The time is now to assess all of the ESTMA reporting requirements for your company.
In 2017, Canadian companies that are directly or indirectly engaged in the commercial development of oil, gas or minerals or that control companies engaging in these activities—at home or abroad—will be required to submit their first report under the Extractive Sector Transparency Measures Act (ESTMA).1
In it, they will need to disclose any payments over $100,000 made to all levels of government during the previous fiscal year—including taxes, royalty fees, production entitlements, bonuses, dividends and infrastructure improvement payments. Failing to comply can result in penalties of up to $250,000 a day.
For example, companies with a December 31, 2016 year-end will be required to report by May 30, 2017 and include all payments made during the 2016 calendar year.
To prepare for compliance, companies will need to take steps to assess their risk, put appropriate data collection processes into place and review their internal controls to ensure they have the ability to track and report on payments made to governments on a global basis. As with all such disclosures, accuracy is paramount—every report must contain an attestation from either a corporate director, officer or from an independent auditor or accountant.
1 In Québec, see additional legislation Bill n°55: An Act respecting transparency measures in the mining, oil and gas industries.Who should report?
To determine how your company may be affected by ESTMA and to prepare for compliance, contact a KPMG audit professional today. We are well versed in all aspects of ESTMA reporting and can help you put the processes you need in place both nationally and internationally.