15 April 1983 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.

April 15, 1983 Tel: 426-3135 Source Deductions J. D. Glennie

Dear Sirs:

XXX

Your request for a waiver of withholding under Regulation 105 of the Income Tax Act on payments by the above client has been considered by this office.

The information provided is insufficient for us to determine the potential tax liability of XXXX under all sections of the Income Tax Act. The waiver is therefore not approved at this time and all charter payments will be subject to the 15% withholding. Payroll deductions will be required to be remitted to this Department for all employees on this vessel.

I have attached a list of information required should you wish to re-apply for this waiver at a later late.

We regret we cannot give you a more favourable reply.

Yours truly,

Chief of Source Deductions Halifax District Office

Appendix (a)

Information for Application for Waivers

Under the Canada - U. K. Tax Convention Article 27A, paragraph 4 - Service Vessels

(A) Confirmation of Ownership of the Vessel including:

(i) Date of Purchase confirmed by a copy of the sale agreement.

(ii) Was this an arm's length purchase? If not, provide details of the relationships of the previous owner to the U.K. Company.

(B) Confirmation that the vessel is owned by a Corporation resident in the U.K. including:

(1) A copy of the financial statements of the U.K. Company for the last fiscal year.

(II) Certification by the U.K. Tax authorities that the U.K. Corporation is resident in the U.K.

(III) A list of the shareholders of the U.K. Company, including their address and nationality.

(C) If the vessel is not owned but rented or leased provide the following;

(1) A copy of the lease agreement, starting date and method of payment.

(II) Is this an arm's length lease? If not provide details of the relationship between the lessee and owner. What is the Nationality of the owner.

(D) Verification that the employees on this vessel are subject to withholding of Canadian Income Tax, Canada Pension, and Unemployment Insurance by:

(1) Providing a list of all employees on the vessel including their Canadian Social Insurance number; nationality, and rate of pay in 1983 and total earnings in 1982.

(2) The location and Agent who will maintain the payroll in Canada.

(3) A signed undertaking by the Agent and the Company that the employees' earnings and deductions will be reported on Income Tax from T-4 and that the employees will file a Canadian Income Tax Return for each year they are employed or resident in Canada.

(E) An undertaking signed by an officer of the U.K. Company and the Canadian agent that the U.K. Company will file T-2 Corporation returns and pay any taxes owing as required by law.

The Canadian agent must undertake to absolve the Crown of any loss on default of this undertaking.

JDG/kp (Appendix. 2)