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.
XXXX D.S. Delorey
December 20, 1984
XXXX
This is in reply to your letter of November 3 asking if there is going to be a non-resident tax on foreign annuity cheques in 1984 or 1985.
In replying, we assume that you are referring to payments received by persons resident in the U.S. from a Canadian source pursuant to a life annuity contract. Under the previous Canada-U.S. Income Tax Convention, such payments were not taxable by Canada. However, under the recently ratified Canada-U.S. Income Tax Convention (1980), such payments will be taxable by Canada as of January 1, 1986 at a rate of 15%. This tax will be withheld by the payor and remitted to Revenue Canada, Taxation.
To avoid double taxation, we understand that the U.S. Government will allow a foreign tax credit with respect to such taxes paid to the Canadian government. In this regard, you may wish to contact the Internal Revenue service.
Yours truly,
for Director Non-Corporate Rulings Division
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© Her Majesty the Queen in Right of Canada, 1984
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© Sa Majesté la Reine du Chef du Canada, 1984
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