Finance Minister Paul Martin has announced a one-year delay of the effective date of income tax proposals affecting non-resident trusts and foreign investment entities.

Draft income tax legislation to implement these proposals, which were first put forward in the 1999 budget, was released for comment on August 2. Several detailed submissions have recently been received by the Department concerning the proposed legislation.

Martin noted that it is important to carefully consider these submissions before finalizing changes in this complex area of the income tax system.

Accordingly, the effective date for the new income tax rules affecting non-resident trusts and foreign investment entities will be delayed by one year, generally to take effect for taxation years that begin after 2002.

This delay will allow for full consideration, in the first part of next year, of all of the submissions that have been received, in order to finalize and implement these proposals before the end of 2002.