Cases
Reyes v. Canada, 2019 FCA 7
The taxpayer, who was a former Columbia government official, commenced receiving a pension from Columbia after he became a Canadian resident. The...
Korfage v. The Queen, 2016 TCC 69 (Informal Procedure)
A Canadian-resident recipient of pension payments from a U.S. pension plan was entitled under Art. XVIII, para. 1 of the Treaty to deduct from his...
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| Tax Topics - Income Tax Act - Section 261 - Subsection 261(2) | pension income deduction arose when each pension payment was received, translated at annual average | 334 |
Rodrigue v. Canada (Attorney Général), 2001 DTC 5296, 2001 FCA 157
In rejecting a submission of the taxpayer that he was entitled to a deduction for a contribution to a pension plan in the United States that was...
See Also
Dumoulin v. The Queen, 2003 DTC 872 (TCC)
Canada pension plan payments made to the taxpayer were subject to 25% withholding given that Article 18 of the Canada-Swiss Convention, which...
Merrins v. The Queen, 2002 DTC 1848 (TCC)
Although the taxpayer was a resident of Ireland, he qualified for payments under the Old Age Security Act (Canada) because at the time he left...
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| Tax Topics - Income Tax Act - Section 217 - Subsection 217(2) | 121 | |
| Tax Topics - Treaties - Income Tax Conventions | 121 |
Levert v. The Queen, 2001 DTC 781 (TCC) (Informal Procedure)
A disability pension received by the taxpayer from the United Steelworkers of America as a result of group term life insurance provided by them...
Coblentz v. The Queen, 96 DTC 6531, [1996] 3 CTC 295 (FCA.)
The taxpayer, while a Canadian resident, received a lump sum payment on the winding-up of a pension fund operated by his former U.S. employer. His...
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| Tax Topics - Treaties - Income Tax Conventions | 25 |
Administrative Policy
6 December 2023 External T.I. 2017-0735631E5 - Distribution of funds from an IRA and 401(k)
Shortly after renouncing his U.S. citizenship, a Canadian resident fully collapsed his IRA and 401(k) plan, so that all funds were distributed to...
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| Tax Topics - Income Tax Act - Section 56 - Subsection 56(1) - Paragraph 56(1)(a) - Subparagraph 56(1)(a)(i) | double taxation avoided through s. 56(1)(a)(i)(C.1) where Canadian renounces his US citizenship and collapses his IRA/ potential Treaty exemption re his 401(k) plan | 331 |
| Tax Topics - Income Tax Act - Section 56 - Subsection 56(1) - Paragraph 56(1)(a) - Subparagraph 56(1)(a)(i) - Clause 56(1)(a)(i)(C.1) | taxability of IRA on Canadian resident’s individual’s expatriation from the US, but corresponding exclusion from income under s. 56(1)(a)(i)(C.1) when such amounts distributed | 226 |
12 December 2023 External T.I. 2021-0881541E5 - Pension benefit from Chile
The Chilean government, in response to the pandemic, adopted an exceptional measure (the “Measure”) in 2020, permitting the withdrawal of up...
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...
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| Tax Topics - Other Legislation/Constitution - Federal - Income Tax Conventions Interpretation Act - Section 5 | CPP and OAS are normally considered pensions for Treaty purposes | 90 |
20 June 2023 Internal T.I. 2021-0904981I7 - Application of ss.227(6) to treaty benefits
As an example of an “as if resident” (“AIR”) clause, the Directorate referred to Art. 18(2) of the Canada-Italy Treaty which relevantly...
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| Tax Topics - Income Tax Act - Section 227 - Subsection 227(6) | the two-year s. 227(6) time limit for requesting a Part XIII tax refund applies to a request based on a Treaty “as if resident” clause that is silent on the timing point | 265 |
3 November 2023 APFF Financial Strategies and Instruments Roundtable Q. 9, 2023-0976941C6 - Withholding on registered plans
After indicating that the reduced rate of 15% under Art. XXII:2 of the Canada-U.S. Convention may be applied to amounts distributed to U.S....
