17 May 1993 External T.I. 9304765 F - Tax Exempt U.S. Pension Fund (4093-U5-100-4)

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.

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Attention:  XXXXXXXXXX

Dear Sirs:

RE:  Residence of a U.S. Tax Exempt Pension Trust

This is in reply to your letter of February 15, 1993 wherein you requested our opinion concerning the residence of a U.S. tax exempt pension trust under the Canada-U.S. Income Tax Convention (1980) (the "Convention").

Revenue Canada has taken the position, in consultation with the Department of Finance, that tax exempt entities, including U.S. tax exempt pension trusts, are considered to be residents of the contracting state under which they are organized for purposes of Article IV of the Convention and for similar articles in other income tax conventions or agreements which Canada has in force. Accordingly, a U.S. tax exempt pension trust would therefore be entitled to all benefits under the Convention, including those contained in Articles VII, X and XIII of the Convention, notwithstanding that such entities are not "liable to tax" in the United States. The comments set out in the Technical Explanation to the Convention concerning "resident in and resident of a contracting state", in respect to Article XXI of the Convention, have been superceded by the above commments which are applicable to all of Canada's tax conventions or agreements.

In summary, a tax exempt U.S. pension trust will be considered a resident of a contracting state for purposes of Article IV and will therefore be eligible to obtain any benefits provided under the Convention including Articles VII, X and XIII.

Yours truly,

for DirectorReorganizations and Non-resident DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch