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.
May 9, 1989
Dear Sirs:
This is in reply to your letter of April 18, 1989, wherein you requested a technical interpretation with respect to certain foreign plans under which your client, a Canadian resident, is a participant.
We do not give opinions in respect of factual completed transactions and therefore suggest that you consult with the local district taxation office. However, we will offer the following general comments.
Generally, a plan under which contributions are made by an employer to a custodian in connection with benefits to be received on retirement or substantial change in services would be considered a "retirement compensation arrangement" ("RCA") under subsection 248(1) of the Income Tax Act (the "Act").
We direct your attention to subsection 207.6(5) of the Act which provides that a plan that would be exempted from the definition of RCA under subsection 248(1) of the Act by virtue of paragraph (L) thereof will be deemed to be a "Residents arrangement" and subject to the RCA rules to the extent that the contributions are made in respect of services rendered by an employee who was resident in Canada at the time the services were rendered.
However, it should be noted that the Department of Finance proposes to exclude certain foreign pension plans from the RCA rules provided they meet certain conditions.
Furthermore, it is our view that a payment received upon retirement by an employee that represents unused sick leave credits would generally be considered a retiring allowance under subsection 248(1) of the Act unless the payment is made under a funded plan. In the latter situation the plan would be considered an RCA.
Finally, it should be noted that the determination of whether a foreign pension plan is an RCA, SDA or an unregistered pension plan can only be made after a detailed examination of all the relevant terms and conditions.
We trust the above comments will be of assistance to you.
Yours truly,
for Director Financial Industries Division Rulings Directorate
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 1989
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 1989
Email this Content