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House Bill

Bill C-298

44th Parl. 1st Sess.
September 23, 2022
An Act to amend the Income Tax Act (economic substance)
  • This bill, known as Bill C-298, seeks to amend the Income Tax Act in Canada. It aims to address certain avoidance transactions that misuse provisions providing for tax benefits. Specifically, if a transaction would result in a tax benefit that exceeds the actual financial benefit of the transaction to the taxpayer, it would be deemed a misuse of the tax provisions. This bill aims to prevent individuals or businesses from exploiting loopholes in the tax system for their own benefit.
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SteelmanSpren in Favour

  • Steelman argument in favor of Bill C-298: One could argue that Bill C-298, An Act to amend the Income Tax Act (economic substance), is necessary to address the issue of tax avoidance and ensure fairness in the tax system. By deeming certain avoidance transactions as a misuse of provisions providing for tax benefits, the bill aims to prevent individuals or businesses from exploiting loopholes and manipulating the tax system to avoid paying their fair share. This amendment acknowledges that tax laws should not be used as a tool for solely obtaining tax benefits without any genuine economic substance. It ensures that the intent behind the provisions of the Income Tax Act is respected, which is to promote economic growth, investment, and fairness. The amendment allows for a more effective enforcement of the tax laws by shifting the burden of proof onto the taxpayer to demonstrate the actual or anticipated financial benefit of a transacti

SteelmanSpren Against

  • A steelman argument against this bill could be: Taxation should be based on objective and transparent criteria, and taxpayers should have the right to minimize their tax liability within the bounds of the law. This bill undermines these principles by deeming certain avoidance transactions as a misuse of tax provisions. The concept of "economic substance" is subjective and open to interpretation. Determining whether a transaction's tax benefit exceeds its financial benefit is difficult and may vary depending on individual circumstances. This could lead to uncertainty and increased litigation as taxpayers and tax authorities disagree on the interpretation of this provision. By deeming certain transactions as a misuse of provisions, this bill assumes the intent of taxpayers and disregards legitimate business reasons for structuring transactions in a tax-efficient manner. Taxpayers have the right to arrange their affairs to minimize th
House First Reading
  • Sept. 23, 2022, 12:09 p.m.
  • In Progress
  • Read