Principal Issues: Does the Income Tax Regulation 209 allow an Issuer to send the particular information slips electronically without the express consent of the recipient?
Position: No, except for the information returns discussed in Regulation 209(5).
Reasons: Subsection 209(3) requires express consent from the recipient in order to send the slip electronically.
March 21, 2018
Glenn Peters HEADQUARTERS Information Returns Program Section Income Tax Rulings Third Party Reporting Division Directorate Individual Returns Directorate Lata Agarwal, CPA, Assessment, Benefit and Service Branch CMA, MBA
2017-073076
Electronic slips
We are writing in response to your email of November 6, 2017, concerning the issuance of tax information slips via a secure electronic portal pursuant to subsection 209(3) of the Income Tax Regulations (“Regulations”). We also acknowledge our subsequent telephone conversations (Naufal/Peters, Agarwal/Peters).
In brief, you advised us that a number of financial institutions and similar entities (“Issuers”) have asked your branch whether they can provide their clients with electronic copies of information slips on a secure website, in addition to the paper copies, without the written consent of their clients. In the Issuers’ view, express written consent from the client should not be required for making the slips available electronically where the paper slips are also being distributed.
Our comments
Subsection 209(1) of the Regulations requires every person who is required by section 200, 201, 202, 204, 212, 214, 215, 217 or 218, subsection 223(2) or section 228, 229, 230, 232, 233 or 234 to make an information return to forward to each taxpayer to whom the return relates two copies of the portion of the return that relates to that taxpayer. In this regard, subsection 209(3) of the Regulations allows the Issuers of the information returns referred to in subsection 209(1) to send these returns to a taxpayer electronically as long as the taxpayer provides the “express consent” to receive the returns in that format.
Subsection 209(3) states:
“A person may send a document, as required under subsection (1), in an electronic format if the person has received the express consent of the taxpayer…”
In our view, the above provision clearly says that the particular documents may be sent electronically only where the Issuer has received the taxpayer’s express consent. In our opinion, this means the Issuer cannot send the particular documents electronically without obtaining the express consent of the taxpayer, even where the Issuer has otherwise fulfilled the subsection (1) requirement by sending the paper copies separately.
For the above purposes, subsection 209(4) of the Regulations defines express consent to be consent given in writing or in an electronic format. We note that the only exception to this requirement is in subsection 209(5), applicable in respect of T4 information returns that are required to be filed after 2017. Subsection 209(5) permits an Issuer to provide T4 information returns electronically to a taxpayer without having received the taxpayer’s express consent provided certain criteria are met.
Consequently, in our view, unless subsection 209(5) of the Regulations applies, absent the express consent of the taxpayer (either in writing or electronically), subsection 209(3) prevents an Issuer from sending the particular documents in an electronic format to the taxpayer even where the Issuer has fulfilled the subsection 209 (1) requirement by sending the paper copies to the taxpayer.
We trust that these comments will be of assistance.
Yours truly,
Terry Young, CPA, CA
Manager, Administrative Law Section
International Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch