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.
September 18, 1984
Revenue Canada Taxation 875 Heron Road
Ottawa, Ontario K1A 0L8
Attention Mr. J. Deree
Dear Sirs:
We are writing to request an opinion on the new Canada-U.S. Tax Treaty which was recently ratified.
Article XXX, Entry into Force, states in paragraph 2 that the Treaty has effect to source deductions on dividends the first day of the second month following ratification, which would be October, 1984. For other taxes, the Treaty takes effect for taxable years beginning on or after January 1 next following the date when ratification takes place. Paragraph 5 states that the 1942 Convention will continue to have effect for the first taxation year with respect to which the provisions of the Convention would otherwise have effect under paragraph 2(b) if there would be greater relief under the prior convention.
Our question concerned a branch of a U.S. corporation operating in Canada with a February 28 year end. Under the new Treaty, a wholly-owned Canadian subsidiary paying dividends on October 1 or later would be subject to a 10% withholding. As the branch tax concept is an integration scheme with dividends and is outlined in Article Z of the Treaty (the same as dividends), our question is whether in calculating the branch tax liability for the year ended February 28, 1985 the new Treaty would be in effect. It would appear that this would be an equitable application of the Treaty.
Yours very truly,
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 1984
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, 1984
Email this Content