Ltd v

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Unformatted text preview: hority under article xxix a(6) to obtain treaty benefits. i nternational tax planning n 97 FIGURE 1 Takeover of USco by Canco Canco Canada Bermudaco Country A United States USco should not reward treaty shopping, neither should it penalize situations in which no inappropriate treaty benefits are obtained. given the facts and circumstances, it is reasonable to allow usco to be eligible to benefit from the reduced withholding tax rate on interest payments to Canco because there does not appear to be a benefit to bermudaco. in fact, if bermudaco were liquidated, usco would be a qualifying person and would be eligible to benefit from the reduced interest withholding rate on interest payments from Canco. aCTIve Tr ade or BusINess TesT a non-qualifying person that is a resident of a contracting state (for example, the united states) may still be entitled to treaty benefits in respect of income derived from the other contracting state (for example, Canada) if this person or a related person is engaged in the active conduct of a trade or business in the united states, n th...
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