Income Tax Severed Letters - 2024-04-10

Technical Interpretation - External

12 December 2023 External T.I. 2021-0881541E5 - Pension benefit from Chile

Unedited CRA Tags
56(1)(a); 110(1)(f); 248(1) "superannuation or pension benefit"; Article 18(1) of Canada-Chile Treaty.
Summary Under
Tax Topics - Treaties - Income Tax Conventions - Article 18
an exceptional COVID-related withdrawal from a Chilean pension plan qualified as an exempted pension under the Canada-Chile Treaty

Principal Issues: Whether the withdrawal of funds from a mandatory pension scheme in Chile under an exceptional measure authorizing the withdrawal is subject to tax in Canada.

Position: No.

Reasons: Pursuant to Article 18(1) of the Canada-Chile Tax Treaty, pensions arising in Chile and paid to a taxpayer resident in Canada are only taxable in Chile.

3 October 2023 External T.I. 2023-0965061E5 - Northern Residents Travel Deduction

Unedited CRA Tags
110.7(1); 110.7(3); ITR 7304

Principal Issues: Whether an eligible taxpayer in receipt of a travel benefit from employment may continue to claim two trips per person, on a taxpayer by taxpayer basis, under the amended legislation.

Position: No.

Reasons: See below.

Technical Interpretation - Internal

29 December 2023 Internal T.I. 2023-0998801I7 - Payments to Low-Income Seniors Benefit recipients

Unedited CRA Tags
56(1)(u); ITR 233(2); Section 52 of New Brunswick's Income Tax Act.

Principal Issues: Whether a non-legislated "affordability supplement" payment for each of the 2023 and 2024 benefit years, to be made in 2024 to recipients of the New Brunswick Low-Income Seniors Benefit, would be included in the recipients' income.

Position: Likely not.

Reasons: Although the affordability supplement appears to be a social assistance payment contemplated in paragraph 56(1)(u), it would meet one of the reporting exceptions in paragraphs 233(2)(f) or (g) of the Income Tax Regulations. When this is the case, it is the practice of the Canada Revenue Agency not to require the excluded amount(s) to be included in the recipient’s income.