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Unformatted text preview: that consideration should also be given to the interpretive approach adopted by the united states, including the technical explanation to the us model convention.8
in addition to raising interpretation issues, the application of the bilateral LOb article also creates significant practical implications. Now, to be eligible for a reduced tax rate under the treaty, a Canadian taxpayer that pays an amount to a us resident to which withholding tax can apply must not only consider whether it is entitled to treaty benefits based on residence, but must also determine whether it meets the conditions of the LOb article.
The purpose of this paper is to provide a general explanation of the LOb article, examine selected practical problems in its application, highlight areas in which additional guidance is required, identify potential problems and anomalies that taxpayers may encounter in applying the new rules, and make certain recommendations for improving the current situation. The New BIlaTer al arTICle X XIX a
generally, to be en...
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