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My late sister was deemed to be a Non-Resident of Canada for tax purposes because of the bilateral treaty between Germany and Canada. She passed away in December 2017 in Germany and as siblings/heirs, we are told that since, the funds are coming out of a tax sheltered plan (RRSP), the taxes: 25% as per CRA rule are due at time of withdrawal before distribution to the heirs.
Why can't lesser taxes be applicable because of that treaty, since as a non-resident my late sister was paying taxes in all her NR4 slips, < 25% , in Germany ?
To whom should I write at CRA to clarify this matter since my communications with them have been unidirectional thus far ?
Thank you in anticipation
According to the Canada-Germany tax treaty, lump-sum withdrawals / payments from a RRSP to a non-residents of Canada are subject to a non-resident withholding tax of 25%. It could be that she was receiving periodic payments, which are subject to a lower withholding rate of 15%.