Company: BPYPN
Filing Date: 2025-03-21
Form Type: 20-F
Source: 0001545772-25-000008
Chunk: 206

Company: Brookfield Property Partners L.P.
Filing Date: 2025-03-21
Form: 20-F
Item: Item 10
Chunk 206
---
 income (or loss) of BPY and New LP, as applicable, deductions may be claimed in respect of reasonable administrative costs, interest and other expenses incurred by BPY and New LP, as applicable, for the purpose of earning income, subject to the relevant provisions of the Tax Act. BPY and New LP, as applicable, may also deduct from its income for the year a portion of the reasonable expenses, if any, incurred by BPY and New LP, as applicable, to issue partnership interests. The portion of such issue expenses deductible by BPY and New LP, as applicable, in a taxation year is 20% of such issue expenses, pro-rated where BPY’s or New LP’s taxation year is less than 365 days. Bill C-59, which received royal assent on June 20, 2024, implements the interest deductibility limitations announced in the 2021 Canadian federal budget (the “ EIFEL Rules”). The EIFEL Rules would have the effect of denying the deductibility of net interest and financing expenses for taxpayers that are corporations or trusts (other than certain excluded entities) in certain circumstances where such taxpayer’s net interest and financing expenses exceeded a fixed ratio of the taxpayer’s adjusted taxable income, or in certain circumstances where such taxpayer’s net interest and financing expenses exceed an alternative allocated group ratio amount. In general, under the EIFEL Rules, any interest and financing expenses and income of BPY or New LP, as applicable will be attributed to Resident Holders that are corporations or trusts to the extent of their interest in BPY or New LP, as applicable. Where a Resident Holder to which the EIFEL Rules apply is determined to have excess interest and financing expenses under the EIFEL Rules (determined including its allocable share of any interest and financing expenses and income of BPY or New

- 139 -

LP), the Resident Holder will be required to include an amount in income in respect of its share of BPY’s or New LP’s interest and financing expenses (effectively reversing the Resident Holder’s allocable share of the deduction by BPY or New LP in respect of such expenses). The EIFEL Rules could apply to corporations and trusts within our group and to certain Resident Holders in respect of their interest in our partnership. However, the EIFEL Rules do not apply to a corporation or trust that qualifies as an “excluded entity” for a taxation year. For these purposes, an “excluded entity” is generally a taxpayer that: (a) is a “ Canadian controlled private