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2012 Ruling 2011-0429961R3- Hydrocarbon & Immovable property: Canada-UK Treaty-- summary under Article 13 Summary Under Tax Topics- Treaties- Income Tax Conventions- Article 13 storage business carried on in leased real estate had over 50% of value Ruling that the transfer of shares of a UK company (Forco2- whose value is derived from CAnco shares) by two other UK companies (Forco1 and Forco4) would be exempt under Art. XIII, para. 8 of the Canada-UK Convention on the basis of an internal estimate prepared by Canco management that the going concern value of the gas storage business carried on by Canco (which was carried on in real estate facilities held on leased land) was greater than X% of the value of the shares of Canco, and that the hydrocarbon assets of Canco did not exceed Y% of the assets of Canco. ...

29 August 2012 External T.I. 2012-0433791E5- Permanent Establishment-- summary under Article 5 Summary Under Tax Topics- Treaties- Income Tax Conventions- Article 5 counting of presence on personal business A Canadian-resident employee (Mr A) of a Canadian resident corporation (Canco) provides services in the US to US businesses for 150 days in any 12-month period, with such services being Canco's only source of gross active business revenue. CRA was asked whether Mr A would be considered to be present in the US for more than 183 days for purposes of para. 9(a) of Article V of the Canada-US Convention, on the basis that Mr A was present in the US for a further 50 days in a 12-month period for personal reasons, such as shopping, vacationing and attending sporting events. ...

17 May 2012 IFA Roundtable, 2012-0444161C6- Competent Authority Agreements-- summary under Article 13 Summary Under Tax Topics- Treaties- Income Tax Conventions- Article 13 no deferral agreement where gain exempted In responding to a query which noted that the Canada-U.S. Treaty, unlike other Conventions, specifically referred to deferral agreements of competent authorities being entered into to avoid double taxation, and asked whether "the Canadian Competent Authority [would] be willing to enter into a deferral agreement under one of these other treaties where the profit, gain or income is exempted or excluded from taxation under the domestic laws of the residence," CRA responded negatively:...the Canadian Competent Authority requires taxpayers seeking a deferral agreement to demonstrate that the profit, gain or income for which an agreement is being sought is only deferred- not exempted or excluded- from taxation under the domestic laws of the residence state. ...

30 January 2013 External T.I. 2012-0449621E5 F- Belgian pension-- summary under Article 18 Summary Under Tax Topics- Treaties- Income Tax Conventions- Article 18 Belgian social security payment received by Canadan resident must be included in the personal return, but with offsetting s 110(1)(f)(i) deduction claimed Respecting the payment of a Belgian pension to a Canadian resident, CRA stated (TaxInterpretations translation): Thus, to the extent that the retirement pension of a recipient satisfies the conditions stated in paragraph 1 of Article 18 of the Convention and does not constitute a payment by virtue of social security legislation of Belgium, the sum received by the Canadian taxpayer is taxable in Canada and in Belgium. ...

18 November 2013 Internal T.I. 2011-0399581I7 F- Application of section 212(1)(d) ITA-- summary under Article 12 Summary Under Tax Topics- Treaties- Income Tax Conventions- Article 12 contingent payments came within broad Treaty definition of royalty Canco is granted an exclusive licence, bearing a royalty, by NRCO (an arm's length resident of Ireland) in respect of patents and know-how for the production and commercialization of certain products. ... " However, they were royalties under the Ireland-Canada Convention- but were exempt under Art. 12, subpara. 3(b) as royalties for the use of, or the right to use, any patent or information concerning industrial, commercial or scientific experience. ...

28 November 2010 Annual CTF Roundtable, 2010-0387001C6- Canada-US Treaty LOB- Treatment of Interest-- summary under Article 29A Summary Under Tax Topics- Treaties- Income Tax Conventions- Article 29A interest paid out of connected business Canco has both qualifying active business income from a Canadian business that is connected with an active trade or business (the connected business) of its wholly-owning US parent (USco) and also non-qualifying income of some kind, and pays interest to USco (which is not a qualifying person) on a debt owing to USco. ... XXIX A, para. 3 of the Canada-US Convention if (1) the payment is in respect of indebtedness that was incurred exclusively for the purpose of earning income from Canco's connected business, or (2) Canco can establish that the interest payment was funded out of the earnings of the connected business. ...

30 November 2010 Annual CTF Roundtable, 2010-0386391C6- Branch Tax-- summary under Article 10 Summary Under Tax Topics- Treaties- Income Tax Conventions- Article 10 In response to a query as to whether the branch tax reduction in Art. X(6) of the Canada-US Tax Convention is available to a fiscally transparent LLC that is wholly-owned by US-resident individuals, CRA stated that such Treaty benefits may be claimed by an LLC on behalf of its members with respect to an amount of profit attributable to a Canadian branch only if the amount is considered to be derived, pursuant to Art. ...

17 May 2012 IFA Roundtable, 2012-0444151C6- Hybrid Partnerships and Branch Tax Liability-- summary under Article 29A Summary Under Tax Topics- Treaties- Income Tax Conventions- Article 29A The two partners of a partnership which has elected to be a domestic corporation for Code purposes are: a corporation which is resident in the U.S. for purposes of the Canada- U.S. Income Tax Convention; and a corporation resident in a non-Treaty country. ...

15 November 2011 External T.I. 2011-0415881E5 F- Pension alimentaire pour enfants-- summary under Article 18 Summary Under Tax Topics- Treaties- Income Tax Conventions- Article 18 taxpayer not entitled to deduct child support payments upon becoming a non-resident The taxpayer was resident in Canada when ordered by a divorce decree to pay a monthly support to his ex-spouse for the exclusive benefit of their minor child (which was included in her income), but then ceased to be a resident in Canada. The taxpayer argued that he could deduct the amounts paid by virtue of Art. 18 of the applicable Convention, which provided: "[A]limony and other similar payments arising in a Contracting State [e.g. ...

24 June 2011 External T.I. 2011-0409741E5 F- Déductions d'impôt sur une bourse de recherche-- summary under Article 20 Summary Under Tax Topics- Treaties- Income Tax Conventions- Article 20 assistance received by unenrolled Chinese student towards Ph.D. thesis research assistance was Treaty-exempt A Chinese student worked at the organization’s premises on a doctoral thesis and who was not enrolled in a Canadian university received a scholarship award from it. ... After finding that the award came within s. 56(1)(o) as a research grant, CRA stated: A student who was, immediately before travelling to Canada, a resident of the People's Republic of China and who stays in Canada only to continue the student’s education or training would not be taxable in Canada on the money received to cover the student’s maintenance and education expenses pursuant to Article 19 of the [Canada-PRC] Convention and may claim a deduction pursuant to ITA subparagraph 110(1)(f)(i). ...