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.
November 24, 1980
Director, Non-Corporate Rulings Revenue Canada Taxation 875 Heron Road Confederation Heights Ottawa, Ontario K1A OL8
Dear Sir:
XXXX
I have recently been asked about the tax status of payments made by a Canadian husband to an estranged wife resident in Australia. A strict reading of the Canada-Australia Tax Convention (1980), Interpretation Bulletin 118R and paragraph 212(1) (f) of the income Tax Act lead me to think that a non-resident tax remittance of 25% Is exigible on such payments.
If I am right, this seems a bit unfair because the Convention applies a 15% rate in respect of pensions and annuities but is silent as to alimony and maintenance. As well, I am given to understand that the new Canada-U.S. Convention will exempt from non-resident tax all alimony and maintenance payments between those two countries.
Would you please advise me if I am correct in assuming a 25% rate, or if it is indeed 15%. Since alimony payments are not taxable to the recipient in Australia, a logical case could be built. for not having a non-resident tax deduction at all, but .1 do appreciate that this Is not what our law says.
I appreciate your help.
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© Her Majesty the Queen in Right of Canada, 1980
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© Sa Majesté la Reine du Chef du Canada, 1980
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