Canadian multinationals have a 26 June 2014 deadline to rewrite the history of their CFA distributions

Canadian corporate taxpayers can elect by June 26, 2014 to apply Reg. 5901(2)(b) (and various other provisions) retroactively, thereby effectively according a choice as to whether post-December 20, 2002 foreign affiliate distributions reduced surplus or instead ground basis.  For example, this choice could resolve uncertainty where it was unclear whether an historic distribution was a capital or dividend distribution or inadvertently elevated taxable surplus.  The taxpayer might also elect for a distribution to come out of exempt surplus before that surplus was eroded by exempt losses.

Neal Armstrong.  Summaries of Geoffrey S. Turner, "June 2014 Election Deadlines for Retroactive Application of New Foreign Affiliate Reorganization Rules", CCH International Tax, No. 74, February 2014, p. 1 under Reg. 5901(2), s. 88(3.3), s. 95(2)(d.1) and s. 95(2)(e).