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Canada opens consultation on draft tax reform proposals

Tuesday, 6 August, 2019

The Government of Canada has opened a public consultation on proposed reforms to the country’s tax system, asking for comment on a series of draft legislative proposals that would implement Budget 2019 measures.

On July 30, the Department of Finance Canada released the proposals for the as-yet unlegislated Budget reforms, including:

  • improving consistency of tax treatment for owners of residential properties;
  • providing greater flexibility in managing retirement savings and bringing specified multi-employer pension plan rules into line with the tax rules on defined benefit plans;
  • modifying the Income Tax Act to remove the time limitation on the period that a Registered Disability Savings Plan may remain open after a beneficiary becomes ineligible for the Disability Tax Credit;
  • streamlining the requirement-for-information process by allowing requirements for information to be sent to banks and credit unions electronically;
  • improving transfer pricing rules that apply in transactions occurring across international borders and applying appropriate tax consequences to cross-border share lending arrangements being used to avoid dividend withholding tax; and
  • better countering tax base erosion that results from transactions in which a Canadian-resident corporation controlled by a non-resident invests in a foreign affiliate.

Early feedback has also led the Department of Finance to include proposals to modify tax measures legislated in the Budget Implementation Act, 2019, No. 1.

The consultation comes shortly after feedback collected by the Canada Revenue Agency (CRA) on how the service can better support Canadians. The CRA plans to release its report, Serving Canadians Better, in Autumn 2019.

Comments on the draft legislative proposals should be emailed or posted to the Department of Finance by October 7, 2019.