2023-12-08-KPMG_Global-Canada_–_Finance_Canada_Indicates_AMT_Rules_Changes_Coming_4页_268kb

In November 2023, Finance Canada announced proposed changes to the Alternative Minimum Tax (AMT) rules in response to the Fall Economic Update. These changes, not yet law, are expected to take effect after the 2023 tax year and significantly alter the calculation of AMT for certain taxpayers.

Key changes affect globally-mobile employees, particularly those with high capital gains, dividend income, stock options, or donations to charity. The new rules may increase tax burdens, impacting both personal taxes and business expenses related to assignments to Canada.

Actionable updates include increased inclusion rates for capital gains (from 80% to 100%), stock options, capital losses, and other deductions varying from current rules. For instance:

• Capital gains and gains from listed personal property are now fully taxable under AMT.
• Deductions for certain business losses, pensions, moving costs, and child-care are reduced.

Those affected should consider actions like donating securities or exercising stock options by the end of 2023 to optimize tax positions. Employers may face higher costs due to these changes.

Further details can be found in KPMG resources referenced in the document.