Principal Issues: Whether Article XXX(5) of the Treaty applies to limit the application of the 15% reduced withholding tax rate provided for in Article XXIII of the Treaty to a dividend paid by a Canadian-resident corporation to a Canadian-resident trust, and deemed to have been received, under subsection 104(19), by a Barbados-resident beneficiary of the trust that is subject to tax on a remittance basis in Barbados.
Position: In order for the benefit of the 15% reduced withholding tax rate in Article XXIII of the Treaty to apply to the trust distribution, the non-resident beneficiary of the trust would have to establish, based on supporting relevant documentary evidence, that the dividend has been remitted and taxed in Barbados in conformity with the law in force in Barbados.
Reasons: Previous positions and application of Articles XXIII(3) and XXX(5) of the Treaty.