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Fioravanti (613) 995-1767 December 17, 1984 Dear Sir: This is in reply to your letter of September 7 requesting our interpretation of the effective rate of "branch tax" provided by Section 219 of the Income Tax Act in light of the 1960 Canada- U.S. lax Convention. You raise the question that in view of the provisions of Subsection 11(4) ITAR and in view of the intention to equate the rate of branch tax to the rate of dividends paid by a subsidiary to its parent, will the provisions of Subsection 11(4) ITAR and the relevant provisions in the new Convention be interpreted to permit a reduction ire the branch tax from 15% to 10% from October 1, 1964 to the effective date of paragraph 6 of Article X of the new Convention (being the first fiscal year of the payer non-resident corporation commencing on or after January 1, 1985): or, does the fact that any additional tax is limited by paragraph 6 of Article X of the new Convention to 10% result in Subsection 11(4) ITAR being inapplicable notwithstanding the fact that the limitation contained in paragraph 6 of Article h of the new Convention does not have effect in respect of the taxation year in respect of which the branch taxes are required to be paid where such taxation year did not commence on or after January 1, 1985? We agree with your latter analysis that the branch tax will not be reduced to 10% prior to the period set out in paragraph 2(b) of Article XXX of the Convention. ...

Income Tax Convention (Convention) This is in reply to your memorandum of November 16, 1987 concerning the treatment of recapture of capital cost allowance under the Convention. It continues to be our general view, for the reasons set out in the letters attached to your memorandum, that Article XIII of the Convention will have application to capital gains derived by a resident of the United States whereas Articles VI, VII, VIII and XIV of that Convention will apply to tax the income, including the recapture of capital cost allowance, which a non-resident earns in Canada. Paragraph 8 of Article XIII of the Convention permits the Canadian competent authority, in the situations set out therein, to agree to defer the recognition of the profit, capital gain or income (including C.C.A.) for Canadian income tax purposes in order to avoid double taxation. ...

The draft Tax Convention between Canada and the United Kingdom was issued to the public on September 8, 1978. ... We regret that we have no alternative but to assess XXXX in accordance with the provisions or the Income Tax Act and the present Canada-United Kingdom Tax Convention. The treaty makes no provision for people who entered into contract prior to the entry into force of the present Convention, other than for situations covered by paragraph 4 of Article 28 of the Convention (copy attached). ...

Short: XXXX is seeking a solution to the following problem relating to paragraph 7 of Article XI of the Canada-United Kingdom Convention (the Convention). ... The technical interpretation of the Convention and the Act is that this interest is subject to 25% withholding tax, even when the interest is physically paid by the United Kingdom branch to the United Kingdom lender. ... Is there a specific reason why the Convention does not contain an "other income" article? ...

It is not a "qualifying person" for the purposes of paragraph XXIX-A(1) of the Convention. 6. ... In general terms, Article XXIX-A of the Convention states that a person that is a resident of a Contracting State and that is not a "qualifying person" may nonetheless be entitled to the benefits of the Convention if one of three exceptions applies. Paragraph XXIX-A(3) of the Convention provides for one of these exceptions. ...

The provisions for taxing business income are found in Article 7 of the Convention. ... Valuable guidance on the interpretation of articles within income tax conventions is provided in the commentary to the OECD Model Tax Convention on Income and Capital (July 2010). ... The definition of "immovable property" is found in paragraph 2 of Article 6 of the Convention. ...

Déduction d'impôt prévue par la Convention si le contribuable a des revenus de la France dans l'année du décès. ... Le paragraphe 1e) de l'article XXIII de la Convention n'a pas pour objet de permettre d'accorder une déduction pour impôt étranger à l'égard de l'ISF. Le paragraphe 1e) de l'article XXIII de la Convention est identique au paragraphe 3 de l'article 23A du Modèle de Convention Fiscale de l'OCDE. ...

Income Tax Convention (the “Convention”) but the U.S. tax so imposed should not exceed certain tax rates provided by the Convention (the “treaty rate(s)”). ... Before the Third Protocol, paragraph 5 of Article XXIV of the Convention required that Canada provide a tax credit equal to the lesser of the amount of U.S. tax otherwise payable or 15% of the gross amount of each item of income referred to in that paragraph regardless of the rate that such item of income was taxed by the U.S. under the Convention. ... In the mean time if the tax imposed by the U.S. after tax credits on an item of income referred to in paragraph 5 of Article XXIV of the Convention as amended by the Third Protocol exceeds what is allowed under the Convention, you may suggest the taxpayer to seek the assistance of Competent Authority in Canada to resolve the issue. ...

Income Tax Convention (the “U.S. Convention”) This is in reply to your memorandums of April 24th and 30th in which you requested clarification as to whether the provisions of paragraph 2(a) of Article XXI of the U.S. ... Convention, income referred to in Article X (Dividends) and XI (Interest) of the U.S. ... Convention, this would depend on the actual facts surrounding each particular payment. ...

Reasons: Interpretation of the provisions of the Act and Articles 3, 15 and 27A of the Canada-United Kingdom Income Tax Convention ("UK Convention"). ... In the situation set out above, there is no relief from taxation in Canada under the Canada-United Kingdom Income Tax Convention (the "UK Convention"). Our analysis of the relevant provisions of that convention is as follows. ...