Department of Finance Canada
Today, the Minister of Finance and National Revenue, the Honourable François-Philippe Champagne, released for consultation draft legislative proposals that would implement a range of previously announced and other tax measures, including measures that would:
- Expand what qualifies as an eligible small business corporation share and relax certain conditions for the rule on the capital gains rollover on business investment to apply, as announced in the 2024 Fall Economic Statement.
- Add a $10 million capital gains exemption for qualifying sales of businesses to worker co-ops and make technical changes to the existing exemption for sales to employee ownership trusts, as announced in Budget 2024.
- Increase the annual expenditure limit and taxable capital phase-out thresholds for the enhanced 35 per cent scientific research and experimental development investment tax credit, extend the refundable credit to small public corporations, and reinstate the availability of the credit for capital expenditures, as announced in the 2024 Fall Economic Statement.
- Enhance the reporting requirements for non-profit organizations to improve transparency in the sector, as announced in the 2024 Fall Economic Statement.
- Implement the Organisation for Economic Co-operation and Development's Crypto-Asset Reporting Framework in Canada, with attendant adjustments to the Common Reporting Standard, as announced in Budget 2024.
- Provide the Canada Revenue Agency with enhanced audit powers to more easily obtain information, including through a new penalty for non-compliance, as announced in Budget 2024.
- Provide an exemption from the excessive interest and financing expenses limitation (EIFEL) rules for debt used to fund the acquisition, construction or conversion of purpose-built residential rental buildings, as announced in Budget 2024.
- Provide an exemption from the EIFEL rules for debt used to fund a regulated energy utility business carried on in Canada, as announced on August 12, 2024.
- Implement the remaining portion of the substantive Canadian-controlled private corporations measure relating to the passive income of foreign affiliates, as proposed in Budget 2022.
- Introduce routine technical amendments to ensure Canada's tax laws align with their underlying policy objectives.
Details on all the above draft legislative proposals can be found under Related documents below.
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