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 the XXXXXXXXXX is a prescribed international organization for purposes of subparagraph 110(1)(f)(iii) of the Act.
Position: No.
Reasons: The XXXXXXXXXX does not form an integral part of the United Nations, nor is it a specialized agency bought into relationship with the United Nations.
2007-024832
XXXXXXXXXX D. Zhang
(613) 957-2104
January 22, 2008
Dear XXXXXXXXXX :
Re: Prescribed International Organization
We are writing in reply to your letter of August 9, 2007 in which you requested our comments on whether the XXXXXXXXXX is a "prescribed international organization" for purposes of subparagraph 110(1)(f)(iii) of the Income Tax Act (the "Act"). We apologize for the delay in replying.
The situation outlined in your letter relates to the employment contracts of specific taxpayers. Written confirmation of the tax implications inherent in particular transactions is given by this Directorate only where the transactions are proposed and are the subject matter of an advance income tax ruling submitted in the manner set out in Information Circular 70-6R5, "Advance Income Tax Ruling", dated May 17, 2002. This Information Circular and other Canada Revenue Agency ("CRA") publications can be accessed on the Internet at http://www.cra-arc.gc.ca. Where the employment contracts of specific taxpayers are in respect of completed transactions, you should submit all relevant facts and documentation to the appropriate Tax Services Office ("TSO") for their views. A list of TSOs is available on the "Contact Us" page of the CRA website. Although we cannot comment on your specific situation, we are prepared to provide the following general comments.
Subparagraph 110(1)(f)(iii) of the Act allows a taxpayer to deduct, in computing taxable income for a taxation year, any amount that is income from employment with a prescribed international organization. Subsection 8900(1) of the Income Tax Regulations defines a prescribed international organization to include "the United Nations, and each international organization that is a specialized agency brought into relationship with the United Nations in accordance with Article 63 of the Charter of the United Nations." Article 63 of the Charter of the United Nations (the "Charter") provides that the Economic and Social Council of the United Nations may enter into agreements with any of the agencies referred to in Article 57 of the Charter, 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. Article 57 of the Charter states that 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. The agencies brought into a relationship with the United Nations are referred to as specialized agencies.
Based on a review of the information that you provided as well as information available on the United Nations web site, we are of the view that the XXXXXXXXXX does not form an integral part of the United Nations, nor is it a specialized agency brought into relationship with the United Nations in accordance with Article 63 of the Charter. As a result, the XXXXXXXXXX would not be considered a prescribed international organization for purposes of paragraph 110(1)(f) of the Act.
We trust that these comments are of assistance.
Yours truly,
Daryl Boychuk
for Director
International and Trusts Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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