Canada: Draft excessive interest and financing expenses limitation (EIFEL) rules

Proposed to apply to tax years beginning in 2023

Excessive interest and financing expenses limitation (EIFEL)

Draft legislation concerning the excessive interest and financing expenses limitation (EIFEL) rules is proposed to apply to tax years beginning in 2023. However, a revised version of the rules that could include additional changes is expected to be issued for public consultation.

​In addition to large multinationals, the proposals would apply to trusts and small- and medium-sized corporations, with narrow exceptions. For example, the EIFEL rules could apply in common situations that include corporations and trusts with foreign affiliates, non-resident shareholders or beneficiaries, business carried on outside Canada, or interest paid to tax-indifferent investors.

Read an August 2022 report [PDF 224 KB] prepared by the KPMG member firm in Canada


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