27 June 2011 External T.I. 2011-0410811E5 - Prescribed International Organization

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Principal Issues: Whether the Inter-American Development Bank is a prescribed international organization such that its employees are entitled to a deduction under paragraph 110(1)(f)(iii).

Position: No

Reasons: Not one of the specialized agencies prescribed in paragraph 8900(1)(b) of the Regulations.

XXXXXXXXXX 								Alain Godin
									(613) 957-2745
									2011-041081
June 27 2011

Dear Sir,

Re : Prescribed International Organization

We are writing in response to your e-mails of May 26th and May 27th 2011, in which you requested a technical interpretation regarding the eligibility of your employment income for a deduction under paragraph 110(1)(f) of the Income Tax Act (the "Act"). In particular, you asked us if the Inter-American Development Bank (the "IDB") is a "prescribed international organization" for the purposes of subparagraph 110(1)(f)(iii) of the Act.

You provided us with a copy of a document you have received from the IDB establishing the Inter-American Development Bank and entitled 'Treaty Series 1972 No. 17'. The agreement was signed by Canada (Department of Finance) on May 3, 1972 and entered into force on the same day.

Opinion

Employees of a "prescribed international organization" are entitled to a deduction under paragraph 110(1)(f)(iii) of the Act in computing taxable income equal to their income from employment with that particular organization. To date, the organizations that have been prescribed under subsection 8900(1) of the Income Tax Regulations are the United Nations, and any specialized agency that is brought into relationship with the United Nations in accordance with Article 63 of the Charter of the United Nations.

The "United Nations" would include its Regional Commissions and other United Nations Bodies. Article 63 of the Charter reads as follows:

1. The Economic and Social Council may enter into agreements with any of the agencies referred to in Article 57, defining the terms on which the agency concerned shall be brought into relationship with the United Nations. Such agreements shall be subject to approval by the General Assembly.

2. It may co-ordinate the activities of the specialized agencies through consultation with and recommendations to such agencies and through recommendations to the General Assembly and to the Members of the United Nations.

Article 57 of the Charter of the United Nations reads as follows:

1. The various specialized agencies, established by intergovernmental agreement and having wide international responsibilities, as defined in their basic instruments, in economic, social, cultural, educational, health, and related fields, shall be brought into relationship with the United Nations in accordance with the provisions of Article 63.

2. Such agencies thus brought into relationship with the United Nations are hereinafter referred to as specialized agencies.

The question is thus whether the IDB is a specialized agency of the United Nations. The United Nations website provides a complete list of specialized agencies of the United Nations at http://www.un.org/en/aboutun/structure/index.shtml. Unfortunately, the IDB is not on the list and we cannot confirm that your employment income from IDB is exempt as it is not employment income from a prescribed international organization.

We trust the above comments will be of some assistance.

Yours truly,

Alain Godin, Manager
for Director
International and Trusts Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch