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Canada: Tax disclosure requirements in Quebec, nominee agreements

Canada: Tax disclosure requirements in Quebec

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.


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The obligation applies to all nominee agreements entered into since 17 May 2019. Additionally, certain agreements entered into before 17 May 2019, when the tax consequences continue after 16 May 2019, will need to be disclosed by 16 September 2019. Taxpayers who fail to disclose nominee agreements may face penalties of up to $5,000* even if they already disclose details of such an arrangement in their provincial tax return.

Possible update to disclosure deadline

Revenue Quebec subsequently, on 22 August 2019, proposed to extend the 16 September deadline, but the measures to disclosure deadline beyond 16 September 2019 have not yet been introduced. Read TaxNewsFlash


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.

Read an August 2019 report [PDF 187 KB] prepared by the KPMG member firm in Canada

*$ = Canadian dollar

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