in-print-bilateral-benefits-0409-en

Tr ade or business

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Unformatted text preview: on of the us parent company? ex ample 1: Takeover of us Company b y C anadian Public Company suppose that Canco, a Canadian public company, is resident in Canada, and its principal class of shares is primarily and regularly traded on the Toronto stock Exchange. Canco acquires the shares of bermudaco, a bermuda company resident in bermuda. in turn, bermudaco owns the shares of usco, a us company resident in the united states. The structure is depicted in figure 1. Canco is a qualifying person under article xxix a(2)(c) because it is resident in Canada and its principal class of shares is primarily and regularly traded on the Toronto stock Exchange. because bermudaco is not a qualifying person (since it is not resident in Canada or the united states), usco is not a qualifying person under articles xxix a(2)(d) and (2)(e)(i). suppose further that Canco makes a downstream interest-bearing loan to usco. as a qualifying person, Canco should be eligible to benefit from the reduced withholding rate under article xi of the treaty on the interest payments from usco.28 Now con...
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