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.
| |
November 27, 1990 |
| Source Deduction Division |
Financial Industries |
| Research and Enquiries |
Division |
| Section |
F. Francis |
| |
957-3496 |
| Attention: E. Hammond |
| |
7-903195 |
SUBJECT: Retirement Compensation Arrangement ("RCA")
This is in reply to your memorandum of November 5, 1990 wherein you requested our opinion as to whether the withholding requirements under paragraph 153(1)(q) of the Income Tax Act (the "Act") would be applicable to recoveries of refundable tax and refunds of employer contributions to RCAs.
In our view, recoveries of refundable tax received by an RCA trust would not be considered as a distribution under an RCA and therefore would not be subject to withholding tax.
However, we note that the definition of "refundable tax" under subsection 207.5(1) of the Act provides that distributions to one or more person under an RCA includes amounts that are required by paragraph 12(1)(n.3) of the Act to be included in the recipients income. Consequently it would appear that any payment to the employer under an RCA trust would be considered as a "distribution" to persons under an RCA under paragraph 153(1)(q) of the Act and subject to withholding tax.
We trust the above comments are of assistance to you.
for DirectorFinancial Industries DivisionRulings Directorate
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© Her Majesty the Queen in Right of Canada, 1990
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© Sa Majesté la Reine du Chef du Canada, 1990
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