Ottawa, July 25, 2012
2012-082

Archived - Harper Government Releases Draft Legislation to Strengthen Tax Fairness for Canadians

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The Department of Finance today released two sets of draft legislative proposals to strengthen and create greater fairness in Canada’s tax system.

The first set of proposals would implement measures announced on July 20, 2011 relating to the taxation of specified investment flow-through entities (SIFTs), real estate investment trusts (REITs) and publicly-traded corporations.

The Department of Finance also released proposals responding to the Tax Court of Canada decision in Richard Lewin Re: The J.J. Herbert Family Trust #1 v. The Queen, 2011 TCC 476. In the absence of today’s proposals, the decision would make it more difficult to enforce the withholding tax rule that applies to payments from Canadian resident trusts to non-resident beneficiaries in circumstances where a trust emigrates from Canada.

These proposals address situations in which a Canadian resident trust makes an amount payable to a non-resident beneficiary of the trust but only actually pays or credits the amount in the beneficiary’s favour at some later time after the trust has ceased to be resident in Canada. In these circumstances, the amount will be deemed to have been paid or credited before the trust became non-resident.

Full explanatory notes are included with the draft legislation. Interested parties are invited to provide comments on the draft legislation by September 25, 2012 to ConsultationsSSWT-TARI@fin.gc.ca or:

SIFT and TCC Proposals
Tax Legislation Division - Tax Policy Branch
Department of Finance
140 O’Connor Street
Ottawa, Ontario
K1A 0G5

For further information, media may contact:

Jack Aubry
Media Relations
Department of Finance
613-996-8080

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