2015 Federal Budget: Tax Highlights

As has been widely predicted, today's federal budget (Budget 2015) delivered a handful of tax "goodies" in the lead-up to the coming election. It also includes a number of important proposed changes to the corporate tax rules. They are noteworthy, although not as extensive as the corporate tax changes proposed in some recent budgets and are less likely to interfere with commercial aspects of most corporate transactions than some of those previous changes.

The principal tax changes announced in Budget 2015 of interest to the business community are summarized below.

• Synthetic Equity Arrangements. Budget 2015 includes "synthetic equity arrangement" proposals that will more clearly deny the inter-corporate dividend-received deduction when a Canadian corporation has hedged its long position in shares of Canadian companies by entering into a total return swap or other derivative with a Canadian tax-exempt or a non-resident person not subject to Canadian tax.