Canada - Status of tax measures from 2013 budget 

October 24:  The Department of Finance Canada on 18 October 2013 tabled a “Notice of Ways and Means Motion” (197 pages of draft legislation and 166 pages of explanatory notes) to implement remaining tax measures from the 2013 federal budget, as well as “certain previously announced tax measures.”

Excluded measures

The following proposed measures, among others, appear to still be outstanding:

  • Foreign affiliate, non-resident corporations without share capital, foreign currency election, and residence of international shipping corporation rules, among others (released as draft legislation on 12 July 12013)
  • Foreign affiliate dumping rules and relieving amendments (released as draft legislation on 16 August 2013)
  • Base erosion rules (released as draft legislation on 27 November 2012)

Also excluded are draft proposals for which a consultation period is still open (e.g., life insurance exemption test, treaty shopping prevention, and testamentary trusts' graduated tax rates).

Notice of Ways and Means Motion

According to Finance's press release, the Notice of Ways and Means Motion includes the following 2013 federal budget measures:

  • Increasing and indexing the lifetime capital gains exemption
  • Expanding accelerated capital cost allowance to further encourage investments in clean energy generation
  • Providing that synthetic disposition transactions are taxed as actual dispositions
  • Providing that income from character conversion transactions is taxed appropriately
  • Providing that the tax attributes of trusts cannot be inappropriately transferred among arm's length persons
  • Amending the rules that apply to non-resident trusts
  • Eliminating unintended tax benefits from two types of leveraged life insurance arrangements
  • Restricting corporate loss trading among arm's length persons

These measures were released as draft legislation on 13 September 2013.

Previously announced tax measures

The other previously announced tax measures in the Notice of Ways and Means Motion include:

  • 21 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
  • 25 July 2012 draft legislation - SIFT stapled securities and withholding tax on trusts emigrating to Canada.

Read an October 2013 report prepared by the KPMG member firm in Canada: Finance Tables 2013 Federal Budget Bill #2 and Other Catch-Up Measures

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