Weekly Tax Highlights

November 10, 2011

Canada signs updated international agreement to help combat tax evasion

On November 4, 2011, Finance Minister Jim Flaherty announced that Canada signed an updated international agreement to facilitate the exchange of tax information between Canada and other countries with the intent of combatting international tax evasion. The protocol to the multilateral Convention on Mutual Administrative Assistance in Tax Matters ensures that bank secrecy laws or domestic tax interest requirements do not prevent a country from exchanging information for tax purposes.

While Canada is a signatory to the Convention, the Convention is not yet in force in Canada. It will only come into force in Canada after it has been tabled in Parliament and ratified. More information on the Convention is available on the OECD website.

Deloitte brings productivity message to the Government

In the past few weeks, Deloitte's tax policy leaders have had two opportunities to appear before the government and offer our recommendations to enhance the future of Canada.

On October 27, 2011, Andrew W. Dunn, Managing Partner of Tax, and Bill Currie, Americas Managing Director and Vice Chair, appeared before the Senate Standing Committee on Banking, Trade and Commerce. The discussion centered around how as a matter of public policy Canada could improve its level of productivity.‪

On October 31, 2011, Andrew W. Dunn also appeared before the House of Commons Standing Committee on Finance to offer our recommendations for Budget 2012.‪ Our focus centred on enhancing Canada's prosperity through increased productivity. Deloitte is committed to participating in helping shape a prosperous future for Canada. If you would like to discuss our tax policy vision, please contact your Deloitte representative. In addition, we invite you to review our positions on our website, The Future of Tax.

Consultation on employee profit sharing plans – Deloitte’s comments

On October 25, 2011, tax leaders from Deloitte provided their comments on the tax rules applicable to employee profit sharing plans (EPSPs) in response to the invitation from the Department of Finance on August 30, 2011. This consultation was undertaken because of the increased use of EPSPs and a concern on the part of the Government as to whether they are being used for the originally intended purposes. Deloitte’s comments addressed the following issues:

Eligibility to participate in an EPSP
Role of minor children
Limitations on contributions
Withholding requirements

Deloitte’s comments are available for you to read.

New social security agreements with Romania and Macedonia

On November 1, 2011, the Canada-Romania social security agreement and the Canada-Republic of Macedonia social security agreement each entered into force. The agreements may help individuals qualify for certain Canadian, Romanian or Macedonian benefits, including old age, retirement, disability, and survivor benefits. As well, the agreements may result in savings for Canadian companies operating in Romania or Macedonia. If you believe that either of these social security agreements may be relevant to your circumstances, please contact your Deloitte representative.

Federal government delivers Update on Economic and Fiscal Projections

In a November 8, 2011 speech at the Calgary Chamber of Commerce, Finance Minister James M. Flaherty delivered his fall Update on Economic and Fiscal Projections.