• Service: Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 12/19/2013

Canada - Federal budget bill #2 receives Royal Assent 

December 19:  Legislation in Canada containing the remaining tax measures from the 2013 federal budget, as well as certain other previously announced tax measures, received Royal Assent on 12 December 2013.

The provisions in the legislation (Bill C-4) are considered substantively enacted for purposes of IFRS and Accounting Standards for Private Enterprises (ASPE) as of 22 October 2013, when it received first reading in the House of Commons (because Canada has a majority government).

Bill C-4 is enacted for U.S. GAAP purposes on 12 December 2013, the date the bill received Royal Assent.

List of enacted measures

Bill C-4 includes the following 2013 federal budget measures to:

  • Increase and index the Lifetime Capital Gains Exemption
  • Expand the accelerated capital cost allowance to further encourage investments in clean energy generation
  • Provide that synthetic disposition transactions are taxed as actual dispositions
  • Tax income from character conversion transactions
  • Provide limitations on the transfer of the tax attributes of trusts between arm's length persons
  • Amend the rules that apply to non-resident trusts
  • Eliminate "unintended tax benefits" from two types of leveraged life insurance arrangements
  • Restrict corporate loss trading among arm's-length persons

The bill also includes certain previously announced tax measures, including:

  • December 2012 technical amendments - RRSP anti-avoidance rules, section 88 bump denial rules, and section 55 divisive reorganization rules, as well as changes to Alternative Minimum Tax
  • July 2012 draft legislation - SIFT stapled securities and withholding tax on trusts emigrating to Canada.

Read a December 2013 report prepared by the KPMG member firm in Canada: 2013 Federal Budget Bill #2 Receives Royal Assent

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