2012 Federal Budget: Changes to the thin-capitalization rules
On March 29, 2012, Canadian Federal Finance Minister Jim Flaherty delivered the government’s 2012 federal budget (the “Budget”). As is typical in Canada, the Budget contained interesting tax policy changes. In particular, the Budget contained material changes to the thin-cap rules. This article briefly highlights the three most important proposed changes to the thin-cap rules that apply to in-bound Canadian investments.