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.
Principal Issues: Whether an employee of the XXXXXXXXXX would qualify for a deduction under paragraph 110(1)(f).
Position: No.
Reasons: The XXXXXXXXXX is not as international organization that is a specialized agency brought into relationship with the United Nations.
June 7, 2005
International Tax Services Office HEADQUARTERS
Louise Dalgleish Charles Rafuse
Resource Officer 613-957-8967
2204 Walkley Road,Ottawa, On
2005-013272
Prescribed International Organization
This is in reply to your fax of May 24, 2005, concerning the eligibility of XXXXXXXXXX to claim a deduction under paragraph 110(1)(f) of the Income Tax Act (the Act) for employment income earned from a prescribed international organization.
Specifically, you have indicated that XXXXXXXXXX was a factual resident of Canada working in XXXXXXXXXX. She was employed with the XXXXXXXXXX and would like to have her returns adjusted to allow a deduction under paragraph 110(1)(f).
In computing the taxable income of a taxpayer for a taxation year, subparagraph 110(1)(f)(iii) of the Act provides for a deduction for income earned from employment with a "prescribed international organization". Section 8900 of the Income Tax Regulations (the Regulations) defines prescribed international organizations for the purposes of paragraph 110(1)(f) of the Act. By virtue of paragraph 8900(a) of the Regulations, "the United Nations, and any specialized agency that is brought into relationship with the United Nations in accordance with Article 63 of the Charter of the United Nations" is a prescribed international organization.
The relevant articles in the Charter which deal with specialized agencies are as follows:
Article 57
1. The various specialized agencies, established by intergovernmental agreement and having wide international responsibilities, as defined in their basic instruments, in economic, social, cultural, educational, health, and related fields, shall be brought into relationship with the United Nations in accordance with the provisions of Article 63.
2. Such agencies thus brought into relationship with the United Nations are hereinafter referred to as specialized agencies.
Article 63
1. The Economic and Social Council may enter into agreements with any of the agencies referred to in Article 57, defining the terms on which the agency concerned shall be brought into relationship with the United Nations. Such agreements shall be subject to approval by the General Assembly.
2. It may co-ordinate the activities of the specialized agencies through consultation with and recommendations to such agencies and through recommendations to the General Assembly and to the Members of the United Nations.
It is apparent from these articles in the Charter that XXXXXXXXXX itself must be the agency brought into relationship with the UN to be considered a "specialized agency". Article 63 requires that the Economic and Social Council enter into agreement with the agency, and that this agreement is approved by the General Assembly. We have reviewed information available on the UN website, but there is no indication that XXXXXXXXXX is a specialized agency. XXXXXXXXXX.
In our view, since XXXXXXXXXX is not considered a specialized agency for the purposes of paragraph 8900(a) of the Regulations, XXXXXXXXXX would not be eligible for the deduction under paragraph 110(1)(f) of the Act for 1999 and 2000.
We trust this information is helpful.
Charles Rafuse
For Director
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Planning Branch
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