Thank you, Mr. Chair.
I would like to go back to the goodwill amount. Clause 195 of Bill C-48 makes an addition to section 56.4. In it, several terms are defined, including “restrictive covenant” and ”goodwill amount”, which have some implications. I am specifically thinking of industries that are based on the principles of intellectual property. That is why I gave the GlaxoSmithKline example earlier.
According to the definition, the goodwill amount is included “in computing the cumulative eligible capital of the business carried on by the taxpayer through a permanent establishment located in Canada”. At the end of the definition of the term “goodwill amount”, it says the definition is used in applying new subsection 56.4(7), where the question of restrictive covenants potentially comes up.
With industries based on the principle of intellectual property, are the tax consequences of these technical amendments clearly understood?