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Catch-Up Bill and 2013 Budget Bill Receive Royal Assent 

Canadian Tax Adviser

 

July 03, 2013

 

Bill C-48, the "catch-up bill" containing a large backlog of tax legislation, and Bill C-60, which implements certain measures announced in the 2013 federal budget, received Royal Assent on June 26, 2013. The provisions in Bill C-48 and Bill C-60 are considered substantively enacted for purposes of IFRS and Accounting Standards for Private Enterprise (ASPE) as of November 21, 2012 and April 29, 2013, respectively, when these bills received first reading in the House of Commons (as Canada has a majority government). Bill C-48 and Bill 60 are enacted for U.S. GAAP purposes on June 26, 2013, the date the bills received Royal Assent.

Bill C-48
Bill C-48 accumulates more than 900 pages of tax technical fix-up amendments affecting literally hundreds of sections of the Income Tax Act. These important tax amendments have been sought by the CRA, the Department of Finance and taxpayers alike. Among other changes, the bill contains the legislation to enact amendments to the:

 

  • Foreign affiliate rules, including
    • Extending the deadlines to revoke many foreign affiliate elections
    • Introducing rules for upstream loans from foreign affiliates and hybrid surplus
  • Non-Resident Trust (NRT) and Foreign Investment Entity (FIE) rules including 2010 federal budget modifications to previous draft legislation
  • Tax status and treatment of a Real Estate Investment Trust (REIT)
  • Restrictive covenant rules
  • Expenditure limitations for the issuance of certain non-monetary compensation (e.g., shares or options)
  • Factor in the paragraph 110(1)(k) deduction for Part VI.I tax
  • Implement the remaining 2010 federal budget measures including
    • New aggressive tax planning reporting regime
    • Foreign tax credit generator rules
    • Loss utilization regarding income trust conversions
  • Charitable donation advantage and split-receipting rules.

 

The bill also enacts other tax technical fix-up amendments, including measures included in the November 5, 2010 and October 31, 2011 mini-technical bills

 

Bill C-60
Bill C-60 contains the same legislation as the Notice of Ways and Means Motion released on April 22, 2013, including the change in the taxation of non-eligible dividends for 2014, the extension of the Class 29 CCA rate for M&P equipment, GST changes, and the administrative changes to the judicial process for the CRA to obtain an unnamed persons requirement. Bill C-60 also includes changes relating to customs tariffs as well as amendments to various other Acts.

 

The bill does not contain the more substantive tax changes from the 2013 federal budget such as the life insurance changes, trust and corporate tax loss trading, the mining tax changes, thin capitalization, character conversion transactions, synthetic dispositions, or restricted farm loss changes.

 

For more information, contact your KPMG adviser.

 

 

 

 

 

Information is current to July 03, 2013. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500

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