7 October 1991 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.

24(1)
                                   5-912670
                                   D.S. Delorey
                                   (613) 957-953

19(1)
                                   October 7, l991
Dear Sirs:

This is in reply to your letter of September 17, 1991 concerning the taxation of registered retirement income fund ("RRIF") payments to a U.S. resident.

Where the arrangement between the RRIF carrier and the annuitant provides that the minimum annual amount determined under paragraph 146.3(1)(b.1) of the Income Tax Act (the "Act") will be paid to the annuitant, it is the position of the Department that those minimum annual amounts represent periodic pension payments for the purposes of Article XVIII of the Canada-U.S. Income Tax Convention (1980). Accordingly, the 25% Part XIII withholding tax under paragraph 212(1)(q) of the Act will be reduced to 15% by reason of part 2(a) of that Article where such amounts are paid to a U.S. resident. Where such an arrangement is in place and at a particular time during a year the U.S. resident requests payment of an amount in excess of the minimum annual amount for the year, such excess amount would normally not qualify as a periodic pension payment and would thus be taxed at the 25% rate referred to above.

Where the arrangement is other than that described above, the determination of the income tax implications is done on a case- by-case basis having knowledge of all relevant facts. Such determinations would normally be made by the Non-resident Taxation Division, 360 Laurier Avenue West, Room 200C, Ottawa, Ontario KlP 5K2.

We trust our comments are of assistance.

Yours truly,

for Director Financial Industries Division Rulings Directorate,

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