Canada Introduces Economic Action Plan 2013

Online, December 20, 2013 (Newswire.com) - The Canadian Minister of Finance recently introduced the Economic Action Plan 2013 Act #2 in an effort to stimulate the economy and job creation, reports Nair & Co. International Tax Team. The new measures are also intended to prevent tax evasion and minimize tax loopholes.

Efforts to increase job creation and economic growth include provisions to increase the scope for the Hiring Credit for Small Business, securing Employment Insurance premium rates for three years and increasing the Lifetime Capital Gains Exemption to CAD 800,000. In addition, the government has expanded the accelerated capital cost allowance to encourage investments in clean energy generation.

The measures that have been introduced to close tax loopholes and combat tax evasion include new monetary penalties and criminal offences to discourage the use, sale, development and possession of software used to forge records for tax evasion purposes .These measure also include closing tax loopholes in relation to character conversion transactions, leveraged life insurance arrangements and synthetic dispositions, just to list a few. The Canada Revenue Agency, in certain situations, will be allowed to audit taxpayers for failing to report income generated from foreign property. Further, the act includes the phasing out of the Labour-Sponsored Venture Capital Corporations tax credit.

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