| 24(1) | 5-9209 |
| M.P. Sarazin | |
| (613) 957-2125 |
19(1)
December 13, 1990
Dear Sirs:
We are writing in response to your letter dated December 4, 1989 regarding the application of Section 105 of the Income Tax Regulations ("Regulations") to payments made by a person to non-resident persons for services to be rendered in Canada, commonly referred to as advance payments. We apologize for the delay in responding to your request.
The Department has recently reconsidered its position on this matter and it is now our view that paragraph 153(1)(g) of the Income Tax Act (Canada) and subsection 105(1) of the Regulations, read together, require a Canadian payor to withhold on amounts paid to non-resident persons for services to be rendered in Canada.
Our comments herein are provided in accordance with the practice referred to in paragraph 24 of Information Circular 70-6R2 dated September 28, 1990.
Yours truly,
for DirectorReorganizations and Non-Resident DivisionRulings DirectorateLegislative and IntergovernmentalAffairs Branch