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.
XXXX
July 27, 1981
Revenue Canada, Taxation Non-Corporate Ruling Division 875 Heron Road OTTAWA, ONTARIO K1A 0L8
Dear Sirs:
RE: CANADA-U.K. TAX CONVENTION
We respectfully request your interpretation of the application of the Canada-U.K. Tax Convention in the following situation.
The taxpayer is a university professor coming to Canada in July, 1980, from the United Kingdom for the purpose of teaching temporarily in Canada for a period not exceeding two years. According to Article 18 of the Canada-U.K. Income Tax Agreement and IT-68R , the taxpayer is exempt from Canadian income tax on his remuneration earned from such teaching duties in Canada and from Canada Pension Plan. He will receive a refund of the Canadian income tax and CPP he has paid on the teaching remun- eration after he terminates his teaching in Canada at the end of the two-year period.
The Canada-U.K. Income Tax Agreement ceased to have effect after the Canada-U.K. Income Tax Convention (1978) entered into force on December 17, 1980. The new Convention does not contain the same provision to exempt the tax on visiting professors' remun- eration. Instead, Article 15 of the new Convention provides that if the employment of the taxpayer is exercised in Canada, the remuneration derived from Canadian employment may be taxed in Canada. The Canadian government can tax the remuneration earned by visiting professors in Canada for the 1976 taxation year and subsequent years. However, by virtue of Article 28, if any provision of the old Canada-U.K. Agreement will provide greater relief from tax than the new Canada-U.K. Convention, that provision of the old Agreement will continue to have effect in Canada for any taxation year beginning before December 17, 1980.
The taxation year of the taxpayer is a calendar year (section 249 of the Income Tax Act). Therefore, our interpretation of the Convention is that the taxpayer is exempt from Canadian income tax and CPP on his teaching remuneration earned in Canada for the 1980 calendar year, and a refund of the above amounts will be made by the Department of National Revenue after he terminates his teaching in Canada at the end of the two- year period, in accordance with IT-68R . From 1981 onward the taxpayer's Canadian teaching remuneration will be subject to Canadian income tax and CPP.
Please confirm that our interpretation as stated above is correct. If you have any questions regarding this matter, please contact the writer at your convenience.
Yours very truly
XXXX
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