28 January 1992 Income Tax Severed Letter 9133635 - Pensions from the United Nations Joint Staff Pension Fund

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.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department. Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Subject: PENSIONS FROM THE UNITED NATIONS JOINT STAFF PENSION FUND Section(s): ART 18, 56(1)(a)(i)]

913363
Jim Wilson
(613)957-2123

XXX

January 28, 1992

Dear XXX:

This is in reply to your letter dated November 27, 1991, concerning the tax implications in Canada on certain foreign pension income. Our understanding of the facts is as follows:

XXX

Our Comments:

Under the Canadian tax system, a resident of Canada is generally taxed on his world income including any superannuation or pension benefits arising outside Canada. Pursuant to the Privileges and Immunities (International Organizations) Act and the order-in-council respecting privileges and immunities for the International Labour Organization, no exemption from Canadian tax is granted with respect to superannuation or pension benefits earned as a result of services provided to the ILO.

It is our understanding that the UNJSPF is an entity constituted within the United Nations, the administration and control of which is the responsibility of the Secretary-General of that organization. With the United Nations headquarters being located in the United States the application of the Canada-U.S. Income Tax Convention (the "treaty', must be considered. Pursuant to Article XVIII of the treaty Canada maintains its right to tax pension income arising in the U.S. and paid to a resident of Canada to the extent such income would have been subject to tax in the U.S. had the recipient been a resident of the U.S.. In this regard we have received confirmation from the Internal Revenue Service that Pensions paid from the UNJSPF to residents of the U.S. are taxable in that country. Accordingly, the treaty does not affect Canada's right to tax such income. A foreign tax credit would be allowed in respect of income tax which is required to be withheld by the payer.

We trust the above explanation is satisfactory for your purpose.

Yours truly,

for Director
Reorganizations and Foreign Division
Rulings Directorate
Legislative and Intergovernmental
Affairs Branch