Canada: Changes to excessive interest and financing expenses limitation (EIFEL) rules in 2022 fall economic update

Proposed EIFEL rules would apply to tax years beginning on or after 1 October 2023

2022 fall economic update

Canada’s Finance Minister on 3 November 2022 delivered the government’s 2022 fall economic update.

Although the update does not include any individual or corporate tax rate changes, the proposed excessive interest and financing expenses limitation (EIFEL) rules would now only apply to tax years beginning on or after 1 October 2023 (instead of taxation years beginning in 2023).

Similarly, the Department of Finance would delay the proposed mandatory reporting requirements for certain reportable and notifiable transactions until these changes receive Royal Assent (instead of for transactions after 2022). The update introduces a refundable clean technology investment tax credit and announces an intention to introduce a 2% share buyback tax on certain corporations, among other tax measures.

Although more specific details on some of these announcements will be provided in the 2023 federal budget, Finance did release draft legislation for reporting requirements for digital platform operators and revised draft legislation for the EIFEL rules.

Read a November 2022 report [PDF 232 KB] prepared by the KPMG member firm in Canada


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