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14 April 2014 Internal T.I. 2013-0516151I7 F- Article XIII(4) of the Canada-XXXXXXXXXX Convention-- summary under Article 13 Summary Under Tax Topics- Treaties- Income Tax Conventions- Article 13 partnerships holding Quebec real estate were transparent for purposes of Treaty "consists of" test A non-resident corporation (Vendor) disposed at a gain of shares of Canco, which held partnership interests in two Quebec real estate partnerships (an SEC and SENC). ... XIII, para. 4 of the Canada-Singapore Convention, on the basis that para. 3 did not apply, which refers to: gains from the alienation of shares of a company, or of an interest in a partnership or a trust, the property of which consists principally of immovable property…. ... [T]he better position…is to consider that SEC and SENC are not distinct persons for purposes of the Convention and that their respective patrimonies can be assimilated to that of their members. ...

XXIV de la Convention Canada-France-- summary under Article 25 Summary Under Tax Topics- Treaties- Income Tax Conventions- Article 25 Art. 24(1) of Canada-France Convention would provide the principal residence exemption to a Canadian citizen if France accorded the exemption to a French national residing in Canada Regarding a capital gain realized by a Canadian citizen residing in Canada on the disposition of a residence located in France, CRA indicated that Art. 24(1) of the Canada-France Convention was “intended to ensure that nationals of a Contracting State in the same circumstances are not treated less favourably in the other Contracting State than that State's own nationals,” CRA stated: [Art. 24(1)] would require the French tax authorities to treat the gain realized by the Canadian citizen on the disposition of a residence located in France in the same way as such a gain would be treated if it were realized by an individual with French nationality who was in the same situation as the Canadian citizen, i.e. the individual resided in Canada and the residence the individual had was located in France. … [T]he Canadian citizen to whom you refer in your request will be able to benefit from the exemption for the gain realized on the disposition of the residence located in France to the extent that a person with French nationality whose situation in fact and in law is identical to the individual’s own could benefit from it. ...

26 March 2001 External T.I. 2001-0070165 F- Conventions fiscales et lois provinciales-- summary under Article 12 Summary Under Tax Topics- Treaties- Income Tax Conventions- Article 12 Canada will not reduce its withholding rate to 0% to make room for Quebec taxes imposed on the same property income The questioner noted that, in the situation of a Quebec resident with property income from Canada and whose dual residence was determined in favour of the other contracting state under Article 4 of a Canadian tax treaty and where such resident derived property income to which the treaty limited the Canadian rate of tax to 10%, senior ARQ officials had indicated that Canada should reduce its rate of withholding to 0% in light of the Quebec taxation of such income. CCRA responded: Canadian tax treaties only cover “the taxes imposed by the Government of Canada under the Income Tax Act” (see, for example, paragraph 2 of Article II of the Canada-United States Tax Convention). ... Consequently, in the situation referred to in the question submitted to senior officials of Revenu Québec at the 1996 APFF convention, the federal government would not be required to reduce its own tax rate to 0% in order to comply with the terms of the tax treaties to which it is a party. ...

26 March 2001 External T.I. 2001-0070165 F- Conventions fiscales et lois provinciales-- summary under Article 2 Summary Under Tax Topics- Treaties- Income Tax Conventions- Article 2 Canada has no obligation to absorb Quebec taxes imposed on property income with treaty-reduced withholding Where a Quebec resident who was resident in a treaty country under the tie-breaker rule was otherwise subject to both Quebec tax and Part XIII tax on property income received from Quebec, the ARQ had suggested that Canada should reduce its rate of withholding to 0%. CCRA stated: Canadian tax treaties only cover “the taxes imposed by the Government of Canada under the Income Tax Act” (see, for example, paragraph 2 of Article II of the Canada-United States Tax Convention). ... Consequently, in the situation referred to in the question submitted to senior officials of Revenu Québec at the 1996 APFF convention, the federal government would not be required to reduce its own tax rate to 0% in order to comply with the terms of the tax treaties to which it is a party. ...

