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Unformatted text preview: ply in some unexpected situations, as demonstrated in the examples below.
The LOb article introduces an entirely new due diligence standard. under the income Tax act,15 it is the Canadian taxpayer’s responsibility to withhold and remit at the appropriate rate, and the Canadian taxpayer is liable to the Crown for any deficiency.16 With the comprehensive LOb article, Canadian taxpayers now must rely on a more extensive and formal certification process. in fact, the Cra has announced plans to introduce procedures and forms to clarify the inquiries that it expects the Canadian resident payer to make.17 However, until these guidelines and procedures are established, taxpayers that cannot verify a recipient’s eligibility to claim treaty benefits are left in a difficult position.
Owing to the complexity of the LOb provisions, the appendix to this article contains decision-making flowcharts that focus on the eligibility of various persons that claim treaty benefits under the protocol.18 While the flowcharts provide a 14 The LOb article takes effect on different dates, depending on the nature of the income taxes involved...
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