Canadian legislation on non-resident trusts: October 25, 2001.

On October 25, 2001, TEI submitted the following letter to the Canadian Minister of Finance, Paul Martin, commenting on draft legislation relating to Non-Resident Trusts (NRT). For TEI's comments on the latest draft of the FIE provisions, see the related comments in this issue. The NRT comments follow up on a submission on an earlier draft version of the legislation sent by TEI in February 2001. TEI members also met with representatives of the Department of Finance in May to discuss the legislation. (For TEI's comments on the previous draft of the NRT and FIE legislation, see the March-April 2001 issue of The Tax Executive.) TEI's earlier comments were prepared under the aegis of TEI's Canadian Income Tax Committee, whose chair is David M. Penney of General Motors Canada Limited. Contributing significantly to the development of TEIs comments was Alan Wheable of Toronto Dominion Bank, TEI's Vice President--Region I.

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On June 22, 2000, the Department of Finance released draft legislation relating to Foreign Investment Entities (FIE) and Non-Resident Trusts (NRT). In response to public comments and consultations on the draft proposals, the Department on September 7, 2000, announced modifications to the proposals, delayed the implementation date, and extended the consultation period. Tax Executives Institute submitted comments on the modified draft in February 2001 and met with representatives from the Department of Finance in May. TEI is pleased that the Department afforded us the opportunity to discuss the draft legislation and to elaborate on our written comments. Subsequently, another draft of the legislation was released on August 2, 2001. While the draft legislation has been improved, TEI remains concerned about the draft legislation relating to Non-Resident Trusts (NRT). Under separate cover, we will be submitting comments on the latest draft of the Foreign Investment Entity provisions.

Background

Tax Executives Institute is the preeminent association of business tax executives. The Institute's 5,300 professionals manage the tax affairs of the leading 2,800 companies in Canada, the United States, and Europe and must contend daily with the planning and compliance aspects of Canada's business tax laws. Canadians constitute 10 percent of TEI's membership, with our Canadian members belonging to chapters in Calgary, Montreal, Toronto, and Vancouver, which together make up one of our eight geographic regions. Our non-Canadian members...