Canada Consults On Numerous Tax Law Amendments
Wednesday, September 3, 2014
The Canadian Government is consulting on draft legislative proposals that would implement personal, business, and international tax measures announced in the Economic Action Plan 2014.
On the personal income tax front, the following measures are proposed:
- Extending the intergenerational rollover and life-time capital gains exemption
for farming and fishing businesses;
- Permitting income contributed to an amateur athlete trust to qualify as
earned income for Registered Retirement Savings Plan contribution limit purposes,
with a three-year retrospective application;
- Including, in the definition of 'split income,' income from a
business or property that is paid or allocated to a minor child from a partnership
or trust where a person related to the child is engaged in the activities
of the partnership or trust to earn that income; and
- Eliminating graduated rate taxation for trusts and certain estates with
an exception for cases involving testamentary trusts whose beneficiaries include
individuals eligible for the Disability Tax Credit.
In the business income tax sphere, the following measures are proposed:
- Expanding eligibility for the accelerated capital cost allowance for clean
energy generation and energy conservation equipment under Class 43.2 to include
water-current energy equipment and a broader range of equipment used to gasify
eligible waste; and
- Extending the tax deferral provision with respect to breeding animals to
bees, and to all types of horses that are over 12 months of age, that are
kept for breeding.
The following international tax changes are proposed:
- Better circumscribing an existing exception from the "investment business"
definition in the foreign accrual property income regime by introducing additional
conditions for the application of the exception;
- Adjusting Canada's foreign accrual property income rules in order to address
offshore insurance swap transactions and ensure that income derived directly
or indirectly from the insurance of Canadian risks is taxed appropriately; and
- Addressing back-to-back loan arrangements involving an intermediary by adding
a specific anti-avoidance rule in respect of withholding tax on interest payments,
and modifying an existing anti-avoidance rule in the thin capitalization rules.
For charities, it is proposed that greater flexibility will be allowed in income
tax rules for the recognition of charitable donations made in a well or on death.
A number of other measures, which were not included in the Economic Action Plan 2014, are proposed, including:
- Modernizing the life insurance policy exemption test;
- Amending the foreign affiliate dumping rules to ensure the rules apply in appropriate
circumstances and, where applicable, provide appropriate results.
- Amending the definition "non-qualifying country" in the foreign
affiliate rules to:
- exclude from this definition those countries or other jurisdictions for which
the Convention on Mutual Administrative Assistance in Tax Matters is in force
and effect; and
- avoid unintended tax consequences with respect to the British Overseas Territory
of the British Virgin Islands, which is now a jurisdiction that has a comprehensive
tax information exchange agreement with Canada.
- Ensuring that Pooled Registered Pension Plans are subject to similar Goods and
Services Tax/Harmonized Sales Tax treatment as registered pension plans.
The consultation is open until September 28.
Jersey Regulator Issues AML/CTF Funds Guidance
Jersey's financial services regulator, the Jersey Financial Services Commission, has issued new anti-money laundering and countering the financing of terrorism guidance for Funds and Fund Operators.
More Tax Hikes For UK Taxpayers In 2017 Budget
The UK Budget, released on March 9, 2017, featured tax measures to, among other things, hike taxes on self-employed workers, further close avenues for legal avoidance, and defer mandatory digital tax reporting until April 2019.
ACOSS Submits Recommendations For Australian Budget
The Australian Council of Social Services has urged that the Government abolish ineffective tax concessions, introduce a sugary drinks tax, and scrap its company tax proposals.
MEPs Call For Wider Access To Beneficial Ownership Data
EU citizens would be able to view information in registers of beneficial ownership without having to demonstrate a "legitimate interest," under proposed amendments the Anti-Money Laundering Directive.
New Zealand Tax Changes Enter Into Force
A Bill including provisions to simplify New Zealand's tax processes, reduce compliance costs for smaller businesses, and tighten foreign trust disclosure rules received Royal Assent on February 21.
Guernsey Introduces Client Asset Handling Rules
Guernsey's financial services regulator, the Guernsey Financial Services Commission, said it intends to introduce rules governing the holding and administration of client assets in 2017.
Australian Accountants Urge Tax Burden Shift
Australia desperately needs large scale tax reform and should aim to rebalance its tax mix, the Institute of Public Accountants has argued.
IRS Issues Final Regulations On REIT Spin-Offs
On January 18, the US Internal Revenue Service issued its final regulations
regarding the measures included in the Protecting Americans from Tax Hikes Act to restrict the tax-free spin-offs involving publicly traded real estate investment
Bermuda, EU To Collaborate On Insurance, Pensions Oversight
The European Insurance and Occupational Pensions
Authority and the Bermuda Monetary Authority have newly signed a memorandum
Hong Kong Consults On Beneficial Ownership Plans
Hong Kong's Financial Services and the Treasury Bureau has launched public
consultations on legislative proposals to increase the transparency of corporate
beneficial ownership in the city, and to enhance its regulatory regime for combating
money laundering and terrorist financing.
Hong Kong Reports On Incorporations In 2016
There was an increase in local company incorporations in Hong Kong in 2016, although incorporations by foreign companies experienced a dip, according to the territory's Companies Registry.
Guernsey Regulator Outlines 2017 Funds Strategy
Guernsey's financial services regulator, the Guernsey Financial Services Commission, has outlined its funds sector strategy for 2017.
Canada Waives Income, Activities Reporting For Labor Org's
Canada's Revenue Minister has announced that certain reporting requirements on labor organizations and labor trusts will be waived.
South African Tax Bills Approved By Parliament
South Africa's Ministry of Finance has published the 2016 Taxation Laws Amendment
Bill, which has received parliamentary approval and gives effect to the
tax changes announced in the Budget in February this year, together with legislation
confirming the final details of. the Special Voluntary Disclosure Program.
Switzerland Praised For Combatting Financial Crime
The Swiss Federal Council has hailed the publication of the Financial Action Task Force's fourth mutual evaluation report on action taken to combat money laundering and terrorist financing, stating that "overall Switzerland's results can be considered to be good."