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The Government of Canada and the Government of the
United Republic of Tanzania, desiring to conclude an
Agreement for the avoidance of double taxation and the
prevention of fiscal evasion with respect to taxes on
income and on capital, have agreed as follows:
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This Agreement shall apply to persons who are residents of
one or both of the Contracting States.
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1. This Agreement shall apply to taxes on income and on
capital imposed on behalf of each Contracting State, irrespective
of the manner in which they are levied.
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2. There shall be regarded as taxes on income and on capital
all taxes imposed on total income, on total capital, or on elements
of income or of capital, including taxes on gains from the
alienation of movable or immovable property, as well as taxes on
capital appreciation.
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3. The existing taxes to which the Agreement shall apply are,
in particular:
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(a) in the case of Canada:
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the taxes imposed by the Government of Canada under the
Income Tax Act (hereinafter referred to as ``Canadian
tax'');
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(b) in the case of Tanzania:
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(i) the income tax and any other tax deemed to be tax on
income,
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(ii) the capital gains tax, and
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(iii) the excess profits tax,
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(hereinafter referred to as ``Tanzanian tax'').
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4. The Agreement shall apply also to any identical or
substantially similar taxes and to taxes on capital which are
imposed after the date of signature of the Agreement in addition
to, or in place of, the existing taxes. The competent authorities of
the Contracting States shall notify each other of any substantial
changes which have been made in their respective taxation laws.
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1. For the purposes of this Agreement, unless the context
otherwise requires:
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(a) the term ``Canada'', used in a geographical sense, means
the territory of Canada, including
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(i) any area beyond the territorial seas of Canada which, in
accordance with international law and the laws of Canada,
is an area within which Canada may exercise rights with
respect to the seabed and subsoil and their natural
resources,
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(ii) the seas and airspace above every area referred to in
subparagraph (i) in respect of any activity carried on in
connection with the exploration for or the exploitation of
the natural resources referred to therein;
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(b) the term ``Tanzania'' means the territory of the United
Republic of Tanzania, including any area outside the territorial
waters of Tanzania which has been or may be designated or
proclaimed under the laws of Tanzania as an area over which
Tanzania may exercise its sovereign rights of jurisdiction in
accordance with international law;
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(c) the terms ``a Contracting State'' and ``the other Contracting
State'' mean, as the context requires, Canada or Tanzania;
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(d) the term ``person'' includes an individual, an estate, a trust,
a company, a partnership and any other body of persons;
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(e) the term ``company'' means any body corporate or any
entity which is treated as a body corporate for tax purposes; in
French, the term ``sociiti'' also means a ``corporation'' within
the meaning of Canadian law;
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(f) the terms ``enterprise of a Contracting State'' and
``enterprise of the other Contracting State'' mean respectively
an enterprise carried on by a resident of a Contracting State
and an enterprise carried on by a resident of the other
Contracting State;
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(g) the term ``competent authority'' means:
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(i) in the case of Canada, the Minister of National Revenue
or his authorized representative,
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(ii) in the case of Tanzania, the Minister for the time being
responsible for Finance or his authorized representative;
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(h) the term ``tax'' means Canadian tax or Tanzanian tax, as the
context requires;
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(i) the term ``international traffic'' means any transport by a
ship or aircraft operated by a resident of a Contracting State,
except where the ship or aircraft is operated solely between
places in the other Contracting State;
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(j) the term ``national'' means:
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(i) any individual possessing the nationality of a
Contracting State,
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(ii) any legal person, partnership and association deriving
its status as such from the laws in force in a Contracting
State.
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2. As regards the application of the provisions of the
Agreement by a Contracting State at any time, any term not
defined therein shall, unless the context otherwise requires, have
the meaning which it has at that time under the law of that State
concerning the taxes to which the Agreement applies.
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1. For the purposes of this Agreement, the term ``resident of
a Contracting State'' means any person who, under the laws of
that State, is liable to tax therein by reason of his domicile,
residence, place of management, place of incorporation or any
other criterion of a similar nature.
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2. Where by reason of the provisions of paragraph 1 an
individual is a resident of both Contracting States, then his status
shall be determined as follows:
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(a) he shall be deemed to be a resident of the State in which he
has a permanent home available to him; if he has a permanent
home available to him in both States, he shall be deemed to be
a resident of the State with which his personal and economic
relations are closer (centre of vital interests);
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(b) if the State in which he has his centre of vital interests
cannot be determined, or if he has no permanent home
available to him in either State, he shall be deemed to be a
resident of the State in which he has an habitual abode;
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(c) if he has an habitual abode in both States or in neither of
them, he shall be deemed to be a resident of the State of which
he is a national;
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(d) if he is a national of both States or of neither of them, the
competent authorities of the Contracting States shall settle the
question by mutual agreement.
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3. Where by reason of the provisions of paragraph 1 a
company is a resident of both Contracting States, then its status
shall be determined as follows:
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(a) it shall be deemed to be a resident of the State of which it
is a national;
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(b) if it is a national of neither of the States, it shall be deemed
to be a resident of the State in which its place of effective
management is situated.
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4. Where by reason of the provisions of paragraph 1 a person
other than an individual or a company is a resident of both
Contracting States, the competent authorities of the Contracting
States shall by mutual agreement endeavour to settle the question
and to determine the mode of application of the Agreement to
such person.
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1. For the purposes of this Agreement, the term ``permanent
establishment'' means a fixed place of business through which
the business of an enterprise is wholly or partly carried on.
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2. The term ``permanent establishment'' includes especially:
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(a) a place of management;
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(f) a mine, an oil or gas well, a quarry or any other place of
extraction of natural resources.
