by Kabir Jamal, Goodmans LLP
Canada’s Department of Finance, on July 29, released for consultation draft legislative proposals to implement measures previously announced on March 22 in the 2016 Federal Budget. Interested parties have been invited to provide comments on the draft proposals by September 27.
The draft legislative proposals include measures relating to:
- the introduction of reporting requirements for the country-by-country report developed by the OECD
- the tax treatment of foreign-currency denominated debt obligations that are “parked” (rather than settled) to avoid foreign exchange gain realization
- the extension of the back-to-back loan rules to rents, royalties and similar payments and certain other related amendments
- the clarification of existing rules relating to cross-border surplus stripping transactions
- the taxation of transactions involving emission allowances
- the repeal of the eligible capital property rules and the introduction of a new class of depreciable capital property
- the multiplication of the small business deduction and reduction of the “small business limit”
- the recognition of capital gains on shares of mutual fund corporations organized as multi-class, or “switch”, funds
- the tax character of returns on linked notes
- the valuation for derivatives
The Department of Finance has stated that the above measures, as well as other Budget 2016 measures, may be included in a bill to be tabled to Parliament following the expiry of the consultation period.
We will provide a detailed discussion of the proposals shortly.
— Kabir Jamal is an attorney with Goodmans LLP, Toronto, where he specializes in domestic and international corporate taxation, including cross-border mergers, corporate reorganizations, domestic and international corporate finance, debt restructurings, and private equity investments. He can be reached at [email protected].
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