Convention Between the Government of Canada and the Government of the Kingdom of Norway 1966

Status of Tax Treaties

This electronic version of the Canada-Norway Income Tax Convention signed on November 23, 1966 is provided for convenience of reference only and has no official sanction.

The Government of Canada and the Government of the Kingdom of Norway, desiring to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, have agreed as follows:

1. The taxes to which this Convention shall apply, are:

2. This Convention shall also apply to any other taxes of a character substantially similar to those referred to in paragraph 1 imposed in Norway or by the Government of Canada after the date of signature of this Convention.

1. In this Convention unless the context otherwise requires:

2. In the application of this Convention by one of the Contracting States any term which is not defined in this Convention shall, unless the context otherwise requires, have the meaning which it has under the laws of that Contracting State relating to the taxes which are the subject of this Convention.

1. For the purposes of this Convention the terms "resident of Norway" and "resident of Canada" mean respectively any person who is resident in Norway for the purposes of Norwegian tax and any person who is resident in Canada for the purposes of Canadian tax, and the terms "resident of one of the Contracting States" and "resident of the other Contracting State" mean any person who is a resident of Norway or a resident of Canada as the context requires.

2. Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States then in this case the following rules shall apply:

3. Where by reason of the provisions of paragraph 1, a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident of the Contracting State in which its place of effective management is situated.

4. Notwithstanding paragraph 3 where a company that had been incorporated in one of the Contracting States and which at a time after the coming into force of this Convention was a resident of that State changes its place of effective management to the other Contracting State and the competent authorities of the two Contracting States agree that one of the main reasons for changing the place of effective management from one Contracting State to the other State was to avoid taxes on the undistributed income of the company on hand at the time the change in the place of effective management was made, the company shall be deemed to continue to be resident in the Contracting State in which it was incorporated.

1. For the purposes of this Convention, the term "permanent establishment" means a fixed place of business in which the business of the enterprise is wholly or partly carried on.

2. The term "permanent establishment" shall include especially:
3. The term "permanent establishment" shall not be deemed to include:
4. A person acting in one of the Contracting States on behalf of an enterprise of the other Contracting State -- other than an agent of an independent status to whom paragraph (5) applies -- shall be deemed to be a permanent establishment in the first-mentioned State:

5. An enterprise of one of the Contracting States shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business in that other State through a broker, general commission agent or any other agent of an independent status, where such persons are acting in the ordinary course of their business.

6. The fact that a company which is a resident of one of the Contracting States controls or is controlled by a company which is a resident of the other Contracting State, or which carries on business in that other State (whether through a permanent establishment or otherwise), shall not of itself constitute either company a permanent establishment of the other.

1. Income from immovable property may be taxed in the Contracting State in which such property is situated.

2. The term "immovable property" shall be defined in accordance with the law of the Contracting State in which the property in question is situated. The term shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting landed property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, sources and other natural resources: ships, boats and aircraft shall not be regarded as immovable property.

3. The provisions of paragraph 1 shall apply to income derived from the direct use, letting, or use in any other form of immovable property.

4. The provisions of paragraphs 1 and 3 shall also apply to the income from immovable property of an enterprise and to income from immovable property used for the performance of professional services.

5. Rentals from immovable property or timber royalties derived from sources within Canada by a resident of Norway shall be entitled to tax treatment by Canada not less favourable than that accorded under Section 110 of the Income Tax Act as in effect on January 1st, 1966.

1. The profits of an enterprise of one of the Contracting States shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other Contracting State but only so much of them as is attributable to that permanent establishment:

2. Where an enterprise of one of the Contracting States carries on business in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment.

3. In the determination of the profits of a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purposes of the permanent establishment including executive and general administrative expenses so incurred, whether in the Contracting State in which the permanent establishment is situated or elsewhere.

4. No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise.

5. Where profits include items of income which are dealt with separately in other Articles of this Convention, then the provisions of those Articles shall not be affected by the provisions of this Article, unless those items of income are attributable to a permanent establishment through which an enterprise of one of the Contracting States carries on business in the other Contracting State.

1. Profits of an enterprise from the operation of ships or aircraft in international traffic shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated.

2. The provisions of paragraph 1 shall likewise apply to profits derived from the operation of vessels engaged in fishing, sealing or whaling activities on the high seas.

