Section 217

Administrative Policy

2 October 89 Memorandum (March 1990 Access Letter, ΒΆ1160)

GAAR did not apply to an arrangement whereby temporary Canadian employees of the Canadian subsidiary of a U.S. corporation contributed $3500 each year to an RRSP out of money borrowed from the Canadian subsidiary, then after they returned to the U.S. were credited in stages with amounts in the RRSP (which were used to pay off their debt to their former Canadian employer). By virtue of their election under s. 217 and their personal credits, no tax was payable by them. S.217 does not distinguish between periodic and lump sum payments from an RRSP, and does not deny relevant deductions that would reduce the taxpayer's income to nil.


"RRSP Withdrawals by U.S. Executives Temporarily Resident in Canada May Escape Canadian Withholding and Income Taxation", Taxation of Executive Compensation and Retirement, June 1990, p. 297

Further discussion of RCT October 1989 memorandum.

Subsection 217(2) - Part I return


Merrins v. The Queen, 2002 DTC 1848 (TCC)

In finding that the taxpayer (who was a resident of Ireland in receipt of both Canadian old age security payments and also pension income that would be exempt under the Canada-Ireland Treaty in the absence of the making of an election under s. 217) was not entitled to receive both the credit under s. 217(6) in respect of the pension income and also to treat the pension income by virtue of the Treaty as being exempt from Canadian income tax, Ripp T.C.J. applied (at p. 1854) the principle that:

"Taxpayers should not be allowed to take inconsistent positions with respect to the application of tax treaties and domestic tax laws in order to duplicate a benefit."