List of outstanding specific legislative proposals for listed tax laws announced prior to April 1, 2013
Pursuant to the requirement of the Financial Administration Act, this list contains all specific legislative proposals to amend listed tax laws that have been announced by the Government before April 1, 2013 and have not been enacted or withdrawn. These specific legislative proposals are those for which draft legislation has been released before April 1, 2013, or for which, before April 1, 2013, the Government publicly announced its intention to legislate and for which draft legislation was subsequently released, and with which the Government intends to proceed. All specific legislative proposals to amend listed tax laws for which draft legislation has been released before April 1, 2013, and that are not included on this list below, are withdrawn.
Income Tax Act and Income Tax Regulations
- Legislative proposals released on November 27, 2012 (re-released February 27, 2014) relating to income tax rules applicable to Canadian banks with foreign affiliates. This measure alleviates the tax cost to Canadian-based banks using excess liquidity of their foreign affiliates in their Canadian operations. The measure also ensures that certain securities transactions undertaken in the course of a bank’s business of facilitating trades for arm’s length customers are not inappropriately caught by the base erosion rules. This measure is included in the 2014 second budget implementation bill (BIA 2).
- Legislative proposals released on August 23, 2013 relating to changes to the life insurance policyholder exemption test. This measure modernizes the exemption test and other life insurance policyholder taxation rules. Legislative proposals were announced in Budget 2012 and the Government indicated it intended to proceed with these proposals in Budget 2013 on March 21, 2013. This measure is included in BIA 2.
- Legislative proposals previously announced on November 14, 2003, and most recently released for consultation on April 8, 2014, relating to amendments to the Income Tax Act that would make material improvements to the Canadian Film or Video Production Tax Credit regime. This measure is included in BIA 2.
- Legislative proposals in respect of the foreign affiliate dumping rules, released for consultation on three occasions since the basic rules were introduced in 2012, most recently, on August 29, 2014, which includes modifications of the earlier proposals based on comments received. This measure contains a number of mostly relieving technical amendments to the foreign affiliate dumping rules. The technical amendments are generally intended to reduce impediments to corporate acquisitions, facilitate financing transactions, ease compliance burdens and more appropriately deal with adjustments to paid-up capital. In particular, it:
- reduces impediments to corporate acquisitions by limiting the application of the rules where a corporation resident in Canada makes an investment in a foreign affiliate before that corporation becomes controlled by a non-resident corporation;
- eliminates the requirement that a corporation resident in Canada must distribute funds in order to obtain a reinstatement of its paid-up capital, and extends the rule reinstating paid-up capital to situations where the corporation resident in Canada receives amounts as interest on, or from the repayment or sale of, certain debt obligations owed to the corporation resident in Canada by the foreign affiliate;
- eases compliance requirements by making the application of the “paid-up capital offset” rule automatic;
- facilitates certain financing arrangements by amending the computation of the debt of a corporation resident in Canada for the purpose of determining the corporation’s debt-to-equity ratio under the thin capitalization rules; and
- restricts the circumstances in which the paid-up capital of a corporation resident in Canada is reduced in lieu of a dividend being deemed to be paid under the rules.
This measure is included in BIA 2.
Income Tax Conventions Interpretation Act
Excise Tax Act and any regulations made under that Act
- Pooled registered pension plans – This measure is intended to ensure that pooled registered pension plans are subject to similar GST/HST treatment as registered pension plans. This measure was announced on December 14, 2011 by way of news release and backgrounder and draft legislative amendments were released for consultation on August 29, 2014. This measure is included in BIA 2.
Excise Act, 2001 and any regulations made under that Act
Air Travelers Security Charge Act and any regulations made under that Act
Excise Act and any regulations made under that Act
Customs Tariff and any regulations made under that Act