Income Tax Severed Letters - 2025-07-23

Technical Interpretation - External

19 March 2024 External T.I. 2024-1003321E5 - Enhanced Trust Reporting

Unedited CRA Tags
104(1), 104(2), 150(1), 150(1.1), 150(1.2), 237(1.1), 237(2), 248(1) and 270(1) of the Act and 204.2 of the Regulations
Summary Under
Tax Topics - Income Tax Act - Section 237 - Subsection 237(1.1) - Paragraph 237(1.1)(b)
RRSP beneficiaries of unit trusts are now generally required to get a TIN
Summary Under
Tax Topics - Income Tax Regulations - Regulation 204.2 - Subsection 204.2(1)
beneficiaries listed on the Sched. 15 must obtain a TIN

Principal Issues: 1. Where a trust governed by a RRSP is a unitholder of a unit trust, is the former trust required to register for a taxpayer identification number for the sole purpose that it can be included on the T3SCH15 that the unit trust has to file?
2. Should the answer to the first question be negative, is the CRA prevented from requiring trusts governed by a RRSP to register for a taxpayer identification number?

Position: 1. Yes, provided the RRSP trust is a beneficiary and that the unit trust is not subject to one of the exceptions in paragraphs 150(1.2)(a) to (o).
2. Not required given the answer to the first question.

Reasons: When the new reporting requirements for trusts apply, a trust will be required to make an information return (T3SCH15) and as such, it will need to provide information on each of its beneficiary, including the taxpayer identification number of the beneficiary. Where the beneficiary is a trust, the number to provide on the T3SCH15 is the trust account number. Paragraph 237(1.1)(b) mentions that every person and partnership shall provide their designated number to another person, at their request, if the other person or partnership is required to make an information return pursuant to the Act or the Regulations requiring the designated number. Both the trust governed by a RRSP and the unit trust meet the definition of "person". Given the unit trust is required by section 204.2 to make an information return (T3SCH15) that requires the taxpayer identification number of its beneficiary, the trust governed by a RRSP is required to provide its trust account number to the unit trust upon request. Where the RRSP trust does not have such a number, it should make a request to obtain one.

25 January 2024 External T.I. 2023-0990781E5 - Part XX and business registration number

Unedited CRA Tags
sections 282 to 295 of the Act and OECD Model Rules
Summary Under
Tax Topics - Income Tax Act - Section 284 - Subsection 284(2) - Paragraph 284(2)(d)
the concept of reporting platform operators collecting “business registration numbers” from Canadian-resident sellers is inapplicable

Principal Issues: Does Canada issue business registration numbers to Canadian resident entities that are sellers for the purpose of Part XX of the Act?

Position: No.

Reasons: Canadian entities can be incorporated federally or under the laws of a province or territory. They are usually required to register in any province or territory in which they are carrying on business. Paragraph 284(4)(a) exempts reporting platform operators from collecting the TIN and the business registration number where the jurisdiction of residence of the seller does not issue such a number. The word "jurisdiction" in Part XX is a reference to a country as a whole. Canada, as a jurisdiction, does not issue business registration numbers to entities.

12 December 2023 External T.I. 2023-0967811E5 - Letter of Authority to reduce payroll withholding

Unedited CRA Tags
Subsections 2(1), 5(1), 126(1), 126(7), paragraph 153(1)(a) of the Income Tax Act; 100, 101, 102, 104(2) of the Income Tax Regulations; Articles XV, XXIV of the Canada-U.S. Income Tax Convention
Summary Under
Tax Topics - Income Tax Regulations - Regulation 102 - Subsection 102(1)
there can be double source deductions where a resident Canadian is employed in the US by a US employer
Summary Under
Tax Topics - Income Tax Act - Section 153 - Subsection 153(1.1)
procedure for Letter of Authority where US employment income of resident employee is subject to double source deductions

Principal Issues: 1. Is a non-resident employer required to deduct or withhold from a payment of salary or wages to Canadian resident employees who perform employment services solely outside Canada, in a situation where payroll deductions are required by the country of source? 2. Where a non-resident employer is required to withhold from the payment of salary or wages to Canadian resident employees and the employees would otherwise be entitled to claim a foreign tax credit, is the employer permitted to reduce the amount withheld from the payment of salary or wages to the employees to take into account a foreign tax credit, by way of a Letter of Authority? 3. In the hypothetical circumstances noted above, will a Letter of Authority be provided to allow for the reduction of the amount withheld from the payment of salary or wages? 4. Would the fact that a Canadian resident employee performs services partially in Canada and partially outside Canada impact the response to questions 1 through 3?

Position: 1. Yes. 2. Yes. 3. It depends. 4. Based on the hypothetical facts, the response to questions 1 through 3 would not be different for a Canadian resident employee who performs services exclusively outside Canada than for a Canadian resident employee who performs services partially in Canada and partially outside Canada.

Reasons: 1. Under paragraph 153(1)(a), a non-resident employer that employs a Canadian resident employee who performs services outside Canada has an obligation to deduct from the salary or wages paid to that employee an amount determined in accordance with subsection 102(1) of the Regulations. The employer is not relieved of its withholding obligation under subsection 153(1) by the fact that it has also withheld payroll deductions as required where the services were provided. 2. In the hypothetical situation provided, a Canadian resident employee may request a Letter of Authority to authorize the non-resident employer to reduce the amount deducted from the remuneration paid to the employee to take into account the employee’s foreign tax credit for the year. 3. In the hypothetical circumstances provided, the issuance of a Letter of Authority depends on the content of Form T1213 and supporting documentation, such as completed Form T2209 and details on the employee’s foreign tax credit entitlement. 4. The non-resident employer is not relieved of its withholding obligation under subsection 153(1) of the Act despite the fact that it has withheld payroll deductions as required by the country of source and the Canadian resident employee performs services partially in Canada and partially outside Canada.

6 November 2023 External T.I. 2022-0954001E5 - Meaning of “Express Consent” in Regulations 209(3)

Unedited CRA Tags
209(1), 209(2), 209(3), 209(4). 209(5) of Income Tax Regulations; 221.01 of the Income
Summary Under
Tax Topics - Income Tax Regulations - Regulation 209 - Subsection 209(4)
consent given over the phone or by pressing options on a touchtone phone does not constitute “express consent” to electronic information slips
Words and Phrases
express consent electronic format

Principal Issues: Whether the requirement of providing "express consent" as stated in Regulations 209(3) and 209(4) is considered to have been given by a taxpayer where (1) the taxpayer provides their consent to the issuer over the phone and (2) the taxpayer provides their consent by selecting electronic receipt of documents option using a touchtone phone?

Position: No, express consent would not be considered to have been given by a taxpayer in the described scenarios. However, if subsection 209(5) of the Regulations applies in the scenarios provided, express consent would not be required.

Reasons: Although it is a question of fact as to what constitutes express consent for the purposes of Regulations 209(3) and 209(4), express consent is not considered to be provided by the taxpayer in the scenarios presented as the described methods of providing consent would not constitute consent in writing or electronic format in accordance with Regulations 209(3) and 209(4).