Revisions to Canadian APA Program - TEI Comments
On July 21, 2023, the Institute filed comments with Canadian Department of Finance regarding Information Circular 94-4R2 "International Transfer Pricing: Advance Pricing Arrangements." TEI's comments included concern with the undue compliance burden the Circular proposes to impose on taxpayers, its unreasonable filing deadlines, and the additional requirements for renewing an advanced pricing agreement. TEI's comments were prepared under the aegis of its Canadian Income Tax Committee. Benjamin R. Shreck, TEI Tax Counsel, coordinated the preparation of the Institute's comments.
TEI Comments on Proposed Penalty for Canadian GAAR
On May 31, 2023, TEI filed comments with the Canadian Department of Finance regarding a proposal to impose a penalty on taxpayers who violate Canada's general anti-avoidance rule ("GAAR"). TEI commented that a distinct penalty for violations of the GAAR was not necessary given the current structure of the Canadian income tax code. Should the Canadian government implement such a penalty, TEI recommended that the penalty only be imposed in cases where the taxpayer acted with "gross negligence" or a similar level of fault, among other things.
TEI Submits Comments Regarding Proposed Canadian 2% Buyback Tax
On February 23, 2023, TEI submitted comments to Canadian Finance Minister Chrystia Freeland regarding the proposed Canadian 2% tax on share buybacks. TEI took the view that Canada should not implement a share buyback tax. Should Canada implement such a tax, however, the Institute's recommendations included that the tax be more closely aligned with the U.S. version of the tax with respect to both the tax rate and exclusions from the U.S. tax. TEI's comments were prepared under the aegis of its Canadian Commodity Tax Committee, whose Chair is Steve Saunders.
TEI Submits Comments on Draft Form RC312 Under Canada's Mandatory Disclosure Rules
On February 13, 2023, TEI filed comments with the Canada Revenue Agency regarding Draft Form RC312 - Reportable Transaction and Notifiable Transaction Information Return. TEI's comments primarily concerned the volume of information required by the form, as well as the unclear nature of several provisions in the form. TEI's comments were prepared under the aegis of its Canadian Income Tax Committee, whose Chair is Steve Saunders of Atco. Benjamin R. Shreck, TEI Tax Counsel, coordinated the preparation of the Institute's comments.
TEI Submits Comments on Proposed Canadian EIFEL Rules
On January 31, 2023, TEI filed comments and recommendations with the Canadian Department of Finance regarding proposed excessive interest and financing expense limitation (EIFEL) legislation. The Institute's recommendations included delaying the effective date of the rules, providing transition relief, and not applying the EIFEL rules when computing the foreign accrual property income of controlled foreign affiliates. TEI's comments were prepared under the aegis of its Canadian Income Tax Committee, whose Chair is Steve Saunders. Benjamin R.
TEI Participates in Canadian Income Tax Mandatory Disclosure Rules Consultation
On April 5, 2022, TEI submitted written comments to the Department of Finance concerning the government’s newly released draft legislative proposals to amend Canada’s income tax mandatory disclosure rules. These proposals were initially described in the federal budget documents tabled in Canada’s House of Commons on April 19, 2021 (“Budget 2021”), on which TEI provided preliminary feedback last fall. Consistent with our earlier submission, the enclosed comments focus intently on the perceived overbreadth of the draft proposals along with the immense compliance and administration
TEI Participates in Consultation on Canada’s Proposed Excessive Interest and Financing Expenses Limitation
On May 6, 2022, TEI submitted written comments to the Department of Finance concerning the government’s newly released draft legislative proposals to limit the amount of interest and other financing expenses that businesses may deduct for Canadian income tax purposes. These proposals were initially described in the federal budget documents tabled in Canada’s House of Commons on April 19, 2021 (“Budget 2021”), on which TEI provided preliminary comments last December. Consistent with our earlier submission, the enclosed comments raise a range of concerns with the draft legislation
TEI Comments on the Proposed Implementation of Pillar Two (Global Minimum Tax) in Canada
On July 21, 2022, TEI submitted preliminary comments to the Department of Finance concerning the Government of Canada’s proposal to implement Pillar Two of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (“BEPS”) two-pillar plan for international tax reform, as contemplated by the federal budget documents tabled in Canada’s House of Commons on April 7, 2022 (“Budget 2022”). TEI’s comments highlight several areas of significant, widespread concern with the plan’s implementation in Canada, as contemplated by Budget 2022, that warrant further and careful attention.
TEI Applies for Leave to Intervene (as Amicus Curiae) in Deans Knight Income Corporation v. The Queen
On June 30, 2022, TEI applied for leave to intervene (as amicus curiae) in Deans Knight Income Corporation v.
TEI Comments on Proposed Interest Deductibility Limits in Canadian Budget 2021
On December 29, 2021, TEI submitted comments to the Department of Finance Canada concerning the government’s proposal to introduce a new limitation on the deduction of business interest expense, as described in Budget 2021. Generally speaking, the proposal would limit the amount of net interest expense that a corporation could deduct in computing its taxable income to a fixed share of the corporation’s earnings.