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.
DATE March 4, 1988
TO SPECIALTY RULINGS DIRECTORATE
K.B. Harding
FROM HEAD OFFICE Source Deductions Division Non-Resident Section G.W. Richardson (613) 954-5184
SUBJECT: Section 217 Election Canada-U.S. Tax Convention Taxation of OAP/CPP/QPP Benefits
Further- to your telephone conversation with Eric Hammond of this section, would you please provide us with your opinion as to what extent, if any, the Canada-U.S. Tax Convention (1980) will have, when a U.S. non-resident individual makes an election under Section 217 of the Act.
Interpretation Bulletin 163-R2 states that OAP/CPP/QPP benefits are not subject to Part XIII tax pursuant to paragraph 212(1)(h) of the Act. It further states that Section 217 removes a non-resident's Canadian tax liability under Part XIII of the Act in respect of qualifying amounts (paragraph 4) and incorporates them in a modified computation of the non-resident's "taxable income earned in Canada" under Part I of the Act (paragraph 8). Paragraph 9 further details that OAP/CPP/QPP benefits are brought back into the determination of the non-resident's taxable income earned in Canada pursuant to subparagraph 217(b)(1) of the Act.
Paragraph 18 also details the department's policy for application by a non-resident of Canada for a reduction in the amount of non-resident tax required to be withheld pursuant to subsection 809(1) of the Income Tax Regulations.(NR5). This calculation requires the inclusion of OAP/CPP/QPP benefits in full for this determination.
Your comments on the above situations will be greatly appreciated.
Non-Resident Tax Officer
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