18 June 1990 Internal T.I. 59419 F - Canada-Germany Income Tax Agreement

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

19(1)

June 18, 1990

Dear Sirs:

Re: Article 19 of the Canada-Germany Income Tax Agreement  (1981)

This is in reply to your letter of January 9, 1990.

Article 19(1)(b) of the Agreement between Canada and the Federal Republic of Germany for the avoidance of double taxation with respect to taxes on income and certain other income entered into on July 17, 1981 and proclaimed in force on September 23, 1983 does not apply to permit Canada to impose tax upon remuneration paid by the german government for services rendered thereto unless the services in respect of which the remuneration is paid are rendered in Canada by a resident of Canada who is not a national of Germany.

We observe that the reference in your letter to "non-business services rendered in Germany to the German government" indicates that you may have a misunderstanding in respect of paragraph (2) of Article 19.  The reference in paragraph (2) of Article 19 to "services rendered in connection with a business carried on by a Contracting State..." refers to the nature of the activities of the payor, not the nature of the services rendered by the recipient of the remuneration.

Yours truly,

for DirectorReorganizations and Non-Resident DivisionSpecialty Rulings DirectorateLegislative and Intergovernmental Affairs Branch