12 January 1990 Administrative Letter 59106 F - Non-resident Withholding Tax

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.

January 12, 1990

Dear Sir:

This is in reply to your letter of November 17, 1989 and further to our conversation of December 8, 1989 with respect to the withholding of tax pursuant to Part XIII of the Income Tax Act (the "Act") where a non-resident corporation in one country uses a Canadian bank as its agent to make interest or dividend payments to a non-resident in another country.

Notwithstanding the fact that a Canadian bank is acting as an agent for a non-resident corporation and may not be required to withhold tax pursuant to Part XIII of the Act, depending on the facts of the particular situation (e.g. country of residence of the non-resident) the Canadian bank may still be required to prepare certain forms such as NR1, NR4, NR601 and NR602. Should you wish copies of any of these forms or have any particular questions concerning such filing requirements we suggest you contact your District Office.

As was indicated to you, without further detail we are unable to provide you with the confirmation you seek concerning the situation in which you describe the bank as a "nominee" rather than an agent.  As a minimum we would need to review the contractual relationships between the bank and other parties to the transaction. Should you have a specific proposed transaction, you may wish to request an advance income tax ruling. The procedure to be followed in requesting an advance income tax ruling are described in Information Circular 70-6R, a copy of which is enclosed.

We hope our comments are of assistance to you.

Yours truly,

for DirectorFinancial Industries DivisionRulings Directorate