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 ISSUE:
Whether any amount that is withdrawn from a RRIF in the year the fund is entered into is subject to withholding tax.
Position TAKEN:
Yes.
Reasons FOR POSITION TAKEN:
Withholding is required on amount withdrawn in excess of minimum amount and the minimum amount in the year the fund is entered into is nil.
5-943252
XXXXXXXXXX L. Roy
Attention: XXXXXXXXXX
February 8, 1995
Dear Sirs/Madam:
Re: Withholding Tax from Registered Retirement Income Funds ("RRIF")
This is in reply to your letter of December 15 1994 in which you requested whether any amount that is withdrawn from a RRIF in the year the fund is entered into is subject to withholding tax.
Pursuant to section 103 of the Income Tax Regulations, the yearly minimum amount that is required to be paid to a taxpayer under a RRIF is not subject to withholding tax. However, withholding is required with respect to payments in excess of the minimum amount.
Pursuant to the definition of "minimum amount" under subsection 146.3(1) of the Income tax Act, the minimum amount required to be paid to a taxpayer in the year the fund is entered into is nil. Therefore, it is our view that any amount withdrawn in that year is subject to withholdings.
The foregoing opinions are not rulings and, in accordance with the guidelines set out in Information Circular 70-6R2 dated September 28, 1990, are not binding on the Department.
We trust the above comments will be of assistance to you.
Yours truly,
for Director
Financial Industries Division
Rulings Directorate
Policy and Legislation Branch
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