The answer is yes! On May 17, 2019, the Ministère des Finances du Québec announced the introduction of a new measure for the disclosure of nominee contracts. Although certain measures already existed to disclose them, every party with a prête-nom contract will now be required to disclose it to theARQ using a prescribed form, which must include the following information:
- The date of the nominee contract;
- The identity of the parties to the nominee agreement;
- A full description of the facts relating to the transaction or series of transactions to which the nominee agreement relates, and the identity of any person or entity in respect of whom the transaction or series of transactions has tax consequences;
- Any other information requested on the prescribed form.
This new obligation applies to any contract concluded before May 17, 2019 that is still in force, as well as to any contract concluded on or after May 17, 2019. To the extent that the prescribed form is not published byARQ before the filing deadline, you will need to send a letter including all the information mentioned above.
Watch out for penalties!
In the event that the disclosure is not made on time, the parties to the nominee contract will be jointly and severally liable for a penalty of $1,000 and an additional penalty of $100 per day of delay, starting on the second day following the omission, for a maximum of $5,000.
In addition, failure to disclose the nominee agreement may suspend the limitation period for the tax consequences of the nominee agreement until disclosure is made. Stay alert!
What you should know
On August 22, 2019,ARQ announced that disclosure will be due by the latest of the following dates:
- the 90th day following the date on which the nominee contract is entered into; and
- the 90th day following the date of assent to the forthcoming bill containing the measures relating to the requirement to disclose a nominee contract.
Since no bill has been published and assented to to date, the 90-day period has not begun to run, giving the parties sufficient time to gather the information they need to file the prête-nom disclosure within 90 days of the upcoming bill being assented to.
