Income Tax Conventions Interpretation Act

Section 3

Cases

Beame v. Canada, 2004 DTC 6103, 2004 FCA 51

Article VI of the Canada-Ireland Convention, which provided that "the rate of Canadian tax on income ... derived from sources within Canada by a resident of Ireland shall not exceed 15 percent" applied to limit the rate of capital gains tax payable by a resident of Ireland on the disposition of shares of a Canadian private corporation to 15 percent of the taxable capital gain rather than of the capital gain, given that both Article II(3) of the Convention and s. 3 of the ITCIA mandated that the meaning to be given to a term found in a treaty should be the meaning given to the term from time to time under the Act, unless the context otherwise required.

Locations of other summaries Wordcount
Tax Topics - Treaties - Income Tax Conventions - Article 2 119

Section 4.3

Administrative Policy

11 October 2013 Roundtable, 2013-0492821C6 F - Question 3 - APFF Round Table

s. 4.3 precludes application of tie-breaker rule

After noting the introduction of s. 4.3, CRA stated:

[T]he effect of this new provision is to make it impossible to break the tie [under the Canada-U.S. Treaty tie-breaker rule] because it deems such equality to be non-existent.

Locations of other summaries Wordcount
Tax Topics - Treaties - Income Tax Conventions - Article 4 s. 94 trusts were resident in Canada for Treaty purposes even before Income Tax Conventions Interpretation Act amendment, which precludes application of tie-breaker 305

Section 5

Pension

Administrative Policy

30 March 2017 External T.I. 2015-0609951E5 F - Article 18 of the Canada-Turkey Income Tax Convention

RRSP annuity payments to Turkish resident were subject to Pt XIII tax as pension payments

RRSP annuity payments made to a resident of Turkey were deemed by s. 5 to be pension payments (as “pension” was not specifically defined in the Canada-Turkey Treaty), so that the payments were subject to Canadian withholding at the reduced rate described in Art. 18, para. 2.

Locations of other summaries Wordcount
Tax Topics - Treaties - Income Tax Conventions - Article 18 capital portion of s. 56(1)(d) is not excluded as an annuity under Canada-Turkey Treaty/RRSP annuity payments are pensions 382
Tax Topics - Income Tax Act - Section 56 - Subsection 56(1) - Paragraph 56(1)(d) capital components are not deduction of cost 122

Periodic Pension Payment

Administrative Policy

12 September 2019 External T.I. 2017-0732681E5 - Payment of pension surplus to US resident beneficiary

winding-up IPP payment or commutation or minimum amount payments are not periodic

The U.S.-resident beneficiary of her deceased mother’s individual pension plan (IPP) received monthly benefits thereunder that were eligible for the 15% Treaty-reduced rate under the Treaty – but thereafter the IPP was wound up by virtue of having reached the end of a 10-year guarantee period. CRA rejected the taxpayer submission that the IPP winding-up distribution was “simply an extension of the periodic guarantee payments,” and found that, since it was a lump sum payment as referenced in the definition of “periodic pension payment” in s. 5 of the Income Tax Conventions Interpretation Act, it was subject to withholding at 25%.

CRA went on to gratuitously state:

[A]ny additional payment that an IPP may be required to make in a particular year to comply with the IPP minimum amount rules in [Reg.] 8503(26) … is not considered to be a periodic pension payment. … Similarly, a commutation payment made to a member or a beneficiary of a member in full or partial satisfaction of their entitlement to benefits under a defined benefit RPP is not a periodic pension payment.

Locations of other summaries Wordcount
Tax Topics - Treaties - Income Tax Conventions - Article 18 Reg. 8503(26) minimum amount payments or commutation payments are lump sums ineligible for reduction under Canada-U.S. Treaty 289