KPMG is asking the government to delay implementing its proposed private company tax changes.
In our submission on these controversial new proposals, KPMG notes that the government's new approach represents a major shift in tax policy for private corporations, and significantly changes taxpayers' ability to use tax planning involving "income sprinkling", claiming lifetime capital gains exemption (LCGE) and converting a private corporation's regular income into capital gains. KPMG believes that delaying these proposals will allow for a more comprehensive review of the government's tax fairness objective and, at the same time, ensure that any new rules are not unduly complex for taxpayers and their private corporations. A delay would also give business owners more time to fully comply with any new requirements.
The government's 75-day consultation period on the tax proposals ended on October 2, 2017. We now await the government's response to the submissions that it received. It remains to be seen what changes the government will make to the proposals and whether there will be any delay in the effective date of the proposed tax regime. KPMG is following this process closely and will provide you with updates on further announcements by the government, including helping you assess the impact of any final proposals on your business. However, you and your tax advisor may now want to start considering tax planning steps that you may need to change or implement in light of these significant new proposals.
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