22 December 2021 External T.I. 2021-0878661E5 - Canadian tax on lump sum RRSP payments -- summary under Article 18

Regarding the Canadian withholding tax rate applicable to lump sum payments from a Canadian registered retirement savings plan (“RRSP”) to a resident of New Zealand, the questioner noted that IC76-12R6 as it then read stated, in Appendix C, that a lump sum RRSP payment to a resident of New Zealand was subject to a 15% Canadian withholding tax. CRA noted that the Circular had since been updated on June 21, 2021 to reflect that under the current New Zealand-Canada Treaty that became effective on August 1, 2015, the reduced 15% Canadian withholding tax rate under Art. 17 only applies to periodic pension payments, and that lump sum RRSP payments to a resident of New Zealand are subject to Canadian withholding tax at the rate of 25% under s. 212(1)(l).