Tax Treaty Amendments

[Kathryn41 3,205]

Canada Gives Final Approval To Amended Tax Treaty With U.S.

16:21 12/14 (CEP News) Ottawa – Legislation amending a series of tax measures between Canada and the U.S. has been given Royal Assent and will become law as soon as it has been approved by the United States.

Finance Minister Jim Flaherty announced Friday that Canada has completed the steps required in this country to give effect to the fifth Protocol to the Canada-United States Income Tax Convention.

“Modernizing this long-standing treaty will encourage further trade and investment in Canada and the United States and help us to better compete in the global economy,” said Flaherty.

The agreement to modify the Convention was signed in September by Flaherty and Henry Paulson, U.S. Treasury Secretary. First signed in 1980, the Convention has been updated four times in the past through agreements known as Protocols.

Key measures of the fifth Protocol include:

- Eliminating withholding taxes on cross-border interest payments.

- Extending treaty benefits to limited liability companies.

- Allowing taxpayers to require that certain key double taxation issues, such as transfer pricing, be settled through arbitration.

- Ensuring there is no double taxation on emigrants’ gains.

- Giving mutual tax recognition of pension contributions.

- Clarifying how stock options are taxed.

By Geoff Matthews, gmatthes@economicnews.ca, edited by Stephen Huebl, shuebl@economicnews.ca

(END) ©CEP Newswires - ©CEP News Ltd. 2007. All Rights Reserved. www.economicnews.ca

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[Chica Yeyé 41]

I am in a know about this whole tax #######. I don't understand the language or anything else. Would we both have to file TWO returns? Door #1 for Canada Revenue AND Door #2 for the IRS? Or how does the treaty work?????

Canada Revenue would give me a nice refund , but I don't know ####### to do.