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.
Dear Sir:
Re: Canada-Malta Income Tax Agreement, 1986 (the “Agreement”)
This is in reply to your letter to the Canadian Embassy in Rome dated November 23, 1990, whereby you inquired concerning the application of paragraph (4) of Article 28 of the above-noted Agreement in respect of an offshore company registered under the Malta International Business Activities Act, 1988 that has waived in part the benefits of that Act by electing to pay tax at a rate higher than applicable to it under that Act but below the standard rate for companies owned by residents of Malta.
Unfortunately, we are unable to provide a definitive, binding opinion to you in response to your inquiry. In order to do so, we would require more information, including an explanation as to why a company would elect to pay Maltese tax at a higher rate than it is legally obliged to pay. We enclose herewith a copy of a publication issued by this Department (Information Circular No. 70-6R2 dated September 28, 1990) which sets forth the procedures for obtaining a binding ruling concerning the interpretation and application of the income tax laws of Canada (including the Agreements for the avoidance of double taxation to which Canada is a party).
We can however advise that we are generally inclined to the view that the amount of tax imposed on the income of a company is the amount of tax that the company is legally obligated to pay and that such amount is not increased by a voluntary election by the company to waive an exemption or benefit any pay more tax.
We also point out that generally only a resident of a Contracting State is entitled to the benefits of the Agreement. In any particular case we would carefully consider whether an offshore company of the kind referred to in your letter is a resident of Malta for purposes of the Agreement.
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© Her Majesty the Queen in Right of Canada, 1991
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 1991
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