Archived - Government of Canada Extends the Functional Currency Election Deadline
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The Honourable Jim Flaherty, Minister of Finance, today announced the extension, to December 15, 2008, of the deadline to elect into the new functional currency tax reporting regime, applicable to any such election that would otherwise be due before that date.
Bill C-28, the second Budget 2007 implementation bill, included amendments to the Income Tax Act to implement the Budget 2006 proposal to introduce functional currency tax reporting rules. In response to representations from stakeholders concerning the amended rules, this past June (2008-048) the Government proposed several technical revisions including:
- Amending the definition of "functional currency" to address concerns about its practical application to the situations of certain taxpayers; and
- Introducing symmetry in foreign exchange rate calculations used in the reporting of assets and debt obligations.
In light of these significant revisions, the Government also extended to October 31, 2008 the deadline to elect functional currency tax reporting, for any such election that would otherwise be due before that date.
Draft legislation to implement the announced changes is expected to be released for consultation in November. To ensure taxpayers have an opportunity to consider the details of the new rules prior to making a decision on whether or not to elect into the new regime, an extension of the October 31, 2008 deadline is necessary.
"Our government is committed to fairness and transparency and to providing an environment in which Canadian businesses can operate effectively," said Minister Flaherty. "We plan to release the draft functional currency legislation in November, and I think it only fair to extend the election deadline so that Canadian businesses can take better and more-informed decisions about tax measures respecting their particular operations."
For further information, media may contact:
Office of the Minister of Finance
Department of Finance
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