Tax wiki
s. 237.4
PART XV — Administration and Enforcement · General
Definitions
Not yet annotated · Text current to 2026-06-21 · section last amended 2023-06-22
Current text
The following definitions apply in this section.
advisor, in respect of a notifiable transaction, means each person who provides, directly or indirectly in any manner whatever, any assistance or advice with respect to creating, developing, planning, organizing or implementing the notifiable transaction, to another person (including any person who enters into the notifiable transaction for the benefit of another person). (conseiller)
fee, in respect of a notifiable transaction, has the same meaning as in subsection 237.3(1). (honoraires)
notifiable transaction, at any time, means
a transaction that is the same as, or substantially similar to, a transaction that is designated at that time by the Minister under subsection (3); and
a transaction in a series of transactions that is the same as, or substantially similar to, a series of transactions that is designated at that time by the Minister under subsection (3). (opération à signaler)
person includes a partnership. (personne)
promoter, in respect of a notifiable transaction, has the same meaning as in subsection 237.3(1). (promoteur)
tax benefit has the same meaning as in subsection 245(1). (avantage fiscal)
tax treatment has the same meaning as in subsection 237.3(1). (traitement fiscal)
transaction has the same meaning as in subsection 245(1). (opération)
Interpretation – substantially similar
(2)For the purposes of the definition notifiable transaction in subsection (1), the term “substantially similar”
includes any transaction, or series of transactions, in respect of which a person is expected to obtain the same or similar types of tax consequences (as defined in subsection 245(1)) and that is either factually similar or based on the same or similar tax strategy; and
is to be interpreted broadly in favour of disclosure.
Designation of notifiable transactions
(3)The Minister may designate for the purposes of this section, with the concurrence of the Minister of Finance, in such manner as the Minister considers appropriate, transactions or series of transactions.
Requirement to file return
(4)An information return in prescribed form and containing prescribed information in respect of a notifiable transaction must be filed with the Minister by
every person for whom a tax benefit results, or for whom a tax benefit is expected to result based on the person’s tax treatment of the notifiable transaction, from
the notifiable transaction,
any other notifiable transaction that is part of a series of transactions that includes the notifiable transaction, or
a series of transactions that includes the notifiable transaction;
every person who has entered into, for the benefit of a person described in paragraph (a), the notifiable transaction;
every advisor or promoter in respect of the notifiable transaction; and
every person who is not dealing at arm’s length with an advisor or promoter described in paragraph (c) and who is or was entitled, either immediately or in the future and either absolutely or contingently, to a fee in respect of the notifiable transaction.
Application
(5)For the purpose of subsection (4), if any particular person that is an employer or a partnership is required to file an information return in respect of a notifiable transaction under paragraph (4)(c) or (d), the filing of an information return required under those paragraphs by the particular person in respect of the notifiable transaction in prescribed form and manner is deemed to have been made by each employee or partner of the particular person in respect of the particular transaction.
Due diligence
(6)Paragraphs (4)(a) and (b) do not apply to a person in respect of a notifiable transaction if the person has exercised the degree of care, diligence and skill in determining whether the transaction is a notifiable transaction that a reasonably prudent person would have exercised in comparable circumstances.
Reasonable expectation to know
(7)Paragraphs (4)(c) and (d) do not apply to a person in respect of a notifiable transaction unless the person knows or should reasonably be expected to know that the transaction was a notifiable transaction.
Clerical or secretarial services
(8)For greater certainty, subsection (4) does not apply to a person solely because the person provided clerical services or secretarial services with respect to the notifiable transaction.
