Deadline For Foreign Affiliate Elections Is Fast Approaching

The Budget and Economic Statement Implementation Act, 2007 (Bill C-28) received Royal Assent on December 14, 2007. Bill C-28 contained significant amendments to the rules in the Income Tax Act (Canada) applicable to foreign affiliates of Canadian taxpayers. These amendments generally apply retroactively – in most cases, to taxation years of a foreign affiliate beginning either after 1999 or after December 20, 2002. However, taxpayers may elect to have many of these amendments apply earlier – to taxation years of foreign affiliates beginning after 1994. Depending on a taxpayer's particular circumstances, these elections could be very favourable to a Canadian taxpayer and must be made in a timely manner.