Finance just announced that “Canada’s New Government Sign[ed] Protocol to the Canada-U.S Tax Treaty for the Benefit of Canadians”. The news release summarizes the changes implemented as follows:
The fifth update of the Canada-U.S. Tax Treaty:
* eliminates withholding taxes on cross-border interest payments;
* extends treaty benefits to limited liability companies;
* allows taxpayers to require that certain key double tax issues, such as transfer pricing, be settled through arbitration;
* ensures that there is no double taxation on emigrants’ gains;
* gives mutual tax recognition of pension contributions; and
* clarifies how stock options are taxed.
The text of the fifth protocol amending the Canada-U.S. Income Tax Convention (1980) can be found here.
