• Service: Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 7/17/2013

Canada - Transition relief for derivative forward agreements 

July 17:  Canada’s Department of Finance announced transitional relief for the character conversion transaction rules as proposed in the 2013 federal budget.

Finance's announcement (11 July 2013) states that transitional relief for certain derivative forward agreements will be provided until the end of 2014 if the agreements were entered into before 21 March 2013.

To qualify for the transitional relief, the derivative forward agreement must stay within new growth limits specified by Finance.

Previously, the budget had announced that the new rules would apply to derivative forward agreements entered into after 20 March 2013 and also to derivative forward agreements entered into before 21 March 2013 if the term of the agreement was extended to after 20 March 2013.

The transitional relief measures are intended to provide affected taxpayers with additional time to unwind their derivative forward agreement structures.

Read a July 2013 report prepared by the KPMG member firm in Canada: Finance Announces Transitional Relief for Character Conversion Transactions

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