Recent Changes To Pertinent Loan Or Indebtedness (PLOI) Elections – Withholding Tax

On March 25, 2022, the Canada Revenue Agency (the
“CRA“) issued a notice to tax
professionals outlining certain changes to “pertinent loan or
indebtedness” (“PLOI“)
elections, including PLOI elections made in respect of cross-border
shareholder loans under subsection 15(2.11) of the Income
Tax Act (the
“ITA“).¹ These changes
apply to PLOI elections made on or after April 11, 2022.

Background on subsection 15(2.11) PLOI elections

Subsection 15(2) of the ITA provides that where a person or a
partnership is:

1. a shareholder of a corporation;




2. connected with a shareholder of a corporation; or




3. a member of a partnership or a beneficiary of a trust that is a
   shareholder of a corporation,

and the person or partnership has received…