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Inside Internal Controls

News and discussion on implementing risk management

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TOSI

A new era of private corporation tax rules – Part IV

The new TOSI rules are effective as of January 1, 2018. However, corporations have until the end of 2018 to complete corporate reorganizations to meet the votes and value test in the “excluded shares” exception if that exception is otherwise available to be used. Other points from Bill C-74 will be of interest as well. This article highlights comments from the Canada Revenue Agency and Department of Finance made at the roundtable at CALU and STEP.

 

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Upcoming corporate income tax changes to curb income sprinkling issues

On July 18, 2017, the federal Department of Finance released legislative proposals and a consultation paper dealing with tax planning affecting private corporations. The goal is to close loopholes that allow wealthy Canadians to avoid higher tax rates, largely by targeting people who incorporate themselves and then draw income from their businesses while paying lower corporate taxes. These proposals, if enacted, will potentially affect most Canadian business owners who carry on their businesses through private corporations, significantly increase the complexity of the tax rules applicable to private corporations and reverse many long-standing tax policies that have encouraged business growth.

 

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