• Service: Tax, Global Transfer Pricing Services, Global Mobility Services, International Tax
  • Type: Regulatory update
  • Date: 7/31/2014

Canada - Protocol to amend UK tax treaty 

July 31: Canada recently agreed to amend its tax treaty with the United Kingdom (UK), and a Protocol between the two countries was signed 21 July 2014.

Among other changes to the Canada-United Kingdom income tax treaty, the Protocol streamlines the business profits article, introduces a time limit to initiate transfer pricing assessments and changes the time frame for seeking competent authority assistance, and clarifies who is eligible for the tax treaty benefits.

The Protocol also eliminates withholding tax on interest for loans between persons who are dealing at arm’s length and dividend withholding tax for certain pension plans.

Finally, the Protocol amends the taxation of employment income and revises the provision on the “exchange of information” to adopt the standard developed by the Organisation for Economic Co-operation and Development (OECD).

The Protocol must be ratified by both countries before coming into force.

Read a July 2014 report prepared by the KPMG member firm in Canada: Canada and U.K. Agree to Amend Tax Treaty

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