It is clear that the conversion to IFRS from Canadian GAAP will have wide-ranging tax implications. What is not clear yet are the details. Based on our experience in Europe and the rest of the world, we're confident that our tax advisors can help you avoid any unforeseen risks associated with this mandated conversion process.
Though there are many similarities between the current tax guidelines (CICA 3465) and the proposed IFRS regulations (IAS 12), there are also areas of significant difference, notably with respect to deferred tax liabilities. IFRS accounting may result in revenues and expenses being recognized in earlier or later periods than under Canadian GAAP. If profit recognized in financial statements is the starting point for tax liabilities, the transition to IFRS will have an immediate impact.
Multinational businesses with local subsidiaries will need to be aware of differences between IFRS and local GAAP, which may still be in place for the purpose of tax filings.
In addition, there will be specific tax implications for each industry sector, making PwC's depth of industry knowledge indispensable for planning your company's tax strategy concerning IFRS conversion.
Further information on the potential tax implications of conversion to IFRS can be found in the following publications:
