PwC Federal Budget instant reaction: Budget encourages fairness, closes tax
loopholes

TORONTO, March 4 /CNW/ - PwC tax specialists commented today:

New initiatives announced today in Budget 2010 are intended to protect the integrity of the tax system. By closing loopholes in the tax system, the Federal Government intends to ensure all taxpayers pay their fair share of tax on income earned in Canada and abroad. Also, initiatives in the budget will strengthen the capacity of the Canada Revenue Agency to address aggressive tax planning and compliance risks with the potential to erode the tax base, and to fight against tax evasion.

Notable actions include:

    
    -   Tightening of tax rules on stock options to eliminate tax reduction
        arrangements.

    -   Consultation for a new reporting regime for aggressive tax avoidance
        transactions.

    -   New rules to counter schemes often referred to as "foreign tax credit
        generators" that are designed to shelter tax otherwise payable.

    -   Ensure that income trust conversions into corporations are subject to
        the same loss utilization rules that currently apply to similar
        transactions involving only corporations.

    -   Limitations to tax ability of cosmetic medical expenses.
    

A PwC Budget Flash with additional Budget highlights has been issued today followed by a detailed Budget Memo. For more information and detailed commentary on the Budget please contact, Kiran Chauhan, [email protected], 416-947-8983 or visit www.pwc.com/ca/budget.

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For further information: Kiran Chauhan, [phone], [email protected]