19 March 1980 Income Tax Severed Letter

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.

M. Eisner (995-0051)

March 19, 1980

XXXX

This is in reply to your letter of January 12 concerning your source Income.

Subject to the provisions of the Canada-United Kingdom Tax Agreement, a resident of the United Kingdom, who is employed or carries on business in Canada, is generally required to file a Canadian income tax return.

The income from XXXX should be reported in the enclosed T-1 income tax return. We have also enclosed a copy of Interpretation Bulletin IT-171 which outlines has personal exemptions are to be calculated.

In the second page of your letter, you have referred to a 15% withholding tax deducted by a province. We assume that this tax is as described in the enclosed Information Circular 75-6.

When this tax is withheld, it is considered to have been paid by you on account of your tax liability which is determined by completing a Canadian income tax return. It cannot be deducted in determining your income that is subject to tax.

XXXX While you were resident in Canada XXXX

We would assume this would be part of your professional income subject to 15% withholding tax unless you were an employee and subjected to normal withholding tax. This income should be reported in your Canadian return.

As a U.K. resident, you are not required to report the royalty income you received from Canada, XXXX.

We trust that the enclosed Circular and income tax return will enable you to determine the nature of the tax withheld from your income.

For your further information, we have enclosed a copy of the pamphlet entitled "Income Tax and the Non-Resident" which generally explains how non-residents are taxed by Canada.

Yours truly,

for Director Non-Corporate Rulings Division

Can-U.K. Tax Convention Art. 15