TEI Comments on Proposed Canadian Legislation Effecting Synthetic Equity Arrangements

On August 28, 2015, TEI submitted a letter to the Canadian Department of Finance urging exception for stock-based compensation programs from potential representation requirements at issue in proposed legislation regarding synthetic equity arrangements. The legislation would require participants in synthetic equity arrangements to affirmatively represent that they are Canadian taxpayers in order to claim a dividends-received deduction in certain transactions involving stock hedging. Employee stock-based compensation programs frequently use such hedging arrangements, but a requirement that a participant represent as to his or her Canadian-taxpayer status would be impractical for compensation plans involving thousands of employees.

TEI's Canadian Income Tax Committee prepared these comments. Grant Lee chairs the Committee, and TEI Tax Counsel John Schoenecker coordinated the preparation of TEI's comments.

Download the submission.