Update gaar-examples-4.html

compliance/gaar-examples-4.html

@@ -105,8 +105,8 @@ <h2 id="h_2">Examples of when the CRA would apply the GAAR</h2>
 <p>Taxpayers, including in-house tax advisers and the audit committees of public companies, may want to consult these examples to determine whether any tax planning they are contemplating is similar. </p>
 
  <p>The CRA will update this list from time to time to add other types of transactions.</p>
-	<p>If you are aware of examples of transactions to which the CRA should consider applying the GAAR, you are invited to send them to <a href="#">[email protected]</a>.</p>
-<p>To stay informed about updates to this page, sign up for our <a href="#">Business - Tax Information Newsletter</a> that highlights CRA and other Government of Canada services for businesses.</p>
+	<p>If you are aware of examples of transactions to which the CRA should consider applying the GAAR, you are invited to send them to <a href="mailto:[email protected]">[email protected]</a>.</p>
+<p>To stay informed about updates to this page, sign up for our <a href="https://www.canada.ca/en/revenue-agency/news/e-services/canada-revenue-electronic-mailing-lists/electronic-mailing-list-businesses-tax-information-newsletter.html">Business - Tax Information Newsletter</a> that highlights CRA and other Government of Canada services for businesses.</p>
 
 <h3 id="h_2-1">Surplus stripping</h3>
 <h4>Targeted abuse</h4>
@@ -270,9 +270,14 @@ <h4>Transactions &ndash; Scenario 2</h4>
 
 
 <h2 id="h_3">Misrepresentation and Penalties </h2>
-<p>Pursuant to subparagraph 152(4)(a)(i), a misrepresentation must be "attributable to neglect, carelessness or willful default," or it must involve the commission of fraud in order for the CRA to reassess a particular tax return beyond the normal reassessment period.  For a penalty to apply under ss. 163(2), a taxpayer must have knowingly, or under circumstances amounting to gross negligence, made a false statement or an omission in their return. </p>
-<p>The scope for their application is not limited to particular provisions of the Act, but applies for the purpose of the Act as a whole, including section 245 of the Act.  Therefore, the CRA could consider the application of either of the provisions above to tax avoidance arrangements involving the application of the GAAR. </p>
-<p>Whether the ss. 163(2) penalty applies in a given case or whether there has been a misrepresentation or fraud in accordance with subparagraph 152(4)(a)(i), is a question of fact that can be determined only after a review of all the facts and circumstances. For example, a penalty may be considered in a situation where the taxpayer has disregarded the jurisprudence confirming the application of the GAAR in circumstances similar to the transaction(s) undertaken by or with the taxpayer. </p>
+<p>Pursuant to subparagraph 152(4)(a)(i), the CRA may reassess a particular tax return beyond the normal reassessment period in circumstances of  misrepresentation "attributable to neglect, carelessness or willful default," or where there is  fraud. For a penalty to apply under subsection 163(2), a taxpayer must have knowingly, or under circumstances amounting to gross negligence, made a false statement or an omission in their return. </p>
+<p>The scope for their application is not limited to particular provisions of the Act but applies for the purpose of the Act as a whole, including section 245 of the Act. Therefore, the CRA could consider the application of either of the provisions above to tax avoidance arrangements involving the application of the GAAR. </p>
+<p>Whether the subsection 163(2) penalty applies in a given case, or whether there has been a misrepresentation or fraud in accordance with subparagraph 152(4)(a)(i), is a question of fact that can be determined only after a review of all the facts and circumstances. For example, a penalty may be considered in a situation where the taxpayer has disregarded the jurisprudence confirming the application of the GAAR in circumstances similar to the transaction(s) undertaken by or with the taxpayer. </p>
+
+<h3>GAAR Penalty</h3>
+	<p>Since June 2024, the legislation includes under subsection 245(5.1) a penalty applicable to the amount of tax payable and to refundable tax credits reduced, as a result of the application of the GAAR. The penalty applies to a transaction only if the transaction or the series that includes the transaction was not <a href="https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/compliance/mandatory-disclosure-rules-overview/guidance-document.html">disclosed to the Minister of National Revenue</a>. The amount of the penalty will be reduced by any gross negligence penalty calculated under subsection 163(2) with respect to the same transaction or series where the GAAR penalty applies. </p>
+	<p>An exception to the penalty is available under subsection 245(5.2). Subsection 245(5.2) is intended to be a narrow rule that may apply in circumstances where a taxpayer entered into a transaction reasonably relying upon the current state of the case law and administrative guidance from the Minister of National Revenue.</p>
+
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