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) Jim Wilson
(613) 957-2063
HBW 4125-C2
HBW 6591-C2
April 18, 1990
Dear 19(1) Re: 24(1)
Article XI of the Canada-China Income Tax Convention We are writing in regard to your letter dated January 17, 1989 (copy attached), in which you requested confirmation on the tax status of the 24(1) regarding interest earned on deposits held in Canada. Our Vancouver District Office replied to the letter on April 4, 1989 (copy attached) and acknowledged tax exemption to the 24(1) in accordance with paragraph 3, Article 11 of the Canada-China Income Tax Convention.
Our Vancouver District Office was of the understanding that the 24(1) was a financial establishment mutually agreed upon by the competent authorities of both states in accordance with subparagraph 3(b)(iv) of Article 11. Our division has no record of such a competent authority agreement.
Article 3 of Convention delegates the competent authority function to your Ministry of Finance ar its authorized representative.
Could you please provided us with names and addresses of the competent authority delegates. The Minister of National Revenue has delegated the exercise of the competent authority function for the determination of such issues to myself (i.e. Director of provincial and international Relations Division).
We are of the opinion that subparagraphs 3(b)(i), (ii) and (iii) of
Article 11 do not exempt 24(1) form withholding tax on interest
earned from deposits held in Canada. Accordingly, exemption can
only be provided by mutual agreement between the competent
authorities. We are prepared to accept 24(1) and
eligible for exemption on interest arising in Canada on accordance
with subparagraph 3(b)(iv) of Article 11. If your competent
authority is prepared to accept the foregoing proposal, this letter
and their reply will be regarded as constituting an official
agreement on this matter. The agreement will be effective for all
interest payments made after 1988.
We look forward to hearing form you soon.
Yours sincerely,
C.Savage A/Director Provincial and International Relations Division
JW/jb File copy Sequence file Author's copy Reading file Access to Info(2)
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