January 22, 2009
As you are aware, several years ago most international sport federations relaxed the rules requiring funds earned by athletes to be held in a trust in order to be eligible to compete at the amateur level. The consequence of this decision was to cause athletes to lose the opportunity to defer tax liability to a future date by placing earned income into a trust historically administered by the relevant sport federation.
On December 29, 2008 the Government of Canada through the Minister of Finance issued the enclosed press release outlining legislative proposals to changes in the income tax act that would broaden the existing language in the act and "increase the number of Canadian amateur athletes eligible to defer income tax on income from endorsements, prizes, and other remuneration related to the athlete's athletic endeavours."
Attached (Click here) is the specific press release and the text of the Legislative Proposals and Explanatory Notes relating to the Income Tax Act, as well as a Questions and Answers information piece published by the Canada Revenue Agency on January 14, 2009. .
This announcement applies retroactively to make income earned by athletes in 2008 eligible for treatment under these newly expanded rules with regard to Athlete Trusts. Athletes must act prior to March 02, 2009 in order to avail themselves of this opportunity. We would also strongly advise athletes to get professional advice with respect to their decisions on these financial and income tax matters.
Finally, the COC would like to recognize the vision of Minister Flaherty and his staff for recognizing the benefit that accrues to our athletes and for acting quickly on this issue. As you may know, is has been a personal cause of COC President Mike Chambers that these changes to the income tax rules applying to Athlete Trusts come about. President Chambers extends a particular thank you to the members of the B2ten athletes support group for their efforts over the course of the past year in working with the Minister of Finance and his officials to bring about this change.
Here is the link to the press release (English): http://www.fin.gc.ca/n08/08-113-eng.asp
Here is the link to the legislative proposals (English): http://www.fin.gc.ca/drleg-apl/biadec08-eng.asp
Chief Executive Officer & Secretary General
Chef de la direction et secrétaire general
Canadian Olympic Committee/Comité olympique canadien
21 St. Clair Ave. E., Suite 900
Toronto, ON, Canada M4T 1L9
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