Canada Proposes Significant Tax Amendments To Align With OECD BEPS Recommendations

In 2022, the federal government released draft legislation to adopt many of the OECD's BEPS recommendations, including those related to interest deductibility, anti-hybrid measures and mandatory disclosure. These and other proposals will have an impact on a wide range of tax issues, both domestic and international. Many of the proposals will apply retroactively to the date of announcement, making it important for taxpayers to track the progress of and amendments to the draft legislation to plan and ensure compliance.

EIFEL: New interest deductibility limits proposed

The government released draft legislation creating a new limit on interest deductibility based on OECD BEPS Action 4 on February 4, 2022, followed by a revised draft on November 3, 2022. The new rules are open for comments until January 6, 2023 and are proposed to be effective for taxation years beginning on or after October 1, 2023.