KPMG sheds light on budget day impacts
TORONTO AND OTTAWA, Feb. 11, 2014 /CNW Telbec/ - In an effort to balance
the books by 2015, today's federal budget focused mostly on job
creation and innovation. As predicted by KPMG, this budget also introduced a host of new measures to tighten the tax
system by closing "tax loopholes".
Budget 2014 highlights include the following proposals:
Funding of approximately $229 million for apprenticeships and
$40 million over four years to the Canada Accelerator and Incubator
Program to help entrepreneurs create new companies and provide
mentoring and other resources.
$40 million towards supporting up to 3,000 internships in high-demand
$15 million annually towards supporting up to 1,000 internships in small
and medium-sized enterprises.
$150,000 to increase mentorship among women entrepreneurs.
Additional funding for research and innovation, including the creation
of the Canada First Research Excellence fund with $ 1.5 billion in
funding over the next 10 years for certain post-secondary institutions.
Tax transparency and Base Erosion and Profit Shifting (BEPS)
Focus on key areas, such as aggressive tax planning using preferential
tax regimes and treaty shopping, hybrid instrument mismatches, transfer
pricing methodologies, and other potential areas for abuse under
taxation systems around the world.
The budget is requesting comments from stakeholders on a number of broad
questions intended to provide the government with a framework for
Canada's own BEPS action plan.
International tax changes:
Expand the existing anti-avoidance rules in the thin capitalization
provisions and to add a back-to-back loan provision.
Amend the current rule aimed at preventing Canadian taxpayers from
shifting income from the insurance of Canadian risks offshore.
Business tax changes:
Proposes to repeal the Eligible Capital Property regime, replacing it
with a new Capital Cost Allowance (CCA) class and transfer taxpayers'
existing Cumulative Eligible Capital pools to the new CCA class.
Personal tax changes:
Proceed with measures to eliminate the tax benefits that arise from
taxing at graduated rates the taxable income of testamentary trusts.
Eliminate the benefits for immigrant trusts that end after 2014 if the
60-month exemption is applied.
Apply the tax on split income where a minor is allocated income from a
partnership or trust that is derived from business or rental activities
conducted with third parties.
KPMG's Perspective on the Budget
"The themes for today's budget are jobs, growth and innovation. The
focus on jobs and growth is to manage current issues including bridging
the skills gap in Canada while balancing the budget by 2015. The Harper
Government has also introduced a number of tax measures aimed at
closing "tax loopholes" in line with the government's continued focus
on tax fairness measures and tax transparency."
− Elio Luongo, Canadian Managing Partner, Tax, KPMG
KPMG's Spokespeople across the Country
KPMG's Tax professionals from coast to coast are available to provide
regional insight into the federal budget. With more than 30 offices
across the country, our regional professionals can comment on the
budget's local impact for Canadians and businesses.
@KPMG_Canada - #bdgt14 #eap14
KPMG on LinkedIn
KPMG's Federal Budget Webcast
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
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