Mahi Sall, Advisor, Fintech-Bank Partnerships, Payments and Financial Inclusivity
January 25th, 2023
Mahi Sall is the CEO & Founder of FinXpair, a Berlin-based strategic advisory boutique firm focu[...]
DWPV LLP: Department of Finance Releases Draft Tax Legislation to Promote Fairness and Clean Economy
Tax Legislation | Aug 28, 2023
Image: Unsplash/Kelly Sikkema
The article titled "Government of Canada Releases Package of Proposed Domestic and International Tax Legislation" by esteemed law firm, Davies Ward Phillips & Vineberg LLP, provides insights into the draft tax legislation released by the Department of Finance (Finance) for public consultation on August 4, 2023.
Here are the key points from the article:
- The primary focus of the draft legislation is on promoting tax fairness and a clean economy.
- The most significant item in the release is the draft of the Global Minimum Tax Act, which spans almost 150 pages. This statute is aimed at fulfilling Canada’s obligation to implement the OECD’s “Pillar Two” initiative for a 15% global minimum tax on certain large multinationals.
- The package also includes new versions of several proposed tax measures from the 2023 federal budget - read more details about each measure here
- The general anti-avoidance rule (GAAR)
- Employee ownership trusts
- Special tax rules on intergenerational business transfers
- A 2% tax on public company share buybacks
- Carbon capture and other clean technology incentives
See: Do employees pay less taxes by exercising stock options pre-IPO?
- Updated legislation was provided for two other significant proposals:
- The excessive interest and financing expenses limitation (EIFEL) rules, which limit interest deductions and are set to be effective for most taxpayers in 2024.
- The digital services tax, which was initially announced in 2020, was then suspended, and is now proposed to be enacted with retroactive effect from 2022.
- The measures aim to offer tax relief for specific Canadian businesses while ensuring fairness in the tax system.
- A public consultation period is open until September 29, 2023, for the Pillar Two proposals and until September 8, 2023, for the other proposals.
The article goes into further detail about each of these points, discussing the implications and specifics of the proposed changes -- see more here.
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