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3. The term ``permanent establishment'' likewise
encompasses:
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(a) a building site, a construction, assembly or installation
project or supervisory activities in connection therewith, but
only where such site, project or activities continue for a period
of six months or more;
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(b) the furnishing of services, including consultancy services,
by an enterprise through employees or other personnel
engaged by the enterprise for such purpose, but only where
activities of that nature continue (for the same or connected
project) within the country for a period or periods aggregating
to six or more months within any twelve month period.
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4. Notwithstanding the preceding provisions of this Article,
the term ``permanent establishment'' shall be deemed not to
include:
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(a) the use of facilities solely for the purpose of storage,
display or delivery of goods or merchandise belonging to the
enterprise;
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(b) the maintenance of a stock of goods or merchandise
belonging to the enterprise solely for the purpose of storage,
display or delivery;
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(c) the maintenance of a stock of goods or merchandise
belonging to the enterprise solely for the purpose of
processing by another enterprise;
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(d) the maintenance of a fixed place of business solely for the
purpose of purchasing goods or merchandise or of collecting
information for the enterprise;
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(e) the maintenance of a fixed place of business solely for the
purpose of carrying on, for the enterprise, any other activity of
a preparatory or auxiliary character;
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(f) the maintenance of a fixed place of business solely for any
combination of activities mentioned in subparagraphs (a) to
(e) provided that the overall activity of the fixed place of
business resulting from this combination is of a preparatory or
auxiliary character.
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5. Notwithstanding the provisions of paragraphs 1 and 2,
where a person - other than an agent of an independent status to
whom paragraph 7 applies - is acting in a Contracting State on
behalf of an enterprise of the other Contracting State, that
enterprise shall be deemed to have a permanent establishment in
the first-mentioned State in respect of any activities which that
person undertakes for the enterprise, if such person has and
habitually exercises in the first-mentioned State an authority to
conclude contracts in the name of the enterprise, unless the
activities of such a person are limited to those mentioned in
paragraph 4 which, if exercised through a fixed place of business,
would not make this fixed place of business a permanent
establishment under the provisions of that paragraph.
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6. Notwithstanding the preceding provisions of this Article,
an insurance enterprise of a Contracting State shall, except in
regard to re-insurance, be deemed to have a permanent
establishment in the other Contracting State if it collects
premiums in the territory of that other State, or insures risks
situated therein, through a person other than an agent of an
independent status to whom paragraph 7 applies.
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7. An enterprise of a Contracting State shall not be deemed to
have a permanent establishment in the other Contracting State
merely because it carries on business in that other State through
a broker, general commission agent or any other agent of an
independent status, provided that such persons are acting in the
ordinary course of their business. However, when the activities
of such an agent are devoted wholly or almost wholly on behalf
of that enterprise, he will not be considered an agent of an
independent status within the meaning of this paragraph.
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8. The fact that a company which is a resident of a Contracting
State controls or is controlled by a company which is a resident
of the other Contracting State, or which carries on business in that
other State (whether through a permanent establishment or
otherwise), shall not of itself constitute either company a
permanent establishment of the other.
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1. Income derived by a resident of a Contracting State from
immovable property (including income from agriculture or
forestry) situated in the other Contracting State may be taxed in
that other State.
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2. For the purposes of this Agreement, the term ``immovable
property'' shall have the meaning which it has under the laws of
the Contracting State in which the property in question is situated
and shall include any option or similar right in respect thereof.
The term shall in any case include property accessory to
immovable property, livestock and equipment used in
agriculture and forestry, rights to which the provisions of general
law respecting landed property apply, usufruct of immovable
property and rights to variable or fixed payments as
consideration for the working of or the right to work, mineral
deposits, sources and other natural resources; ships and aircraft
shall not be regarded as immovable property.
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3. The provisions of paragraph 1 shall apply to income derived
from the direct use, letting, or use in any other form of immovable
property and to income from the alienation of such property.
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4. The provisions of paragraphs 1 and 3 shall also apply to the
income from immovable property of an enterprise or to income
from immovable property used for the performance of
independent personal services.
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1. The profits of an enterprise of a Contracting State shall be
taxable only in that State unless the enterprise carries on business
in the other Contracting State through a permanent establishment
situated therein. If the enterprise carries on or has carried on
business as aforesaid, the profits of the enterprise may be taxed
in the other State but only so much of them as is attributable to:
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(a) that permanent establishment; or
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(b) business activities carried on in that other State, of the same
or similar kind as those effected through that permanent
establishment, unless they are unrelated to the activities of that
permanent establishment.
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2. Subject to the provisions of paragraph 3, where an
enterprise of a Contracting State carries on business in the other
Contracting State through a permanent establishment situated
therein, there shall in each Contracting State be attributed to that
permanent establishment the profits which it might be expected
to make if it were a distinct and separate enterprise engaged in the
same or similar activities under the same or similar conditions
and dealing wholly independently with the enterprise of which
it is a permanent establishment and with all other persons.
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3. In the determination of the profits of a permanent
establishment, there shall be allowed as deductions expenses
which are incurred for the purpose of the business of the
permanent establishment, including executive and general
administrative expenses so incurred, whether in the State in
which the permanent establishment is situated or elsewhere.
Nothing in this paragraph shall require a Contracting State to
allow the deduction of any expenditure which, by reason of its
nature, is not generally allowed as a deduction under the taxation
laws of that State.
