TORONTO, Jan. 27, 2014 /CNW/ - With the Conservative government planning
to balance its books in 2015, KPMG expects the Harper government will
continue to tighten the tax system by closing "tax loopholes" and
introduce a range of tax measures to achieve tax fairness. Budget day
is set for February 11.
The government could comment on the OECD's push for greater tax
transparency and its ambitious Action Plan on Base Erosion and Profit
Shifting (BEPS) that Canada and other G20 leaders signed in July 2013.
The government may use the budget to signal how Canada will respond to
the BEPS action plan, including the OECD timelines, to implement the
various international initiatives.
Canada has been in talks with the US government to enter into an
inter-governmental agreement (IGA) to streamline FATCA (the US Foreign
Account Tax Compliance Act) compliance for Canadians, and the budget
may also include details of the IGA to simplify practical
implementation and reduce costs.
More on what to expect
This year's report by the House of Commons Finance Committee, "The Future We Want: Recommendations for the 2014 Budget", highlights additional 2014 budget considerations and potential tax
changes. KPMG believes the following recommendations may be included in
"Tax loopholes" - conduct a comprehensive review of the tax system to ensure its fairness
and neutrality by continuing to close what it refers to as "tax
loopholes" examination of additional ways to better equip the CRA to
combat tax evasion.
Business tax changes - investigate expanding the accelerated capital cost allowance to
encourage the construction of domestic infrastructure in the oil and
gas sector; examine tax provisions in real estate to allow small
investors to defer tax on income from the sale of property; continue to
promote tax incentives to encourage the development and use of clean
energy generation; consider making permanent the temporary 15 per cent
Mineral Exploration Tax Credit, to support junior mineral exploration.
Personal tax changes - changes to the tax credit for charitable donations to facilitate
greater charitable giving; continue implementing Pooled Registered
Pension Plans; explore tax incentives to assist skilled workers in
enhancing their mobility in order to support skilled trades in Canada.
The Finance Committee also recommends the government find ways to
simplify the Income Tax Act, ensure the timely assessment of income tax
returns, and explore the possibility of permitting consolidated
"With the government's goal to balance the budget by next year, we don't
anticipate major increases in spending. We still expect to see a range
of tax measures as the Conservatives maintain their focus on tax
fairness and tax tightening measures. With that in mind, we may also
see some signals of things to come such as joint filing by spouses,
business initiatives on training incentives for young apprentices and
more changes to certain incentive programs and deductions. "
- Elio Luongo, Canadian Managing Partner, Tax, KPMG in Canada.
KPMG on the Hill
KPMG will be on the frontline on budget day to provide commentary and
explain the budget's impact. Budget highlights will be made available
late afternoon on budget day. Details will be made available at kpmg.ca/budget2014.
KPMG Spokespeople Across the Country
KPMG's Tax professionals from coast to coast are available to provide
regional insight leading up to federal budget. With more than 30
offices across the country, our regional professionals can comment on
the budget's regional impact for Canadians and businesses.
@KPMG_Canada - #bdgt14
KPMG on LinkedIn
KPMG LLP, an Audit, Tax and Advisory firm (kpmg.ca) and a Canadian limited liability partnership established under the
laws of Ontario, is the Canadian member firm of KPMG International
Cooperative ("KPMG International"). KPMG member firms around the world
have 155,000 professionals, in 155 countries.
The independent member firms of the KPMG network are affiliated with
KPMG International, a Swiss entity. Each KPMG firm is a legally
distinct and separate entity, and describes itself as such.
SOURCE: KPMG LLP
For further information:
For more information and to arrange a pre-budget interview, please contact:
KPMG in Canada
KPMG in Canada