On August 12, the Department of Finance Canada (“Finance Canada”) released proposed amendments to the Income Tax Act (the “Act”) implementing the new Canadian Entrepreneurs’ Incentive (the “Incentive”). The Incentive aims to reduce the capital gains inclusion rate to one-third on a lifetime maximum of $2 million in eligible capital gains.
The Incentive ...
The past two federal budgets introduced various new refundable investment tax credits (“Refundable ITCs”) to encourage and promote the increased adoption of alternative or renewable energy. In the words of the Federal Government, the “transformational new big five Clean Investment Tax Credit…will help produce, manufacture, or transition to clean energy in ...
For tax years ending on or after December 31, 2023, most bare trusts will be required to file a T3 trust income tax return, regardless of the absence of any income to report, and may also be required to disclose information about the beneficiaries of the bare trust (referred to as a Schedule 15 disclosure).
A “bare trust” is not technically a legal term but is a commonly used ...
The federal government has announced they are removing the Goods and Services Tax/Harmonized Sales Tax (GST/HST) on all new qualifying rental housing constructions to help with the rising cost of living. This is effective September 14, 2023, subject to the passage of the related legislation.
The removal will be by way of an enhanced GST/HST Rental Rebate, available on new ...
Background
Canada has a series of bilateral tax treaties. These have evolved over time to include various anti-avoidance, and anti-treaty shopping rules. These rules include limitation on benefits provisions and purpose tests. The treaty between Canada and Hong Kong had one of the broadest rules.
Many countries, including Canada and Hong Kong, are now signatories to the ...
Revisions to earlier draft legislation on the Excessive Interest and Finance Expenses Limitation (EIFEL) regime were released by the Department of Finance on November 3, 2022. Lawson Lundell submitted comments on the government’s first round of consultations, raising concerns about the overly broad scope of the rules. A copy of our earlier submission can be found at ...
In June 2022, Canada published a report concerning its tax gap.[1] A “tax gap” is the difference between (a) the amount of money a tax authority could collect, in theory, if everyone complied with the law; and (b) the amount in fact collected. Canada’s tax gap has remained stable for the period 2014 to 2018, at 9% of tax revenue.[2] This translates to between $20 billion ...
On February 4, the federal government put forward draft legislation setting out the new Excessive Interest and Financing Expenses Limitation (EIFEL) regime. EIFEL is intended to prevent erosion of the Canadian tax base by limiting net interest and financing deductions of certain Canadian taxpayers generally to 30% of earnings before interest, taxes, depreciation and ...
Most taxation is concerned with raising revenue for government expenditure in the short term (typically within a year or so of the taxable event). A well-designed modern tax will also typically involve a withholding mechanism: think, for example, of payroll withholding on wages or the charge / input tax credit system in a typical VAT, such as Canada’s GST. The Digital ...
The expanded registration requirements for British Columbia Provincial Sales Tax (“PST”) will come into effect on April 1, 2021. Under the new requirements, and where criteria are met, all Canadian and foreign providers of software and telecommunications services will be required to collect and remit PST at a rate of 7% from customers located in British Columbia.
New ...
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