in-print-bilateral-benefits-0409-en

ofpricewaterhousecoopersllptoronto 86 87 88 89 91 92

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Unformatted text preview: ver. ** Of PricewaterhouseCoopers LLP, Toronto. 86 87 88 89 91 92 93 94 95 96 97 98 98 99 103 103 104 105 106 108 i nternational tax planning Capital Gains: Canadian Subsidiaries Held by US-Resident Companies Active Trade or Business Test: Application to Capital Gains General Anti-Abuse Provision Conclusion Appendix n 87 110 110 112 112 113 INTroduCTIoN The fifth protocol to the Canada-us tax treaty1 replaces article xxix a, the limitationon-benefits (LOb) article that was negotiated in 1995 in the third protocol,2 with a new LOb article.3 Previously, the LOb article was one-sided in the sense that it applied only to Canadian residents who sought treaty benefits from the united states. No other us treaty contained a one-sided LOb article. The introduction of a comprehensive bilateral LOb article into a tax treaty represents a significant change in policy for Canada. Canada reversed its position in the protocol in lieu of relying on the less restrictive anti-treaty-shopping rules that were previously applicable under Canadian tax law. This change is likely the result of Canada’s inability to pr...
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This note was uploaded on 11/03/2013 for the course ACCOUNTING 346 taught by Professor William during the Fall '12 term at DeVry Chicago.

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