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.
Tax Department
November 17, 1986
Revenue Canada Taxation Head Office Ottawa, Ont. K1A 0L8
Attention: Mr. B. Darling Legislative and intergovernmental affairs branch
Subject: Canada-Brazil Income Tax Convention (the Treaty) (Your reference 5-2278 M. Trotier)
Dear Mr. Darling
Further to your letter dated October 22, 1986 to XXXX on the above subject I seek an additional clarification of your position concerning tax sparing under Article 22 of the Treaty.
Paragraph 3 of Article 22 provides that Brazilian tax shall always be considered as having been paid at the rate of 20 per cent (20%) of the gross amount of the income paid in Brazil in the case of interest to which paragraph 2 of Article 11 applies. In the case of an exempt loan (a loan exempt from Brazilian tax by decree or special legislation) are we to consider that Brazilian tax has been paid at a rate of 20%? In other words does interest arising in Brazil, paid to a Canadian branch of a bank, on an exempt loan qualify for tax sparing under Article 22?
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© Her Majesty the Queen in Right of Canada, 1986
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© Sa Majesté la Reine du Chef du Canada, 1986
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