Daily Tax Update - September 3, 2014: Anti-Treaty Shopping Measures Not Included in New Canadian Draft Tax Legislation

Anti-Treaty Shopping Measures Not Included in New Canadian Draft Tax Legislation.  The Canadian Department of Finance published draft legislation on August 29 that would implement tax measures from Economic Action Plan 2014, issued in February.  The draft legislation includes various proposals relating to personal income tax, charities, business income tax, and international tax.  Additionally, the draft legislation includes some tax measures that were not included in Economic Action Plan 2014, including a proposal to modernize the life insurance policy exemption test and a proposal to amend the foreign affiliate dumping rules. 

The draft legislation, however, does not contain certain anti-treaty shopping measures that were included in Economic Action Plan 2014.  In a summary of the draft legislation, the department said “[a]fter engaging in consultations on a proposed anti-treaty shopping measure, the Government will instead await further work by the Organisation for Economic Co-operation and the Group of 20 (G-20) in relation to their Base Erosion and Profit Shifting initiative.”  The draft legislation is open to public comment through September 28. 

The summary of the draft legislation can be accessed here

The draft legislation can be accessed here