Toolbox Seminar Hot Topic

Topics to Discuss

1. Federal Budget Changes

• Limits on Interest Deductibility

2. International Tax Initiatives

• Global Minimum Tax Rate of 15%

Federal Budget Tax Changes

Interest Deductibility Limits

• Starting in 2023 a corporation that is affiliated with a non‐resident will be able to deduct only 40% of "tax EBITDA"
• Namely, 40% of taxable income before taking into account interest expense, interest income and income tax, and deductions for depreciation and amortization
• After 2023, the limit is reduced to 30%
• Two important exclusions:
  • CCPC's and their associated corporations having taxable capital of less than $15 million, and
  • Groups of corporations and trusts whose aggregate net interest expense is $250,000 or less