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4. Insofar as it has been customary in a Contracting State to
determine the profits to be attributed to a permanent
establishment on the basis of an apportionment of the total profits
of the enterprise to its various parts, nothing in paragraph 2 shall
preclude that Contracting State from determining the profits to be
taxed by such apportionment as may be customary; the method
of apportionment adopted shall, however, be such that the result
shall be in accordance with the principles contained in this
Article.
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5. No profits shall be attributed to a permanent establishment
by reason of the mere purchase by that permanent establishment
of goods or merchandise for the enterprise.
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6. For the purposes of the preceding paragraphs, the profits to
be attributed to the permanent establishment shall be determined
by the same method year by year unless there is good and
sufficient reason to the contrary.
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7. Where profits include items of income which are dealt with
separately in other Articles of this Agreement, then the
provisions of those Articles shall not be affected by the
provisions of this Article.
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1. Profits derived by an enterprise of a Contracting State from
the operation of aircraft in international traffic shall be taxable
only in that State.
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2. Profits derived by an enterprise of a Contracting State from
the operation of ships in international traffic may be taxed in both
Contracting States according to the law of each Contracting
State. Provided that where such an enterprise derives profits from
such operation in the other Contracting State, for the purposes of
taxation in that other State:
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(a) such profits shall be deemed to be an amount not exceeding
five per cent of the full amount received by the enterprise on
account of the carriage of passengers or freight embarked in
that other State;
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(b) the tax chargeable in that other State shall not exceed fifty
per cent of the profits as calculated under the provisions of
subparagraph (a).
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3. Notwithstanding the provisions of paragraphs 1 and 2 and
of Article 7, profits derived from the operation of ships or aircraft
used principally to transport passengers or goods exclusively
between places in a Contracting State may be taxed in that State.
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4. The provisions of paragraphs 1, 2 and 3 shall also apply to
profits from the participation in a pool, a joint business or an
international operating agency.
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5. In this Article,
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(a) the term ``profits'' includes:
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(i) profits, net profits, gross receipts and revenues derived
directly from the operation of ships or aircraft in
international traffic, and
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(ii) interest on sums generated directly from the operation
of ships or aircraft in international traffic provided that such
interest is incidental to the operation;
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(b) the term ``operation of ships or aircraft in international
traffic'' by an enterprise includes:
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(i) the charter or rental of ships or aircraft,
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(ii) the rental of containers and related equipment, and
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(iii) the alienation of ships, aircraft, containers and related
equipment,
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by that enterprise provided that such charter, rental or
alienation is incidental to the operation by that enterprise of
ships or aircraft in international traffic.
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1. Where
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(a) an enterprise of a Contracting State participates directly or
indirectly in the management, control or capital of an
enterprise of the other Contracting State, or
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(b) the same persons participate directly or indirectly in the
management, control or capital of an enterprise of a
Contracting State and an enterprise of the other Contracting
State,
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and in either case conditions are made or imposed between the
two enterprises in their commercial or financial relations which
differ from those which would be made between independent
enterprises, then any income which would, but for those
conditions, have accrued to one of the enterprises, but, by reason
of those conditions, have not so accrued, may be included in the
income of that enterprise and taxed accordingly.
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2. Where a Contracting State includes in the income of an
enterprise of that State - and taxes accordingly - income on which
an enterprise of the other Contracting State has been charged to
tax in that other State and the income so included is income which
would have accrued to the enterprise of the first-mentioned State
if the conditions made between the two enterprises had been
those which would have been made between independent
enterprises, then that other State shall make an appropriate
adjustment to the amount of tax charged therein on that income.
In determining such adjustment, due regard shall be had to the
other provisions of this Agreement and the competent authorities
of the Contracting States shall if necessary consult each other.
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3. A Contracting State shall not change the income of an
enterprise in the circumstances referred to in paragraph 1 after the
expiry of the time limits provided in its national laws and, in any
case, after five years from the end of the year in which the income
which would be subject to such change would, but for the
conditions referred to in paragraph 1, have accrued to that
enterprise.
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4. The provisions of paragraphs 2 and 3 shall not apply in the
case of fraud, wilful default or neglect.
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1. Dividends paid by a company which is a resident of a
Contracting State to a resident of the other Contracting State may
be taxed in that other State.
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2. However, such dividends may also be taxed in the
Contracting State of which the company paying the dividends is
a resident and according to the laws of that State, but if the
recipient is the beneficial owner of the dividends the tax so
charged shall not exceed:
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(a) 20 per cent of the gross amount of the dividends if the
beneficial owner is a company which controls directly or
indirectly at least 15 per cent of the voting power in the
company paying the dividends;
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(b) 25 per cent of the gross amount of the dividends in all other
cases.
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The provisions of this paragraph shall not affect the taxation of
the company on the profits out of which the dividends are paid.
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3. The term ``dividends'' as used in this Article means income
from shares, mining shares, founders' shares or other rights, not
being debt-claims, participating in profits, as well as income
which is subjected to the same taxation treatment as income from
shares by the laws of the State of which the company making the
distribution is a resident.
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4. The provisions of paragraph 2 shall not apply if the
beneficial owner of the dividends, being a resident of a
Contracting State, carries on business in the other Contracting
State of which the company paying the dividends is a resident,
through a permanent establishment situated therein, or performs
in that other State independent personal services from a fixed
base situated therein, and the holding in respect of which the
dividends are paid is effectively connected with such permanent
establishment or fixed base. In such case the provisions of Article
7 or Article 15, as the case may be, shall apply.
