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Josephine Chuk

Josephine Chuk is a Tax Advisor in Baker McKenzie Toronto office.

Canada’s Federal Budget 2021 (“Budget 2021”) proposes to expand the disclosure rules for certain transactions, which is in line with the measures recommended in the OECD’s Base Erosion and Profit Shifting Project, Action 12: Final Report (BEPS Action 12 Report).
The proposed expansion of mandatory disclosure rules contemplates: (i) changes to the Income Tax Act’s (ITA) existing reportable transaction rules; (ii) a new requirement to report notifiable transactions; (iii) a new requirement for specified corporations to report uncertain tax treatments; and (iv) an extension of the reassessment period in respect of transactions that are subject to the new disclosure rules and addition of penalties for failure to comply.

New Canadian trust reporting and disclosure rules will come into effect in 2021. In brief, the new rules will impose a filing obligation on certain trusts which currently do not have a filing requirement. They apply to non-resident trusts that currently have to file a T3 return and certain trusts that are resident in Canada. Such trusts will be required to report the identity of all trustees, beneficiaries and settlors of the trust, as well as anyone with the ability to exert control or override trustee decisions over the appointment of income or capital of the trust (e.g., a protector).