8 June 2000 External T.I. 2000-0016005 - Paragraph 81(1)(g) of the Act

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.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues: Whether amount paid to a Canadian resident by the Federal Republic of Germany from the Claims Conference Article 2 Fund is excluded in computing the income of the Canadian resident under paragraph 81(1)(g) of the Act

Position: Yes

Reasons: It is because all the conditions of that paragraph have been met.

XXXXXXXXXX 2000-001600
S. Leung
June 8, 2000

Dear Sirs:

Re: Paragraph 81(1)(g) of the Income Tax Act (the "Act")

We are writing in reply to your facsimile transmission of March 14, 2000 in which you requested our view as to whether an amount paid to a Canadian resident from the Federal Republic of Germany under the Claims Conference Article 2 Fund (the "Fund") is excluded in computing the income of the Canadian resident pursuant to paragraph 81(1)(g) of the Act. Payments from the Fund are made to Holocaust survivors who were unable to collect as a result having resided behind the iron curtain.

In order for paragraph 81(1)(g) of the Act to apply, one of the conditions to be met is that no tax is payable in respect of payments from the Fund under a law of the Federal Republic of Germany that imposes an income tax. We have recently received confirmation from the German tax authority that such payments are not subject to income tax in Germany. Therefore, paragraph 81(1)(g) of the Act would apply to such payments and they are not required to be included in computing the income for income tax purposes of a Canadian resident recipient.

As stated in paragraph 22 of Information Circular 70-6R3 dated December 30, l996, the opinion expressed in this letter is not a ruling and is consequently not binding on the Canada Customs and Revenue Agency.

Yours truly,

for Director
Reorganizations and International Division
Income Tax Rulings Directorate
Policy and Legislation Branch

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