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.
930489
XXXXXXXXXX D. Patrick
(613) 957-2125
March 19, 1993 Dear XXXXXXXXXX Re: Non Resident Taxation from Rental Income earned in Canada
This is in reply to your letter of February 8, 1993 in which you inquired whether a non resident is taxable on rental income earned in Canada.
For your information we are enclosing an Interpretation Bulletins IT 434 ( IT-434R ) which outlines the treatment of income from the rental of real property by an individual. Paragraphs 15 and 16 deal specifically with the treatment of rental income received by a non-resident of Canada.
These bulletins indicate that rental income from real property situated in Canada is subject to tax in Canada.
In general terms, the determination of the tax is dependent on whether the rental income arises from a business carried on in Canada, or whether it is considered to arise from the property itself. Reference should be made to paragraphs 2 - 8 of IT-434R to assist you in making this determination for a particular fact situation.
We are enclosing copies of Articles V, VI and VII of the Canada - United Kingdom Income Tax Convention (1978) which deals with income from the rental of real property.
If the rental income is determined to be income from property, a taxpayer will be entitled to file an election when it is advantageous to him. Details of the filing of this election which must be made within 2 years from the end of the Calendar year in which the income was received, are discussed in detail in IT-393R .
Also attached for you information is a Non Resident and Deemed residents of Canada tax return for 1991 and 1992, a Rental Income Tax guide for 1992 and Interpretation Bulletins IT-393R and IT-171R2 .
Yours truly,
for Director Reorganizations and Foreign Division Rulings Directorate Legislative and Intergovernmental Affairs Branch
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© Her Majesty the Queen in Right of Canada, 1993
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© Sa Majesté la Reine du Chef du Canada, 1993
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