The Honourable Jim Flaherty, Minister of Finance, today announced that the fifth Protocol updating the treaty between Canada and the United States with respect to taxes on income and on capital, signed by Minister Flaherty and Secretary of the Treasury Henry M. Paulson, Jr. on September 21, 2007, entered into force today.
"The entry into force of this updated treaty with our largest trading partner will benefit individuals and businesses on both sides of the border, including manufacturers," said Minister Flaherty. "The increased trade and investment that it will induce is particularly timely given uncertain global economic conditions."
The treaty was first signed on September 26, 1980, and has been updated on four previous occasions -- June 14, 1983, March 28, 1984, March 17, 1995 and July 29, 1997. Key measures of the updated treaty include:
- eliminating withholding taxes on cross-border interest payments;
- extending treaty benefits to limited liability companies;
- allowing taxpayers to require that certain key double tax issues, such as transfer pricing, be settled through arbitration;
- ensuring that there is no double taxation on emigrants' capital gains;
- giving mutual tax recognition of pension contributions; and
- clarifying how stock options are taxed.
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For further information, media may contact:
Chisholm Pothier
Press Secretary
Office of the Minister of Finance
613-996-7861
Jack Aubry
Media Relations
Department of Finance
613-996-8080
