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Canada Announces Enhanced Capital Cost Allowances

Canada Announces Enhanced Capital Cost Allowances

Canadian businesses will be able to more quickly recover the costs of certain investments.

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Canadian businesses will be able to more quickly recover the costs of certain investments under new rules announced in Finance's 2018 Fall Economic Update. The Update, which was released on November 21, 2018, announces new rules to temporarily allow businesses to immediately expense, for tax purposes, the cost of certain new investments in qualifying machinery and equipment, as well as specified clean energy equipment, and to accelerate tax depreciation on other capital investments. The rules apply to capital property acquired after November 20, 2018 and available for use before 2028. In addition, Finance says it will extend the 15% Mineral Exploration Tax Credit to 2024 and introduce a new refundable tax credit for qualifying news organizations, among other changes.

Finance's new proposals affecting investments in qualifying machinery and equipment and other capital investments have been issued in response to recent U.S. tax measures that allow U.S. businesses to immediately claim a tax deduction for 100% of certain capital investments. This change was included as part of the U.S. tax reform enacted at the end of 2017.

Download this edition of the TaxNewsFlash to learn more.

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KPMG International Cooperative (“KPMG International”) is a Swiss entity.  Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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