EY, "Revised EIFEL proposals", Tax Alert 2022 No. 43, 10 November 2022

Separate flow-up of relevant affiliate IFE or relevant affiliate IFR (p. 4)

  • The amounts that would be the interest and financing revenues (IFRs)...

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IFE of CFA not restricted (p. 4)

  • Per s. 95(2)(f.11)(ii)(A), the EIFEL rules should not restrict the IFE of the CFA for the purposes of...

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No carryforward (pp. 4-5)

  • Per s. 95(2)(f.11)(ii)(D), where a portion of a taxpayer’s IFE for a taxation year is denied under s. 18.2(2), the...

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Earnings not subject to EIFEL adjustments (p. 6)

  • “Earnings” under para. (b) of the Reg. 5907 definition (essentially, FAPI recharacterized as...

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Various imputed amounts not included (p.6)

  • The IFR definition will not be amended to include amounts under ss. 16.1, 17 and 247(2), and draft...

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Potential need to determine pre-EIFEL IFR and IFE (p. 7)

  • Given the potential to carry forward losses from pre-EIFEL years, taxpayers may be...

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Transferee can have a different functional currency or be a REIT (p. 7)

  • The EIFEL revisions have removed the requirement that cumulative unused...

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Can be different reporting currencies (p. 9)

  • Under an amendment to s. 18.21(2)(a) of the group ratio rules, the requirement that the tax...

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Grind removed (p. 9)

  • The amended “group ratio” definition has removed the progressive grind (formerly in para. (b) of “group ratio”).