TEI comments on 2005 Canadian budget.

• Position: Recent Activities

Tax Executives Institute has filed comments with the Canadian House of Commons Standing Committee on Finance in respect of the country's 2005 pre-budget consultations. The Institute's comments included recommendations to foster economic growth and job creation, promote a favorable business environment for investments in Canada, and ensure a high level of innovation and productivity.

In its September 6 comments, TEI urged the Standing Committee to implement as soon as practicable the 2005 budget announcement calling for phased corporate income tax rate reductions as well as the elimination of the corporate surtax. In addition, TEI made the following recommendations:

1. Abandon or substantially narrow the Reasonable Expectation of Profit (REOP) test included in draft legislation clarifying the deductibility of interest and other expenses.

2. Urge the Department of Finance to expeditiously negotiate and implement a new provision in the Income Tax Convention with the United States eliminating withholding on all dividends and interest for payments to both related and unrelated parties.

3. Abandon draft legislation in respect of Foreign Investment Entities and Non-Resident Trusts; if...