Joint Committee, "Summary of Feedback on Various Technical Issues", 14 April 2025 Joint Committee Submission

Summary Under
Tax Topics - Income Tax Act - Section 18.2 - Subsection 18.2(1) - Interest and Financing Revenues

IFR should include s. 78(1)(a) inclusion (p.2)

  • For greater certainty, an amount included in a taxpayer's income under s. 78(1)(a) should be...

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Summary Under
Tax Topics - Income Tax Act - Section 80 - Subsection 80(2) - Paragraph 80(2)(b)

Failure to refer to interest which is not deductible under s. 18.2(2) (pp. 2-3)

  • Interest, which is not deductible under the EIFEL rules, is not...

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Summary Under
Tax Topics - Income Tax Act - Section 18.2 - Subsection 18.2(1) - Excluded Entity - Paragraph (c)

Broad scope of eligible group entity (p. 3-4)

  • By including all related and affiliated persons, subject to limited exceptions, in the definition...

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Summary Under
Tax Topics - Income Tax Act - Section 18.2 - Subsection 18.2(1) - Tax-Indifferent - Paragraph (c)

REIT as tax-indifferent (pp. 4-5)

  • The definition of “tax-indifferent” includes a trust resident in Canada if more than 50% of the fair market...

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Summary Under
Tax Topics - Income Tax Act - Section 18.2 - Subsection 18.2(1) - Adjusted Taxable Income - C - Paragraph (a)

Upstream loan to a related Canadian corporation that is subject to Pt. XIII tax (pp. 5-7)

  • Where a foreign affiliate makes an upstream loan to its...

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Summary Under
Tax Topics - Income Tax Act - Section 18.2 - Subsection 18.2(1) - Excluded Lease

Excluded lease definition re a building should extend to the related land (p. 7)

  • An excluded lease would include for instance the lease of...

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Summary Under
Tax Topics - Income Tax Act - Section 191.1 - Subsection 191.1(1) - Excluded Dividend

Inappropriateness of Pt. VI.1 tax where non-resident shareholder (p. 12)

  • Where the shareholder of a taxable preferred share is a non-resident...

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Summary Under
Tax Topics - Income Tax Act - Section 12 - Subsection 12(13) - Paragraph 12(13)(b)

Desirability of expanding flipped property exclusions (pp. 13-15)

  • The flipped property rules should be amended to aggregate the period of...

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Summary Under
Tax Topics - Income Tax Act - Section 183.3 - Subsection 183.3(1) - Substantive Debt - Paragraph (c)

Dividends determined re pref share redemption amount ((pp. 7-8)

  • Para. (c) of the definition of substantive debt references a test under which the...

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Summary Under
Tax Topics - Income Tax Act - Section 183.3 - Subsection 183.3(2)

Qualifying issuances falling over a year-end (pp. 7-9)

  • The share buyback tax can apply in a punitive manner where a qualifying issuance occurs...

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Summary Under
Tax Topics - Income Tax Act - Section 55 - Subsection 55(5) - Paragraph 55(5)(e) - Subparagraph 55(5)(e)(i)

Scope of related party butterfly exception (pp. 9-10)

  • The time at which a share is to be characterized as a QSBCS or family farm/fishing corp....

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Summary Under
Tax Topics - Income Tax Act - Section 93.4 - Subsection 93.4(1) - Foreign Accrual Business Income

Needed expansion of scope of FABI (pp. 10-11)

  • As noted by commentators, the definition of foreign accrual business income (FABI) should be...

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Summary Under
Tax Topics - Income Tax Act - Section 220 - Subsection 220(3.2)

Restricted CRA discretion to extend election filing deadline (p. 11)

  • S. 220(3.2) should be amended to eliminate the reference to a prescribed...

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