| 24(1) | 901787 |
| L.A. McCarron-McGuire | |
| (613) 957-2092 | |
| 19(1) |
October 22, 1990
Dear Sirs:
Re: Request for Technical Interpretation
We are writing in response to your letter, dated July 31, 1990 regarding a German citizen who has personal and economic ties with both Canada and Germany.
Your letter discusses actual transactions which have already occurred, as well as specific proposed transactions. It is the practice of the Rulings Directorate not to comment on transactions which have already occurred. Assurance as to the tax consequences of specific proposed transactions will only be given in response to a written request for an advance income tax ruling. The procedures for requesting advance income tax rulings are set out in Information Circular 70-6R2. We are, however, providing you with the following general comments which we hope will be of assistance.
It is a question of fact whether a person is a resident of a particular country. If a person is a resident of Canada, he is subject to taxation in accordance with the laws of Canada. If, however, that same person is also a resident of Germany, he is subject to taxation in accordance with the laws of Canada and of Germany. To avoid double taxation, Canada and the Federal Republic of Germany have entered into an agreement, the Canada-Germany Income Tax Agreement (the "Agreement"), which applies to persons who are residents of one or both Canada and Germany. The Agreement overrides domestic taxation when one of its Articles is applicable to a specific situation.
You stated in your letter:
"Based upon an analysis of the client's economic and family ties and the residence provisions of the Canada/Germany Income Tax Agreement, we have concluded that the client is a non-resident of Canada and as such has filed tax returns with Revenue Canada reporting his income ... as a non-resident".
The purpose of the residence provisions of the Agreement is to determine, for the purposes of the Agreement, the residence of a person. It does not determine whether a person is a resident of a particular country, (which is a question of fact, as we have noted above), for purposes of domestic taxation. Therefore, it is possible that your client is a resident of Canada, and should be filing Canadian income tax returns on the basis that he is a resident of Canada. Should you require Revenue Canada's assistance in making a determination of whether your client is a resident of Canada, we suggest that you contact:
International Taxation Office875 Heron Road Ottawa, Ontario K1A 1A8
Telephone: Outside Canada (613) 952-3741 Inside Canada 1-800-267-5177
and provide all the relevant facts.
The foregoing expressions of opinion are given in accordance with the practice referred to in paragraph 21 of information Circular 70-6R2 dated September 28, 1990 and are not binding on Revenue Canada, Taxation.
Yours truly,
for DirectorReorganizations and Non-resident DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch