An Act to amend the Income Tax Act (economic substance)

This bill was last introduced in the 41st Parliament, 2nd Session, which ended in August 2015.

Sponsor

Murray Rankin  NDP

Introduced as a private member’s bill. (These don’t often become law.)

Status

Introduced, as of June 16, 2014
(This bill did not become law.)

Summary

This is from the published bill. The Library of Parliament often publishes better independent summaries.

This enactment amends the Income Tax Act to require the Minister or the court to take into consideration the economic substance of a transaction in the determination of whether that transaction is an avoidance transaction and whether that transaction results in a misuse or abuse of that Act. Further, it establishes the presumption that an avoidance transaction that does not have substantial economic substance in relation to its anticipated tax benefit results in a misuse or abuse of that Act.

Elsewhere

All sorts of information on this bill is available at LEGISinfo, provided by the Library of Parliament. You can also read the full text of the bill.

Income Tax ActRoutine Proceedings

June 16th, 2014 / 3:25 p.m.
See context

NDP

Murray Rankin NDP Victoria, BC

moved for leave to introduce Bill C-621, An Act to amend the Income Tax Act (economic substance).

Mr. Speaker I rise to introduce an act to amend the Income Tax Act. This enactment would enable the government and courts to more effectively identify, pursue and convict tax cheats.

The amendment would require the minister or the court to take into consideration the economic substance of a transaction in determining whether it constituted an avoidance transaction and whether it resulted in a misuse or abuse of the Income Tax Act. Further, it would establish the presumption that an avoidance transaction that did not have a substantial economic substance in relation to its anticipated tax benefit resulted in a misuse or abuse of the act.

I would like to thank Dr. Robert McMechan for his expertise in proposing these legislative changes in his acclaimed book, entitled Economic Substance and Tax Avoidance: An International Perspective. Dr. McMechan is a former general counsel in the tax litigation section of the Department of Justice and is with us today.

Recognizing the role that these transactions play in tax avoidance and recognizing that Canada is now out of step with many other jurisdictions, this bill would help bring tax avoidance laws in Canada into closer harmony with tax avoidance measures already in place elsewhere.

(Motions deemed adopted, bill read the first time and printed)