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5. Where a company which is a resident of a Contracting State
derives profits or income from the other Contracting State, that
other State may not impose any tax on the dividends paid by the
company, except insofar as such dividends are paid to a resident
of that other State or insofar as the holding in respect of which the
dividends are paid is effectively connected with a permanent
establishment or a fixed base situated in that other State, nor
subject the company's undistributed profits to a tax on
undistributed profits, even if the dividends paid or the
undistributed profits consist wholly or partly of profits or income
arising in such other State.
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6. Notwithstanding any provision of this Agreement:
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(a) a company which is a resident of Tanzania and which has
a permanent establishment in Canada shall, in accordance
with the provisions of Canadian law, remain subject to the
additional tax on companies other than Canadian
corporations, but the rate of such tax shall not exceed 20 per
cent;
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(b) a company which is a resident of Canada and which has a
permanent establishment in Tanzania shall remain subject to
an additional rate of tax in accordance with the provisions of
Tanzanian law, but such additional rate shall not exceed 12 per
cent.
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1. Interest arising in a Contracting State and paid to a resident
of the other Contracting State may be taxed in that other State.
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2. However, such interest may also be taxed in the Contracting
State in which it arises and according to the laws of that State, but
if the recipient is the beneficial owner of the interest the tax so
charged shall not exceed 15 per cent of the gross amount of the
interest.
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3. Notwithstanding the provisions of paragraph 2,
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(a) interest arising in a Contracting State and paid in respect
of a bond, debenture or other similar obligation of the
government of that Contracting State or of a political
subdivision or local authority thereof shall, provided that the
interest is beneficially owned by a resident of the other
Contracting State, be taxable only in that other State;
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(b) interest arising in Tanzania and paid to a resident of Canada
shall be taxable only in Canada if it is paid in respect of a loan
made, guaranteed or insured, or a credit extended, guaranteed
or insured by the Export Development Corporation, as long
as it remains wholly-owned by the Government of Canada;
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(c) interest arising in Canada and paid to a resident of Tanzania
shall be taxable only in Tanzania if it is paid in respect of a loan
made, guaranteed or insured, or a credit extended, guaranteed
or insured by any institution wholly-owned by the
Government of Tanzania; and
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(d) interest arising in a Contracting State and paid to a resident
of the other Contracting State who was constituted and is
operated exclusively to administer or provide benefits under
one or more pension, retirement or other employee benefits
plans shall not be taxable in the first-mentioned State provided
that
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(i) the resident is the beneficial owner of the interest and is
generally exempt from tax in the other State, and
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(ii) the interest is not derived from carrying on a trade or a
business or from a related person.
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4. The term ``interest'' as used in this Article means income
from debt-claims of every kind, whether or not secured by
mortgage, and in particular, income from government securities
and income from bonds or debentures, including premiums and
prizes attaching to such securities, bonds or debentures, as well
as income which is subjected to the same taxation treatment as
income from money lent by the laws of the State in which the
income arises. Penalty charges for late payment shall not be
regarded as interest for the purpose of this Article. However, the
term ``interest'' does not include income dealt with in Article 8
or Article 10.
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5. The provisions of paragraph 2 shall not apply if the
beneficial owner of the interest, being a resident of a Contracting
State, carries on business in the other Contracting State in which
the interest arises through a permanent establishment situated
therein, or performs in that other State independent personal
services from a fixed base situated therein, and the debt-claim in
respect of which the interest is paid is effectively connected with:
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(a) such permanent establishment or fixed base; or with
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(b) business activities carried on in that other State of the same
or similar kind as those effected through that permanent
establishment.
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In such case the provisions of Article 7 or Article 15, as the case
may be, shall apply.
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6. Interest shall be deemed to arise in a Contracting State when
the payer is that State itself, a political subdivision, a local
authority or a resident of that State. Where, however, the person
paying the interest, whether he is a resident of a Contracting State
or not, has in a Contracting State a permanent establishment or
a fixed base in connection with which the indebtedness on which
the interest is paid was incurred, and such interest is borne by
such permanent establishment or fixed base, then such interest
shall be deemed to arise in the State in which the permanent
establishment or fixed base is situated.
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7. Where, by reason of a special relationship between the
payer and the beneficial owner or between both of them and some
other person, the amount of the interest, having regard to the
debt-claim for which it is paid, exceeds the amount which would
have been agreed upon by the payer and the beneficial owner in
the absence of such relationship, the provisions of this Article
shall apply only to the last-mentioned amount. In such case, the
excess part of the payments shall remain taxable according to the
laws of each Contracting State, due regard being had to the other
provisions of this Agreement.
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1. Royalties arising in a Contracting State and paid to a
resident of the other Contracting State may be taxed in that other
State.
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2. However, such royalties may also be taxed in the
Contracting State in which they arise and according to the laws
of that State, but if the recipient is the beneficial owner of the
royalties the tax so charged shall not exceed 20 per cent of the
gross amount of the royalties.
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3. The term ``royalties'' as used in this Article means payments
of any kind received as a consideration for the use of, or the right
to use, any copyright, patent, trade mark, design or model, plan,
secret formula or process or other intangible property, or for the
use of, or the right to use, industrial, commercial or scientific
equipment, or for information concerning industrial, commercial
or scientific experience (but does not include any amount paid as
consideration for the right to exploit a mine, oil well or quarry or
of any other place of extraction of natural resources), and
includes payments of any kind in respect of motion picture films
and works on film, videotape or other means of reproduction for
use in connection with radio or television and gains arising in
Tanzania derived from the sale or exchange of any right or
property giving rise to such royalties.
