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Administrative Letter

22 December 1993 Administrative Letter 9316286 F - Is the Clawback of OAS an Income or Profits Tax (7793-5)

Income Tax Convention (the "Convention"), the taxpayer is exempt from tax in Canada on one-half of the total amount of the U.S. social security benefits. ... Alternatively, it may be argued that paragraph 2(a) of Article II (Taxes Covered) of the Convention clearly indicates that Part I.2 of the Act is not a tax specifically covered under the Convention. ... As a result, it is arguable that Part I.2 tax is not covered by the Convention. ...
Administrative Letter

1 May 1992 Administrative Letter 9206506 F - Application Of The 50% Test And"Liable To Pay Tax"(4232)

The exemption provided under a tax agreement or convention  provides that no tax is payable under Part XIII on particular types of income even though the taxpayer was liable to pay tax under that Part. Accordingly, pensions under the Old Age Security Act, benefits under the Canada or Quebec Pension Plans, alimony and any other amounts which are exempt from tax by virtue of the Canada-U.S.Income Tax Convention (the "Convention") will be considered to fall within the expression "...liable to pay tax under Part XIII of the Act... ... It is our view that any amounts which are exempt from tax in Canada, by virtue of a tax agreement or convention would not be considered as being "...included in the individual's taxable income... ...
Administrative Letter

8 April 1992 Administrative Letter 9200896 F - U.K. Corps Being Discriminated With Cancorps (4093-u422)

Income Tax Convention (1978) (the "Convention") reads as follows: The nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances are or may be subjected. ... Even if it is determined by the competent authorities that a particular company is a resident of the United Kingdom for purposes of the Convention, that company would continue to be a resident of Canada for Canadian taxation purposes subject to any relief provided by the Convention. ... Clearly one could not argue that this was the intention of the negotiators of the Convention. ...
Administrative Letter

4 July 1989 Administrative Letter 58156 F - Employee Benefit Plan

It is your view that EBP payments will qualify as periodic pension payments for purposes of the Canada-United States Income Tax Convention (the "Convention") if the EBP has been set up as an unregistered pension plan and no portion of the employer's contributions relates to deferred compensation. You conclude that in accord with Article XVIII of the Convention, payments out of this type of EBP should be subject to a 15% withholding tax and that the provisions of paragraph 153(1)(a) of the Income Tax Act (the "Act") and Part 1 of the Income Tax Regulations (the "Regulations") will be restricted in their application. ... For purposes of Canadian taxation it is our opinion that, in general, payments made to a non-resident out of an EBP into which contributions had been made at a time when the recipient was resident and employed in Canada, will be income from employment subject to the provisions of paragraph 115(1)(a) of the Act and Article XV of the Convention. ...
Administrative Letter

1 October 1990 Administrative Letter 901836 F - Charitable Organization Status - Trust Whose Income is Exempt in the Hands of Beneficiaries under Tax Treaty

The Department has adopted the position that a tax exempt organization can be resident in a Contracting State for purposes of Article XXI of the Convention notwithstanding that the organization may not be a "resident of a Contracting State" within the meaning of that term as defined by Article IV of the Convention because of it not being liable to tax.       ... This is also confirmed by the Technical Explanation of paragraph 1 of Article XXI of the Convention. 2.      ... However, it is by no means clear that this definition is applicable for purposes of Article XXI of the Convention as it is arguable that the context in which the term is used in Article XXI requires otherwise. ...
Administrative Letter

22 June 1993 Administrative Letter 9234262 - STATUS OF U.S. LIMITED LIABILITY COMPANY (4093-U5-100-4)

Income Tax Convention (the "Convention"). If such company's mind and management is in Canada, it will only be resident of Canada for the purposes of paragraph 1 of Article 4 of the Convention, paragraph 3 of Article 4 of the Convention will not apply and subsection 250(5) of the Act will not apply. ...
Administrative Letter

23 March 1994 Administrative Letter 9332416 F - Japan Inhabitant's Tax — Income or Profits Tax

In addition to our comments on the "Inhabitant's Tax", we have commented on the application of the Canada-Japan Income Tax Convention ("Convention") and residence matters that may pertain to XXXXXXXXXX (the "taxpayer"). ... Article 4 of the Convention The taxpayer, XXXXXXXXXX has not severed her residential ties with Canada and continues to file Canadian tax returns as a factual resident of Canada. ... This creates the possibility that the Japanese taxation authorities consider the taxpayer a resident of Japan for the purpose of the Convention. ...
Administrative Letter

5 March 1991 Administrative Letter 902916 F - Excess U.S. Taxes Creditable and/or Deductible for Canadian Tax Purposes

Income Tax Convention (the Convention) as a result of an election made by the Canadian resident individual pursuant to U.S. tax law to bo taxed as though he were a U.S. resident alien.  ... Given that such investment income is not earned by the "S" corporation and that the individual would have dual resident status, it is our opinion that in such circumstances the Convention should apply and the amount of taxes creditable for purposes of section 126 and/or deductible for purposes of subsection 20(11) and (12) of the Income Tax Act would be limited to the maximum rate provided by the treaty. ...
Administrative Letter

31 May 1993 Administrative Letter 9312986 F - Permanent Establishment & Carrying on Business (4112-2-5)

If the XXXXXXXXXX is considered to be carrying on business in Canada, the next step would be to determine whether the XXXXXXXXXX has a permanent establishment in Canada pursuant to Article V of the Canada-Belgium Income Tax Convention (the "Convention"). ... If the payments in 3. above are subject to Part XIII tax, it is then necessary to determine whether the payments fall under the definition of "royalties" in paragraph 4 of Article XII of the Convention. ... If they are not "royalties" under Article XII of the Convention, the payments would fall under Article VII of the Convention as "business profits" of the XXXXXXXXXX and such payments may be exempt from Canadian tax if the actual facts indicate that the XXXXXXXXXX does not have a permanent establishment in Canada. 5.      ...
Administrative Letter

7 January 1991 Administrative Letter 903426 F - Withholding of Tax from a Payment to a Joint Venture Having a Non-resident Member

In addition, if a joint venture would be considered to have a permanent establishment in Canada for the purposes of an income tax convention that Canada has with another country, if it were a resident of a contracting state for the purposes of that convention, any member of such a joint venture who is resident in that country will generally be considered to have a permanent establishment in Canada.  ...

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