The term refers to the formula used to calculate tax deductions for Foreign Accrual Property Income (FAPI) . When a Canadian taxpayer earns passive income through a Controlled Foreign Affiliate (CFA) , they are taxed on that income in Canada as it is earned. To prevent double taxation, the Canada Revenue Agency (CRA) allows a deduction based on the foreign taxes already paid.
For example, if a foreign corporation pays $2,500 in foreign tax (FAT) and the RTF is 4.0, the total deduction available to the Canadian parent company would be $10,000 ($2,500 x 4.0). Why "RTF" Has Been in the News
This reduction essentially increases the net tax paid in Canada because the "shield" provided by the foreign tax deduction is much smaller. Alternative Contexts fat.rtf
This is a multiplier used to "gross up" the foreign tax so it can be deducted against Canadian income. It is designed to represent the reciprocal of the Canadian tax rate. How the Calculation Works
Here is a deep dive into the world of fat.rtf (FAT/RTF) and why it matters to businesses and individuals with foreign investments. The Core Components The term refers to the formula used to
While "fat.rtf" might sound like a mysterious digital artifact, it is most commonly a reference to a critical calculation in . Specifically, it involves the interplay between Foreign Accrual Tax (FAT) and the Relevant Tax Factor (RTF) .
Did you find a with this name on an old drive? Tax changes on foreign investment income for CCPCs For example, if a foreign corporation pays $2,500
"Relative Truncal Fat" (RTF) is a metric used in medical studies to measure central adiposity (body fat distribution) and its relationship to mortality.