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4. The provisions of paragraph 2 shall not apply if the
beneficial owner of the royalties, being a resident of a
Contracting State, carries on business in the other Contracting
State in which the royalties arise through a permanent
establishment situated therein, or performs in that other State
independent personal services from a fixed base situated therein,
and the right or property in respect of which the royalties are paid
is effectively connected with:
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(a) such permanent establishment or fixed base; or with
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(b) business activities carried on in that other State, of the same
or similar kind as those effected through that permanent
establishment.
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In such case the provisions of Article 7 or Article 15, as the case
may be, shall apply.
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5. Royalties shall be deemed to arise in a Contracting State
when the payer is that State itself, a political subdivision, a local
authority or a resident of that State. Where, however, the person
paying the royalties, whether he is a resident of a Contracting
State or not, has in a Contracting State a permanent establishment
or a fixed base in connection with which the obligation to pay the
royalties was incurred, and such royalties are borne by such
permanent establishment or fixed base, then such royalties shall
be deemed to arise in the State in which the permanent
establishment or fixed base is situated.
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6. Where, by reason of a special relationship between the
payer and the beneficial owner or between both of them and some
other person, the amount of the royalties, having regard to the
use, right or information for which they are paid, exceeds the
amount which would have been agreed upon by the payer and the
beneficial owner in the absence of such relationship, the
provisions of this Article shall apply only to the last-mentioned
amount. In such case, the excess part of the payments shall
remain taxable according to the laws of each Contracting State,
due regard being had to the other provisions of this Agreement.
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1. Gains derived by a resident of a Contracting State from the
alienation of immovable property situated in the other
Contracting State may be taxed in that other State.
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2. Gains from the alienation of movable property forming part
of the business property of a permanent establishment which an
enterprise of a Contracting State has in the other Contracting
State or of movable property pertaining to a fixed base available
to a resident of a Contracting State in the other Contracting State
for the purpose of performing independent personal services,
including such gains from the alienation of such a permanent
establishment (alone or with the whole enterprise) or of such a
fixed base may be taxed in that other State.
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3. Gains from the alienation of ships or aircraft operated in
international traffic by an enterprise of a Contracting State or
movable property pertaining to the operation of such ships or
aircraft shall be taxable only in that State.
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4. Gains derived by a resident of a Contracting State from the
alienation of:
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(a) shares (other than shares quoted on an approved stock
exchange in the other State) forming part of a substantial
interest in the capital stock of a company which is a resident
of that other State the value of which shares is derived
principally from immovable property situated in that other
State, or
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(b) a substantial interest in a partnership, trust or estate,
established under the law in the other State, the value of which
is derived principally from immovable property situated in
that other State,
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may be taxed in that other State. For the purposes of this
paragraph, the term ``immovable property'' includes the shares
of a company referred to in subparagraph (a) or an interest in a
partnership, trust or estate referred to in subparagraph (b) but
does not include any property, other than rental property, in
which the business of the company, partnership, trust or estate is
carried on.
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5. Gains from the alienation of shares of a company which is
a resident of Tanzania, other than shares to which paragraph 4
applies, may be taxed in Tanzania provided that the person
alienating the shares owns less than 25 per cent of the capital
stock of the company immediately before the alienation.
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6. Where a resident of one of the Contracting States alienates
property in the course of a corporate organization,
reorganization, amalgamation, division or similar transaction
and profit, gain or income with respect to such alienation is not
recognized for the purpose of taxation in that State, if requested
to do so by the person who acquires the property, the competent
authority of the other State may agree, subject to terms and
conditions satisfactory to such competent authority, to defer the
recognition of the profit, gain or income with respect to such
property for the purpose of taxation in that other State until such
time and in such manner as may be stipulated in the agreement.
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7. Gains from the alienation of any property, other than that
referred to in paragraphs 1, 2, 3, 4 and 5 shall be taxable only in
the Contracting State of which the alienator is a resident.
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8. The provisions of paragraph 7 shall not affect the right of a
Contracting State to levy, according to its law, a tax on gains from
the alienation of any property derived by an individual who is a
resident of the other Contracting State and has been a resident of
the first-mentioned State at any time during the six years
immediately preceding the alienation of the property.
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1. Management or professional fees arising in a Contracting
State and paid to a resident of the other Contracting State may be
taxed in that other State.
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2. However, such management or professional fees may also
be taxed in the Contracting State in which they arise and
according to the laws of that State, but the tax so charged shall not
exceed 20 per cent of the gross amount of the fees.
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3. The term ``management or professional fees'' as used in this
Article means payments of any kind to any person, other than to
an employee of the person making the payments, in
consideration for any service of a managerial, technical,
professional or consultancy nature.
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4. The provisions of paragraph 2 shall not apply if the recipient
of the management or professional fees, being a resident of a
Contracting State, carries on business in the other Contracting
State in which the fees arise, through a permanent establishment
situated therein, or performs in that other State professional
services from a fixed base situated therein, and the fees are
effectively connected with such permanent establishment or
fixed base. In such a case, the provisions of Article 7 or Article
15, as the case may be, shall apply.
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5. Management or professional fees shall be deemed to arise
in a Contracting State when the payer is that State itself, a political
subdivision, a local authority or a resident of that State. Where,
however, the person paying the fees, whether he is a resident of
a Contracting State or not, has in a Contracting State a permanent
establishment in connection with which the obligation to pay the
fees was incurred, and such fees are borne by such permanent
establishment, then such fees shall be deemed to arise in the
Contracting State in which the permanent establishment is
situated.
