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.
Principal Issues:
T/P states that our letter of January 20, 1995 mentions that tax on a RRIF payment is based on a monthly basis while the Hamilton District Office's letter of November 17, 1994 states that it is based on an annual basis.
Position TAKEN:
Position in our letter dated January 20, 1995 is accurate.
Reasons FOR POSITION TAKEN:
Memo from Source Deductions Division
5-951357
XXXXXXXXXX A. St-Amour
Attention: XXXXXXXXXX
July 7, 1995
Dear Sirs:
Re: Computation of Withholding Tax from a Registered Retirement Income Fund ("RRIF")
This is in response to your letter of May 9, 1995 which refers to our letter of January 20, 1995 and a letter dated November 17, 1994 issued by the Hamilton District Office.
The information in our letter of January 20 concerning the calculation of the tax withholding on the excess amount over the minimum amount from a RRIF is accurate except that the withholding rates are as follows:
Amount Tax Rate
Not more than $5,000 10%
More than $5,000 and but not more than $15,000 20%
More than $15,000 30%
With respect to RRSP's, if an individual withdraws 12 RRSP payments during a taxation year and each has a value not exceeding $5,000, the required tax withholding from each payment is 10 percent. The individual will subsequently be responsible for any shortfall in tax. However, if the withdrawals are in the nature of instalments made in fulfilment of a single request by the individual, it is the Department's position that the withholding rate applicable to the total amount requested will apply to each withdrawal. The Hamilton District Office has been advised of this position.
As explained in paragraph 21 of Information Circular 70-6R2 dated September 28, 1990, the above comments do not constitute an advance income tax ruling and are not binding on the Department. We trust the above comments will be of assistance to you. If you have any questions do not hesitate to contact us.
Yours truly,
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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