On the heels of the January 31, 2025 announcement from the Minister of Finance to defer the effective date of the increase to the capital gains/stock option inclusion rate (from 50% to 66.67%) to January 1, 2026, new Prime Minister Mark Carney announced on March 21, 2025 that the liberals would not pursue the legislative change, which effectively means that the capital gains/stock option inclusion rate will remain at its original 50% rate for the foreseeable future. …
Latest Developments On January 31, 2025, the Canadian Minister of Finance and Intergovernmental Affairs announced a deferral of the entry into force of amendments to the capital gains inclusion rate increase (directly impacting stock option income inclusions). Originally set to take effect on June 25, 2024, the new effective date is now January 1, 2026. This announcement provides clarity on the administration of income tax withholdings on stock option income subject to the preferential regime…
After discussing the issues for a tax deduction for share-based awards in Israel in my last blog, I wanted to revisit another tax deduction conundrum, this time in Canada. In the past, the Canada Revenue Agency (CRA) generally has not allowed a local tax deduction for the cost of share-settled awards (other than under very narrow circumstances). However, based on a technical interpretation released on April 12, 2017, the CRA updated its position such that…