| 19(1) | Jim Wilson |
| (613) 957-2063 | |
| HBW 4000-2 | |
| HBW 4125-S7 |
March 23, 1990
19(1)
We are writing in reply to your letter dated March 15, 1990, concerning the tax treatment of certain pensions received from Sweden.
Pursuant to Article 18, paragraph 1 of the Canada-Sweden Income Tax Convention, pensions arising in Sweden and paid to a resident of Canada may be taxed in both Sweden and Canada. Canada would allow a foreign tax credit for Swedish income taxes withheld, not exceeding, however, the Canadian taxes attributable to that particular foreign pension. The foreign tax credit ensures there is no element of double taxation. You will effectively be subject to the higher rate of tax between the two countries.
To answer your letter more specifically, you must report the Swedish pension on your T1 return. We have enclosed a copy of Form T2209 for purposes of your federal foreign tax credit.
We trust you will find this to your satisfaction. This Division has record of receiving your letter dated February 12, 1990.
Yours sincerely,
C. SavageA/DirectorProvincial and International Relations Division
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