TaxCycle | Products | Pricing | Training | Documentation | Support | News

Tax exempt foreign Business income

If someone can help me:
Is CPP payable on tax exempt foreign income?
What is the proper way to prepare such return on Tax Cycle
Purushottam Gupta

Enter the details on the Foreign Income screen. It has fields for certain types of income that might be exempt. You might do a websearch for the “country” canada tax treaty. The treaties show you status of each type of income.

I would check to see if there is a Social Security treaty with the country in question. If you are not certain, check with Service Canada or International Taxation.

You can elect to pay CPP on sources of income, should the taxpayer choose. Check out CPT20 for the cases.

Note that you need to paper file the CPT20 following the electronic filing.

I would contact both CRA CPP/EI Rulings under the CRA Business Enquiries 1-800-959-5525 and Service Canada.

Refer to links below.
The CPP/EI Rulings Program is responsible for providing clients with rulings that indicate whether a worker is an employee or is self-employed, and whether or not that worker’s employment is pensionable for Canada Pension Plan (CPP) purposes and/or insurable for employment insurance (EI) purposes. A ruling may also indicate the amount of pensionable or insurable earnings a worker has and the number of insurable hours an employee has in insurable employment.

The CPP/EI Rulings Program is also responsible for issuing certificates of coverage and extensions to those certificates, under Social Security Agreements that Canada has with other countries. In addition, CPP/EI Rulings Program is responsible for certifying applications by religious sects seeking exemption from coverage under the CPP, and approving applications for coverage of employment of an Indian in Canada under the CPP, whose income is exempt under the Income Tax Act.

CPP and Foreign Pensions Benefits Overview