Time for filing return
(9)An information return required under subsection (4) to be filed with the Minister for a notifiable transaction must be filed by
a person described in paragraph (4)(a) or (b) on or before the particular day that is 90 days after the earliest of
the day on which the person becomes contractually obligated to enter into the notifiable transaction,
the day on which the person enters into the notifiable transaction, and
if the person is described in paragraph (4)(a) and a person described in paragraph (4)(b) enters into the notifiable transaction for the benefit of the person described in paragraph (4)(a), the day on which the notifiable transaction is entered into; and
a person described in paragraph (4)(c) or (d) no later than the earliest particular day described in paragraph (a) for a person described in paragraph (4)(a) or (b) in respect of the notifiable transaction.
Clarification of reporting transactions in series
(10)For greater certainty, if subsection (4) applies to a person in respect of each transaction that is part of a series of transactions that includes a notifiable transaction, the filing of the information return by the person that reports each transaction in the series is deemed to satisfy the obligation of the person under subsection (4) in respect of each transaction so reported.
Assessments
(11)Notwithstanding subsections 152(4) to (5), the Minister may make any assessments, determinations and redeterminations that are necessary to give effect to subsection (12).
Penalty
(12)Every person who fails to file an information return in respect of a notifiable transaction as required under subsection (4) on or before the particular day required under subsection (9) is liable to a penalty equal to
if the person is described in paragraph (4)(a) or (b),
if the person is a corporation and the carrying value of the corporation’s assets is greater than or equal to $50 million for its last taxation year that ends prior to the day on which the information return is required to be filed under subsection (4), $2,000 multiplied by the number of weeks during which the failure continues, to a maximum amount equal to the greater of
$100,000, and
25% of the amount of the tax benefit in respect of the notifiable transaction, and
in any other case, $500 multiplied by the number of weeks during which the failure continues, to a maximum amount equal to the greater of
$25,000, and
25% of the amount of the tax benefit in respect of the notifiable transaction; and
if the person is described in paragraph (4)(c) or (d), the total of
the amount of the fees charged by that person in respect of the notifiable transaction,
$10,000, and
$1,000 multiplied by the number of days during which the failure continues, up to a maximum of $100,000.
Penalty – deeming rule
(13)If a person described in both paragraphs (4)(b) and (d) is liable to a penalty under subsection (12) in respect of a notifiable transaction, the amount of the penalty is deemed to be equal to the greater of the amounts determined under paragraphs (12)(a) and (b).
Penalty – non-application
(14)For greater certainty, if any person is deemed to have filed an information return in prescribed form and manner in respect of a particular notifiable transaction under subsection (5), that person is not liable to a penalty under subsection (12) in respect of the particular transaction.
Carrying value
(15)For the purpose of subparagraph (12)(a)(i), the carrying value of the assets of a corporation is to be determined in accordance with paragraphs 181(3)(a) and (b).
Return – not an admission
(16)The filing of an information return under this section by a person in respect of a notifiable transaction is not an admission by the person that any transaction is part of a series of transactions.
Application of sections 231 to 231.3
(17)Without restricting the generality of sections 231 to 231.3, even if a return of income has not been filed by a taxpayer under section 150 for a taxation year of the taxpayer in which a transaction occurs that is relevant to the tax benefit referred to in paragraph (4)(a) that results (or is expected to result) from a notifiable transaction, sections 231 to 231.3 apply, with such modifications as the circumstances require, for the purpose of permitting the Minister to verify or ascertain any information in respect of the notifiable transaction.
Solicitor-client privilege
(18)For greater certainty, this section does not require the disclosure of information if it is reasonable to believe that the information is subject to solicitor-client privilege.
Source: Justice Laws Website. Not an official version.
Historic text
This section has not been amended since it was enacted (2023, c. 26, s. 69), so there is no earlier version.
Earlier versions: Justice Laws point-in-time versions of the Act (from 31 August 2004), and CanLII (under “Versions”). On Justice Laws, each version of section 237.4 links to the one before it.
Enacting and amending legislation
- 2023, c. 26, s. 69
Text before 2004 is found in the annual Statutes of Canada cited above. Application and coming-into-force provisions are not part of the consolidation; see the amending Acts.
Cross-references
Citation
Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), s. 237.4.