Certain types of Canadian income earned by non-residents are not taxed under Part I of the Income Tax Act. Which of the following types of income would be eligible for this treatment? Ignore any tax treaty implications that might be applicable.

Question

Quizplus · Accepted Answer

Interest income earned by non-residents from Canadian sources, such as interest on a Guaranteed Investment Certificate (GIC) issued by a Canadian bank, is often not subject to Part I tax. This is because non-resident interest income is typically only subject to withholding tax at the source, and depending on the tax treaty between Canada and the non-resident's country of residence, this income may not be taxed in Canada at all. Income from the sale of real estate, income from exercising stock options, and recapture from the sale of business property are generally subject to Canadian tax for non-residents.

Certain Types of Canadian Income Earned by Non-Residents Are Not