The following News Release or Speech has just been posted on the Finance Canada Site.
Ottawa, July 14, 2008
The Honourable Jim Flaherty, Minister of Finance, today released draft legislative proposals to implement the remaining tax measures from Budget 2008 along with several previously announced tax initiatives for consultation.
“Our government is not only reducing the tax burden on all Canadians, many of the measures contained in this second Budget Implementation Bill will modernize our tax system and make it more efficient,” said Minister Flaherty.
The proposals released today include draft legislation to:
* Clarify the application of the excess corporate holdings rules for private foundations;
* Increase the amount that corporations will be able in future to pay as “eligible dividends”, to reflect lower corporate income tax rates and in keeping with the Budget 2008 modification of the dividend tax credit;
* Reduce the paper burden on businesses by allowing a larger number of government entities to share Business Number-related information in connection with government programs and services;
* Enact several regulatory amendments that complement and complete measures enacted in the Budget Implementation Act, 2008; and
* Introduce minor adjustments to the Tax Free Savings Account rules and the scientific research and experimental development investment tax credit rules, further to post-Budget consultation with affected taxpayers.
The draft legislative proposals also include other previously announced measures including:
* New income tax rules to facilitate the conversion of specified investment flow through (SIFT) trusts (often referred to as “income trusts”) into corporations. The rules reflect the Government’s commitment to ensure that existing SIFTs can choose to reorganize as corporations without undue tax effects;
* Revised draft amendments to take into account financial institution accounting changes;
* The extension of the general treatment of capital gains and losses on an acquisition of control of a corporation to gains and losses that result from fluctuations in foreign exchange rates in respect of debt denominated in foreign currency;
* An enhanced carry-forward for investment tax credits;
* Updated prescribed amounts for automobile expenses and benefits;
* Revised draft amendments relating to the computation of income, gains and losses of a foreign affiliate; and
* Revised draft regulations that modify the tax treatment of foreign affiliate active business income earned in a jurisdiction with which Canada has concluded a tax information exchange agreement.
Full explanatory notes are included with the legislative proposals. References to “Announcement Date” are to be read as references to today’s date.
For simplicity, today’s draft assumes that all other pending legislative proposals, including those that are currently before Parliament, will have been enacted as proposed before the measures in this release are themselves enacted. While it is expected that today’s draft amendments will form part of a Bill to be introduced into Parliament later this year, that Bill may also include other items.
Interested parties are invited to provide comments on the draft legislative proposals by September 15, 2008. Please send your comments to:
Tax Policy Branch
Department of Finance
140 O’Connor Street
For further information, media may contact:
Office of the Minister of Finance
Department of Finance
Source Dept of Finance Newsroom