3. When it is not feasible to determine that the place of effective management is in one of the Contracting States alone, and when the enterprise is carried on by one or more partners jointly and severally responsible and resident in one of the Contracting States and by one or more partners jointly and severally responsible and resident in the other Contracting State, profits as mentioned in paragraphs 1 and 2 are taxable in a Contracting State only in proportion to the share of the profits held by such partners resident in that Contracting State.

4. The provisions of paragraph (1) shall apply in respect of participation in pools of any kind by Canadian or Norwegian enterprises engaged in shipping or air transport.

Where

in either case conditions are made or imposed between the two enterprises, in their commercial or financial relations, which differ from those which would be made between independent enterprises, then any profits which but for those conditions would have accrued to one of the enterprises but by reason of those conditions have not so accrued may be included in the profits of that enterprise and taxed accordingly.

1. Dividends paid or credited by a company which is a resident of one of the Contracting States to a resident of the other Contracting State may be taxed in that other State.

2. Such dividends may also be taxed in the Contracting State of which the company paying or crediting the dividends is a resident, according to the law of that State, but the rate of tax so charged shall not exceed 15 per cent.

This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid.

3. The provisions of paragraph 2 shall not apply if the person to whom the dividend is paid or credited, being a resident of one of the Contracting States has in the other Contracting State, of which the company paying the dividends is a resident, a permanent establishment with which the holding by virtue of which the dividends are paid is effectively connected. In such a case, the provisions of Article 6 shall apply.

4. Where a company which is a resident of one of the Contracting States derives profits or income from sources within the other Contracting State, that other State may not impose any tax on the dividends paid by the company to persons who are not residents of that other State or subject the company's undistributed profits to a tax on undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such other State.

1. Interest arising in one of the Contracting States and paid or credited to a resident of the other Contracting State may be taxed in that other State.

2. Such interest may also be taxed in the Contracting State in which it arises, according to the law of that State, but the rate of tax so charged shall not exceed 15 per cent.

3. The provisions of paragraph (2) shall not apply if the person to whom the interest is paid or credited, being a resident of one of the Contracting States, has in the other Contracting State in which the interest arises, a permanent establishment with which the debt-claim from which the interest arises is effectively connected. In such a case, the provisions of Article 6 shall apply.

4. Interest shall be deemed to arise in one of the Contracting States when the payer is that State itself, a political subdivision, a local authority or a resident of that State. Where however, the person paying the interest, whether he is a resident of one of the Contracting States or not, has in one of the Contracting States a permanent establishment in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such permanent establishment, then such interest shall be deemed to arise in the Contracting State in which the permanent establishment is situated.

5. Where, owing to a special relationship between the payer and the recipient or between both of them and some other person, the amount of the interest paid, having regard to the debt-claim for which it is paid, exceeds the amount which would have been agreed upon by the payer and the recipient in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In that case, the excess part of the payments shall remain taxable according to the law of each Contracting State, due regard being had to the other provisions of this Convention.

6. The term "interest" means interest on bonds, securities, notes, debentures or any other form of indebtedness as well as any excess of the amount repaid in respect of any form of indebtedness over the amount lent.

1. Royalties paid or credited by a resident of one of the Contracting States to a resident of the other Contracting State may be taxed in that other State.

2. Such royalties as specified in paragraph 3, sub-paragraphs b) and c), may also be taxed in the Contracting State of which the person paying or crediting such royalties is a resident, according to the law of that State, but the tax so charged shall not exceed the rate limitations stated therein.

3. a ) Copyright royalties and other like payments in respect of the production or reproduction of any literary, dramatic, musical or artistic work (excluding royalties and like payments in respect of motion picture films and films or video tapes for use in connection with television) paid or credited by a resident of one of the Contracting States to a resident of the other Contracting State shall be exempt from tax in the first-mentioned State.

4. Royalties shall be deemed to arise in one of the Contracting States when the payer is that State itself, a political subdivision, a local authority or a resident of that State. Where, however, the person paying the royalties, whether he is a resident of one of the Contracting States or not, has in one of the Contracting States a permanent establishment in connection with which the contract has been concluded on which the royalties are paid, and such royalties are borne by such permanent establishment, then such royalties shall be deemed to arise in the Contracting State in which the permanent establishment is situated.

5. The provisions of paragraphs 2 and 3 shall not apply if the recipient of the royalties, being a resident of one of the Contracting States, has in the other Contracting State in which the royalties arise a permanent establishment with which the right or property giving rise to the royalties is effectively connected. In such a case, the provisions of Article 6 shall apply.

