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Quebec Taxpayers Take Note: Timely Disclosure of Nominee Agreements Now Required

By John Leopardi and Kalev Tamm
May 31, 2019

As mentioned in the March 21, 2019, Quebec budget, the Province of Quebec has bolstered the disclosure requirement of nominee agreements (Measure). This initiative is in line with its stated intention to protect the integrity and fairness of its tax system. The Measure forms part of the Quebec Ministry of Finance’s Information Bulletin 2019-5 (Bulletin) published on May 17, 2019, and Quebec’s tax legislation will be amended accordingly.

At the time of drafting, the Measure is considered relevant for any taxpayer that is subject to Quebec tax laws and has entered into a nominee agreement.


The Measure targets nominee agreements made as part of a transaction or series of transactions that have Quebec “tax consequences.” Nominee agreements are lawful forms of contracts of mandate that, under Quebec civil law, allow a mandatary to act on behalf of a mandator while appearing in the eyes of third parties to be acting in the mandatary’s own name. Such agreements are typically, although not exclusively, used in real estate transactions where multiple parties are involved and there is a legitimate commercial desire for flexibility and anonymity.


Prior to the introduction of the Measure, disclosure of a nominee agreement to Revenu Québec was necessary to ensure that it was recognized for tax purposes. Revenu Québec’s administrative position is that this disclosure was required to be made in the parties' tax returns for the year in which they entered into the agreement. Although the Measure may not be completely unexpected, it expands existing Quebec tax disclosure requirements by adding a prescribed form, deadlines and penalties.

Disclosure must be made to Revenu Québec through a prescribed information return that has yet to be released. However, the Bulletin indicates that disclosure shall include the following:

  • The date of the agreement
  • The identity of the parties to the agreement
  • A full factual description of the transaction or series of transactions to which the nominee agreement relates, as well as the identity of any parties for which such transaction or series has tax consequences
  • Any other information requested on the prescribed form


The information return must be filed with Revenu Québec no later than 90 days after the date on which the nominee agreement was concluded. There is no need to file the prescribed form on a recurring basis for each fiscal year during which the agreement is in effect. Furthermore, only one of the parties to the agreement must file the return. 

Failure to file the prescribed form within the time limit will result in the parties to the nominee agreement being jointly liable to a C$1,000 penalty, plus an additional penalty of C$100 per day starting on the second day of the omission to a maximum penalty of C$5,000.

Moreover, missing the deadline may result in the suspension of the statutory limitation period otherwise applicable to a taxation year for a person participating in a nominee agreement with respect to the tax consequences, for that year, arising from a transaction or series of transactions that occurred that year and are part of the nominee agreement.


The Measure will apply to nominee agreements concluded on or after May 17, 2019. In addition, a nominee agreement entered into before May 17, 2019, and that relates to a transaction or series of transactions with tax consequences that continue on or after May 17, 2019, will need to be disclosed to Revenu Québec no later than September 16, 2019.


After preliminary discussions with an official of the Quebec government, we obtained certain additional information and context in connection with the Measure. For example, it appears that the Measure is not intended to apply to a broker listed in a securities registry as holding securities “for and in the name of” someone else.

However, despite the additional information we have received, several questions remain as to the scope of the Measure. Specifically, the breadth of the term “tax consequences” seems unclear. This means that it may be difficult to determine whether an existing nominee agreement and the transactions related to it “continue to have tax consequences” on or after May 17, 2019. Moreover, no information is provided as to when the statutory limitation period, once it has been suspended, would be restored. Taxpayers should be aware of these issues and seek advice accordingly.

We hope that helpful guidance and information will be provided prior to the first deadline to disclose (August 15, 2019) so that taxpayers can properly meet their filing obligations under the Measure.

We will continue to monitor the Measure’s development and engage in discussions with the Ministry of Finance to provide our clients with the latest insights.

For more information, please contact:

John Leopardi             514-982-5030

or any member of the Tax  group.