OTTAWA: On July 18, 2017, the federal government of Canada introduced proposals (“announcements”) curtailing the use of private corporations to gain tax advantages over other individuals in Canada who do not utilize such corporations. The proposals were positioned by the government as measures to ensure that the wealthy pay their fair share and the Canadian tax system is applied in a manner that is fair for all Canadians. If enacted as introduced, these proposals represent arguably the most significant changes to the taxation of private corporations in over 40 years.
Thankfully, the government retracted some of the proposals, but has stated its intent to proceed with others. As there have been countless releases from Finance in October and November, we thought it would be useful to summarize the government’s intent and where we are right now. We say “right now,” as there is a significant amount of clarification and actionable tax legislation required before any of the new measures can be enacted into law in a manner that allows taxpayers to reasonably comply.
There is planning that taxpayers should consider in 2017. When the final rules are determined, compensation and ownership structures should be revisited to determine if changes are required. Your Collins Barrow advisor can lead taxpayers though this planning process.
