Another Round Of Submissions On Draft Excessive Interest And Financing Expenses Limitation Legislation

Revisions to earlier draft legislation on the Excessive Interest and Finance Expenses Limitation (EIFEL) regime were released by the Department of Finance on November 3, 2022. Lawson Lundell submitted comments on the government's first round of consultations, raising concerns about the overly broad scope of the rules. A copy of our earlier submission can be found at the end of our April 29, 2022 blog.

The government's latest revisions address various issues identified by taxpayers with respect to the initial draft of the rules, including relaxing the rules to exclude arm's length financing (albeit based on a high threshold test that requires "all or substantially all" debt to be from arm's length lenders). There remain, however, technical and policy concerns regarding the rules. Lawson Lundell submitted comments again on January 6, 2023 as part of the Federal Government's second round of consultations.