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1. Subject to the provisions of Article 14, income derived by
a resident of a Contracting State in respect of professional
services or other activities of an independent character shall be
taxable only in that State unless:
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(a) he has a fixed base regularly available to him in the other
Contracting State for the purpose of performing his activities,
in that case only so much of the income as is attributable to that
fixed base may be taxed in that other State; or
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(b) his stay in the other Contracting State is for a period or
periods amounting to or exceeding in the aggregate 183 days
in the fiscal year concerned, in that case only so much of the
income as is derived from his activities performed in that other
State may be taxed in that other State.
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2. The term ``professional services'' includes especially
independent scientific, literary, artistic, educational or teaching
activities as well as the independent activities of physicians,
lawyers, engineers, architects, dentists and accountants.
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1. Subject to the provisions of Articles 17, 19 and 20, salaries,
wages and other similar remuneration derived by a resident of a
Contracting State in respect of an employment shall be taxable
only in that State unless the employment is exercised in the other
Contracting State. If the employment is so exercised, such
remuneration as is derived therefrom may be taxed in that other
State.
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2. Notwithstanding the provisions of paragraph 1,
remuneration derived by a resident of a Contracting State in
respect of an employment exercised in the other Contracting
State shall be taxable only in the first-mentioned State if:
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(a) the recipient is present in the other State for a period or
periods not exceeding in the aggregate 183 days in any twelve
month period commencing or ending in the calendar year
concerned; and
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(b) the remuneration is paid by, or on behalf of, an employer
who is not a resident of the other State; and
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(c) the remuneration is not borne by a permanent
establishment or a fixed base which the employer has in the
other State.
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3. Notwithstanding the preceding provisions of this Article,
remuneration in respect of an employment exercised aboard a
ship or aircraft operated in international traffic by an enterprise
of a Contracting State, may be taxed in that State.
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1. Directors' fees and other similar payments derived by a
resident of a Contracting State in his capacity as a member of the
board of directors or a similar organ of a company which is a
resident of the other Contracting State may be taxed in that other
State.
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2. Salaries, wages and other similar remuneration derived by
a resident of a Contracting State in his capacity as a top-level
managerial position of a company which is a resident of the other
Contracting State may be taxed in that other State.
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1. Notwithstanding the provisions of Articles 7, 15 and 16,
income derived by a resident of a Contracting State as an
entertainer, such as a theatre, motion picture, radio or television
artiste, or a musician, or as an athlete, from his personal activities
as such exercised in the other Contracting State, may be taxed in
that other State.
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2. Where income in respect of personal activities exercised by
an entertainer or an athlete in his capacity as such accrues not to
the entertainer or athlete himself but to another person, that
income may, notwithstanding the provisions of Articles 7, 15 and
16, be taxed in the Contracting State in which the activities of the
entertainer or athlete are exercised.
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3. The provisions of paragraph 2 shall not apply if it is
established that neither the entertainer or the athlete nor persons
related thereto, participate directly or indirectly in the profits of
the person referred to in that paragraph.
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4. The provisions of paragraphs 1 and 2 shall not apply to
income derived from activities performed in a Contracting State
by a resident of the other Contracting State who is a non-profit
organization or an entertainer or athlete, provided the visit to the
first-mentioned Contracting State is substantially supported by
public funds and the activities are not performed for the purpose
of profit.
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1. Subject to the provisions of paragraph 2 of Article 20,
pensions, similar payments and annuities arising in a Contracting
State and paid to a resident of the other Contracting State may be
taxed in that other State.
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2. Pensions arising in a Contracting State and paid to a resident
of the other Contracting State may also be taxed in the State in
which they arise and according to the law of that State. However,
in the case of periodic pension payments, the tax so charged shall
not exceed
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(a) in the case of pensions arising in Canada, the lesser of
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(i) 15 per cent of the gross amount of the payment, and
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(ii) the rate determined by reference to the amount of tax
that the recipient of the payment would otherwise be
required to pay for the year on the total amount of the
periodic pension payments received by him in the year, if
he were a resident of Canada;
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(b) in the case of pensions arising in Tanzania, 15 per cent of
the gross amount of the pensions.
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3. Annuities arising in a Contracting State and paid to a
resident of the other Contracting State may also be taxed in the
State in which they arise and according to the law of that State;
but the tax so charged shall not exceed 15 per cent of the portion
thereof that is subject to tax in that State. However, this limitation
does not apply to lump-sum payments arising in Canada on the
surrender, cancellation, redemption, sale or other alienation of an
annuity, or to payments of any kind under an annuity contract the
cost of which was deductible, in whole or in part, in computing
the income of any person who acquired the contract.
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4. Notwithstanding anything in this Agreement:
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(a) war pensions and allowances (including pensions and
allowances paid to war veterans or paid as a consequence of
damages or injuries suffered as a consequence of a war) arising
in a Contracting State and paid to a resident of the other
Contracting State shall be exempt from tax in that other State
to the extent that they would be exempt from tax if received
by a resident of the first-mentioned State;
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(b) alimony and other similar payments arising in a
Contracting State and paid to a resident of the other
Contracting State who is subject to tax therein in respect
thereof shall be taxable only in that other State; and
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(c) pensions and other payments made under a public scheme
which is part of the social security system of a Contracting
State or a political subdivision or a local authority thereof shall
be taxable only in that State.
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1. (a) Salaries, wages and similar remuneration, other than a
pension, paid by a Contracting State or a political subdivision
or a local authority thereof to an individual in respect of
services rendered to that State or subdivision or authority shall
be taxable only in that State.
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(b) However, such salaries, wages or similar remuneration
shall be taxable only in the other Contracting State if the
services are rendered in that other State and the individual is
a resident of that other State who:
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(i) is a national of that other State; or
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(ii) did not become a resident of that other State solely for
the purpose of rendering the services.
