property in July 2018 and still has title deeds after May 17, 2019. The economic beneficiary collects the rent and incums a fee for the property after that date and, therefore, the Nominee contract must be disclosed. On May 17, 2019, Quebec`s Minister of Finance issued a newsletter that implemented, among other things, a mandatory mechanism for disclosing information about bid agreements or agreements with Préte-Nom. This advertising mechanism relates to agreements reached after 16 May 2019, as well as all existing agreements that continue to have tax consequences after that date. The newsletter does not specify who this measure applies to; it may therefore be wise to consider that it will be widely applicable. Therefore, if you are participating in a Nominee agreement with tax implications, you should contact your tax advisor Crowe BGK to review your obligations regarding this disclosure of the applicant. Please note that failure to comply with this new disclosure requirement will result in penalties (including certain daily penalties) and the suspension of the limitation period for reassessments until the disclosure obligation is met. Accordingly, we recommend that you make the necessary disclosures of the nominary agreements as soon as possible and, in any event, by virtue of The federal civil law, an appointment contract is a contract of appointment in which an agent acts on behalf of a client, but does not transmit the agency relationship to third parties. On the contrary, the officer appears to be acting on his own behalf. If the parties to the Nominee agreement do not return this information within the prescribed time frame, they are liable for a fine of $1,000 and an additional penalty of $100 per day, up to a maximum of 5,000 DOLLARS, from the second day of the omission.
However, for the application of tolerance, Revenue Quebec requires that all GST/QST reports have been submitted for this period and that the actual beneficiaries and the candidate have entered into a joint venture agreement and an electoral form. As a precautionary measure, however, Revenue Quebec will assess whether the joint venture agreement forms a joint venture and it remains to be seen how the government will address this at this point. Most importantly, Revenue Quebec has announced that it will already cancel the pre-name valuations issued under such agreements and that it will reimburse interest and penalties collected. This makes the judgments waver, as well as all the objections that have ended there. For nominating agreements already in force on 24 September 2020, the deadline for publication is 23 December 2020. Disclosure must be made in a prescribed form and must be made by recommended letter, along with the Nominee agreement, counter-letter or fictitious contract, if applicable. In addition, these amendments apply to a Nominasis agreement reached before May 17, 2019 if the tax consequences of the transaction or a number of transactions under the Nominee agreement persist after May 16, 2019. In this case, the disclosure containing the information described above must be submitted to Revenue Quebec by September 16, 2019.
In particular, the return of information invites the taxpayer to disclose information relating to the existing nominating agreement, which includes that, in order to ensure that Revenue Quebec is immediately informed of all transactions involving a candidate, the tax rules are amended so that the parties to a nominatine agreement concluded in connection with a transaction or a series of transactions are required to disclose the situation to Revenue Quebec.