Vol. 138, No. 39 — September 25, 2004

Regulations Amending the Income Tax Regulations (Luxembourg and Warsaw Stock Exchanges)

Statutory authority

Income Tax Act

Sponsoring department

Department of Finance

REGULATORY IMPACT
ANALYSIS STATEMENT

Description

Sections 3200 and 3201 of the Income Tax Regulations (the Regulations) list the stock exchanges inside and outside Canada that are prescribed for various purposes of the Income Tax Act (the Act). For example, shares listed on a prescribed stock exchange are eligible investments for registered retirement savings plans (RRSPs), registered retirement income funds (RRIFs) and deferred profit-sharing plans (DPSPs). Also, such shares are qualified securities for rules pertaining to securities lending arrangements, excluded from the application of withholding requirements under section 116 of the Act, and generally not considered to be "taxable Canadian property."

Section 3201 is amended to add the Luxembourg Stock Exchange and the main and parallel markets of the Warsaw Stock Exchange to the list of stock exchanges outside Canada. These additions to section 3201 follow upon a news release issued on June 23, 2003, and, as announced, these amendments apply on and after June 24, 2003.

Alternatives

No alternative exists within the existing legislative framework.

Benefits and costs

No significant revenue impact is anticipated from these changes.

Consultation

The Department received separate requests from taxpayer advisors to prescribe the Luxembourg Stock Exchange and the Warsaw Stock Exchange. The decision to prescribe only the main and parallel markets of the Warsaw Stock Exchange was reached after consultations with advisors who had requested that the exchange be prescribed. These amendments were announced in news release 2003-032, dated June 23, 2003.

Compliance and enforcement

The Act provides the necessary compliance and enforcement mechanisms for these Regulations.

Contact

Mr. Ryan Hall, Tax Policy Branch, Department of Finance, 140 O'Connor Street, East Tower, 17th Floor, Ottawa, Canada K1A 0G5, (613) 996-5155.

PROPOSED REGULATORY TEXT

Notice is hereby given that the Governor in Council, pursuant to section 221 (see footnote a) of the Income Tax Act (see footnote b), proposes to make the annexed Regulations Amending the Income Tax Regulations (Luxembourg and Warsaw Stock Exchanges).

Interested persons may make representations with respect to the proposed Regulations within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Ryan Hall, Tax Legislation Division, Department of Finance, L'Esplanade Laurier Building, 17th Floor, East Tower, 140 O'Connor Street, Ottawa, Ontario K1A 0G5.

Ottawa, September 22, 2004

EILEEN BOYD
Assistant Clerk of the Privy Council

REGULATIONS AMENDING THE INCOME
TAX REGULATIONS (LUXEMBOURG AND
WARSAW STOCK EXCHANGES)

AMENDMENT

1. Section 3201 of the Income Tax Regulations (see footnote 1) is amended by striking out the word "and" at the end of paragraph (v) and by adding the following after paragraph (w):

(x) in Luxembourg, the Luxembourg Stock Exchange; and

(y) in Poland, the main and parallel markets of the Warsaw Stock Exchange.

APPLICATION

2. Section 1 applies on and after June 24, 2003.

[39-1-o]

Footnote a

S.C. 2000, c. 12, s. 142 (Sch. 2, par. 1(z.34))

Footnote b

R.S., c. 1 (5th Supp.)

Footnote 1

C.R.C., c. 945

NOTICE:
The format of the electronic version of this issue of the Canada Gazette was modified in order to be compatible with hypertext language (HTML). Its content is very similar except for the footnotes, the symbols and the tables.

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