Joint Committee, "Hybrid Mismatch Arrangements Proposals", 30 June 2022 Submission of the Joint Committee

Summary Under
Tax Topics - Income Tax Act - Section 113 - Subsection 113(5)

Relief for foreign withholding tax on dividends subject to s. 113(5) (under “2. Recognition of Foreign Withholding Tax”)

  • Where a dividend is...

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Summary Under
Tax Topics - Income Tax Act - Section 18.4 - Subsection 18.4(3)

Recommended exclusion of ss. 12.7 and 18.4 from the foreign affiliate context (under “3. Application to Foreign Affiliates”)

  • Where, for...

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Summary Under
Tax Topics - Income Tax Act - Section 18.4 - Subsection 18.4(1) - Canadian Ordinary Income - Paragraph (a) - Subparagraph (a)(iii)

Ambiguity as to whether general deductions come within the (a)(iii)(A) and (B) exclusions (under 4. “Canadian Ordinary Income” & “Foreign...

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Summary Under
Tax Topics - Income Tax Act - Section 18.4 - Subsection 18.4(9)

Potential double taxation through considering there to be a mismatch where the amount is deductible (but not actually deducted) in the foreign...

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Summary Under
Tax Topics - Income Tax Act - Section 18.4 - Subsection 18.4(1) - Specified Entity

More explicit exclusion needed for mere security arrangements (under “9. Proposed Subsection 18.4(17) & Security Interests”)

The “specified...

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Summary Under
Tax Topics - Income Tax Act - Section 12.7 - Subsection 12.7(3)

Need for a relieving rule for timing mismatches that produce income inclusions under s. 12.7(3) (under “10. Timing Mismatches and Proposed...

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Summary Under
Tax Topics - Income Tax Act - Section 227 - Subsection 227(6.1)

Absence of a Part XIII refund mechanism for where a s. 20(1)(yy) deduction is generated (under “11. Proposed Paragraph 20(1)(yy) & Dividend...

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