Specified Investment Flow-Through Tax – SIFT

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Definition: Specified Investment Flow-Through Tax – SIFT

It is the tax imposed by the Canadian government. This tax deals with the distribution of special types of Canadian income trust. This tax provided tax benefits prior to 2006 but after 2006 the Canadian government found that it was not being able to collect as much revenues as it wanted to hence tax benefits available to the SIFT trusts were not appropriate.

 

SIFT trust was a popular way of business organization. The Canadian government provided tax benefits to this trusts.


But after 2006 a new tax under the tax fairness Plan was implemented. These made the SIFT taxation similar to corporate taxation. Also there was significant number who made their business structure to corporate structure.

 

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