23 July 1990 Ruling EACC9373 F - Withholding Tax Exemption on Trust Income Distributed to Israel

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.

July 23, 1990

19(1)

Re:   24(1)

We are writing in reply to your letters dated June 15 and June 29, 1990, in which you requested exemption from withholding tax on trust income distributed to the State of Israel.

We are pleased to advise you that we are prepared to grant exemption to the Sate of Israel on the basis of sovereign immunity.  This letter serves as authorization for the trustee of the above-noted Estate to make payments of trust income to the Sate of Israel without withholding Part XIII tax.  Where tax has already been withheld, the non-resident beneficiary (i.e. Israel) should provide a photostatic copy of this letter with the NR7-R refund application (see paragraph 71 of Information Circular 77-16R3 enclosed herewith).

This exemption is granted pursuant to the Doctrine of Sovereign Immunity and is subject to the conditions contained in paragraph 47 of the above-mentioned circular.  It is also granted on the understanding that the income of the trust consists of interest on Canadian term deposits and bank accounts.

The authorization for exemption from tax expires on December 31, 1991.  If at that time the Estate has not wound-up (i.e. distribution of residuary estate), a re-application for sovereign immunity should be made.  We are of the understanding that the Estate will be wound-up upon receipt of a clearance certificate (i.e. subsection 159(2) of the Income Tax Act) from our department.

We trust you will find this to your satisfaction.

Yours sincerely,

C. Savage A/DirectorProvincial and InternationalRelations Division

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