Interest Deductibility Limitation

Home/Interest Deductibility Limitation

The interest deductibility limitation proposal – a new, critical tax issue

2020-02-07T13:26:43-05:00

The interest deductibility limitation proposal – a new, critical tax issue Besides the promise to review the capital gains inclusion rate, the Liberals made another tax promise in the October campaign that could have serious unintended consequences, detrimental to rental housing providers and renters. It now appears that a decision on any change to capital gains taxes is not imminent. However, unless the federal government reverses course, it is our understanding that a change to the interest deductibility rules will be announced in Budget 2020, which is likely to be tabled in March or early April. Explanation of the issue [...]

The interest deductibility limitation proposal – a new, critical tax issue2020-02-07T13:26:43-05:00

The interest deductibility limitation proposal – What you can do

2020-02-07T13:28:04-05:00

What you can do The federal government proposes to set a limit on the amount of interest that any business can claim as an expense against gross income for tax purposes. The proposed limit is 30% of the corporation’s “earnings before the deduction of interest, taxes, depreciation and amortization” (EBITDA). EBITDA is similar to net operating income less applicable administrative expenses. You are welcome to work out if that limit would affect you. Rental providers and others can make comments in the pre-budget consultation. You can access the pre-budget consultation at https://budget.gc.ca/2020/prebudget-prebudgetaire/index-en.html. The survey asks for input on current government [...]

The interest deductibility limitation proposal – What you can do2020-02-07T13:28:04-05:00

The interest deductibility limitation proposal – What CFAA is doing to protect rental housing

2020-02-07T13:28:30-05:00

What CFAA is doing to protect rental housing The federal government proposes to set a limit on the amount of interest that any business can claim as an expense against gross income for tax purposes. The proposed limit is 30% of the corporation’s “earnings before the deduction of interest, taxes, depreciation and amortization” (EBITDA). EBITDA is similar to net operating income less applicable administrative expenses. The measure has been recommended for all countries by the Organization for Economic Cooperation and Development (the OECD), as a step to avoid income shifting, whereby multinational corporations shift expenses, and thus income, between countries [...]

The interest deductibility limitation proposal – What CFAA is doing to protect rental housing2020-02-07T13:28:30-05:00