Bill C-59 and Bill C-69 become law and bring massive tax changes

On June 20, 2024, Bill C-59 and Bill C-69 each received Royal Assent. Together, they make sweeping changes to the federal Income Tax Act (the “Act”) that taxpayers and their advisors simply must know. The below chart notes the key changes and their applicable in-force dates. Readers may refer to our previous blogs and tax alerts for commentary regarding certain of the provisions noted below.

Statutory Provision Coming Into Force
Excessive interest and financing expenses limitation (“EIFEL”) rules [enacted] Generally effective for taxation years beginning on or after October 1, 2023.
Hybrid mismatch rules [enacted] Generally apply to payments arising on or after July 1, 2022.
Intergenerational business transfer rules [amended] Generally apply to dispositions of shares on or after January 1, 2024.
General anti-avoidance rule (“GAAR”) [amended] Amendments generally apply to transactions occurring on or after January 1, 2024. However, new GAAR penalty provisions apply to transactions occurring on or after June 20, 2024.

 

“Substantive CCPC” rules [enacted] Generally effective for taxation years ending on or after April 7, 2022.
Tax on equity repurchases (AKA share buyback tax) [enacted] Generally applies to transactions occurring after 2023
Employee ownership trusts (“EOT”) [enacted] Generally applicable in respect of transactions occurring on or after January 1, 2024
Various clean energy / technology measures [enacted] The carbon capture, utilization and storage (CCUS) rules generally apply as of January 1, 2022.

 

The clean technology investment tax credit rules generally apply as of March 28, 2023.

 

The clean hydrogen tax credit rules  generally apply after March 28, 2023.

 

The clean technology manufacturing (CTM) investment tax credit rules generally apply as of January 1, 2024.

 

Digital Services Tax Act [enacted] In force June 28, 2024 pursuant to the order of the Governor in Council.
Alternative minimum tax (AMT) [amended] Amendments generally apply to taxation years beginning after December 31, 2023.
Global Minimum Tax Act [enacted] Generally applies to fiscal years of subject multinational entity (MNE) groups beginning on or after December 31, 2023.
Exclusion of bona fide concessional loans from “government assistance” [enacted]

 

 

Generally applicable to loans made after December 31, 2019.
Home buyers’ plan withdrawal limits [amended] Amendments apply to 2024 and subsequent tax years for amounts received after April 16, 2024.
Denied deductions for non-compliant short-term rentals [enacted] Applicable to outlays and expenses incurred after 2023.

 

Prepared by: Antonio Alcantara Tangonan

Antonio Alcantara Tangonan is an associate working out of the Toronto office of Thorsteinssons LLP. Antonio is a Dual JD graduate from the University of Windsor and University of Detroit Mercy School of Law. In 2020, he competed in the… more »

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