Canada-France agreement concerning a reduction in French taxes on certain payments made to Canadian mutual fund organizations

Pursuant to the Canada-France Income Tax Convention (the "Convention"), the competent authorities for Canada and France have entered into an agreement concerning the application of paragraph (a) of subsection 7 of Article 29 of the Convention.

This paragraph provides, under certain circumstances, for a reduction in French tax on dividends and interest paid from French sources to an organization that was constituted and is established in Canada and which is not subject to taxes for the purpose of the Convention. The Canadian mutual fund organizations that qualify are mutual fund trusts, pooled fund trusts and unit trusts.

The French competent authority has published an instruction that presents the different types of Canadian organizations that qualify for the exemption and the form to be completed to request the exemption. A copy of the instruction and the form can be obtained from the French competent authority. The relevant fiscal documentation is a Bulletin officiel des impôts, numéro 14, du 17 Janvier 2006.

The form is required by the French tax administration to determine treaty benefits under the Convention. The form asks the Canadian competent tax authorities to confirm, to the best of their knowledge, that a number of statements made by the applicant on the form are accurate. To receive the treaty benefits, Canadian organizations must also provide to the French payor with the standardized 5000 A forms for dividends and 5002 A for interest.

As a result of this agreement, the Canada Revenue Agency will be able to certify that the Canadian organization qualifies for the tax reduction.

Canadian organizations should submit the completed statement to their local tax services office for certification by the Canadian tax authorities.

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