22 November 2000 External T.I. 2000-0054485 - 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.

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: Are the Inter-American Institute for Cooperation on Agriculture (IICA) and the Organization of American States (OAS) "prescribed international organizations" under section 8900 of the Income Tax Regulations and subparagraph 110(1)(f)(iii) of the Act.

Position: No

Reasons: IICA is a specialized agency of OAS and IICA is an "international organization" as defined in section 2 of the Foreign Missions and International Organizations Act (FMIOA). OAS is also an "international organization" as defined in section 2 of the FMIOA. However, neither IICA nor OAS are "prescribed international organizations" under section 8900 of the Income Tax Regulations (the "Regulations"). The reason for this is that neither IICA or OAS is a "specialized agency that is brought into relationship with the United Nations in accordance with Article 63 of the Charter of the United Nations" as required by section 8900 of the Regulations. Accordingly, neither IICA nor OAS qualify as a "prescribed international organization" for the purposes of subparagraph 110(1)(f)(iii) of the Act.

However, IICA and OAS qualify as "international organizations" for the purposes of subsection 126(3) of the Act.

								2000-005448
XXXXXXXXXX 							G. Middleton
(613) 957-2122
November 22, 2000

Dear Sir:

Re: Inter-American Institute for Cooperation on Agriculture (IICA)
and the Organization of American States (OAS)_____________

This is in reply to our telephone conversation of November 16, 2000 in which you requested our views on the Canadian income tax treatment of remuneration paid by the IICA office in Chile to an employee who is ordinarily resident in Canada while rendering employment services in Chile for IICA.

IICA is a specialized agency of OAS and IICA is an "international organization" as defined in section 2 of the Foreign Missions and International Organizations Act (FMIOA). OAS is also an "international organization" as defined in section 2 of the FMIOA. However, neither IICA nor OAS are "prescribed international organizations" under section 8900 of the Income Tax Regulations (the "Regulations"). The reason for this is that neither IICA or OAS is a "specialized agency that is brought into relationship with the United Nations in accordance with Article 63 of the Charter of the United Nations" as required by section 8900 of the Regulations. Accordingly, neither IICA nor OAS qualify as a "prescribed international organization" for the purposes of subparagraph 110(1)(f)(iii) of the Income Tax Act (the "Act").

Therefore, remuneration paid by an IICA office in Chile to an employee who is ordinarily resident in Canada while rendering services in Chile is required to be included in the employee's income and the employee would not be entitled to claim a deduction for the remuneration under subparagraph 110(1)(f)(iii) of the Act as IICA is not a prescribed international organization.

We would also like to mention that IICA and OAS qualify as "international organizations" for the purposes of subsection 126(3) of the Act. The purpose of subsection 126(3) is to provide a tax credit to Canadian resident employees of such an organization in respect of any levy in lieu of taxes charged to such an employee by the organization on the employee's remuneration.

We trust this is the information you require.

Yours truly,

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