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| Tax Topics - Treaties - Income Tax Conventions - Article 22 | reduced 15% withholding rate under Art. 22 of the Canada-U.S. Convention applies to TFSA and RDSP trusts | 159 |
22 December 2021 External T.I. 2021-0878661E5 - Canadian tax on lump sum RRSP payments
Regarding the Canadian withholding tax rate applicable to lump sum payments from a Canadian registered retirement savings plan (“RRSP”) to a...
2021 Ruling 2021-0876671R3 - Transfer between US pension plans
S. 56(1)(a) generally requires the recognition of an amount received as or in satisfaction of a pension benefit. A portion of a multi-employer US...
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| Tax Topics - Income Tax Act - Section 56 - Subsection 56(1) - Paragraph 56(1)(a) - Subparagraph 56(1)(a)(i) | the transfer of a portion of the assets and Canadian beneficiaries from an old to a new US pension plan did not result in receipt under s. 56(1)(a) | 466 |
| Tax Topics - General Concepts - Payment & Receipt | no constructive receipt to Canadian beneficiaries where the transfer of a portion of the assets and Canadian beneficiaries from an old to a new US pension plan | 109 |
| Tax Topics - Income Tax Act - Section 207.6 - Subsection 207.6(5.1) | Reg. 6804 exclusion applied | 178 |
13 October 2020 External T.I. 2020-0860081E5 - Pension income from India
Would the receipt by a Canadian resident of a military service pension and a military disability pension from the Ministry of Defence of the...
S5-F3-C1 - Taxation of a Roth IRA
Basic U.S. Treaty exemption for distributions from Roth IRA
1.9 An individual resident in Canada can file an election under paragraph 7 of Article...
12 September 2019 External T.I. 2017-0732681E5 - Payment of pension surplus to US resident beneficiary
Upon retirement, Ms. X, who was the sole member of an individual pension plan (“IPP”), started receiving monthly retirement benefits, subject...
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| Tax Topics - Other Legislation/Constitution - Federal - Income Tax Conventions Interpretation Act - Section 5 - Periodic Pension Payment | winding-up IPP payment or commutation or minimum amount payments are not periodic | 186 |
15 May 2017 External T.I. 2016-0645891E5 F - Services rendered to a State
Art. 18(2)(a) of the Canada-Swiss Treaty provides that “pensions paid by, or out of funds created by, Switzerland or a political subdivision or...
30 March 2017 External T.I. 2015-0609951E5 F - Article 18 of the Canada-Turkey Income Tax Convention
How does Art. 18 of the Canada-Turkey Treaty (the “Convention”) apply to a payment arising in Canada and paid to a resident of Turkey...
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| Tax Topics - Other Legislation/Constitution - Federal - Income Tax Conventions Interpretation Act - Section 5 - Pension | RRSP annuity payments to Turkish resident were subject to Pt XIII tax as pension payments | 46 |
| Tax Topics - Income Tax Act - Section 56 - Subsection 56(1) - Paragraph 56(1)(d) | capital components are not deduction of cost | 126 |
22 February 2016 External T.I. 2014-0525681E5 - Taxation of inherited pension plan payment
A U.S. citizen is resident in Canada and was the beneficiary of a deceased U.S resident who had been a retired member of a U.S. public pension...
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| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Superannuation or Pension Benefit | pension paid to beneficiary of deceased employee was pension rather than death benefit | 294 |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Death Benefit | payment out of a pension plan to a beneficiary of deceased employee was a pension rather than death benefit payment | 76 |
3 October 2014 External T.I. 2013-0509751E5 - RRSP or RRIF payments to a resident of New Zealand
How is the tax treatment of RRSP payments (either periodic or in a lump-sum) or RRIF payments made to non-residents in New Zealand affected by the...
26 September 2014 External T.I. 2014-0531441E5 - Unfunded LTD plan payment to non-resident employee
A Canadian resident employee, after qualifying for benefits under the unfunded long term disability plan ("LTD Plan") of the Canadian resident...
