Canada: Second federal budget bill enacted
Implements some of the outstanding tax measures announced in the 2022 and 2021 federal budgets
Implements some of the outstanding tax measures announced in the 2022 and 2021 federal bud
Bill C-32, which implements some of the outstanding tax measures announced in the 2022 and 2021 federal budgets, received Royal Assent on 15 December 2022.
Bill C-32 enacts the enhanced trust reporting rules, the one-time Canada recovery dividend and the additional 1.5% tax on banks and life insurer groups, among other measures.
Business income tax measures
- The Canada recovery dividend and the additional 1.5% tax on banks and life insurers
- The small business deduction (i.e., increasing the upper limit of taxable capital to CA$50 million (from CA$15 million))
- Clean technology tax incentives for air-source heat pumps (i.e., expanding the capital cost allowance regime and tax rate reduction for zero-emission technology manufacturers)
- The 30% critical mineral exploration tax credit
- Phase-out of flow-through shares for oil, gas and coal activities
- International Financial Reporting Standards for insurance contracts (IFRS 17)
- The application of the general anti-avoidance rule (GAAR) to tax attributes
- Interest coupon stripping
Other tax measures
- Enhanced trust reporting rules
- Avoidance of tax debts
- Annual disbursement quota for charities
- Taxes on registered investments
- Canada Revenue Agency (CRA) audit authority
- Allocation to redeemers rules for mutual funds
- Underused housing tax, including a new exemption for certain vacation properties
The bill also includes several individual (personal) income tax measures, including the residential property flipping rule, as well as certain changes to the excise duty frameworks related to cannabis and vaping products.
Read a December 2022 report prepared by the KPMG member firm in Canada
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