Canada: Details of draft revised EIFEL rules
Proposed to be effective for tax years beginning on or after 1 October 2023
Proposed to be effective for tax years beginning on or after 1 October 2023
The Department of Finance on 4 August 2023 released draft revised excessive interest and financing expenses limitation (EIFEL) rules, which generally limit the amount of net interest and financing expenses that may be deducted by affected corporations and trusts. Read TaxNewsFlash
The newly revised version of these proposals:
- Clarifies how the EIFEL rules apply to controlled foreign affiliates (CFAs)
- Introduces a 10% up-lift for groups that elect to use the group ratio
- Notes that taxpayers will be required to file a new prescribed form along with their tax return with respect to the deductibility of their interest and financing expenses
The revised rules are proposed to be effective for tax years beginning on or after 1 October 2023. Finance is accepting comments on the revised draft legislation until 8 September 2023.
Read an August 2023 report [PDF 201 KB] prepared by the KPMG member firm in Canada
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