Where a cash pooling arrangement in which a Canadian taxpayer may be a debtor is a “notifiable transaction”, would a professional services firm be required to report the arrangement if the firm was not involved in the set-up of the arrangement and only undertakes compliance services based on debt, interest and withholding figures provided by the taxpayer?
CRA indicated that determining whether a professional firm is directly or indirectly providing assistance or advice (as per the definition of advisor) depends on the nature of the work, and bearing in mind that one element is the reporting position of the taxpayer (for example, is it filing on the basis of the application of s. 18(4), and is there withholding and remitting as if the financing had come directly from NR1?). Also relevant is whether the advisor has a professional obligation to validate or advise the client on the actual filing position or on the application of the Act to the client’s cash pooling arrangement.