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| Tax Topics - Income Tax Act - Section 115 - Subsection 115(2) - Paragraph 115(2)(c) | employee long-term disability payments: remuneration under ITA; pension under Cda-U.S. Convention | 214 |
| Tax Topics - Income Tax Act - Section 153 - Subsection 153(1) - Paragraph 153(1)(a) | employee long-term disability payments: remuneration under ITA; pension under Cda-U.S. Convention | 214 |
13 May 2014 External T.I. 2014-0525491E5 - Emigration to Poland - Various tax considerations
As "pension" was not defined in the Canada-Poland Treaty, s. 5(a) of the Income Tax Conventions Interpretation Act applied, so that all of the...
6 September 2013 External T.I. 2013-0478241E5 - U.K. Individual Savings Account (ISA)
Although income earned in a UK Cash ISA is not subject to taxation in the U.K., under the Canadian Income Tax Act ("Act") Canadian residents ......
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| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(c) | 103 | |
| Tax Topics - Treaties - Income Tax Conventions - Article 11 | 117 |
12 March 2013 External T.I. 2013-0476351E5 - Taxation of Roth IRA
A Roth IRA is not a registered plan under the ITA, but Article XVIII will generally apply to distributions to a Canadian resident individual out...
30 January 2013 External T.I. 2012-0449621E5 F - Belgian pension
Respecting the payment of a Belgian pension to a Canadian resident, CRA stated (TaxInterpretations translation):
Thus, to the extent that the...
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| Tax Topics - Income Tax Act - 101-110 - Section 110 - Subsection 110(1) - Paragraph 110(1)(f) - Subparagraph 110(1)(f)(i) | Treaty-exempt receipt required to be reported, but with offsetting s 110(1)(f)(i) deduction | 39 |
17 October 2012 External T.I. 2012-0438671E5 - Treatment of German social security pension
Discussion of treatment of German social security pensions including link to discussion at www.cra-arc.gc.ca/tx/nnrsdnts/ntcs/grmny2005-eng.html. ...
25 June 2012 External T.I. 2011-0398691E5 - Conversion of U.S. Traditional IRA into Roth IRA
An individual who converts a traditional US Individual Retirement Account ("IRA") to a Roth IRA is allowed under the Code to spread the resulting...
25 June 2012 External T.I. 2011-0404071E5 - Election to defer income in U.S. traditional IRA
It is unnecessary for a Canadian-resident individual to file an election under Art. XVIII(7) of the Canada-US Convention to defer recognition of...
12 June 2012 External T.I. 2012-0432281E5 - Foreign pension plan
A 401(k) plan is considered a qualifying retirement plan as defined in Art. XVIII, para. 15 of the Canada-US Convention. General discussion of...
14 January 2009 External T.I. 2008-0274271E5 F - Rente de la Suisse
After noting that a Canadian resident receiving an old age pension from Switzerland could not avail of the exclusion in s. 56(1)(a)(i)(C.1) given...
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| Tax Topics - Income Tax Act - Section 56 - Subsection 56(1) - Paragraph 56(1)(a) - Subparagraph 56(1)(a)(i) - Clause 56(1)(a)(i)(C.1) | does not extend to pension from Switzerland | 29 |
15 November 2011 External T.I. 2011-0415881E5 F - Pension alimentaire pour enfants
The taxpayer was resident in Canada when ordered by a divorce decree to pay a monthly support to his ex-spouse for the exclusive benefit of their...
12 June 2009 External T.I. 2009-0316511E5 F - Charges sociales et autres retenues France
Can the following deductions made by France from the salary of an individual who has been resident in Canada for less than 60 months qualify as...
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| Tax Topics - Income Tax Act - Section 126 - Subsection 126(7) - Non-Business-Income Tax | social security contributions do not qualify as income taxes – but French "contribution sociale généralisée" and "contribution pour le remboursement de la dette sociale" so qualify | 380 |
15 March 2006 External T.I. 2005-0124911E5 F - Prestation compensatoire française
A resident of France was awarded compensatory benefits by order of the applicable French court on her divorce from her husband, consisting of a...
