The new publication Overview of IFRS S1 and IFRS S2 introduces both of the new sustainability Standards IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosure.

It explains the key things you need to know about them. It also provides a description of the four pillars of the Task Force on Climate-related Financial Disclosures (TCFD).

The ISSB’s aim is to establish a global baseline of sustainability-related financial disclosures, which creates a common language for disclosing sustainability risks and opportunities in order to achieve global comparability. The Standards become effective for annual reporting periods beginning on or after January 1, 2024. Together, they mark the start of a new era of requiring reporting entities to make sustainability-related disclosures.

Latest international development

The IFRS Foundation has recently launched the IFRS Sustainability knowledge hub to support the use of the sustainability Standards. The hub has been designed to help companies preparing their sustainability disclosures, but it will also be useful repository for investors, regulators and other stakeholders. Resources on the hub currently include an introduction to the Standards, a guide for transitioning from a previous sustainability framework, such as the TCFD, to the Standards as well as a set of Frequently Asked Questions (FAQs).

The publication Overview of IFRS S1 and IFRS S2 in include in this Sustainability Adviser Alert.

Canada Proposes Global Minimum Tax Act: A Comprehensive Overview of the Draft Legislation and Potential Implications.

On August 4, 2023, the Canadian Department of Finance released draft legislation for the Global Minimum Tax Act (GMTA) which will introduce a global minimum tax (GMT) in Canada.

The GMTA includes two domestic fiscal measures of the OECD/G20 Inclusive Framework’s Pillar 2:

• a 15% domestic minimum top-up tax on the income of Canadian-located entities and permanent establishments of multinational enterprise (MNE) groups—which should be a qualified domestic minimum top-up tax (QDMTT); and
• a 15% top-up tax, under an income inclusion rule (IIR), on the income of foreign-located entities and permanent establishments of MNE groups with Canadian ultimate or intermediate parent entities—a tax that is intended to be a qualified IIR.

The GMTA intends to implement an undertaxed profits rule (UTPR), which is the third domestic fiscal measure of Pillar 2, in the future.

Consistent with the Pillar 2 framework, the proposed Canadian GMT will apply to members of MNE groups that have annual consolidated revenues of €750 million or more, with a business presence in Canada and at least one foreign jurisdiction. The tax is proposed to apply to fiscal years of MNE groups on or after December 31, 2023 (with the UTPR expected to become effective one year later).

At the time of writing, the Canadian GMT is not considered substantially enacted for accounting purposes.

The GMTA will be a stand-alone statute rather than as an additional “part” of the Canadian Income Tax Act. Subsection 3(1) of the GMTA prescribes that certain portions of the legislation (including the parts implementing the IIR and UTPR, but not the part implementing the QDMTT) are to be interpreted consistently with the OECD GloBE model rules, commentary, and administrative guidance (“GloBE sources”), as they may be amended from time to time, unless the context otherwise requires. A separate interpretive rule in paragraph 48(b), applicable to the QDMTT, refers only to the GloBE commentary. This is a novel approach (although it has been used in Canada’s Common Reporting Standard legislation – Part XIX as well as the recently proposed anti-hybrid proposals).

Canadian tax advisors have noted that there could be constitutional issues with this approach; most notably that it may conflict with the exclusive power of the Canadian Parliament to raise “money by any mode or system of taxation”. Additionally, the use of dynamic interpretation will mean that future changes to the GloBE will automatically apply.
The GMTA follows the GloBE sources but its drafting deviates from these sources. Rather than simply adopting the GloBE model rules into Canadian law by reference, the legislation redrafts the rules in a manner that is consistent with Canadian domestic drafting of tax legislation.

Canada and its provinces offer generous tax credits for certain activities notably for R&D and certain other related activities in the film, clean energy, and hi-tech sectors. Typically, these tax credits are not refundable. Hence, they are not qualified credits. We understand that the federal and provincial taxation authorities are considering whether the credits should become refundable.

Cash-flow management software helps small, medium and large businesses to survive and grow. Here is how.

SME and large corporations alike can leverage cash management software to improve their financial stability, make more informed decisions and optimize financial operations. There’s no need to think too big. Carefully selected software can be implemented quickly and affordably.

Optimize cash management

Optimized, automated management of incoming and outgoing cash flows ensures that the company always has the liquidity it needs to meet its financial obligations. It empowers management to make informed decisions about investments, loans, payments to suppliers, and much more.

Proactive management helps minimize borrowing costs and optimize investments.

• For example, by anticipating cash requirements, a company can optimize the use of its lines of credit and avoid unnecessary interest charges.
• It can also maximize returns on its short-term investments without compromising its liquidity needs.

Customers who have migrated their accounting systems to the new cloud platforms can also enjoy unexpected savings. By design, cash management software integrates easily with banks and accounting systems, considerably reducing ERP deployment costs where the system is already in place.

Improve operational efficiency

One of the most underestimated benefits of cash management software is the automation of many financial management tasks, such as payment management and bank reconciliation. The resulting time savings and reduced risk of human error are major advantages.

Counter the labour shortage

Adopting a system will enable your organization to reduce the time spent on operations. This will free up your managers to focus more on strategic functions that add value to the company. Cash management software is in fact one of the most effective solutions to today’s labour shortage.

Detect fraud

Cash management software incorporates advanced security features to detect fraudulent activity more quickly, which helps shield company funds from the risk of fraud.

Choose the right cash management software

It is in your company’s interest to invest in cash management software to improve efficiency. Treasurers and controllers are key strategic partners within your organization. With the right technological tools, they’ll have everything they need to carry out their duties with maximum benefit.

Keep in mind that the cash management software market is vast, offering many possibilities, which can make the choice difficult for an entrepreneur. It is important to choose the best solution for your needs, your objectives and the complexity of your business. You can count on a competent advisor to help you make this choice.