Canada Plan to Block Bank Tax Credits Seen Spurring Disputes

Canada would trigger challenges and disputes if it enacted its proposal blocking banks from getting input tax credits for redeemed credit card loyalty and reward points, tax professionals say.

The draft legislation seeks to reverse a 2024 ruling from Canada’s Federal Court of Appeal, but goes further than restoring the law to what it was before that judgment—it aims to reduce any wiggle room banks might have had to apply for credits, practitioners said.

They said litigation would stem at least in part from language that leaves a good deal of room for interpretation.

“If there’s room for interpretation or ...