15 December 1975 Income Tax Severed Letter

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.

F.P. Padulo, Esq.,                      15th December, 1975
Source Deductions Division,
Revenue Canada, Taxation,
875 Heron Road,
Ottawa, Ont.
K1A 0L8

CANADA/NORWAY TAX CONVENTION CANADA/NETHERLANDS TAX CONVENTION

Dear Mr. Padulo,

With reference to our telephone conversation last week we would like to receive an interpretation as to the application of Article 12 of the current Canada/Norway Tax Convention to payments from trusts that are tax deferral vehicles as defined in Section 205 I.T.A. 1972. We exclude from consideration pension and annuity payments falling in within the provisions of Article 16 of that convention.

Article 2(2) of the convention directs one to the Income Tax Act 1972 for a definition of a "trust". Reference to Subsections 248 104(1) and Section 205 indicate that these vehicles are "trusts" in the context of the Income Tax Act 1972 and therefore subject to Article 12 of the Canada/Norway Convention.

Conversely, payments from similar resident Canadian trusts subject to the current Canada/Netherlands Tax Convention will be subject to Article XVII of the protocol to that Convention dated 2nd April 1957 and thereby excluded from Article XVII of the Convention, effectively subjecting such payments to the Canadian statutory rate of withholding tax under the relevant provisions of Section 21 I.T.A. 1972.

Your interpretation and comment on our views of the application of these two tax conventions to the Canadian withholding rate on payments from such Canadian resident trusts will be appreciated.

Yours truly, XXXX