Canada: Canadian thin capitalisation limitations tightened
Real Estate Tax Services Newsalert ()
On March 29, 2012, the Federal Minister of Finance presented the majority government’s 2012 budget. Of particular interest to non-residents investing in Canadian real estate are the proposed changes to the thin capitalisation rules that limit the deductibility of interest expense of certain Canadian resident corporations. The proposed changes are aimed at aligning the thin capitalisation debt-to-equity ratio to actual industry norms in Canada and preventing non-resident investors from inappropriately reducing their Canadian withholding tax obligations.