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| Tax Topics - Income Tax Act - Section 56.1 - Subsection 56.1(4) - Support Amount | life annuity, but not lump sum, received from divorced ex-spouse in France as “compensatory allowances” under the French Civil Code was taxable as support | 166 |
| Tax Topics - Treaties - Income Tax Conventions - Article 3 | treatment of a life annuity under ITA, as a support amount meant that it was to be treated for Treaty purposes as alimony or similar payments | 136 |
| Tax Topics - Treaties - Income Tax Conventions - Article 21 | non-taxability of lump sum compensation allowance under French law not altered by Art. 21 | 59 |
3 May 2005 Internal T.I. 2005-0120021I7 F - Pension de retraite provenant de la France
The Directorate indicated that the exemption under Art. XVIII(1) of the Canada-France Convention for “[p]eriodic or non-periodic pensions …...
10 February 2004 Income Tax Severed Letter 2003-0052621A11 F - Régime de pension étranger
The resident taxpayer had participated in a French plan that was a compulsory social security scheme providing a retirement pension to...
3 October 2003 External T.I. 2003-0030585 F - PENSIONS ETRANGERES
CCRA discussed the degree of exemption of social security pension payments by a Canadian resident (who otherwise would be taxable thereon under s....
29 September 2003 External T.I. 2003-0013435 F - Pension Belge
Regarding whether a resident employee's retirement pension received from the Belgian National Pensions Office was exempted under Art. 18 of the...
31 July 2002 Internal T.I. 2002-0136937 F - Placement Français "Assurance-salaire-vie
The holder in France of an "assurance-salaire-vie," which is similar to a registered retirement savings plan except that a withdrawal from it is...
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| Tax Topics - Income Tax Act - Section 233.3 - Subsection 233.3(1) - Reporting Entity | cost amount of foreign retirement plan may have been stepped up under s. 128.1(1) | 68 |
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, Croatia and Germany, CCRA indicated that:
Under the Slovenia...
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| Tax Topics - Other Legislation/Constitution - Federal - Income Tax Conventions Interpretation Act - Section 5 - Pension - Paragraph (a) - Subparagraph (a)(ix) | OAS and QPP payments were “pension” payments | 45 |
24 April 1997 External T.I. 9705385 - PENSION FOR U.K. TREATY PURPOSES
A payment under an unmatured RRSP is not considered to be a "pension" for purposes of paragraph 3 of Article 17 of the U.K. Convention because...
21 June 1996 External T.I. 9612045 - ARTICLE XVIII U.S. TREATY
"As long as the amount of the pension arising in the U.S. would have been excluded from taxable income in the U.S. by a U.S. resident recipient,...
29 April 1996 External T.I. 9614485 - PART XIII - RRSP OF DECEASED NON-RESIDENT
Although an RRSP is a "pension" for purposes of Article XVIII of the Canada-U.S. Convention, funds paid out of an RRSP to the estate of a deceased...
1995 TEI Round Table, Q. 17 (Draft) (953051) (C.T.O. "Is a Retirement Compensation Arrangement a 'Pension' for Purposes of Canada-U.S.Treaty?")
"Payments from an RCA as that term is defined in subsection 248(1) of the Income Tax Act, would qualify as 'pensions' for purposes of the...
20 October 1994 External T.I. 9416585 - IS RRIF PAYMENT TO U.K. RESIDENT A PENSION? (U4-100-17)
A payment out of a RRIF is considered to be a payment under a retirement plan referred to in the definition of pension in Article 17, paragraph 3,...
22 September 1994 External T.I. 9411805 - RETIRING ALLOWANCE PAID TO U.K. RESIDENT (U4-100-17)
A retiring allowance paid to a U.K. resident in respect of his wrongful dismissal by a Canadian company would not be exempt under Article 17,...
