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Canada Concludes Tax Treaty Negotiations with China
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Global Tax Adviser % R# U, |: t: \! T5 d0 d
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February 21, 2012 p1 I9 @1 H! C" g" N9 j
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Jill Birks5 z* M# T( G) D: e. \! J" P+ g
Calgary, International Corporate Tax' I. X- ~, D1 O+ ~! l
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Bill Lau
4 _- H# U* t4 Q5 U& WVancouver, International Corporate Tax
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. }3 X' X# @: x4 {; V& Y- Q* kThe Canadian government has announced that an agreement in principle had been reached on an updated Canada-China tax treaty. This announcement coincided with Prime Minister Harper's trip to China in the week of February 6, 2012. The treaty, which was originally signed in 1986, is intended to help promote trade and investment between the two countries.
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The updated treaty will conform to current Canadian and international tax treaty policies, which is based on the Organisation for Economic Co-operation and Development's (OECD) Model Tax Convention on Income and on Capital. The updated treaty will:# ^: K9 H, K( ? K0 C8 \
9 A0 ` s* W. G0 uFurther reduce tax barriers in order to encourage trade and investment between Canada and China
, Z( w. f3 ]+ V2 k. yReduce the rates of withholding taxes that apply on certain cross-border payments
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) t3 ~# D" x$ B4 WEliminate double taxation for individuals and companies doing business or earning income in the other country.8 p& M6 p6 F& u9 z6 T% r
) B* k' L& @ U/ ]4 YThe updated treaty will enter into force once it has been ratified by both countries.
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% ]' @ X0 y+ q+ a( Z; ~" ` For more information, contact your KPMG adviser. " n7 c$ x5 K. R, ^/ H9 z
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