When does my client have to file an RC312 under Canada's mandatory disclosure rules, and what happens if they miss it?
In 2026, Canada's mandatory disclosure rules (ITA sections 237.3 and 237.4) require Form RC312 within 90 days for a reportable transaction, an avoidance transaction with a contingent fee, confidential protection or contractual protection, or for a designated notifiable transaction. A late filer generally pays $500 a week, capped at the greater of $25,000 and 25% of the tax benefit.
What makes a transaction reportable?
A transaction is reportable under ITA 237.3(1) when two things are true: one of its main purposes may reasonably be considered to be obtaining a tax benefit, and at least one of three hallmarks is present laws-lois.justice.gc.ca. The rules received royal assent on June 22, 2023 and apply to reportable and notifiable transactions after June 21, 2023
canada.ca.
| Hallmark | ITA 237.3(1) | What it looks like in practice |
|---|---|---|
| Contingent fee | Paragraph (a) | An advisor or promoter is paid based on the tax benefit, contingent on getting it, reduced if it fails, or based on the number of participants |
| Confidential protection | Paragraph (b) | An advisor or promoter has obtained a restriction on disclosing the tax treatment |
| Contractual protection | Paragraph (c) | Protection against the tax benefit failing, or a promise to pay the costs of a dispute, other than through a contingent fee |
A tax benefit counts even when it only defers tax, increases a refund or preserves an attribute for later use canada.ca. Without a hallmark, nothing is reportable under 237.3, however tax driven the plan. The CRA's own examples of plans with no hallmark are an ordinary estate freeze and a loss consolidation
canada.ca. The standard engagement letter is where the risk sits: a fee that drops if the CRA denies the result, or a clause promising to cover objection costs, turns a routine reorganization into a reportable one.
Who has to file the RC312, and by when?
Section 237.3(2) puts the filing duty on four groups at once, and 237.4(4) repeats the list for notifiable transactions laws-lois.justice.gc.ca.
| Who | Reportable (237.3) | Notifiable (237.4) | Deadline |
|---|---|---|---|
| Person who gets or expects the tax benefit | 237.3(2)(a) | 237.4(4)(a) | 90 days after the earlier of signing and entering into the transaction |
| Person who enters into it for that person's benefit | 237.3(2)(b) | 237.4(4)(b) | Same 90 days |
| Advisor or promoter | 237.3(2)(c), if entitled to a hallmark fee | 237.4(4)(c), if they know or should know it is notifiable | No later than the taxpayer's deadline |
| Person not dealing at arm's length with that advisor or promoter, entitled to a fee | 237.3(2)(d) | 237.4(4)(d) | No later than the taxpayer's deadline |
The clock in 237.3(5) runs from the earliest of the day your client becomes contractually obligated to enter into the transaction and the day it enters into it laws-lois.justice.gc.ca. Under 237.3(3), one RC312 that reports each transaction in a series satisfies the filer's own obligation for every transaction it reports, but it doesn't discharge anyone else's, so each person on the list files its own return
canada.ca.
Worked deadline: your client signs a share purchase agreement on March 3, 2026 that pays the advisor a fee reduced if the tax result fails, and the deal closes April 15, 2026. The 90 days run from March 3, the earlier date: 28 days to March 31, 30 in April, 31 in May, then 1 more. The RC312 is due June 1, 2026, and the advisor's return is due the same day.
File the 2025 version of Form RC312, "Reportable Transaction and Notifiable Transaction Information Return", online through the CRA's RC312 web form or as a fillable PDF downloaded to your computer canada.ca.
What are the penalties for a late or missing RC312?
The penalties are the same for reportable transactions under 237.3(8) and notifiable transactions under 237.4(12) laws-lois.justice.gc.ca. A person caught both as someone who entered into the transaction for the taxpayer's benefit and as a fee earner not at arm's length with the advisor pays only the greater of the two amounts
canada.ca.
| Who | Rate | Maximum |
|---|---|---|
| Corporation with carrying value of assets of $50 million or more | $2,000 per week | Greater of $100,000 and 25% of the tax benefit |
| Every other taxpayer, including individuals and smaller corporations | $500 per week | Greater of $25,000 and 25% of the tax benefit |
| Advisor or promoter | 100% of fees charged, plus $10,000, plus $1,000 per day | The $1,000 daily part stops at $100,000; fees and the $10,000 come on top |
| Reportable uncertain tax treatment (RC3133) | $2,000 per week | $100,000 per treatment |
The $50 million test uses carrying value of assets measured under paragraphs 181(3)(a) and (b), per 237.3(8.2) laws-lois.justice.gc.ca. The CRA's figures match the Act line for line
canada.ca.
Worked penalty: a CCPC with $8 million of assets claims a $400,000 tax benefit and files its RC312 30 weeks late. The penalty is 30 × $500 = $15,000. The cap is the greater of $25,000 and 25% × $400,000 = $100,000, so the cap is $100,000 and the full $15,000 applies. Its advisor charged a $40,000 contingent fee and filed 60 days late: $40,000 + $10,000 + (60 × $1,000) = $110,000. Had the advisor never filed, the most it could owe is $40,000 + $10,000 + $100,000 = $150,000.
There is a due diligence defence in 237.3(11) and 237.4(6): no penalty if your client exercised the care, diligence and skill a reasonably prudent person would have in comparable circumstances laws-lois.justice.gc.ca. The CRA says penalty assessments go through headquarters oversight
canada.ca.
