The Budget confirms the Federal Government’s intention to proceed with certain tax and related measures that were announced in the current session of Parliament but have not yet been legislated, specifically:
- the common reporting standard established by the Organisation for Economic Co-operation and Development for the automatic exchange of financial account information between tax authorities; and
- the draft legislative proposals on the income tax rules for certain trusts and their beneficiaries which were released for comment on January 15, 2016, dealing primarily with the taxation of testamentary spousal trusts. (See Miller Thomson’s January Wealth Matters Newsletter)
The Budget also confirms the Federal Government’s intention to proceed with the following previously announced tax measures, as modified to account for consultations and deliberations since their announcement or release:
- “synthetic equity arrangements” under the Tax Act’s dividend rental arrangement rules;
- the conversion of capital gains into tax-deductible inter-corporate dividends (section 55 of the Tax Act);
- the offshore reinsurance of Canadian risks;
- alternative arguments in support of an assessment;
- an exception to the withholding tax requirements for payments by qualifying non-resident employers to qualifying non-resident employees;
- the repeated failure to report income penalty;
- the acquisition or holding of limited partnership interests by registered charities;
- the qualification of certain costs associated with undertaking environmental studies and community consultations as Canadian exploration expenses;
- the sharing of taxpayer information within the Canada Revenue Agency to facilitate the collection of certain non-tax debts;
- the sharing of taxpayer information with the Office of the Chief Actuary;
- the tax deferral in respect of the commercialization of the Canadian Wheat Board;
- the GST/HST joint venture election; and
- the relief of the GST/HST for feminine hygiene products.
The Budget further affirms the Federal Government’s commitment to move forward as required with technical amendments to improve the certainty of the tax system.
We acknowledge and thank the Department of Finance for their helpful commentary on the Budget which has been utilized in the compilation of this summary.
Those who are interested in reading about Charities and Not-for-Profit sections of the Budget may wish to consult Miller Thomson’s Charities and Not-for-Profit Budget Release.