Interest Deductibility Limits

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.