During the symposium on consumption taxes in May 2024, representatives of Revenu Québec clarified their position regarding contract rectification.
A written contract that does not represent the original intention of the parties can be modified retroactively by means of a declaratory judgment.
To obtain such a judgment, a request for rectification must:
- Be filed by the parties to the contract in the Superior Court of Quebec;
- Call Revenu Québec as a third party in the proceeding.
In the absence of a declaratory judgment, the contractual modifications that the parties wish to apply retroactively are not enforceable against Revenu Québec.
The proposed amendments must serve to reflect the original intention of the parties and must not be used to carry out retroactive tax planning to avoid unanticipated tax consequences.
Comments
If the procedure indicated above was not followed, Revenu Québec could consider that the modifications did not take place, notably if the modifications made by the parties are disadvantageous for the latter.
