Canada-Chile Tax Convention – “Most Favoured Nation” provision takes effect to reduce the tax rate on interest

Effective between January 1, 2017, and December 31, 2018, the withholding rate described in paragraph 2 of Article 11 of the Canada-Chile Tax Convention (Convention) has been lowered from 15 percent to 10 percent on certain interest amounts.

In particular, paragraph 2 of Article 11 of the Convention now reads as follows with respect to interest paid or credited between January 1, 2017, and December 31, 2018:

As of January 1, 2019, paragraph 2 of Article 11 now reads as follows:

These changes occur as a result of the "Most Favoured Nation" provision in the Protocol to the Convention and have been confirmed by Chile.

In circumstances where, between January 1, 2017, and December 31, 2018, tax was withheld at a rate of 15% and not  the 10% rate which should have been applied:

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