SUMMARY

The purpose of this enactment is to implement income tax conventions that have been signed with Latvia, Estonia and Trinidad and Tobago and a protocol to the income tax convention with Hungary.

Tax treaties, and their amending protocols, have two main objectives: the avoidance of double taxation and the prevention of fiscal evasion. Since they contain taxation rules that are different from the provisions of the Income Tax Act, they become effective only if an Act giving them precedence over domestic legislation is passed by Parliament.

The conventions in this enactment are generally patterned on the Model Double Taxation Convention prepared by the Organisation for Economic Co-operation and Development. The protocol in this enactment brings the convention with Hungary in line with current Canadian tax policy, particularly with respect to the rates of withholding taxes.