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.
March 24, 1983
XXXX
K.B. Harding
This is in reply to your letter of March 9 concerning non-resident withholding tax on interest and dividends which have been paid or credited to a person resident in St. Lucia.
Paragraph 1(a)(ii) of Article III of the present Canada-United Kingdom Income Tax Convention which entered into force on December 17, 1980, states:
"the term "United Kingdom" means Great Britain and Northern Ireland, including any area outside the territorial sea of the United Kingdom which in accordance with international tax law has been or may be hereafter designated, under the laws of the United Kingdom concerning the Continental Shelf, as an area within which the rights of the United Kingdom with respect to the sea-bed and sub-soil and their natural resources may be exercised."
Paragraph 1(a) of Article 2 of the former Canada-United Kingdom Income Tax Agreement states that:
"the term "United Kingdom" means Great Britain and Northern Ireland, including any area outside the territorial waters of the United Kingdom which has been designated, under the laws of the United Kingdom concerning the Continental Shelf, as an area within which The rights of the United Kingdom with respect to the sea-bed and sub-soil and their natural resources may be exercised;"
While both the Convention and the Agreement contain clauses which permit an extension of these treaties to any ". . territory for whose international relation either of the Contracting Governments is responsible. . .", the Department of Finance have advised us that neither the Agreement nor the Convention have been extended beyond the scope set out in the above two definitions of the term United Kingdom.
Accordingly, it remains our view that payments of dividends and interest will be subject to withholding tax at the rate of twenty-five per cent since the treaty does not appear to have been extended to St. Lucia.
Our Department would be prepared to review any documentation which the Comptroller of the Inland Revenue of St. Lucia may have which indicates that either the Agreement or Convention has been extended to St. Lucia. Once we are in possession of this documentation, we would be prepared to review this matter with both the Department of Finance and External Affairs.
We trust this is adequate for your purposes.
Yours sincerely,
Director Provincial and International Relations Division
EEC/jb
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© Sa Majesté la Reine du Chef du Canada, 1983
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