Budget 2016: Significant International Tax Proposals Unveiled

BEPS-Related Changes

Over the past several years, Canada, along with many of its G20 counterparts, has been a committed proponent of the "Base Erosion and Profit Shifting" or "BEPS" initiative of the Organisation for Economic Co-operation and Development (the "OECD"). The general focus of the BEPS initiative has been the development and implementation of various measures designed to curb (if not eliminate) certain tax planning strategies and practices of multinational enterprises ("MNEs") that are perceived to result in an inappropriate shifting of income to low-tax jurisdictions.

On the heels of the final BEPS project reports released on October 5, 2015, and Canada's endorsement of the recommendations developed under the BEPS project in November 2015, Budget 2016 proposes several legislative and administrative measures to respond to certain of the recommendations contained in the final BEPS reports, including: (A) the introduction of country-by-country transfer