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Ottawa, October 30, 2003
2003-054

Legislative Proposals for the Taxation of Non-Resident Trusts and Foreign Investment Entities Released

Related documents:

• Backgrounder.

• Notice of Ways and Means Motion to Amend the Income Tax Act.

• Legislative Proposals Relating to the Income Tax Act -Taxation of Non-Resident Trusts and Foreign Investment Entities.

• Explanatory Notes on Taxation of Non-Resident Trusts and Foreign Investment Entities.

Don Boudria, Minister of State and Leader of the Government in the House of Commons, on behalf of John Manley, Deputy Prime Minister and Minister of Finance, tabled today in the House of Commons a Notice of Ways and Means Motion to amend provisions of the Income Tax Act relating to the taxation of income of non-resident trusts and foreign investment entities.

The proposed measures are designed to ensure that Canada taxes investment income earned by Canadians through foreign intermediaries in the same manner that that income would have been taxed if the underlying investment had been made directly. The proposals were first announced in the 1999 budget.

Earlier drafts were released for comment in June 2000, August 2001 and October 2002. The revised legislative proposals being released today include a number of modifications reflecting comments received by the Department of Finance in the course of the most recent consultation process.

Generally, the proposals would take effect for taxation years that begin after 2002. References to "Announcement Date" in the revised legislative proposals (and in the explanatory notes to be released soon) should be read as referring to today’s date.

These documents are available on the Department of Finance Web site at www.fin.gc.ca. Printed copies of the revised proposals for the taxation of income of non-resident trusts and foreign investment entities are available for $16.00 from the Department of Finance Distribution Centre at (613) 995-2855. Printed copies of the explanatory notes cost $22.00.

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Notice of Ways and Means Motion to Amend the Income Tax Act

That it is expedient to amend the Income Tax Act in accordance with the proposals set out in the accompanying publication entitled Legislative Proposals Relating to the Income Tax Act (Taxation of Non-Resident Trusts and Foreign Investment Entities) dated October 2003.