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Tax Perspectives: Review of 2023 & 2024 Outlook

French version coming soon

Throughout 2023, the Government of Canada continued its agenda of major tax reform with new legislative proposals and technical amendments to Canadian tax law affecting the general anti-avoidance rule (GAAR), clean economy tax credits, mandatory disclosure rules, and many more. Along with several important judicial decisions rendered, these enacted and proposed changes will significantly impact businesses and individuals in 2024.

To help decision-makers respond appropriately and plan accordingly, McCarthy Tétrault’s National Tax Group has authored its Tax Perspectives: Review of 2023 & 2024 Outlook. This report overviews the most important legislative and judicial developments in Canadian tax law and examines what impact these changes will have in the year ahead.

Topics covered include:

  • Overview of Canadian tax developments in 2023
    • Developments in income tax legislation, including changes to the GAAR, trust reporting rules, mandatory disclosure rules, tax on repurchases of equity, hybrid mismatch, and more.
    • Income tax cases, including decisions from the Supreme Court of Canada, the Federal Court of Canada, the Tax Court, and the Québec Court.
    • Commodity tax developments in GST/HST, QST, and the provincial sales taxes introduced in British Columbia, Saskatchewan, and Manitoba.
  • Outlook for 2024, covering Bill C-59 and its omnibus revisions to a suite of tax provisions, Pillar Two, The Clean Economy Tax Credits, and more.

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Tax Perspectives: Review of 2023 & 2024 Outlook

Read an excerpt from the publication below:

Part 1 - Overview of Canadian Tax Developments in 2023

INCOME TAX – LEGISLATION

The significant volume of new proposals and draft legislation and tabled legislation implementing previously announced proposals included the following.[1]

  • On March 28, 2023, the Government released the 2023 federal budget (Budget 2023) which included specific proposals to strengthen the general anti-avoidance rule (GAAR), particulars regarding previously announced, as well as a number of new, clean economy investment tax credits (Clean Economy Tax Credits), particulars of the tax on repurchases of equity by publicly traded Canadian entities originally announced in the 2022 Fall Economic Statement (2022 FES), new rules to facilitate the purchase of businesses by employee ownership trusts (EOT), measures to deny the dividend received deduction for financial institutions on shares that are mark-to-market property, changes to the intergenerational business transfer framework, an expansion of the reduced corporate income tax rate for zero-emission technology manufacturers, and an update on the Government’s commitment to follow through on the Organisation for Economic Co-operation and Development (OECD) international tax reform recommendations and other previously announced tax measures. The McCarthy Tétrault LLP overview of Budget 2023 provides a more detailed review.
  • On April 20, 2023, the Government introduced Bill C-47, the Budget Implementation Act, 2023, No. 1, in the House of Commons. Bill C-47 introduced a number of tax measures announced in Budget 2023 and in prior years including significant changes to the mandatory disclosure rules (Mandatory Disclosure Rules) that were originally announced in the 2021 federal budget.
  • On June 6, 2023, Finance released a consultation paper and draft legislative amendments initiating consultation with Canadians regarding Canada’s transfer pricing rules.
  • Also on June 6, 2023, Finance announced that it was seeking feedback on design details for the Clean Economy Tax Credits, being the clean electricity investment tax credit (CEI Tax Credit), clean technology manufacturing investment tax credit (CTM Tax Credit), clean hydrogen investment tax credit (CH Tax Credit), clean technology investment tax credit (CTI Tax Credit), and investment tax credit for carbon capture, utilization and storage (CCUS Tax Credit), as well as the prevailing wage and apprenticeship requirements (Labour Requirements) applicable to the Clean Economy Tax Credits.
  • On June 22, 2023, Bill C-47 received Royal Assent and the amended Mandatory Disclosure Rules came into force.
  • On July 5, 2023, the CRA published administrative guidance to the new Mandatory Disclosure Rules (CRA Guidance). The CRA Guidance was updated on November 2, 2023 and is expected to continue to evolve.

As a national, full-service practice, McCarthy Tétrault’s National Tax Group has an unparalleled understanding of the Canadian tax regime and can assist with all aspects of the Canadian tax advice you require including in the context of income and indirect tax planning and with tax disputes. Our group provides end-to-end support for your most pressing tax concerns, across jurisdictions. Our tax planners and litigators operate as an integrated team, ensuring you are covered whether you need advice on tax planning, transactions or being prepared for a future audit or you must contend with a contentious tax matter. Learn how we can help you.

About McCarthy Tétrault

McCarthy Tétrault LLP provides a broad range of legal services, providing strategic and industry-focused advice and solutions for Canadian and international interests. The Firm has substantial presence in Canada’s major commercial centres as well as in New York and London.

Built on an integrated approach to the practice of law and delivery of innovative client services, the Firm brings its legal talent, industry insight and practice experience to help clients achieve the results that are important to them.

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[1] All statutory references herein are to the Income Tax Act (Canada) (“Act”) unless specifically otherwise noted.

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