12 April 2010 External T.I. 2009-0317941E5- Canada-US Tax Convention- Article XXIX A-- summary under Article 29A Summary Under Tax Topics- Treaties- Income Tax Conventions- Article 29A meaning of "paid or payable...directly or indirectly" in Art. ... Convention? CRA responded: The CRA will interpret the words "paid or payable...directly or indirectly" contained in Articles XXIX A(2)(e) and (4)(b) of the Treaty consistent with the approach we have taken in interpreting those words under subparagraph 95(2)(a)(ii) of the Act. ...

27 January 2011 External T.I. 2010-0384901E5- Article V, Paragraph 6(a) Canada-US Tax Convention-- summary under Article 5 Summary Under Tax Topics- Treaties- Income Tax Conventions- Article 5 strict interpretation of exception for merchandise facility In indicating that a third-party warehousing facility would generally not constitute a permanent establishment, CRA noted that pursuant to Art. ... Income Tax Convention, a facility in Canada is generally not deemed to be a permanent facility if it is used only to hold and deliver merchandise. ...

19 May 2010 IFA Roundtable, 2010-0366521C6- Canada-United States Tax Convention-- summary under Article 4 Summary Under Tax Topics- Treaties- Income Tax Conventions- Article 4 IV.6(b) not avoided using s. 78(1)(b) election A Canadian ULC has interest accrue on a loan from its US-resident parent ("USCo"), with the election being made under s. 78(1)(b) of the Act at the beginning of the third year to have the accrued interest deemed to be paid on that day. In response to an argument that this deemed payment was not subject to Article IV(7)(b) of the US Convention "because the deemed receipt in itself is not recognized under the taxation laws of the United States and would not be recognized if the ULC were not fiscally transparent", CRA indicated that what was required was "an analysis of the treatment of the item of income to which the deemed receipt relates" and that, in this instance, the interest itself would have been recognized under US laws if the ULC were not fiscally transparent. ...

2012 Ruling 2011-0416821R3- Article XII of Canada-US Tax Convention-- summary under Article 12 Summary Under Tax Topics- Treaties- Income Tax Conventions- Article 12 sales-related payments for designs needed to manufacture a product exempted under 3(c) of the Canada-US Treaty A "qualifying person" resident of the US ("Pubco") provides Canco with an exclusive licence to distribute two products in Canada, one of which (the "Existing Product") had been manufactured by Canco's US parent, and a second "New Product" that Canco will have a third party manufacture for sale by it. ... Convention. ...

Tax Convention-- summary under Article 4 Summary Under Tax Topics- Treaties- Income Tax Conventions- Article 4 in the situation where a Canadian unlimited liability company ("ULC"), which is a disregarded entity for US tax purposes, pays an excessive management fee to its US parent (Xco) that is deemed to be a dividend under s. 214(4)(a) and Xco is an LLC that has two qualifying persons (ACo and BCo) as its members, Art. IV, para. 6 of the Canada-US Convention would not apply to treat the management fee as being derived by ACO and BCO because such amounts would be disregarded under the Code in this situation. ...

13 June 2007 External T.I. 2007-0226261E5 F- Convention Émirats Arabes Unis-- summary under Paragraph 5907(11.2)(a) Summary Under Tax Topics- Income Tax Regulations- Regulation 5907- Subsection 5907(11.2)- Paragraph 5907(11.2)(a) FA required to have its central management and control in the Treaty country in addition to satisfying the Treaty residence test Canco incorporated a wholly-owned subsidiary in Dubai, in the United Arab Emirates (Dubai Co), whose management and control, and the sole establishment of its business will be in Dubai. Art. 4(1)(b)(ii) of the Canada UAE Convention, defined a resident of the UAE to include a company incorporated there where “all or substantially all of the company’s income is derived by the company from the active conduct of a trade or business, other than an investment business, in the United Arab Emirates and all or substantially all of the value of the company’s property is attributable to property used in that trade or business.” ... Taking into account the comments in the previous paragraph, if it is established on the facts of a specific situation that Dubai Co is a resident of the UAE, it will in addition, for the purposes of applying section 5907 of the Regulations, have to be a resident for the purposes of the CAN-UAE Convention. ...