13 July 1995 External T.I. 9518165 - WITHHOLDING TAX ON RRSP AND RRIF WITHDRAWALS

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:

Whether withholding tax rate of 10% on amounts withdrawn from RRSP's and RRIF's applies to an amount equal to $5000.

Position TAKEN:

Yes

Reasons FOR POSITION TAKEN:

	Wording of Reg. 103(4) - correction of previous 	statements in 922499 and 922522.

XXXXXXXXXX 951816

Attention: XXXXXXXXXX

July 13, 1995

Dear Sirs:

Re: Withholding Taxes on RRSP's and RRIF's Withdrawals

This is in reply to your letter of July 6, 1995, in which you ask us to confirm the prescribed rate of withholding tax on amounts withdrawn from registered retirement savings plans (RRSP's) and registered retirement income funds (RRIF's). You refer to two previous interpretations issued by our directorate (document numbers 922499 and 922522) concerning the rates prescribed by subsections 103(4), (5) and (6) of the Income Tax Regulations.

This will serve to confirm that our previous interpretations should be amended so that the prescribed rate of withholding tax of 10% is applicable to amounts of "$5000 or less" and the 20% rate is applicable to amounts of "More than $5000 to and including $15,000".

We trust our comments will be of assistance to you.

Yours truly,

for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch