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Unformatted text preview: upra note 7. i nternational tax planning n 107 received from the other contracting state. However, relief is conditional: the rate of withholding tax that is claimed by the contracting state and the country of residence of the shareholder of the person that claims the benefits must be “at least as low as” the rate provided under the treaty.
interestingly, Canada is one of only three countries whose treaties with the united states limit the derivative benefits to withholding taxes.47 Many of the derivative benefits provisions in us treaties and protocols that entered into force in 200748 or earlier are comprehensive. They provide benefits not only for dividends, interest, and royalties, but also for all classes of income and all tax concessions provided by the treaty, including, for example, an exemption for gains and an exemption for business profits that are not attributable to a permanent establishment.
The limited scope of the derivative benefits provision in the protocol does not appear to be premised on any t...
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