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 | 123 |
Section 4.3
Administrative Policy
11 October 2013 Roundtable, 2013-0492821C6 F - Question 3 - APFF Round Table
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 | 339 |
Section 5
Administrative Policy
6 April 2023 Internal T.I. 2022-0929731I7 - Articles 18(2) and (3) of the Canada-Italy Treaty
Regarding the receipt by an individual resident in Italy of periodic Canada Pension Plan (“CPP”) and Old Age Security (“OAS”) benefit payments, the Directorate stated:
[S]ection 5 of the Income Tax Conventions Interpretations Act provides a definition of the term “pension” in respect of payments that arise in Canada. Both the CPP and OAS are normally considered pensions for purposes of Canada’s tax treaties.
It then found that the OAS payments were social security payments for purposes of the Canada-Italy Treaty.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Treaties - Income Tax Conventions - Article 18 | CPP and OAS payments treated as pensions and social security payments under the Canada-Italy Treaty | 155 |
Pension
Administrative Policy
30 March 2017 External T.I. 2015-0609951E5 F - Article 18 of the Canada-Turkey Income Tax Convention
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 | 428 |
| Tax Topics - Income Tax Act - Section 56 - Subsection 56(1) - Paragraph 56(1)(d) | capital components are not deduction of cost | 126 |
Paragraph (a)
Subparagraph (a)(ix)
Administrative Policy
23 August 2001 External T.I. 2001-0086235 F - CONVENTIONS FISCALES A.18
Regarding the tax treatment of QPP and OAS payments made to residents of Slovenia, CCRA indicated that under the Slovenia Convention, since “pension” was not defined, its meaning under s. 5 – pension - (a)(ix), of the ICTCIA applied to render them pension payments.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Treaties - Income Tax Conventions - Article 18 | QPP and OAS were pension payments made under social security legislation for purposes of the Slovenia and Croatia treaties | 240 |
Periodic Pension Payment
Administrative Policy
12 September 2019 External T.I. 2017-0732681E5 - Payment of pension surplus to US resident beneficiary
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 | 307 |
Section 6.2
Administrative Policy
3 January 2001 Internal T.I. 2000-0024247 - Section 6.2 of Income Tax Convention
Article 20 of the Canada-New Zealand Convention provides that items of income of a resident of New Zealand which are not dealt with in other Articles and which are derived by the resident from sources in Canada may be taxed in Canada according to the laws of Canada. A gain of a resident of New Zealand from a disposition of shares of a private Canadian corporation that were taxable Canadian property was subject to Canadian capital gains tax given that it had been the intention of the Canadian negotiators of Canadian ncome tax conventions that the source of income on a disposition of taxable Canadian property is from Canada and this intention was confirmed, for greater certainty, by s. 6.3 of the Income Tax Convention Act.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Treaties - Income Tax Conventions - Article 22 | 130 |