Tax thought leadership roundup (Fall 2016)

Keep up with the latest thinking on tax from CPAs in Canada with our roundup of new tax-related alerts, articles, white papers and thought leadership releases.

Issue in focus

Technology is changing SMPs’ focus

Technology is freeing small and medium tax practitioners from routine tasks so they can focus on higher-value services.

General interest

Tax changes impacting life insurance planning (BDO)

Life insurance is an important component of financial planning. This BDO newsletter discusses important changes from the 2016 federal budget with respect to the corporate distribution of life insurance proceeds and life insurance policy transfers. It also looks at updated rules regarding the exempt test for life insurance policies, scheduled to come into effect in 2017.

Corporate tax

Tax landscape shifts for middle market firms (EY)

New technologies today mean that a company — even a middle market firm — can quickly rise to become a multinational or global player. But tangible tax changes are occurring, sometimes on a daily basis, which firms need to stay on top of if they wish to flourish.

Beyond tax: How BEPS will alter entire businesses (EY)

Although the Organisation for Economic Co-operation and Development has set clear goals for its base erosion and profit shifting project, uncertainty about those details generates risks for multinational companies, warns EY. Departments within those firms need to work closely with their tax colleagues in order to understand and mitigate those risks.

Paying inter-corporate dividends? Proceed with caution (KPMG)

Many Canadian corporations might be adversely affected by the potential application of an expanded anti-avoidance rule, which re-characterizes certain inter-corporate dividends that would otherwise be tax-free as capital gains that are subject to tax. If you are paying inter-corporate dividends, proceed with caution, advises KPMG.

Replacement of the eligible capital property regime (BDO)

With changes to eliminate the current eligible capital property regime scheduled to take effect on January 1, 2017, this BDO newsletter stresses the importance of preparing now, ahead of time, for a transition to a capital cost allowance system. That includes an evaluation of tax-planning issues emanating from this change.

New rules for eligible capital property (Grant Thornton)

The new tax treatment for eligible capital property (ECP) could have potentially significant tax consequences for sale transactions that close after 2016, warns Grant Thornton. This report compares tax treatment under the current ECP rules to that under the proposed new rules introduced in the 2016 federal budget.

Indirect taxes

Are you ready for the indirect tax measures proposed in 2016? (Deloitte)

Mid-year is a good time to take stock of the various indirect tax measures that have been introduced through federal and provincial budgets. Scheduled to take effect at various times during the 2016 calendar year, these measures summarized by Deloitte include increased tax rates, re-introduced taxes and changes to relief rules.

Be prepared: Navigating a GST/HST CRA audit effectively (BDO)

For a small or medium-sized enterprise, receiving a letter from Canada Revenue Agency stating that it has been selected for a GST or HST audit can be daunting . However, the audit process doesn’t need to be as complicated as some fear, particularly if certain steps are undertaken before, during and after an audit, reports BDO.

International tax

IRS issues final country-by-country reporting rules (PwC)

The U.S. Internal Revenue Service recently issued final regulations requiring annual country-by-country reporting for U.S. parented multinational groups. This PwC report summarizes companies’ obligations under these new rules, which originate from the Organisation for Economic Co-operation and Development’s base erosion and profit shifting project.

Brexit: The tax implications (MNP)

The shocking result of the recent Brexit referendum has reverberated around the globe’s financial markets, with more clearly to come. As this article by MNP illustrates, the U.K.’s decision to exit the European Union will potentially have significant economic implications for the U.K., especially on its personal and corporate tax system.

2016 federal budget: Cross-border impact (Grant Thornton)

Among several key cross-border measures announced in the 2016 federal budget are country-by-country reporting requirements that will affect a wide range of corporate transactions involving transfer pricing for international Canadian companies. The rules will also impact on the back-to-back loan anti-avoidance rules and cross-border anti-surplus stripping rules.

Accounting for income taxes

Q2 2016 accounting status (PwC)

The second fiscal quarter usually encompasses the majority of federal and provincial budget initiatives in Canada, so it is an important period that sets the tax tenor for the rest of the calendar year. PwC summarizes this year’s legislative developments affecting income taxes tabled between April 1, 2016, and June 30, 2016.

Tax accounting – Q2 2016 update (KPMG)

If you prepare financial reports for corporate or other organizational clients, certain 2016 income tax rate and other changes might need to be reflected in your interim period financial statements, says this tax update from KPMG.

Accounting firms: Tax pages

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