4 January 1983 Income Tax Severed Letter A-7496 - [830104]

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.

XXXX

Wm.R. McColm (613) 995-2455

January 4, 1983

XXXX

This is in reply to your letter of December 3, 1982 regarding

XXXX

In your latter you have asked for our opinion on whether XXXX would be exempt from Canadian income tax with respect to his remuneration from XXXX by virtue of Article XIV of the Canada-U.K. Tax Convention. You point out that Article XVIII of the former tax convention between Canada and the U.K. did provide such exemption.

Based on our review of the provisions of Article XIV of the present Convention and the facts set out in your letter, it is our opinion that XXXX engagement would not qualify as independent educational activities for the purposes of Article XIV of the Convention. Furthermore, he does not appear to be entitled to an exemption pursuant to Article XV of the present Convention, on the basis that the condition set out in paragraph 2(b) therein is not met.

You have also requested our opinion on whether XXXX is exempted from the obligation to make contributions under the Canada Pension Plan Act. To qualify for the exemption set out in paragraph 6(2)(c) of the CPP Act, a teacher must have completed an exchange arrangement with the Canadian Education Association or such other similar body in the U.K. and must be teaching in Canada for the term of the arrangement. Furthermore the remuneration must be paid by the foreign institution and not by the Canadian institution. Based on the information contained in your letter, XXXX would not appear to qualify for this exemption.

In some cases visiting professors are exempted from making CPP contributions by virtue of a provision in social security agreements which have been entered into by Canada and the home countries of the professors involved. These agreements, in effect, provide that an individual will be subject to the social security system of one country or the other, but not both. At the present time, no such agreement exists between Canada and the U.K.

We note that XXXX also required to make Unemployment Insurance contributions, as he does not qualify for the exemption set out in paragraph 14(b) of the Unemployment Insurance Regulations which reads as follows:

"14. The following employments are excepted from insurable employment: . . . (b) employment of an exchange teacher if that teacher is not remunerated by an employer residing in Canada".

Our interpretation of this provision is the same as that set out above concerning paragraph 6(2)(c) of the CPP Act.

We trust that these comments will be of assistance to you.

Yours truly,

for Director Non-Corporation Rulings Division

Can.-U.K. Treaty Art XIV