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An overview by Borden Ladner Gervais, Taxand Canada
The Canada Revenue Agency (CRA) has issued updated guidance on tax compliance for notional cash pooling arrangements involving Canadian entities. Canadian depositors may trigger “back-to-back” loan rules, requiring either prompt repayment, withholding tax remittance, or a PLOI election – though the latter can be administratively complex.
If the Canadian participant is a debtor, the arrangement may be deemed a notifiable transaction, requiring an RC312 filing and careful determination of the applicable withholding tax rate.
Daniel Lang from our Canadian member firm Borden Ladner Gervais has published a more detailed overview of the updated guidance here, urging businesses must monitor their participation and documentation closely to remain compliant.
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