Summary of Designated Immediate Expensing Property ("DIEP") Rules

By Trent Robinson, Trista Gallant, Buckberger Baerg

On April 19, 2021, the government announced new rules allowing for immediate expensing (100% write off in the year of purchase) of up to $1.5 million of capital asset purchases per year. These rules finally became law in June 2022, allowing CRA to start assessing immediate expensing claims.

For Canadian controlled private corporations (CCPCs), purchases acquired and available for use from April 19, 2021 to December 31, 2023 qualify. These rules were expanded to unincorporated businesses operated by individuals and partnerships (but not trusts) for property acquired and available for use from January 1, 2022 until December 31, 2024. ...

The New Interest Regime – Impact of Interest and Financing Expenses Deductibility Limitations for Owner Managed Businesses

By Marco Fratarcangeli, Levy Pilotte

On February 4, 2022, the Department of Finance released sweeping draft legislation that would limit the deduction of interest and financing expenses to a fixed ratio that comes into force for taxation years commencing after October 1, 2023.

The new rules result in a significant policy change, therefore Canadian tax legislation is shortly entering into a new regime of interest deductibility. Historically, interest expenses were fully deductible to the extent that they were incurred for the purpose of earning income and were not generally otherwise restricted (barring a few exceptions). The new rules will work in tandem with other interest deductibility rules such as the thin-capitalization rules....

Canada's New Luxury Tax Comes into Effect September 1, 2022

By John Grummett, Taylor Leibow LLP

The Luxury Tax ("LT") is a new tax on the sale of road vehicles and aircraft where the consideration payable is greater than $100,000. The LT also applies to marine vessels where the consideration is over $250,000. The LT is levied on the vendor of the vehicle, aircraft or vessel. The LT applies to vehicles, aircraft and vessels where the agreement to purchase or lease was entered into on or after January 1, 2022 and where delivery takes place on or after August 31st, 2022. This article discusses the rules that apply to vehicles. Similar rules apply to aircraft and vessels...