14 May 1991 Internal T.I. 911207 F - Canada-France Income Tax Convention

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.

Dear Sir:

This is in response to your letter of April 17, 1991, and our various conversations with respect to the deduction for Canadian income tax purposes of 24(1)

Our understanding of the limited information provided by you is summarized as follows:

1.     

2.     

3.     24(1)

4.     

You asked whether pursuant to paragraph 5 of Article XXIX of the Canada-France Income Tax Convention (1975), (the "Convention")

24(1)

would qualify as deductible amounts paid to a pension plan that is recognized as such for purposes of the Canadian Income Tax Act (the "Act").

Although the phrase "in respect of services rendered" in paragraph 5 of Article XXIX of the Convention is not restricted to a specific employer or a specific location, it is our view that the words "contributions in a year in respect of services rendered in that year paid by, or on behalf of, an individual" contemplate contributions paid into a pension plan during the period in which the services are rendered i.e. current service payments and not past service payments.  In addition, as paragraph 5 was added to the Convention by the Protocol thereto which entered into forced on October 1, 1988 and will have effect on January, 1, 1989 only contributions made during the period from January 1, 1989 to the day of termination of your employee status with

24(1)

We regret that our response could not be more favourable.

Yours truly,

for DirectorReorganization and Non-Resident DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch