Cross-border (Canada/US) Archives - TaxEd International

Category Archives: Cross-border (Canada/US)

The 2023 Fall Economic Statement

November 27, 2023 Sabrina Jackson-Nazareth and Kevin Yip

On November 21, 2023, Chrystia Freeland, the Deputy Prime Minister and the Federal Minister of Finance, unveiled the 2023 Fall Economic Statement (the “Economic Statement”). While the primary emphasis of the economic statement appears to be the Federal Government’s housing action plan and addressing issues of inflation and affordability, it also proposed technical updates on various tax-related matters. This article summarizes the proposed tax measures in the Economic Statement including updated implementation dates to previously announced measures.

Analysis, Canada, Cross-border (Canada/US)

Clean technology investment tax credit

October 19, 2023 Brian Cheng, Katerina Ignatova and Kevin Yip

On August 4, 2023, the Department of Finance (“Finance”) released draft legislation (the “August 4^th 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 4^th 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 4^th Proposals.

Analysis, Canada, Cross-border (Canada/US)

Revised proposals to amend the general anti-avoidance rule

October 18, 2023 Sabrina Jackson-Nazareth and Kevin Yip

On August 4^th, 2023, the Department of Finance Canada (“Finance”) released draft legislative proposals which included revised proposals to amend the general anti-avoidance rule (the “GAAR”) in section 245 of the Income Tax Act (Canada) (the “ITA”) (the “Revised GAAR Proposals”). The revised proposals follow several GAAR proposed amendments initially introduced in the 2023 Federal Budget (“Budget 2023”) tabled on March 28^th, 2023.

The proposals to amend the GAAR will apply to transactions that occur on or after January 1^st, 2024, except for the amendments to the preamble to the GAAR and related provisions which will come into force on Royal Assent.

Analysis, Canada, Cross-border (Canada/US)

Le processus d’adoption de l’IM est enclenché

July 13, 2018 Alain Ranger

Alain Ranger pratique depuis plus de 30 ans en droit fiscal, plus spécialement en droit fiscal lié au droit des sociétés et au droit des affaires. Au cours des années, Alain a développé une expertise reconnue dans une variété de domaines dont les fusions et acquisitions, les transactions transfrontalières, les réorganisations d’entreprises, les investissements étrangers, les financements structurés et la fiscalité des sociétés. Le 28 mai dernier, le ministre des Finances du Canada a déposé à la Chambre des communes un avis de motion de voies et moyens (l’« Avis ») officialisant ainsi l’intention du Canada de présenter un projet de loi pour mettre en oeuvre les propositions retenues de la Convention multilatérale pour la mise en œuvre des mesures relatives aux conventions fiscales pour prévenir l’érosion de la base d’imposition et le transfert de bénéfices (l’« IM »). L’Avis a été adopté par les parlementaires le 21 juin et le projet de loi a ainsi franchi l’étape de la première lecture à la Chambre des communes.

Pour fins de rappel, le Canada était l’un des signataires de l’IM le 7 juin 2017 et il avait alors annoncé son intention d’adopter les normes minimales proposées par l’OCDE dans le cadre des propositions BEPS ainsi que l’arbitrage obligatoire lié aux différends dans les conventions fiscales. L’Avis prévoit donc l’adoption de ces normes minimales, ainsi que d’autres mesures à l’égard desquelles le Canada avait initialement réservé sa position.

Analysis, Canada, Cross-border (Canada/US)

MLI Implementation in Canada

June 20, 2018 Christopher Steeves

new-york-690868_1920 On May 28, 2018, nearly a year after Canada became a signatory to the OECD’s Multilateral Instrument (“MLI”), a notice of ways & means motion has been tabled by the Minister of Finance (Canada) in the House of Commons signalling the Canadian government’s intention to introduce legislation to ratify the MLI. On June 20, 2018, Bill C-82, which will enact the MLI, received first reading in the House of Commons. The MLI has been signed by 78 countries including Canada.

When the MLI is ratified by Canada and the other signatories, existing bilateral tax treaties may be modified to apply certain agreed to minimum standards on treaty abuse and improving dispute resolution that were endorsed by participating countries under the OECD /G20 Base Erosion and Profit Shifting (BEPS) Project.