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2. (a) Notwithstanding the provisions of Article 19, any
pension paid by, or out of funds created by Tanzania or a
political subdivision or a local authority thereof to an
individual in respect of services rendered to Tanzania or a
subdivision or authority thereof shall be taxable only in
Tanzania.
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(b) However, such pension may also be taxed in Canada if the
individual is a resident of, and a national of Canada.
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3. The provisions of paragraphs 1 and 2 shall not apply to
remuneration and pensions in respect of services rendered in
connection with a business carried on by a Contracting State or
a political subdivision or a local authority thereof.
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Payments which a student, apprentice or business trainee who
is, or was immediately before visiting a Contracting State, a
resident of the other Contracting State and who is present in the
first-mentioned State solely for the purpose of his education or
training receives for the purpose of his maintenance, education
or training shall not be taxed in that State, provided that such
payments arise from sources outside that State.
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1. Subject to the provisions of paragraph 2, items of income
of a resident of a Contracting State, wherever arising, not dealt
with in the foregoing Articles of this Agreement shall be taxable
only in that State.
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2. The provisions of paragraph 1 shall not apply to income
other than income from immovable property if the recipient of
such income, being a resident of a Contracting State, carries on
business in the other Contracting State through a permanent
establishment situated therein, or performs in that other State
independent personal services from a fixed base situated therein,
and the right or property in respect of which the income is paid
is effectively connected with such permanent establishment or
fixed base. In such case, the provisions of Article 7 or Article 15,
as the case may be, shall apply.
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3. Notwithstanding paragraphs 1 and 2 items of income of a
resident of a Contracting State not dealt with in the foregoing
Articles of this Agreement and arising in the other Contracting
State may also be taxed in that other State, and according to the
law of that State.
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1. Capital represented by immovable property owned by a
resident of a Contracting State and situated in the other
Contracting State may be taxed in that other State.
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2. Capital represented by movable property forming part of
the business property of a permanent establishment which an
enterprise of a Contracting State has in the other Contracting
State or by movable property pertaining to a fixed base available
to a resident of a Contracting State in the other Contracting State
for the purpose of performing independent personal services
may be taxed in that other State.
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3. Capital represented by ships and aircraft operated in
international traffic by an enterprise of a Contracting State and by
movable property pertaining to the operation of such ships and
aircraft shall be taxable only in that State.
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4. All other elements of capital of a resident of a Contracting
State shall be taxable only in that State.
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1. In the case of Canada, double taxation shall be avoided as
follows:
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(a) Subject to the existing provisions of the law of Canada
regarding the deduction from tax payable in Canada of tax
paid in a territory outside Canada and to any subsequent
modification of those provisions - which shall not affect the
general principle hereof - and unless a greater deduction or
relief is provided under the laws of Canada, tax payable in
Tanzania on profits, income or gains arising in Tanzania shall
be deducted from any Canadian tax payable in respect of such
profits, income or gains.
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(b) Subject to the existing provisions of the law of Canada
regarding the determination of the exempt surplus of a foreign
affiliate and to any subsequent modification of those
provisions - which shall not affect the general principle
hereof - for the purpose of computing Canadian tax, a
company which is a resident of Canada shall be allowed to
deduct in computing its taxable income any dividend received
by it out of the exempt surplus of a foreign affiliate which is
a resident of Tanzania.
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2. In the case of Tanzania, double taxation shall be avoided as
follows: subject to the provisions of the law of Tanzania,
regarding the allowance of a credit to a Tanzanian resident
against Tanzanian tax of tax payable in a territory outside
Tanzania, Canadian tax payable under the laws of Canada in
accordance with this Agreement, whether directly or by
deduction, in respect of income from sources within Canada shall
be allowed as a credit against any Tanzanian tax payable in
respect of that income. The credit shall not, however, exceed that
Tanzanian tax, computed before allowing any such credit which
is attributable to the income derived from Canada.
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3. Where, in accordance with the provisions of this
Agreement, income derived or capital owned by a resident of
Tanzania is exempt from tax in Tanzania, Tanzania may
nevertheless, in calculating the amount of tax on the remaining
income or capital of such a resident, take into account the
exempted income or capital.
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4. For the purposes of paragraph 1(a), tax payable in Tanzania
by a resident of Canada,
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(a) in respect of profits attributable to a trade or business
carried on by it in Tanzania,
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shall be deemed to include any amount which would have been
payable as Tanzanian tax for any year but for an exemption from,
or reduction of, tax granted for that year or any part thereof under:
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(b) paragraphs 24, 25 and 26 of the second schedule to the
Income Tax Act No. 33 of 1973; so far as they were in force
on, and have not been modified since, the date of signature of
this Agreement, or have been modified only in minor respects
so as not to affect their general character; and except to the
extent that any of the said provisions has the effect of
exempting or relieving a source of income for a period in
excess of ten years; or
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(c) any other provisions which may subsequently be made
granting an exemption or reduction of tax which is agreed by
the competent authorities of the Contracting States to be of a
substantially similar character, if it has not been modified
thereafter or has been modified only in minor respects so as
not to affect its general character.
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5. For the purposes of this Article, profits, income or gains of
a resident of a Contracting State which are taxed in the other
Contracting State in accordance with this Agreement shall be
deemed to arise from sources in that other State.
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1. The nationals of a Contracting State shall not be subjected
in the other Contracting State to any taxation or any requirement
connected therewith which is other or more burdensome than the
taxation and connected requirements to which nationals of that
other State in the same circumstances are or may be subjected.
