03 Nov 2022 Fall Fiscal Update: Summary of Tax Measures
The Deputy Prime Minister and Minister of Finance, Chrystia Freeland, delivered the 2022 Fiscal Update on Nov. 3rd, 2022. The Update did not contain any significant tax changes or increases.
Business Income Tax
Tax on Share Buybacks
The Government announced that public companies will be subject to a 2% tax that would apply to all types of share buybacks. Further information will be announced in the 2023 Budget, with an expected implementation date of January 1, 2024.
Investment Tax Credit for Clean Technologies
The Government announced a refundable Clean Technology Investment Tax Credit on the purchase of eligible equipment. This 30% credit will apply to equipment such as certain electricity generating solar and wind equipment, certain air-source heat pumps, and certain non-road zero-emission vehicles. This tax credit will start on or after the date of the 2023 Budget.
Personal Income Tax
Extension of Residential Property Flipping Rule to Assignment Sales
Budget 2022 proposed a new Residential Property Flipping Rule on the disposition of residential real estate that is owned for less than 12 months. The Government announced today to extend this deeming rule to profits arising from the disposition of rights to purchase a residential property via an assignment sale. These deeming rules will result in the profits being treated as business income instead of capital gains or eligible for the principal residence exemption, subject to certain exemptions for “life changing” events. These rules apply to transactions occurring on or after January 1, 2023.
Canada Workers Benefit
The Government intends to change the refundable Canada Workers Benefit so that it is a quarterly advance payment.
Alternative Minimum Tax (AMT)
The Government intends to bring out a new AMT regime in the 2023 Budget. The AMT is a minimum tax rate applicable to income, typically earned by higher income earners.
This information is general in nature and may not be applicable to all taxpayers. Please contact your Clearline advisor to discuss your specific situation.
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