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.
Source Deductions Division
XXXX
January 17, 1975
Dear XXXX
Thank you for your letter dated January 14, 1975, copy of the Agreement and our telephone conversation on the relevant subject.
While we appreciate your submission we respectfully maintain that your non-resident client is subject to the requirements of Section 105 of the Income Tax Regulations.
With reference to subsection 108(1) of said Regulations the provision was amended by Order in Council P.C. 1974 - 483 of March 5, 1974 and now reads In part:
"Amounts deducted or withheld under subsection 153(1) of the Act shall be paid to the Receiver General of Canada on or before the fifteenth day of the month next following the month in which the amounts were deducted or withheld."
The tax withheld and remitted is on account of the possible liability for Part I tax in the taxation year by the non-resident.
As final determination of Part I tax, can only be made following the end of the taxation year, no special consideration can be given your client under current policy. If on filing the return for the year, it is concluded that under the Act or the Convention the tax withheld is in excess of that required, the surplus will then be refunded.
May we also mention that as an employer your non-resident client is required to withhold tax from remuneration paid to its non-resident employees in Canada in accordance with the Income Tax Deductions at Source tables, available on request from any District Taxation Office. lot addition your client is required to deduct Unemployment Insurance premiums from non-resident employees and to pay the employer's premium by virtue of Section 15 of the Unemployment Insurance Collection of Premiums Regulations. There is, however, no obligation with respect to Canada Pension Plan contributions.
We regret that a more favorable decision cannot be rendered, and would appreciate the co-operation of your non-resident client and the Canadian resident corporation in withholding, remitting and reporting the relevant amounts.
Yours faithfully,
G.J. MacKenzie Director Source Deductions Division
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