Principal Issues: What are the CCRA's requirements to issue a waiver confirming that withholding taxes are not required from payments to a status Indian from an RRSP or RRIF that received funds from an RPP benefit established from tax exempt income?
Position: If the RPP carrier and/or relevant employer can provide the RRSP/RRIF carrier with appropriate documentation and information evidencing that a tax-exempt RPP benefit arose from tax-exempt employment income and the quantum of the tax exempt benefit transferred from the RPP to the RRSP/RRIF, as long as no other monies have been co-mingled with the tax exempt RPP funds, payments from the RRSP/RRIF can be made by the carrier without withholdings. Where co-mingling has occurred, it will be necessary to trace the amounts originating from exempt income.
If the carrier does not have sufficient information to confirm that the RRSP amount is tax-exempt, the Indian can request a waiver from the CCRA. The CCRA will require written confirmation of the Indian's periods of exempt employment and the corresponding tax-exempt RPP benefit that was transferred to the registered vehicle. This information would most likely come from the status Indian's employer or RPP administrator. If the RRSP/RRIF funds originating from an exempt RPP benefit have been commingled with other funds, the CCRA must be provided with the appropriate tracing information.
Reasons: Information provided by Trust Accounts Division (formerly Source Deductions) of Assessment & Collections Branch