Unformatted text preview: , a us company resident in the united states. us Holdco owns all of the shares of us Opco, a us operating company that is resident in the united states.
Further assume that us Opco makes an interest-bearing loan to Canco, that Canco’s operations are 99 times larger than those of us Opco and all of its affiliated us companies, and that us Opco is engaged in the active conduct of a trade or business in the united states. The structure is depicted in figure 3.
austriaco and swissco are not qualifying persons because neither company is resident in Canada or the united states. us Holdco is not a qualifying person under article xxix a(2)(d) of the treaty because it is owned by swissco. because us Holdco is not a qualifying person, us Opco is not a qualifying person for the purposes of article xxix a(2)(d). as noted previously, the ownership test in article xxix a(2)(e)(i) requires that 50 percent or more of the vote and value of the shares of us Holdco and us Opco not be owned, directly or indirectly, by persons other than qualifying persons. This test cannot be met because...
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