Revenue Quebec has proposed to extend the deadline for disclosures of nominee agreements.
The deadline was previously established to be 16 September 2019 for certain agreements entered into before 17 May 2019, when the tax consequences continue after 16 May 2019. Read TaxNewsFlash
There is a proposal being considered that would extend the disclosure deadline to the later of:
Accordingly, the new deadline would depend on certain measures that are expected to be included in a future bill—measures that have not yet been introduced.
Read an August 2019 report [PDF 178 KB] prepared by the KPMG member firm in Canada
There are new tax disclosure requirements in Quebec for those who have entered into a nominee agreement. Either party to a nominee agreement made as part of a transaction, or a series of transactions, must disclose the information to Revenue Quebec.
Under Quebec civil law (section 2130 of the Quebec Civil Code (QCC)), a nominee agreement (prête-nom or agency agreement) is a legal arrangement whereby the owner registers the property in the name of the nominee. While the nominee holds legal title to the property, the nominee does not hold any beneficial interest in the property. Also, nominees are not liable for owners’ contracts.
Under a nominee agreement, a person (i.e., the mandator) confers upon another person (i.e., the mandatary) the authority to represent him or her in the performance of a juridical act with a third person. The mandatary is bound to exercise this power. A nominee agreement is a simulation-led mandate, as defined under section 1451 QCC, whereby the agreement is a “secret contract” (counter-letter) that expresses the genuine will of the parties that differs from the intention expressed in the apparent contract. Generally, when there is a nominee agreement, the mandatary seemingly owns the property title and rights of this contract or the asset it pertains to without being the beneficial owner of the asset. The mandatary acts on behalf of the person that mandated him or her.
© 2021 KPMG LLP, a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.
For more detail about the structure of the KPMG global organization please visit https://home.kpmg/governance.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor 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 on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.