Which transactions are notifiable as of October 2026?
A notifiable transaction is one that is the same as, or substantially similar to, a transaction the Minister of National Revenue designates with the concurrence of the Minister of Finance under 237.4(3). "Substantially similar" covers factually similar plans and plans built on a similar tax strategy, and 237.4(2) says to read it broadly in favour of disclosure laws-lois.justice.gc.ca. No hallmark or purpose test applies: resemblance alone triggers the RC312.
| Code | Designated transaction | Effective |
|---|---|---|
| NT-2023-01 | Straddle loss creation using a partnership and foreign exchange forwards | November 1, 2023 |
| NT-2023-02 | Avoiding the 21 year deemed disposition of trust property, or the nonresident beneficiary rules | November 1, 2023 |
| NT-2023-03 | Temporary bankruptcy to reduce a forgiven amount on a commercial obligation | November 1, 2023 |
| NT-2023-04 | Relying on the purpose tests in section 256.1 to avoid a deemed acquisition of control | November 1, 2023 |
| NT-2023-05 | Back to back arrangements to avoid thin capitalization or Part XIII withholding tax | November 1, 2023 |
As of October 2026 the CRA lists these five designations, all effective November 1, 2023 canada.ca. A designation takes effect the day it is posted, so check the list before each closing
canada.ca. NT-2023-02 is the one that catches family trust work: any plan that moves trust property to a new trust or a nonresident ahead of the 21st anniversary needs a look. NT-2023-05 belongs with the thin capitalization rules review on any intercompany loan.
Advisors and promoters only have to file a notifiable transaction return if they know or should reasonably be expected to know it is notifiable (237.4(7)). When an employer or partnership files, each employee or partner is deemed to have filed under 237.4(5), and someone who only provides clerical or secretarial services has no obligation under 237.4(8) laws-lois.justice.gc.ca.
How a missed RC312 extends the reassessment period and opens GAAR
If an RC312 required under 237.3(2) isn't filed as and when required, paragraph 152(4)(b.5) lets the CRA reassess until three years after the day the return is actually filed, or four years for a mutual fund trust or a corporation that isn't a CCPC laws-lois.justice.gc.ca. Paragraph 152(4)(b.6) does the same for notifiable transactions, and (b.7) for uncertain tax treatments. Until your client files, that clock doesn't start. Subsection 152(4.01) limits the extended reassessment to what can reasonably be regarded as relating to the transaction, so the rest of the year still closes on the normal reassessment period.
Section 237.3(6) adds a second consequence. While a reportable transaction stays unfiled and the penalty is unpaid, subsection 245(4) is disregarded, which lets the CRA deny the tax benefit under GAAR without having to show misuse or abuse laws-lois.justice.gc.ca.
Disclosure also protects your client under the GAAR changes. Section 245(5.1) imposes a penalty of 25% of the extra tax when GAAR applies to a transaction that wasn't disclosed under 237.3 or 237.4 laws-lois.justice.gc.ca, and 152(4)(b)(viii) adds three years to the reassessment period for the same undisclosed transactions
laws-lois.justice.gc.ca. A taxpayer with no filing duty can file an optional RC312 under 237.3(12.1) by its filing due date for the year to avoid both. Filing up to one year late still blocks the penalty, and limits the extra reassessment time to one year
canada.ca. Filing is never an admission that GAAR applies, per 237.3(12)
laws-lois.justice.gc.ca.
What changed in Budget 2025?
Nothing in these rules. The Budget 2025 tax measures make no change to sections 237.3, 237.4 or 237.5 budget.canada.ca, so the 90 day deadline and the penalty amounts above still stand as of October 2026. The large corporation side, Form RC3133 for reportable uncertain tax treatments, is due with the corporation's return and applies to corporations with at least $50 million of assets and audited financial statements
canada.ca. It has its own page: uncertain tax treatment reporting.
Sources
Does solicitor and client privilege excuse my client from filing?
No, it only excuses the privileged information. Sections 237.3(17) and 237.4(18) say the rules don't require disclosure of information it is reasonable to believe is privileged, but the RC312 itself is still due with everything else on it laws-lois.justice.gc.ca.
Is an estate freeze a reportable transaction?
Not on its own. A freeze is reportable only if a hallmark is present, such as a fee contingent on the tax result or a promise to pay the dispute costs if the CRA challenges it, and the CRA uses the plain freeze as its example of a transaction with no hallmark canada.ca. A freeze that resembles NT-2023-02 is a separate question, because notifiable transactions need no hallmark.
Does the CRA have to prove my client knew a transaction was notifiable?
No, the knowledge test in 237.4(7) protects only advisors and promoters. The taxpayer's protection is the due diligence defence in 237.4(6): it has to show it took the care a reasonably prudent person would to work out whether the transaction was notifiable laws-lois.justice.gc.ca.
Do tax shelters and flow through shares need an RC312 too?
Not if the tax shelter or flow through share return was properly filed. Section 237.3(14) and (16) exclude those cases unless one of the main reasons for the acquisition or issuance was to avoid section 237.3, and 237.3(15) reduces the penalty by any tax shelter or flow through penalty already charged laws-lois.justice.gc.ca.
General information for the tax year shown, not advice for a specific client. Confirm the facts before you file or remit.