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: RCA foreign tax credit
Position: Explained provisions
Reasons: Routine
May 14, 1996
Winnipeg Taxation Centre Headquarters
RCA Unit Wayne Harding
(613) 957-8953
Attention: Pearl Fedick
7-961014
RCAs and Foreign Tax Credits
This is in reply to your fax of Mar 19, 1996 concerning the treatment of foreign tax withheld on RCA income. In particular you have asked how should income received from a mutual fund be reported on a T3-RCA where foreign taxes have been withheld at source.
An RCA trust is not subject to Part 1 tax in accordance with paragraph (149(1)(q.1) of the Income Tax Act (the "Act"). Accordingly, it can not claim a deduction under subsection 126(1) of the Act in respect of any foreign taxes paid on its income. However, in accordance with subsections 20(11) and (12) of the Act, an RCA trust may generally deduct any non-business foreign taxes paid when calculating its income for the purposes of computing its Part XI.3 refundable tax payable. An RCA should therefore report the gross amount of income received from a mutual fund and deduct from this amount any amounts that may be claimed in accordance with subsections 20(11) or (12) of the Act. Please refer to Interpretation Bulletin IT506 for a discussion of subsections 20(11) and (12).
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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© Her Majesty the Queen in Right of Canada, 1996
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