| 19(1) | File No. 900923 |
| D. Duff | |
| (613) 957-3498 |
June 4, 1990
19(1)
This is in response to your letter of May 1, 1990 requesting information on the taxation of your pension income should you move to Canada.
As a Canadian resident you would be required to pay tax on your taxable income which would include your pension. However, according to the Canada-Ireland Income Tax Agreement Act, 1967, your pension would be exempt from Irish tax.
The Canadian tax system comprises both federal and provincial taxes on income. The federal rate is 17% on the first $27,803 (for 1989), 26% on the next $27,803 to $55,606 and 29% on amounts over $55,606. These amounts are adjusted annually for inflation. In addition, there are tax credits available to reduce your taxes payable and there is a 5% surtax on your basic federal taxes. The provincial rate for the province of British Columbia is 51.5% of the basic federal taxes.
Although the following is not an accurate determination of what your taxes would be it should be a useful guide. Your pension would be approximately 24(1) Canadian.
24(1)
The amounts used for the personal and age tax credits are also adjusted annually for inflation. There are numerous other provisions in the Income Tax Act of Canada but the ones illustrated would be the most relevant to you.
We trust our comments will be of assistance.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate