10 August 1978 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.

August 10, 1978

Dear Madam:

Re: Non-Resident Withholding Tax

We acknowledge receipt of your letter of July 27, 1978.

We wish to advise that the Government of Canada imposes a tax on the income of residents of Canada and on the income of non-residents derived from Canadian sources.

If you are a resident of Canada, you are taxed on all of your income regardless of whether the income is from sources inside or outside Canada.

If you are not a resident of Canada, you are taxed only on income from Canadian sources.

In general, you are a resident of Canada if you live primarily in Canada.

It has been determined that you are a non-resident of Canada for Income Tax purposes since you have established your residence in another country and because you have severed your residential ties with Canada. As such, you would normally be required to pay a non-resident withholding tax on gross income from Canadian sources.

However, under certain circumstances the tax conventions or agreements between Canada and certain foreign countries provide exemptions from the Non-Resident Tax.

The agreement between Canada and the United Kingdom exempts from tax in Canada pensions paid or credited to a resident of the United Kingdom.

Your pension from XXXX is, therefore, exempt from tax in Canada as mentioned in previous correspondence. You are not required and cannot elect to pay tax to Canada on the gross pension from Canada.

We trust the information provided clarifies the matter to your satisfaction.

Yours truly,

Source Deductions Section.