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Ottawa, November 30, 1999
1999-102

Draft Technical Income Tax Amendments Released

Related documents:

• Annex:  Update on Proposals for the Taxation of Non-Resident Trusts and Foreign Investment Funds.
• Legislative Proposals and Explanatory Notes Relating to Income Tax. (Adobe Acrobat format -- 459,363 bytes).

Finance Minister Paul Martin today released a package of draft technical amendments to the Income Tax Act. The draft amendments correct or clarify the application of existing income tax provisions, implement measures that have already been announced or deal with other situations that required a legislative policy response.

The Minister noted that there are a number of additional technical amendments that also warrant attention, and expressed the expectation that subsequent packages of technical amendments would deal with the outstanding items.

Minister Martin said that the amendments proposed today are being released in draft form to provide taxpayers and their advisors with an opportunity to consider and comment on the proposed changes in a timely manner. Detailed explanatory notes relating to the proposed amendments are also being released. References to "Announcement Date" in the draft legislation and explanatory notes should be read as referring to today's date.

The Minister also provided an update on legislation to implement income tax measures that have already been announced.

First, a bill to implement tax measures arising out of the 1999 federal budget is expected to be tabled in the House of Commons before the Christmas recess. The bill will also include legislation to implement the income tax measures pertaining to the demutualization of insurance corporations.

Second, the Department of Finance indicated in a September 10, 1999 news release that an amended version of the December 1998 legislative proposals on taxpayer migration and trusts would be included in the bill to implement the income tax measures announced in the 1999 budget. However, in order to provide an opportunity for comments on changes made to the December 1998 draft legislation, a revised draft is now planned for release within the next few weeks. This legislation will be merged with the technical amendments when tabled in the House of Commons.

Third, an update of the proposals dealing with the taxation of foreign trusts and foreign investment funds is provided in the Annex.

Finally, tax measures to facilitate the operation of the new regulatory regime allowing foreign banks to operate in Canada directly through branches were announced in a Notice of Ways and Means Motion tabled on February 11, 1999 and a press release issued on May 11, 1999. Minister Martin indicated that detailed legislation to implement the new tax rules would be released in draft form early in the year 2000. He reiterated that it is the intention that the tax rules be given effect as of June 28, 1999, the day the regulatory changes came into force.

The legislative proposals and explanatory notes are available on the Department of Finance Internet site, which is listed below. Printed copies may be obtained by calling the Department of Finance Distribution Centre at (613) 943-8665.

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