Tag Archives: budget

Clean technology investment tax credit

Close up calculator on business working desk, dark background concept.

On August 4, 2023, the Department of Finance (“Finance”) released draft legislation (the “August 4th Proposals”) in respect of the clean technology investment tax credit (“Clean Technology ITC”), which was initially proposed in the 2022 fall economic statement and updated in the 2023 federal budget (“Budget 2023”). The Clean Technology ITC allows qualifying taxpayers to claim up to a 30% refundable tax credit on the capital cost of clean technology property.

The draft legislation includes labour requirements, which are similar to provisions in the United States Inflation Reduction Act (which in turn references certain labour requirements in the United States Davis-Bacon Act) and that must be complied with to be eligible for the full 30% Clean Technology ITC.

Although Finance announced a clean hydrogen investment tax credit (“Clean Hydrogen ITC”) in Budget 2023, the August 4th Proposals did not include draft legislation regarding the Clean Hydrogen ITC.

The description of the Clean Technology ITC below is based on the draft legislation included in the August 4th Proposals.

Continue reading »Facebooktwitterlinkedinmail

Selected Tax Measures in the Federal Budget 2018 – Canada

This update is intended for those seeking additional insights into the 2018 Federal Budget including its impact on both domestic and multinational enterprises.

The Minister of Finance (Canada), the Honourable Bill Morneau, presented the Government of Canada’s (the “Federal Government”) 2018 Federal Budget (“Budget 2018”) on February 27th, 2018 (“Budget Day”). Budget 2018 contains significant proposals to amend the Income Tax Act (Canada) (the “ITA”) and the Excise Tax Act (the “ETA”) while also providing updates on previously announced tax measures and policies.

Significant Budget 2018 proposals and updates include:

  • Introduction of simplified measures (compared to the July 2017 proposals) applicable to passive investment income in a private corporation that will: (i) limit access to the small business rate for small businesses with significant passive savings, and (ii) limit access to refundable taxes for larger Canadian-controlled private corporations (“CCPCs”).
  • Rules applicable to equity-based financial arrangements including synthetic equity arrangements and securities lending arrangements.
  • Rules to prevent tax-free distributions by Canadian corporations to non-resident shareholders through the use of certain transactions involving partnerships and trusts.
  • Modification of the foreign affiliate provisions so certain rules cannot be avoided through the use of “tracking arrangements”.
  • Updates on Canada’s participation in the Organisation for Economic Co-operation and Development (“OECD”) project on Base Erosion and Profit Shifting (“BEPS”).

Our full analysis of selected proposals and tax measures can be found on Fasken.com.Facebooktwitterlinkedinmail

Selected Tax Measures in the Canadian Federal Budget 2017

The Minister of Finance (Canada), the Honourable Bill Morneau, presented the Government of Canada’s 2017 Federal Budget (“Budget 2017“) on March 22, 2017. Budget 2017 contains significant proposals to amend the Income Tax Act (Canada) and the Excise Tax Act (Canada) while also providing updates on previously announced tax measures and policies.

Significant Budget 2017 proposals and updates include:

  • Investing an additional $523.9 million over five years to prevent tax evasion and improve tax compliance.
  • Extending the mutual fund merger rules to “switch” funds and segregated funds.
  • Extending base erosion rules to Canadian life insurers with foreign branches.
  • Two measures that clarify the timing of recognition of gains and losses on derivatives held on income account.
  • Updates on Canada’s participation in the Organisation for Economic Co-operation and Development project on Base Erosion and Profit Shifting.

Our full analysis of selected proposals and tax measures can be found on Fasken.com.Facebooktwitterlinkedinmail