Income Tax Severed Letters - 2022-09-14

Technical Interpretation - External

15 December 2021 External T.I. 2021-0916041E5 - XXXXXXXXXX

Unedited CRA Tags
3, 56(1)(a)(ii), 56(1)(u)

Principal Issues: Whether ex-gratia payments received by individuals, under the proposed XXXXXXXXXX, would be included in the taxable income of the recipient.

Position: No.

Reasons: The ex-gratia payments, under the XXXXXXXXXX, will not constitute income from a source, and therefore, will not be taxable under the Income Tax Act.

Technical Interpretation - Internal

12 January 2022 Internal T.I. 2021-0920371I7 - METC – Cost of a cast

Unedited CRA Tags
Section: 118.2; paragraphs 118.2(2)(i) and (m), paragraph (i) of Regulation 5700

Principal Issues: Whether the cost of a walking cast would qualify as an eligible medical expense for the purposes of the METC.

Position: Yes.

Reasons: See response.

5 October 2021 Internal T.I. 2021-0903361I7 - Remittance Basis Taxation - Canada-Barbados Treaty.

Unedited CRA Tags
104(13), (19) and 212(1)(c) ITA; Art. IV, XXIII(3), XXVII and XXX(5) Canada-Barbados Treaty.
Barbados remittance-based taxpayer is a Treaty resident under Crown Forest test
CRA requires proof that a Barbados remittance-based resident has borne tax on Canadian dividend income before providing the Treaty rate reduction

Principal Issues: Whether Article XXX(5) of the Treaty applies to limit the application of the 15% reduced withholding tax rate provided for in Article XXIII of the Treaty to a dividend paid by a Canadian-resident corporation to a Canadian-resident trust, and deemed to have been received, under subsection 104(19), by a Barbados-resident beneficiary of the trust that is subject to tax on a remittance basis in Barbados.

Position: In order for the benefit of the 15% reduced withholding tax rate in Article XXIII of the Treaty to apply to the trust distribution, the non-resident beneficiary of the trust would have to establish, based on supporting relevant documentary evidence, that the dividend has been remitted and taxed in Barbados in conformity with the law in force in Barbados.

Reasons: Previous positions and application of Articles XXIII(3) and XXX(5) of the Treaty.