| 19(1) | File No. 5-9039 |
| W.C. Harding | |
| (613) 957-3499 |
November 17, 1989
Dear Sirs:
This is in reply to your letter of October 18, 1989 in request of our opinion concerning the transfer of a Malaysian "state employees provident plan" to a registered retirement savings plan (an "RRSP").
We first note that paragraph 5(b) of the Canada-Malaysia Income Tax Agreement provides that:
"pensions and allowances received from Malaysia under paragraphs 7,8 and 9 in Part 1 of Schedule 6 to the Income Tax Act, 1967 of Malaysia shall not be taxable in Canada so long as they are not subject to Malaysian tax".
Accordingly, you may wish to have your client determine from the Malaysian authorities if the plan qualifies under that provision.
Please note that we also cannot advise on the withholding provisions of the Malaysian Income Tax Act with respect to lump sum withdrawals. Should you desire, you may contact the Malaysian Ministry of finance in this regard.
With respect to the provisions of the Canadian Income Tax Act (the "Act"), paragraph 60(j) provides, in part, that, within the limits described therein, a superannuation or pension benefit, attributable to services rendered by a person in a period during which he was not resident in Canada, which is included in income under subparagraph 56(1)(a)(i) of the Act may be transferred to a registered pension plan ("RPP"), if the terms of the plan provide for such a transfer, or to an RRSP.
We trust these comments are satisfactory to your needs.
Yours truly,
for Director Financial Industries Division Rulings Directorate