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 Sirs:
RE: Disability Pension
This is in response to your letter of May 2, 1988. You have enquired whether your disability pension income is subject to Canadian non-resident tax.
The disability pension benefits which you have described are not taxable under the Provisions of the Canadian Income Tax Act (the XXX "Act"). Canada does have the right however, under the provisions of the Article XI of the Canada - U.S. Income Tax Convention (1980) and the Act to apply a withholding tax at a rate of 15% to interest income earned in Canada by a resident of the United States. Unfortunately, the source of funds, whether taxable or not, does not affect the taxation of interest earned thereon.
To eliminate any future Canadian withholding tax you may consider transferring these funds to a bank in the U.S. Regrettably, the Canadian taxes you have already paid on this income cannot be refunded.
We hope that the above will be of assistance to you.
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© Her Majesty the Queen in Right of Canada, 1988
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© Sa Majesté la Reine du Chef du Canada, 1988
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