Principal Issues: [TaxInterpretations translation] Is an amount allowed as a deduction by virtue of subsection 146(5)?
Position: none
Reasons: That concept refers to article 922 of the Taxation Act
XXXXXXXXXX 2011-041654 Michel Lambert CA, M. Fisc. August 31, 2011
Dear Madam,
Subject: Deduction of premiums paid to an RRSP
This is in response to your letter of August 9, 2011 in which you asked us to confirm that a premium paid to your Registered Retirement Savings Plan (RRSP) is an amount that is allowed as a deduction by virtue of subsection 146(5) of the Income Tax Act (the "Act") (footnote 1) for the taxation year in which you paid the premium. You indicated that you did not claim the deduction under that subsection for the taxation year in which you paid the premium.
However, you have claimed a deduction equal to the amount of the premium in computing your Québec tax for the same taxation year and the provincial tax authorities have denied your deduction claim.
Unless otherwise indicated, all statutory references herein are to the provisions of the Act.
Your question as to whether an amount is allowed as a deduction by virtue of subsection 146(5) for a taxation year in computing a taxpayer's income referred to Article 922 of the Quebec Taxation Act (note footnote 2). The federal Income Tax Act does not use the expression "the amount that … is allowed as a deduction” by virtue of subsection 146(5). That question must therefore be resolved with the tax authorities of Quebec.
Subsection 146(5) reads in part as follows:
There may be deducted in computing a taxpayer’s income for a taxation year such amount as the taxpayer claims not exceeding the lesser of […]
We are of the view that if a taxpayer does not claim a deduction by virtue of subsection 146(5) in computing the taxpayer’s income for a taxation year, the deduction amount under that subsection for that taxation year will be nil.
As stated in Information Circular 70-6R5, this opinion does not constitute an advance ruling with respect to income tax and does not bind us.
Best regards,
Louise J. Roy, CGA
Manager, Financial Sector and Exempt Entities Section
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
FOOTNOTES
Due to our system requirements, footnotes contained in the original document are reproduced below:
1 The Income Tax Act is an Act of the Parliament of Canada.
2 Taxation Act, RSQ, c. I-3.