Finance recently released amended draft legislation to expand these mandatory disclosure requirements to require individuals, corporations, trusts and partnerships to disclose certain transactions to the CRA, generally within 45 days of entering into that transaction, among other changes. This legislation, which was released on August 9, 2022, lowers the threshold for disclosing “reportable transactions” and introduces new requirements for taxpayers to advise the CRA of “notifiable transactions” and “uncertain tax treatments”. Finance has revised its earlier draft proposals so that these rules will now begin to apply in 2023 (instead of 2022).
Affected taxpayers should take action now to determine whether they may have any transactions that are proposed to occur after 2022 that must be disclosed once these rules come into effect. In addition, taxpayers should ensure they have implemented a process to identify all transactions and uncertain tax positions that must be reported, as transactions that are not properly disclosed may be subject to onerous penalties and can extend a taxpayer’s reassessment period for certain tax years.
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