Bill C-47, which implements certain outstanding business, personal and indirect tax measures, received Royal Assent on June 22, 2023. The bill includes expanded mandatory disclosure rules, new reporting requirements for digital platform operators and changes related to hedging and short selling by Canadian financial institutions, among other measures. In addition, now that Bill C-47 has received Royal Assent, taxpayers will have to disclose certain “reportable transactions” and “notifiable transactions” entered into as of June 23, 2023, under the expanded mandatory disclosure rules. The tax measures in Bill C-47 were previously announced in the 2021, 2022, and 2023 federal budgets and 2022 federal economic update, along with previously announced technical amendments.
Note that the corporate income tax measures in Bill C-47 are considered enacted for U.S. GAAP purposes on June 22, 2023 (the date the bill received Royal Assent). These measures were considered substantively enacted for IFRS and Accounting Standards for Private Enterprise (ASPE) purposes on June 8, 2023 (the date the bill passed third reading), as Canada has a minority government.
Mandatory disclosure rules
The bill includes the new expanded mandatory disclosure rules. Under these changes, individuals, corporations, trusts and partnerships are generally required to promptly disclose certain “reportable transactions” and “notifiable transactions” to the CRA, among other new obligations. These rules now apply to transactions entered into as of June 23, 2023 (as stipulated under the bill, which provided that these requirements would come into force after the bill received Royal Assent). As a result, a taxpayer must now inform the CRA of a reportable or notifiable transaction by filing an information return within 90 days of the earlier of:
- The day the taxpayer becomes contractually obligated to enter into the transaction, and
- The day the taxpayer enters into the transaction.
This requirement also applies to other persons who enter into these transactions for the taxpayer’s benefit. Persons who fail to disclose reportable or notifiable transactions as required face penalties. Note that although the CRA and Finance previously released a list of sample notifiable transactions, the official list has not yet been designated.
In addition, certain corporate taxpayers will also have to disclose information about uncertain tax treatments reflected in their financial statements for taxation years that begin on or after January 1, 2023. These rules include a separate reporting deadline and penalties.
For further details on the expanded mandatory disclosure rules, see TaxNewsFlash-Canada 2023-21, “Get Ready for New Mandatory Reporting Obligations”.
Other business tax measures
The bill also includes some of the outstanding business tax measures from the 2021 and 2022 federal budgets, including changes related to:
- Annual reporting rules for digital platform operators
- Hedging and short selling by Canadian financial institutions
- Borrowing by defined benefit pension plans
- Annual reporting requirements for Registered Retirement Savings Plans (RRSPs) and Registered Retirement Income Funds (RRIFs).
Personal, indirect tax measures and more
The bill also includes certain indirect tax measures from the 2023 federal budget that affect the GST/HST treatment of payment card clearing services, pension plans and crypto asset mining. In addition, the bill includes some of the personal tax measures from the 2023 federal budget and 2022 federal fall economic update, such as extension of the residential property flipping rule to assignment sales, changes related to Registered Education Savings Plans (RESPs) and Registered Disability Savings Plans (RDSPs) and an increase to the deduction for tradespeople’s tools. The bill also contains administrative tax measures (e.g., related to electronic filing and certification of tax and information returns and electronic payment requirements) and other previously announced technical amendments.
For more information, contact your KPMG adviser.
Information is current to June 26, 2023. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500
