Finance postpones proposed effective date for enhanced trust reporting, reportable transaction, and notifiable transaction rules

On November 4, 2022, Bill C-32 (44-1) was tabled in the House of Commons. Among other things, that Bill contains the latest version of the proposed enhanced trust reporting rules and stipulates that they would be effective for trusts’ taxation years ending only on or after December 31, 2023. The previous version of those proposals would have applied to taxation years ending on or after December 31, 2022 (which itself was one year beyond the date initially outlined in the 2018 federal budget). Notably, Bill C-32 retains the previously-proposed rule which would subject “bare trusts” to the enhanced reporting requirements, subject to certain exceptions.

Separately, in a news release dated November 3, 2022, the Department of Finance announced its intention to delay the coming into force date of the proposed rules regarding reportable transactions and notifiable transactions until the date on which a bill implementing those changes receives Royal Assent. The proposed rules have not yet been included in a bill tabled in Parliament. Consequently, the effective date of the mandatory disclosure rules relating to reportable and notifiable transactions will no longer be January 1, 2023, which was the proposed effective date stated in the legislative proposals released on August 9, 2022. In the same news release, Finance stated that the proposed rules concerning uncertain tax treatments will still apply to taxation years beginning after 2022, albeit with penalties only applying after Royal Assent.

Prepared by: Jonathan Longcroft

Jonathan is an associate at the firm’s Vancouver office. Jonathan is developing a varied tax law practice with an emphasis on corporate tax planning. Prior to joining Thorsteinssons, Jonathan worked at an international investment bank in New York where he… more »