30 January 1990 Ruling HBW4125N1 F - Canada-Netherlands Income Tax Convention

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.

Canada-Netherlands Income Tax Convention

We are writing in reply to your memorandum dated October 27, 1989, concerning the taxability of pensions received from the Netherlands.  We apologize for the delay in replying but we had to wait for translation of the document submitted by the taxpayer (attached hereto).

The organization granting the pension is the Government Pensions Unit.  A.B.P. stands for the "General Pensions Act for Public Employees" (i.e. Algemene Burgerlijke Pensionenwet).  Generally, benefits received under the General Pensions Act for Public Employees are not considered social security benefits.  The reference on the document to "AOW/AWW" appears to be related to premiums paid and not benefits received (similar to C.P.P. contributions on a T4 slip).

We are of the opinion that the pension is not a social security benefit.  Accordingly, paragraph 5(b) of Article 18 of the Canada-Netherlands Income Tax Convention does not apply and the pension may be taxed in Canada.  Where the taxpayer is not a national of Canada, paragraph 3 of the treaty would apply and the Netherlands would not be limited to a 15% withholding tax. This does not appear to be a concern as the tax withheld is well under 15%.

We have enclosed a memorandum sent to our Penticton District Office on January 16, 1990.  It deals in more detail with Dutch social security issues and should be of interest to you.  You may note that there is an exception in that memorandum, treating certain A.B.P. benefits as social security.  It is unlikely that  this exception applies to this taxpayer.  If you have any queries, please call Jim Wilson of this division at 957-2063.

C. SavageA/DirectorProvincial and International Relations Division

Enclosure

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