Promoters
The Canada Revenue Agency (CRA) defines promoters according to certain criteria; an advisor can be considered as a promoter in specific situations.
Who is a promoter?
You are a tax shelter promoter if, in the course of a business, you:
- sell, issue or promote the sale, issuance or acquisition of, the tax shelter
- act as an agent or advisor for such activities
- accept consideration for the tax shelter, either as principal or agent
There may be more than one promoter for the same tax shelter. In this case, there will be a principal promoter. You are a principal promoter if you have been involved in tax shelter sales, including this tax shelter, and you are the leader behind this promotion.
Where there is more than one promoter of the same tax shelter, only one promoter has to apply for a tax shelter identification number. An application by one of the promoters will discharge the others from the obligation to make an application.
When is an advisor a promoter?
The CRA considers that a promoter includes an advisor who establishes, organizes, or sponsors a tax shelter. The CRA will view a person as being a promoter where in the course of providing tax advice, they are "responsible for and contribute to the design of any of the tax avoidance elements" of the arrangements or proposed arrangements. For example:
- an advisor who is consulted on the design and explains why the design does not work, or offers suggestions for changes to it may be a promoter
- an accounting firm that is consulted for accounting may be a promoter if, in the course of carrying out its responsibilities, it provides tax advice for the design of any of the tax avoidance elements
- a law firm (which has a relevant business that includes giving tax advice) that is consulted may be a promoter if, in the course of carrying out its responsibilities, it provides tax advice for the design of any of the tax avoidance elements
The CRA will not view a person as being a promoter where in the course of providing tax advice, they are not responsible for, nor do they contribute to, the design of any of the tax avoidance elements.