Government announces consultation on draft tax proposals

Today the Department of Finance announced a consultation for a new set of draft tax proposals, relating to income tax, GST/HST, and excise tax. The draft legislation and explanatory notes are also available. The income tax proposals include:

• Improving access to the Canada Workers Benefit;
• The deductibility of employee contributions to the enhanced portion of the Quebec Pension Plan;
• The reporting requirements for trusts;
• Artificial losses using equity-based financial arrangements;
• The stop-loss rule on share repurchase transactions;
• The at-risk rules for tiered partnerships;
• Cross-border surplus stripping using partnerships and trusts;
• Foreign affiliate proposals relating to investment businesses, controlled foreign affiliate status, trading or dealing in indebtedness, reassessments and reporting requirements;
• Passive income – the allocation rule for losses applied against Part IV taxes;
• Reassessment periods - requirements for information and compliance orders;
• Reassessment periods - non-resident non-arm's length persons; and
• The sharing of information relating to criminal matters.

The GST/HST and excise tax proposals relate to:

• The excise refund in respect of diesel fuel used for certain purposes;
• The GST/HST holding corporation rules;
• The GST/HST rebate for printed books for qualifying public service bodies;
• Reassessment periods – requirements for information and compliance orders; and
• The sharing of information relating to criminal matters.

The government has also issued a consultation paper regarding certain aspects of the holding company rules. Comments on the issues in this paper must be submitted by September 28, 2018. Comments on all other proposals in the consultation must be submitted by September 10, 2018. All of the relevant documents will be posted to IntelliConnect. Wolters Kluwer will also issue a Special Report in print, which is available by calling 1-800-268-4522.