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Harris (613) 957-2114 July 25, 2005 Dear XXXXXXXXXX: Re: Residence Under the Canada- Switzerland Tax Convention We are writing in response to your letter of February 18, 2005 wherein you requested our comments regarding the interpretation of paragraph 5 of Article 4 of the Canada- Switzerland Tax Convention (the "Convention"). ... You have requested our opinion as to whether paragraph 5 of Article 4 of the Convention would be applicable such that the individual would not be considered a resident of Switzerland for purposes of the Convention. ... The following comments are restricted to a consideration of paragraph 5 of Article 4 of the Convention and should not be construed as signifying that the CRA has accepted that an individual who chooses to pay tax under the Swiss lump-sum basis of taxation would be considered a resident of Switzerland pursuant to paragraph 1 of Article 4 of the Convention. ...

Reasons: Wording of the Convention. XXXXXXXXXX 2003-001241 Fouad Daaboul October 1st, 2003 Dear XXXXXXXXXX: Re: The Canada-Luxembourg Tax Convention This is in reply to your letter of March 20, 2003, wherein you requested our comments on the above-mentioned subject. ... Article 28 of the Convention states in part: 3. The Convention shall not apply to holding companies within the meaning of the special Luxembourg laws (currently the Act of July 31, 1929 and the Grand Duchy Order of December 17, 1938) or any other similar law enacted in Luxembourg after the signature of the Convention, nor to companies subjected to similar fiscal laws in Luxembourg... Since the corporation is a holding company covered by the Luxembourg law of July 31, 1929, it is subject to the exception set out in paragraph 3 of article 28 of the Convention such that any other part of the Convention would generally not apply to the corporation. ...

References in this memo to an Article are references to an Article of the Convention. ... The intent of the contracting parties to substantively deny the benefit of the Convention to a Special Barbados Entity remains. ... According to article III(2) of the Convention, the term enterprise shall have the meaning which it has under the laws of that State since it is not otherwise defined in the Convention. ...

Article VI of the Convention leaves open the question of taxation of income from real property by the State of residence by using the permissive word "may" in the Convention. ... The country of situs has clearly maintained its right to tax gains from the alienation of real property in Article XIII of the Convention and business profits from such alienation, where there is a permanent establishment, in Article 7 of the Convention. ... The Technical Explanation to paragraph 6 of Article VII of the Convention explains the relationship between the provisions of Article VII and other provisions of the Convention. ...

Income Tax Convention (1980) (the "U.S. Convention") and the Canada- U.K. Tax Convention (1978) (the "U.K. Convention"). Under domestic law, payments made from a RRIF to a non-resident are subject to Canadian non-resident tax at a rate of 25% as provided by paragraph 212(l)(q) of the Act. ... A RRIF does not fall under the definition of an annuity found in either Convention. ...

PRINCIPAL ISSUES: Whether a corporation incorporated in Switzerland is a resident of Switzerland for purposes of the Canada- Switzerland Income Tax Convention (the "Convention") POSITION: No definitive opinion provided. ... Leung Attention: XXXXXXXXXX October 4, 1996 Dear Sirs: Re: Article IV of the Canada- Switzerland Income Tax Convention (the "Convention") We are writing in reply to your letter of August 15, 1995 in which you requested our view as to whether the benefits of the Convention is available to the corporation described in the following hypothetical situation. ... Even if such a corporation were considered resident in Switzerland for purposes of the Convention, the Department may consider applying the general anti-avoidance provisions to deny the benefits of the Convention to the corporation if evidence shows that there is an improper use of the Convention. ...

It is our view that any payments made under a registered retirement income fund would fall within the definition of "pension", as defined in the Canada-United States Income Tax Convention (Convention), since such benefits would be considered as a payment under a retirement plan. 2. ... Pursuant to paragraph 5 of Article XXX of the Convention, payments to individuals could enjoy the treatment under the 1942 Convention until December 31, 1985. ... It is our view that where certain payments subject to Part XIII are being paid to non-residents, and such payments would have a more beneficial treatment under the 1942 Convention than under the present Convention, that such non-resident individuals should be given the benefit of the 1942 Convention until December 31, 1985. ...

-Canada convention will enter into force shortly, we are seeking your views in a few situations of concern to us. 1. ... In our capacity as payors of income averaging annuity payments, pension benefits, and RRSP benefits, where the 1942 Convention restricts withholding of Canadian tax to a level lower than that provided in the 1980 Convention, may we apply the provisions of the 1942 Convention until December 31, 1985? ... As the 1980 Convention has no provision analagous to paragraph 5 of Article XI of the 1942 Convention, will you please advise us of the date upon which the statutory authority for Canada's Income Tax Regulation 203 will cease to exist. ...

Income Tax Convention (the “1980 Convention”) or the 1942 Canada-U.S. Income Tax Convention (the “1942 Convention”). In our opinion, based on the case of Indalex v. ... Pursuant to the Entry into Force provisions of the 1980 Convention found in Article XXX(5), the greater benefits of the 1942 Convention would continue to apply to the U.S. resident company through to the end of its first taxation year beginning on or after January 1, 1985. ...

Tax Convention Canada-U.S. Tax Treaty:Art. XIIIC RE: Article XIIIC Canada-U.S. ... Convention. This view has been expressed to several district offices as well as to various accounting and law firms. ... Convention, the Department has accepted the decision of the Federal Court of Appeal in the Saint John Shipbuilding case (80 DTC 6272). ...