Global

Details

  • Service: Tax, International Corporate Tax, Mergers & Acquisitions, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 12/10/2012

Canada - Foreign-affiliate tax rules substantively enacted; taxpayer elections required 

December 10:  The Canadian Department of Finance released what may be the final version of proposed tax rules affecting foreign-affiliate members of Canadian corporate groups.

The legislation is making its way through Parliament, and while not yet formally enacted into law, is considered to be substantively enacted for purposes of International Financial Reporting Standards (IFRS) and Canadian Accounting Standards for Private Enterprises (ASPE).


Once the applicable technical bills receive "Royal Assent," Canadian multinationals will have a limited time to make the vast number of elections contained in almost 1,000 pages of the pending legislation.


The legislation includes several measures that could have a significant impact on foreign-affiliate reorganizations and the computation of surplus in foreign-affiliate groups, including rules concerning:


  • Upstream loans
  • Foreign tax credit generator rules
  • Foreign-affiliate dumping rules
  • Foreign-affiliate distributions
  • Other foreign-affiliate measures

Read a December 2012 report prepared by the KPMG member firm in Canada: Foreign Affiliate Rules Now Set — Take Action to Manage Their Impact




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