INTERNATIONAL TAX CHANGES – "THIN CAPITALIZATION" RULES – REVISED
The "thin capitalization" rules limit the deductibility of interest expense of a Canadian resident corporation in circumstances where the amount of debt owing to certain non-residents exceeds a ratio of 2 to 1 debt-to-equity.
These rules apply to debts owing to a specified shareholder (a person or group owning shares representing more than 25% of the votes or value of the corporation) that is not resident in Canada, and to any other non-resident who does not deal at arm’s length with a specified shareholder.
Download the full International Tax Changes.
