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ARTICLE · 25 AUGUST 2011

Significant Proposals To Amend Canada’s Foreign Affiliate Tax Rules

Osler, Hoskin & Harcourt LLP
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On August 19, 2011, the Federal Minister of Finance released a significant package of proposed amendments to Canada’s income tax rules applicable to Canadian multinational corporations with foreign affiliates (the Proposals).

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Osler's Tax Group
Osler's Tax Group
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On August 19, 2011, the Federal Minister of Finance released a significant package of proposed amendments to Canada's income tax rules applicable to Canadian multinational corporations with foreign affiliates (the Proposals). The Proposals apply to most distributions from, and reorganizations of, foreign subsidiaries of Canadian corporations and contain new rules applicable to certain loans received from foreign subsidiaries that remain outstanding for at least two years, among other significant changes. In addition to certain important new measures, the Proposals replace numerous proposed amendments that were released at various times over the past decade and in many cases will have retroactive effect. The Department of Finance will accept comments on the Proposals until October 19, 2011. This update summarizes the key Proposals.

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