31 October 1995 External T.I. 9525695 - SINGAPORE PENSION EXEMPT FROM TAX (4093-S2)

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 pensions received from Singapore by a resident of Canada are exempt from tax in Canada.

Position:

Yes.

Reasons:

Article XVII of the Canada-Singapore Income Tax Convention provides that pensions arising in Singapore shall be taxable only in Singapore.

		952569
XXXXXXXXXX	G. Middleton
(613) 957-2122
Attention:  XXXXXXXXXX

October 31, 1995

Dear Sirs:

This is in reply to your letter of September 29, 1995 and further to our recent telephone conversation concerning the Canadian income tax treatment of funds from a foreign pension plan received by a resident of Canada.

Our understanding of the facts is as follows:

1.Mr. X became a resident of Canada in 1992; prior to this, he was a resident of and citizen of Singapore.

2.Mr. X is a member of the Central Provident Fund ("CPF") which is located in Singapore and it is a government sponsored pension plan in which employers and employees contribute to the plan.

3.At age 55, Mr. X can receive a payout of all funds available to him out of the CPF and this amount will not be taxable in Singapore.

4.Prior to age 55, Mr. X can withdraw all of the funds from the CPF if he renounces his Singapore citizenship and becomes a Canadian citizen.

Our Comments

(i)If Mr. X receives funds out of the CPF which represent "superannuation or pension benefits" as defined in subsection 248(1) of the Income Tax Act (the "Act"), paragraph 56(1)(a) of the Act would require such amounts to be included in his income.

(ii)Article XVII of the Canada-Singapore Income Tax Convention (the "Treaty") provides that pensions and annuities arising in a Contracting State (such as Singapore) shall be taxable only in that State (Singapore).

(iii)In computing Mr. X's taxable income, he will be entitled to a deduction under subparagraph 110(1)(f)(i) of the Act for the amount of the CPF pensions received by him since such pensions are exempt from income tax in Canada under Article XVII of the Treaty.

(iv)Our comments would not change if Mr. X withdrew such CPF pension funds before age 55.

We trust the above comments satisfactorily answer your enquiries.

Yours truly,

for Director
Reorganizations and Foreign Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch