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Tax Convention- Article IV(7)(b) Unedited CRA Tags 84(1); 212(2); 212(1)(b); Articles IV(7), X; XI; XXIX-A of the Treaty Principal Issues: 1) Whether Article IV(7)(b) of the Treaty applies to treat the deemed dividend and the interest paid by Canco (a fiscally transparent entity) as not being paid to a resident of the USA. 2) Whether the interest paid by Canco to the US resident will be subject to withholding under subsection 212(1)(b). ... Pubco is a non-resident of Canada and a resident of the U.S. for purposes of the Act and for the purposes of the Treaty; k) "Treaty" means the convention between Canada and the United States of America with respect to taxes on income and on capital signed on September 26, 1980, as amended to the date hereof; l) "U.S. ...

2010 Ruling 2009-0348181R3- Canada-US Tax Convention ("Treaty") Unedited CRA Tags Article XXIX A(3) of the Treaty Principal Issues: Whether interest paid by a Canadian corporation to a United States resident corporation qualifies for treaty benefits under Article XXIX A(3) of the Treaty Position: Yes Reasons: The interest income will be derived by a resident of the United States in connection with an active trade or business carried on in the United States that is substantial in relation to the activity in Canada that gives rise to the income XXXXXXXXXX 2009-034818 XXXXXXXXXX, 2010 Re: Advance Tax Ruling XXXXXXXXXX This is in reply to your letter dated XXXXXXXXXX in which you requested an advance tax ruling on behalf of the above named taxpayer. ... Definitions (a) "Agreement" means the agreement between Parent and Vendors executed on XXXXXXXXXX; (b)XXXXXXXXXX (c) "BCA" means the Business Corporations Act (XXXXXXXXXX); (d) "CAD" means Canadian dollars; (e) "CBCA" means the Canada Business Corporations Act; (f) "Canada Holdco I" means XXXXXXXXXX; (g) "Canopco" means XXXXXXXXXX; (h) "Canopco2" means XXXXXXXXXX; (i) "Canadian Bid Co" means XXXXXXXXXX; (j) "CRA" means the Canada Revenue Agency; (k) "Finco" means XXXXXXXXXX; (l) "Forco1" means XXXXXXXXXX; (m) "Forco2" means XXXXXXXXXX; (n) "For2 Bid Co" means XXXXXXXXXX; (o) "For2 Hold Co" means XXXXXXXXXX; (p) "Loan" means the loan from US Bid Co to Canadian Bid Co, as described in paragraph 31; (q) XXXXXXXXXX (r) "New Canopco" means the corporation formed by the amalgamation of Canadian Bid Co, Canada Holdco I and Canopco; (s) "Parent" means XXXXXXXXXX; (t) "Subco" means XXXXXXXXXX.; (u) "Subco2" means XXXXXXXXXX.; (v) "Target Companies" means the XXXXXXXXXX Group of companies consisting of Canopco, Forco1, Forco2 and USopco; (w) "taxable Canadian corporation" has the meaning assigned by subsection 89(1) of the Act; (x) "Treaty" means Canada-United States Tax Convention (1980), as amended; (y) "US Bid Co" means XXXXXXXXXX.; (z) "USD" means United States dollars; (aa) "US GP" means XXXXXXXXXX.; (bb) "USopco" means XXXXXXXXXX.; (cc) "US Vendor" means XXXXXXXXXX.; and (dd) "Vendors" mean collectively XXXXXXXXXX. ...

2009 Ruling 2009-0341681R3- Canada-US Tax Convention ("Treaty") Unedited CRA Tags 84(1); 212(2); 245; Articles IV(7) and X of the Treaty Principal Issues: 1) Whether a subsection 84(1) deemed dividend is a dividend within the meaning of Article X(3) of the Treaty; 2) Whether Article IV(7)(b) of the Treaty applies to treat the dividend as not being paid to or derived by a resident of the United States Position: 1) Yes; 2) No Reasons: 1) Definition of "dividends" in Article X(3) is broad enough to include a subsection 84(1) deemed dividend; 2) Article IV(7)(b) does not apply because the deemed dividend is subject to the same treatment under the taxation laws of the U.S. as it would be if the dividend payer were not fiscally transparent XXXXXXXXXX 2009-034168 XXXXXXXXXX, 2009 Dear XXXXXXXXXX: Re: Advance Income Tax Ruling XXXXXXXXXX (the "Taxpayers") This is in response to your XXXXXXXXXX request for an advance income tax ruling on behalf of the above-noted taxpayers. ... X" means XXXXXXXXXX; (j) "paid-up capital" has the meaning assigned by subsection 89(1) of the Act; (k) "Partnership" means XXXXXXXXXX (l) "Province" means the Province of XXXXXXXXXX; (m) "S Corp" means XXXXXXXXXX.; (n) "related persons" has the meaning assigned by subsection 251(2) of the Act; (o) "taxable Canadian corporation" has the meaning assigned by subsection 89(1) of the Act; (p) "taxation year" has the meaning assigned by subsection 249(1) of the Act; (q) "Treaty" means the Convention Between Canada and the United States of America With Respect to Taxes on Income and Capital Signed on September 26, 1980 as Amended by the Protocols Signed on June 14, 1983, March 28, 1984, March 17, 1995, July 29, 1997 and September 21, 2007; and (r) "United States" means the United States of America. ...

Tax Convention ("Treaty") Unedited CRA Tags 84(1); 212(2); Articles IV(7), X and XII of the Treaty Principal Issues: 1) Whether a subsection 84(1) deemed dividend is a dividend for the purposes of Article X of the Treaty; 2) Whether Article IV(7)(b) of the Treaty applies to treat a subsection 84(1) deemed dividend as not being paid to or derived by a resident of the United States; 3) Whether Article IV(7)(b) of the Treaty applies to treat certain royalty payments as not being paid to or derived by a resident of the United States Position: 1) Yes; 2) No; 3) No Reasons: 1) The definition "dividends" in Article X(3) of the Treaty is broad enough to include a subsection 84(1) deemed dividend; 2) Article IV(7)(b) does not apply because the deemed dividend is subject to the same treatment under the taxation laws of the United States as it would be if the dividend payer were not fiscally transparent; 3) Article IV(7)(b) does not apply because the royalties are subject to the same treatment under the taxation laws of the United States as they would be if the royalty payer were not fiscally transparent. ... In this letter, the following terms have the meanings specified below: "Act" means the Income Tax Act, R.S.C. 1985 (5th Supp.) c.1, as amended; "Agreement" means the XXXXXXXXXX License Agreement, as described in Paragraph 10; "Canco" means XXXXXXXXXX, an unlimited liability company under the Companies Act; "Code" means the Internal Revenue Code of 1986 (United States), as amended; "Companies Act" means the Companies Act (XXXXXXXXXX); "Merger" has the meaning ascribed to in Paragraph 2; "Paragraph" means a numbered paragraph in this letter; "PUC Increase" has the meaning ascribed to in Paragraph 14; "PUC Reduction" has the meaning ascribed to in Paragraph 14; "Qualifying Person" has the meaning ascribed to in Article XXIX-A(2) of the Treaty; "Royalty" means the fee payable under the Agreement, as described in Paragraph 10; "taxable Canadian corporation" has the meaning assigned by subsection 89(1) of the Act; "Treaty" means the Convention Between Canada and the United States of America With Respect to Taxes on Income and Capital Signed on September 26, 1980 as Amended by the Protocols Signed on June 14, 1983, March 28, 1984, March 17, 1995, July 29, 1997 and September 21, 2007; "US Holdings" means XXXXXXXXXX; "US Parent" means XXXXXXXXXX.; and "US Subco" means XXXXXXXXXX. ...