As discussed in prior news items and tax blog, the federal government has announced proposals that will require additional reporting for “reportable transactions” and “notifiable transactions.” Revised legislation for these rules was announced on August 9, 2022 (see our August 22, 2022 update below). Several concerns with these rules remain, in particular, on the reportable transaction proposals. Members of the Joint Committee on Taxation of the Canadian Bar Association and CPA Canada recently met with officials from the Department of Finance Canada, and the key issues raised during the online meeting included:\nREPORTABLE TRANSACTIONS\nApplication of the contractual protection hallmark remains broad – As the revised definition of “avoidance transaction” remains broad, the fact that the contractual protection hallmark also has broad application appears to mean that a filing requirement will arise in many commercial situations. For example, where a business is sold, and tax planning steps of any kind are undertaken prior to the sale, a reporting requirement appears to arise where pre-acquisition taxes are protected under an indemnity, insurance or some other commercial protection. Similar concerns may arise where tax planning advice is provided under engagement letter terms that include limitation of liability clauses.\nUncertainty around the fee hallmark remain – Concern remains on the broad definition of the fee hallmark, as that rule still refers to a fee that is to any extent based on the amount of a tax benefit or the number of taxpayers that participated in a transaction. Fees charged for transaction-based services can be based on several different factors and may be at least minimally related to the value of the tax benefit or the number of taxpayers.\nUncertainty on the application of paragraph 237.3(2)(c) for advisor reporting – Many are having difficulty reaching a conclusion on how the requirement to report for advisors operates. It appears that the fee may have to meet the fee hallmark conditions or be in respect of contractual protection to create a reporting requirement for the advisor, but this should be confirmed by the Department of Finance Canada. \nNOTIFIABLE TRANSACTIONS\nException for employees/partners – The revised legislation includes a new exception for employees or partners of a firm, which is appreciated, but the operation of the exception is raising concerns as it will apply only if the firm reports. For partners and perhaps employees especially, this requirement causes concerns. For example, the employee/partner may not be able to confirm whether the firm filed, or they may not know that the work they performed was used as part of a notifiable transaction. Also, it is not clear whether the exception applies to former employees. \nException for non-tax advisors – The revised legislation also includes a new exception for secondary or ancillary financial services in subsection 237.4(6). While this is helpful, it only applies in respect of banks, insurance companies and credit unions. There are many other types of secondary, non-tax advisors that should also be exempted. \nWe will continue to keep you updated on relevant developments on this new regime.