The tax treaty between the UK and Canada, signed on 21 July 2014, has now come into force with the enactment of the Protocol and Interpretative Protocol (the Arrangements)
The new arrangements between the UK and Canada came into force on 18 December 2014 and strengthen efforts by the two governments to clamp down on the avoidance of double taxation and the prevention of fiscal evasion.
Amendments have been made to articles of the Convention relating to business profits, shipping and air transport, associated enterprises, dividends, interest, royalties, dependent personal services, government service, elimination of double taxation, exchange of information and the mutual agreement procedure.
The general definitions article has been amended to extend the meaning of ‘person’ in the Convention to include partnerships, and the meaning of ‘resident of a Contracting State’ has also been amended.
In addition, an article on assistance in the collection of taxes has been added to the Convention.
In the UK, the Convention will take effect in respect of:
- withholding taxes, on amounts paid or credited on or after 1 January 2015
- income tax and capital gains tax, for any year of assessment beginning on or after 6 April 2015
- corporation tax, for any financial year beginning on or after 1 April 2015
In Canada, the Convention will take effect in respect of:
- withholding taxes, on amounts credited or paid on or after 1 January 2015
- other Canadian taxes, for any tax year beginning on or after 1 January 2015
More details are available from HMRC at https://www.gov.uk/government/publications/announcements-in-2014-of-changes-to-uk-double-taxatation-treaties/canada-entry-into-force-of-the-2014-protocols-to-the-1978-double-taxation-convention-as-amended