Author: Devon LaBuik

Projet de loi C-47 : Entrée en vigueur des nouvelles règles relatives aux opérations à déclarer et à signaler

buildings with Canadian flag

Le 22 juin 2023, le projet de loi C-47, Loi portant exécution de certaines dispositions du budget déposé au Parlement le 28 mars 2023, a reçu la sanction royale. Ce projet de loi introduit de nouvelles règles qui (i) élargissent considérablement l’étendue des circonstances dans lesquelles un contribuable et ses conseillers doivent déclarer certaines opérations à l’Agence du revenu du Canada (l’« ARC ») et (ii) haussent considérablement les pénalités imposées aux parties qui ne déclarent pas de telles opérations. Ces règles sont applicables aux opérations réalisées après le 22 juin 2023. Le présent bulletin fournit un bref résumé de ces nouvelles règles et des sanctions applicables.[1]

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Bill C-47: New Rules for Reportable and Notifiable Transactions Take Effect

buildings with Canadian flag

On June 22, 2023, Bill C-47, An Act to implement certain provisions of the budget tabled in Parliament on March 28, 2023, received royal assent. The bill introduces new rules that (i) significantly broaden the circumstances in which a taxpayer, and their advisors, must report certain transactions to the Canada Revenue Agency (the “CRA”) and (ii) significantly increase penalties on parties that fail to report such transactions. These rules are applicable to transactions entered into after June 22, 2023. This bulletin provides a brief summary of these new rules and the applicable penalties.[1]

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Incorporating an Ontario Corporation: Bill 213 Amendments and Tax Considerations

business person with pen

On December 8, 2020, Bill 213, Better for People, Smarter for Business Act, 2020 received royal assent. The bill includes significant amendments to the Business Corporation Act (Ontario)[1] (the “OBCA”). The amendments to the OBCA in Bill 213 were proclaimed into force on July 5, 2021.

Bill 213 eliminates the requirement that 25% of the directors of an Ontario corporation must be resident Canadians.[2] This means that non-residents may incorporate an Ontario corporation without necessarily retaining a Canadian resident as a director of the corporation (as already permissible in other jurisdictions).

In light of the new changes, many non-residents will likely consider incorporating an Ontario subsidiary to facilitate acquisitions, tax planning, and investment-related activities. This article highlights some of the (new) corporate and tax advantages of incorporating an Ontario subsidiary by such persons.

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Implications of COVID-19 for Corporate Residency


The COVID-19 pandemic has created many changes for corporate management throughout Canada. In the past, directors often traveled outside of Canada for purposes of attending board meetings in foreign jurisdictions. Directors often made such travel arrangements in order to maintain a corporation’s residency outside of Canada for tax purposes. However, the ongoing COVID-19 pandemic has significantly restricted directors’ abilities to travel abroad and, in turn, attend meetings in foreign jurisdictions.

Directors have, in response, created alternative local or “virtual” arrangements (i.e. video or teleconferencing) for such meetings. However, these arrangements may have potentially significant income tax consequences for a corporate taxpayer. This bulletin will briefly address some of these consequences:

General Principles of Residency

The Income Tax Act (Canada)[1] (the “ITA”) imposes tax on corporations resident in Canada. The Courts generally determine a corporation’s residency by applying the common law test of “central management and control”. The test provides that a corporation is resident in the country where its central management and control is exercised. This is generally the country where the directors of the corporation exercise their responsibilities.[2] It should also be noted that a corporation may be resident in one or more different countries (e.g. the directors may be exercising their responsibilities in multiple different countries).[3]

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