6. Where, owing to a special relationship between the payer and the recipient or between both of them and some other person, the amount of the royalties paid, having regard to the use, right or information for which they are paid, exceeds the amount which would have been agreed upon by the payer and the recipient in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In that case, the excess part of the payments shall remain taxable according to the law of each Contracting State, due regard being had to the other provisions of this Convention.

1. Income derived from an estate or trust which is a resident of one of the Contracting States and paid or credited to a resident of the other Contracting State may be taxed in that other State.

2. Such income may also be taxed in the Contracting State of which the estate or trust paying or crediting such income is a resident, according to the laws of that State, but the rate of tax so charged shall not exceed 15 per cent.

1. Income derived by a resident of one of the Contracting States in respect of professional services or other independent activities of a similar character shall be taxable only in that State unless he has a fixed base regularly available to him in the other Contracting State for the purpose of performing his activities. If he has such a fixed base, the income may be taxed in the other Contracting State but only so much of it as is attributable to that fixed base.

2. The term "professional services" includes, especially independent scientific, literary, artistic, educational or teaching activities as well as the independent activities of physicians, lawyers, engineers, architects, dentists and accountants.

1. Subject to the provisions of Articles 15, 16, 17 and 18, salaries, wages and other similar remuneration derived by a resident of one of the Contracting States in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived there from may be taxed in that other State.

2. Notwithstanding the provisions of paragraph 1 remuneration derived by a resident of one of the Contracting States in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if:

3. Notwithstanding the preceding provisions of this Article, remuneration in respect of an employment exercised aboard a ship or aircraft in international traffic may be taxed in the Contracting State in which the place of effective management of the enterprise is situated. When it is not feasible to determine that the place of effective management is in one of the Contracting States alone, and when a shipping enterprise is carried on by one or more partners jointly and severally responsible and resident in one of the Contracting States and by one or more partners jointly and severally responsible and resident in the other Contracting State, remuneration for such services may be taxed in the Contracting State in which the ship is registered. The provisions of this paragraph shall likewise apply to remuneration derived by a resident of a Contracting State in respect of an employment exercised aboard a fishing, sealing or whaling vessel, including remuneration paid to him in the form of a certain lay or share of the proceeds of the fishing, sealing or whaling activity.

4. In relation to remuneration of an individual in his capacity as a member of the board of directors of a company and similar payments the provisions of paragraphs 1 and 2 of this Article shall apply as if the remuneration were remuneration of an employee in respect of an employment, and as if references to an employer were references to the company.

Notwithstanding the provisions of Articles 13 and 14, income derived by public entertainers, such as theatre, motion picture, radio or television artistes, and musicians, and by athletes, from their personal activities as such may be taxed in the Contracting State in which these activities are exercised.

1. Any pension or annuity derived from sources within one of the Contracting States by an individual who is a resident of the other Contracting State shall be exempt from tax in the first-mentioned State.

2. As used in this Article:

1. Remuneration (other than pensions referred to in Article 16 paid by one of the Contracting States or by any political subdivision thereof to any individual for services rendered to it in the discharge of governmental functions shall be exempt from tax in the other Contracting State if the individual is present in that other State solely for the purpose of rendering those services.

2. Paragraph 1 shall not apply to payments in respect of services rendered in connection with any trade or business carried on by either of the Contracting States or by any political subdivision thereof for purposes of profit.

An individual who visits one of the Contracting States for a period not exceeding two years for the purpose of teaching at a university, college, school or other educational institution in that State and who is or was immediately before visiting that State a resident of the other Contracting State shall not be taxed by the first-mentioned State on the remuneration received for that teaching.

Payments which a student or business apprentice who is or was formerly a resident of one of the Contracting States and who is present in the other Contracting State solely for the purpose of his education or training receives for the purpose of his maintenance, education or training shall not be taxed by that other State, provided that such payments are made to him from outside that other State.

1. Any alimony or other maintenance payment received from a resident of one of the Contracting States by a resident of the other Contracting State shall be taxable only in the last-mentioned State.

2. The term "maintenance payment" means a payment made pursuant to an order of a recognized authority or pursuant to a written separation agreement.

1. Where a resident of Norway derived income which, in accordance with the provisions of this Convention, may be taxed in Canada, Norway shall, subject to the provisions of paragraph 2, exempt such income from tax but may, in calculating tax on the remaining income of that person, apply the rate of tax which would have been applicable if the exempted income had not been so exempted.

