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31 May 1990 Income Tax Severed Letter HBW 4125-N1 HBW 6591-N1 Unedited CRA Tags Canada-Netherlands Income Tax Convention Article 25 HBW 4125-N1 HBW 6591-N1 David R. Senécal (613) 957-2074 May 31, 1990 Dear xxxxx Pursuant to paragraph 4 of Article 25 of the Canada-Netherlands Income Tax Convention signed by our two countries on May 27, 1986, we would like to clarify the application of the said Convention to the following situation: A corporation, which is a resident of Canada for the purposes of the Convention, borrows Canadian dollars from a lender in the Netherlands. ... Consequently, as paragraphs 1 and 2 of Article XI of the Convention only apply to reduce the tax to 15% if the interest arises in one State and is paid to a resident in the other State and the Convention does not contain an "Other Income" article deeming the interest to be taxable only in the Netherlands where it arises, a technical interpretation of the Convention would result in the interest being subject to a 25% tax in Canada even though the interest is paid by the permanent establishment in the Netherlands. ...

Amounts paid by a corporation resident in the United States to a corporation resident in Canada that are deemed to be dividends by and for purposes of the taxation laws of the United States may, by virtue of paragraph 3 of Article X of the Canada-United States Income Tax Convention, 1980 (the "Convention"), be deemed to be dividends for purposes of Article X of the Convention. ... Consistent with paragraph 1 of Article X and paragraph 1 of Article XI and as provided by paragraph 2 of Article XXIX of the Convention, the Convention does not affect the manner in which Canada may tax residents of Canada in respect of interest and dividends and accordingly the taxation of residents of Canada in respect of interest and dividends arising in the United States is to be in accordance with the provisions of the Income Tax Act. We cannot rule out the possibility that a taxpayer may be granted relief from taxation in a particular situation by virtue of the provisions of Article XXVI of the Convention and thus recommend that an application be made pursuant to paragraph 1 of Article XXVI of the Convention where a person considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with the provisions of the Convention. ...

HDB9412- 2- 1- U3 This is in reply to your Memorandum dated January 30, 1991 concerning Article XXI of the Canada-United states Income Tax Convention, 1980 (the "Convention"). ... Paragraph 6 of Article XXI of the Convention applies only in respect of "gifts by a resident of Canada". ... The March 15, 1989 Memorandum pointed out that the relevant provisions of the 1942 Convention applied to both residents of Canada and residents of the United States whereas the 1980 Convention only applies to residents of Canada insofar as provision is made by the conventions (as opposed to the Act) for expanding the type of organizations (to U.S. resident organizations not prescribed by the Act) eligible for creating a deduction (or tax credit). ...

Senécal Attention: XXXXXXXXXX August 15, 1997 Dear Sirs: Re: SICAVs- Canada-Luxembourg Income Tax Convention This is in reply to your letter of May 29, 1996, wherein your requested our views as to whether certain corporate entities established in Luxembourg for investment purposes and known as "sociétés d'investissement à capital variable" (SICAVs) were covered by the provisions of the Canada-Luxembourg Income Tax Convention (the "Convention"). ... We have informed the Luxembourg competent authority that it is our department's position that SICAVs constituted and established in Luxembourg, not being liable to taxation in that State, are not considered by this department as being residents of Luxembourg as defined in paragraph 1 of Article 4 of the Convention and are, therefore, not covered by the provisions of the Convention. ... It should be noted that our department is also of the view that SICAVs constituted and established in France are not residents of France for purposes of the Canada-France Income Tax Convention (the "French Convention"). ...

Periodic pension payments out of a RRIF are exempt from tax under paragraph 1 of Article XVII of the Canada-UK Convention. ... Thus, it is our view that the intention of the provisions of the UK Convention should prevail. ... To the best of our knowledge, there was no intention in amending the ITCIA to treat periodic pension payments as annuities so that the annuity provision of an income tax convention would apply rather than the pension provision, especially where a convention such as the UK Convention specifically contemplated that payments similar to periodic pension payments would be dealt with under the term "pension". 933141 XXXXXXXXXX G. ...

Section 33 of the Vienna Convention on the Law of Treaties provides that the version that is closer to the object and purpose of the treaty, shall be adopted. ... Pour ce faire, le texte du paragraphe 5 de l’Article 29 de la Convention doit pouvoir s’appliquer à différents régimes de pension existants dans les deux pays signataires de la Convention. 2. Le paragraphe 4 de l’article 33 de la Convention de Vienne sur le droit des traités précise que dans les cas où une convention entre deux pays a été authentifiée dans plus d’une langue et que le sens des versions diffère, il faut adopter la version dont le sens se rapproche le plus des objectifs et de la raison d’être de la convention entre deux pays. ...

Paragraph 3 of Article XXIV of the Convention reads as follows: "3. ... " Paragraph 4 Article XXIV of the Convention reads as follows: "4. ... The provision of the Convention relevant to this determination in the case of Taxpayer2 is Article XV of the Convention. ...

Cependant, aucune disposition de la Convention ne prévoit actuellement le remboursement de l’«avoir fiscal». ... La Convention modifiée n’entrera en vigueur qu’une fois ratifiée par le Président de la République française. ... A cet égard, nous vous référons au paragraphe 4 de l’article X de la Convention modifiée. ...

Income Tax Convention (the "Convention") Foreign Tax Credit-Canadian Resident and U.S. ... In accordance with paragraph 2 of Article XXIX (subject to paragraph 3) of the Convention the United States is permitted to tax its citizens as if there were no convention between Canada and the United States. ... If the capital gain was not derived from the alienation of real property, as defined in paragraph 3 of Article XIII of the Convention and paragraph 5 of Article XIII of the Convention does not apply, Canada would not be required to allow a FTC for United States taxes paid on the gain. ...

Position: Oui Reasons: Une Convention ne fait pas en sorte qu'une personne n'est pas résidente du Canada pour les fins de la Loi. ... Dans une telle situation, s'il y a une convention fiscale entre le Canada et le pays étranger, l'article de la convention portant sur la résidence est utilisé pour établir un seul pays de résidence pour les fins de l'application de la convention et ainsi éviter la double imposition. Toutefois, lorsque les dispositions d'une convention fiscale font en sorte qu'un particulier résident du Canada pour les fins de la Loi est résident du pays étranger pour les fins de la convention, la convention ne semble pas rendre le particulier un non-résident du Canada pour les fins de la Loi. ...