13 December 1990 Internal T.I. 902529 F - Canada-Sweden Income Tax Convention on Taxation of Insurance Policy

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.

19(1)

December 13, 1990

Dear Sirs:

We are writing in response to your correspondence of September 5, 1990 concerning the taxation in Canada of individual insurance products and, more particularly, the application of any such requirements as would affect Swedes living abroad.

We would advise that the taxation of life insurance products in Canada is dependent upon a number of factors such as the type of the coverage and the date of issuance of the policy. Also, the extent to which any particular individual is subject to tax in Canada is determined by reference to a number of factors including the number of days which the individual is resident in Canada in the particular year. The determination of residency also affects the manner in which the life insurance policy is subject to tax in Canada, if at all. Furthermore, the provisions of the Canada-Sweden Income Tax Convention may be applicable to override the provisions of the Income Tax Act of Canada.

Accordingly, we are unable to answer your questions as the determination of the taxation of any particular insurance policy would require a complete review of all facts relative to the policy and the policyholder having regard to both the Income Tax Act of Canada and the aforementioned income tax convention.

We are enclosing several publications of this Department for your review which consider such topics as "Policyholders' Income from Life Insurance Policies" (IT-87R), "Non-Resident Individuals-Taxable Income Earned in Canada" (IT-171R) and "Taxable Income of Individuals Resident in Canada during Part of a Year" (IT-193 and Special Release). We would caution that many of the comments in these publications are general in nature and that, when considering any particular circumstance, reference should be made to the Income Tax Act of Canada and the Canada-Sweden Income Tax Convention.

We trust that our comments are of assistance to you.

for DirectorFinancial Industries DivisionRulings Directorate