2. Where a resident of Norway derives income which, in accordance with the provisions of Articles 9, 10, 11 and 12, may be taxed in Canada, Norway shall allow as a deduction from the tax on the income of that person an amount equal to the tax paid in Canada. Such deduction shall not, however, exceed that part of the tax, as computed before the deduction is given, which is appropriate to the income derived from Canada.

3. Except in the case of a non-resident-owned investment corporation Canada agrees to allow as a deduction from Canadian tax on any income derived from sources within Norway which is subject to tax in Canada the amount of Norwegian tax payable in respect of that income, provided that the deduction shall not exceed the proportion of the Canadian tax which the income from Norway that is subject to Canadian tax bears to the total income subject to Canadian tax.

4. For the purposes of this Article

1. The nationals of one of the Contracting States shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances are or may be subjected.

2. The term "nationals" means:

3. This Article shall not be construed as obliging Norway to grant to Canadian nationals the exceptional tax relief which is accorded to Norwegian nationals and persons born of parents having Norwegian nationality pursuant to Section 22 of the Norwegian Taxation Act for the Rural Districts and Section 17 of the Norwegian Taxation Act for the Urban Districts.

4. This Article shall not be construed as preventing a Contracting State from taxing a non-resident of that State on a different basis from that on which it taxes a resident of that State.

5. In this Article the term "taxation" means the imposition of the taxes referred to in Article 1.

1. Where a resident of one of the Contracting Parties considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with this Convention, he may, not withstanding the remedies provided by the laws of those States, present his case to the competent authority of the Contracting State of which he is a resident.

2. The competent authority shall endeavour, if the objection appears to it to be justified and if it is not itself able to arrive at an appropriate solution, to resolve that case by mutual agreement with the competent authority of the other Contracting State, with a view to the avoidance of taxation not in accordance with this Convention.

3. The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of this Convention.

They may also consult together for the purpose of endeavouring to eliminate double taxation in cases not provided for in this Convention.

4. The competent authorities of the Contracting States may communicate directly with each other for the purposes of this Article.

1. The competent authorities of the Contracting States shall, upon request, exchange such information as is necessary for the carrying out of this Convention and of the laws of the Contracting States concerning taxes covered by this Convention insofar as the taxation thereunder is in accordance with this Convention. Any information so exchanged shall be treated as secret and shall not be disclosed to any persons or authorities other than those concerned with the assessment or collection of the taxes which are the subject of this Convention.

2. In no case shall the provisions of paragraph 1 be construed so as to impose on one of the Contracting States the obligation:

This Convention may be extended, either in its entirety or with any necessary modifications, to any part of the territory of Norway, which is specifically excluded from the application of this Convention, which imposes taxes substantially similar in character to those to which this Convention applies. Any such extension shall take effect from such date and subject to such modifications and conditions, including conditions as to termination, as may be specified and agreed between the Contracting States in notes to be exchanged through diplomatic channels.

Nothing in this Convention shall affect the fiscal privileges of diplomatic or consular officials under the general rules of international law or under the provisions of special agreements.

Nevertheless, each Contracting State reserves the right to tax its own diplomatic or consular officials, regardless of the provisions of this Convention.

1. This Convention shall be ratified and the instruments of ratification will be exchanged at Oslo as soon as possible.

2. This Convention shall enter into force on the date of exchange of instruments of ratification and shall have effect:

3. The Agreement between the Government of Norway and the Government of Canada constituted by the Exchange of Notes concerning reciprocal exemption from income tax on profits accruing from the operation of ships, dated May 2nd, 1929, shall not have effect in respect of any income year in Norway or taxation year in Canada for which this Convention has effect.

This Convention shall continue in effect until it has been terminated by either one of the Contracting States giving notice of termination on or before the 30th day of June in any calendar year after 1968.

In such event this Convention shall cease to have effect:

IN WITNESS WHEREOF the undersigned, duly authorized thereto, have signed this Convention.

DONE at Ottawa in two copies, this 23rd day of November, nineteen hundred and sixty-six in the Norwegian, English and French languages, each text being equally authentic.

Hon. Mitchell Sharp

FOR THE GOVERNMENT OF CANADA

His Excellency Torfinn Oftedal

FOR THE GOVERNMENT OF THE KINGDOM OF NORWAY

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