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 CCRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.
Principal Issues: Whether Dutch AOW pension and Anw survivor's benefit payments received by residents of Canada are taxable in Canada?
Position: Yes
Reasons: Canada retains its right to tax pension payments arising in the Netherlands and paid to a resident of Canada.
XXXXXXXXXX 2003-000331
Gilles L. Gosselin
April 17, 2003
Dear XXXXXXXXXX:
Re: Dutch AOW pension and Anw survivor benefits
We are writing in response to your letter dated January 17, 2003 and in follow up to our recent telephone conversation (Stalker/XXXXXXXXXX, March 27, 2003). You would like us to confirm your understanding that pension benefit payments to residents of Canada from certain Dutch social insurance schemes, specifically the Dutch AOW pension and Anw survivor's benefit, are taxable in Canada.
Pursuant to subparagraph 56(1)(a)(i) of the Income Tax Act (Canada), a resident of Canada must include in income all payments received on account of pension benefits. Pursuant to paragraph 1 of Article 18 of the Canada-Netherlands Income Tax Convention (the "Convention"), Canada retains its right to tax pension payments, and payments out of a social security system, that arise in the Netherlands and are paid on or after January 1, 1995 to a resident of Canada. Article 18 of the Convention was amended by the Protocol of March 4, 1993, to give this result.
Accordingly, for taxation years after 1994, Canada retains its right to tax AOW pension and Anw survivor's benefit payments made to residents of Canada. We understand that the SVB International Newsletter will be clarifying this issue soon.
Our comments are provided in accordance with the practise outlined in Information Circular 70-6R5. We trust that they are of assistance.
Yours truly,
Jane Stalker
Section Manager
for Division Director
International and Trusts Division
Income Tax Rulings and Interpretations Directorate
Policy and Legislation Branch
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