31 March 1994 T.I. 933999 (C.T.O. "RRIF - Periodic Pension Payment - U.S. Convention (U5-100-18)")
If a payment out of a RRIF qualifies as a "periodic pension payment" as defined under the Income Tax Conventions Interpretation Act, and it is...
24 March 1994 External T.I. 9335755 - RRIF PAID TO UK RESIDENT- PENSION & ANNUITY (U4-100-17)
Notwithstanding the definition for "annuity" found in s. 5 of the Income Tax Conventions Interpretation Act, a payment out of a RRIF which...
93 C.R. - Q. 32
The definition of "pensions" includes a U.S. IRA.
7 February 1994 External T.I. 9401355 - U.S. PENSION RECEIVED BY CANADIAN (4093-U5-100-18)
In order for RC to grant treaty-exemption for the portion of U.S. pension benefits paid to a Canadian resident that represent a return of...
27 February 1992 T.I. (Tax Window, No. 17, p. 18, ¶1767)
A retiring allowance is not periodic pension income and therefore is not eligible for rate reduction under Article XVIII, paragraph 2 of the...
20 November 1991 T.I. (Tax Window, No. 13, p. 8, ¶1601)
If a transfer out of a U.S. pension plan directly into an IRA would not have resulted in the amount being taxed in the U.S. had the person been...
7 October 1991 T.I. (Tax Window, No. 10, p. 22, ¶1500)
The payment of the "minimum amount" under a RRIF to a U.S.-resident annuitant will be subject to withholding at the rate of 15% as limited by...
2 August 1991 T.I. (Tax Window, No. 8, p. 23, ¶1420)
Alimony or maintenance paid by a person who is a U.S. resident at the time of the payment will be considered to arise in the U.S. for purposes of...
6 March 1991 Memorandum (Tax Window, No. 1, p. 18, ¶1148)
The rate reduction under Article XVIII of the U.S. Convention applies only to annuity payments made on a periodic basis, and not to a lump-sum...
88 C.R. - Q.1
Withdrawals from RRSP's are pensions for purposes of Article XVIII of the U.S. Convention. However, the reduced rate of 15% only applies where...
88 C.R. - Q.5
If a Canadian resident is permitted under the Code to roll a lump sum payment received out of a U.S. pension fund into an IRA, a deduction in...
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| Tax Topics - Income Tax Act - Section 56 - Subsection 56(1) - Paragraph 56(1)(a) - Subparagraph 56(1)(a)(i) | 63 |
Articles
Brian Kearl, Carl Deeprose, "Leaving Canada's New High Tax Rate Regime: Considerations, Tips and Traps", 2016 Conference Report (Canadian Tax Foundation),32:1-24
Scope of withholding exemption/reduced withholding for period pension payments (p. 32:15)
The Canada-UK treaty…eliminates withholding for...
Jim Kahane, Uros Karadzic, Simon Létourneau-Laroche, "A Fresh Look at Retirement Compensation Arrangement: A Flexible Vehicle for Retirement Planning", Canadian Tax Journal (2013) 61:2, 479 – 502.
Retirement compensation arrangement as pension (p. 493)
[U]nder the model convention, payments from an RCA are likely to be considered a pension...
Kevyn Nightingale, David Turchen, "The US Tax Implications of a Tax-Free Savings Account", CCH Tax Topics, No. 2146, April 25, 2013, p.1, at 2
Most of the larger accounting firms are taking the conservative position that a TFSA is not treaty-protected....
After reviewing the other...
Faizal Valli, "Implications of Canadians Transferring a U.S. Retirement Plan to Canada", Taxation of Executive Compensation and Retirement, Vol. XV, No. 2, 2011, p. 930.
Finley, "Payments Out of a RCA May Not Be Eligible for Reduced Withholding Tax", Taxation of Executive Compensation and Retirement, September 1990, p. 327
RC has accepted that an RCA which has been established in order to fund supplemental pension benefits for an employee is a "superannuation,...