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2. The taxation on a permanent establishment which an
enterprise of a Contracting State has in the other Contracting
State shall not be less favourably levied in that other State than
the taxation levied on enterprises of that other State carrying on
the same activities.
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3. Nothing in this Article shall be construed as obliging a
Contracting State to grant to residents of the other Contracting
State any personal allowances, reliefs and reductions for taxation
purposes on account of civil status or family responsibilities
which it grants to its own residents.
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4. Enterprises of a Contracting State, the capital of which is
wholly or partly owned or controlled, directly or indirectly by
one or more residents of the other Contracting State, shall not be
subjected in the first-mentioned State to any taxation or any
requirement connected therewith, which is other or more
burdensome than the taxation or connected requirements to
which other similar enterprises of the first-mentioned State, the
capital of which is wholly or partly owned or controlled, directly
or indirectly, by one or more residents of a third State, are or may
be subjected.
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5. In this Article, the term ``taxation'' means taxes which are
the subject of this Agreement.
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1. Where a person considers that the actions of one or both of
the Contracting States result or will result for him in taxation not
in accordance with the provisions of this Agreement, he may,
irrespective of the remedies provided by the domestic law of
those States, address to the competent authority of the
Contracting State of which he is a resident an application in
writing stating the grounds for claiming the revision of such
taxation. To be admissible, the said application must be
submitted within two years from the first notification of the
action which gives rise to taxation not in accordance with the
Agreement.
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2. The competent authority referred to in paragraph 1 shall
endeavour, if the objection appears to it to be justified and if it is
not itself able to arrive at a satisfactory solution, to resolve the
case by mutual agreement with the competent authority of the
other Contracting State, with a view to the avoidance of taxation
not in accordance with the Agreement.
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3. A Contracting State shall not, after the expiry of the time
limits provided in its national laws and, in any case, after five
years from the end of the taxable period in which the income
concerned has accrued, increase the tax base of a resident of either
of the Contracting States by including therein items of income
which have also been charged to tax in the other Contracting
State. This paragraph shall not apply in the case of fraud, wilful
default or neglect.
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4. The competent authorities of the Contracting States shall
endeavour to resolve by mutual agreement any difficulties or
doubts arising as to the interpretation or application of the
Agreement.
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5. The competent authorities of the Contracting States may
consult together for the elimination of double taxation in cases
not provided for in the Agreement and may communicate with
each other directly for the purpose of applying the Agreement.
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6. The competent authorities of the Contracting States,
through consultations, may develop appropriate bilateral
procedures, conditions, methods, and techniques for the
implementation of the mutual agreement procedure provided for
in this Article. In addition, a competent authority may devise
appropriate unilateral procedures, conditions, methods and
techniques to facilitate the above mentioned bilateral actions and
the implementation of the mutual agreement procedure.
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1. The competent authorities of the Contracting States shall
exchange such information as is necessary for carrying out the
provisions of this Agreement or of the domestic laws of the
Contracting States concerning taxes covered by the Agreement
insofar as the taxation thereunder is not contrary to the
Agreement, in particular for the prevention of fraud or evasion of
such taxes. The exchange of information is not restricted by
Article 1. Any information received by a Contracting State shall
be treated as secret in the same manner as information obtained
under the domestic laws of that State. However, if the
information is originally regarded as secret in the transmitting
State it shall be disclosed only to persons or authorities
(including courts and administrative bodies) involved in the
assessment or collection of, the enforcement in respect of, or the
determination of appeals in relation to, the taxes covered by the
Agreement.
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2. Such persons or authorities shall use the information only
for such purposes, but may disclose the information in public
court proceedings or in judicial decisions. The competent
authorities of the Contracting States may, through consultation,
develop appropriate conditions, methods and techniques
concerning the matters in respect of which such exchange of
information shall be made, including where appropriate,
exchange of information regarding tax avoidance.
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3. In no case shall the provisions of paragraph 1 be construed
so as to impose on a Contracting State the obligation:
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(a) to carry out administrative measures at variance with the
laws or the administrative practice of that or of the other
Contracting State;
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(b) to supply information which is not obtainable under the
laws or in the normal course of the administration of that or of
the other Contracting State;
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(c) to supply information which would disclose any trade,
business, industrial, commercial or professional secret or trade
process, or information, the disclosure of which would be
contrary to public policy (ordre public).
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4. If information is requested by a Contracting State in
accordance with this Article, the other Contracting State shall
endeavour to obtain the information to which the request relates
in the same way as if its own taxation was involved
notwithstanding the fact that the other State does not, at that time,
need such information. If specifically requested by the
competent authority of a Contracting State, the competent
authority of the other Contracting State shall endeavour to
provide information under this Article in the form requested,
such as depositions of witnesses and copies of unedited original
documents (including books, papers, statements, records,
accounts or writings), to the same extent such depositions and
documents can be obtained under the laws and administrative
practices of that other State with respect to its own taxes.
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1. Nothing in this Agreement shall affect the fiscal privileges
of diplomatic agents or consular officers under the general rules
of international law or under the provisions of special
agreements.
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2. Notwithstanding Article 4, an individual who is a member
of a diplomatic mission, consular post or permanent mission of
a Contracting State which is situated in the other Contracting
State or in a third State shall be deemed for the purposes of the
Agreement to be a resident of the sending State if he is liable in
the sending State to the same obligations in relation to tax on his
total income as are residents of that sending State.
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3. The Agreement shall not apply to international
organizations, to organs or officials thereof and to persons who
are members of a diplomatic mission, consular post or permanent
mission of a third State or group of States, being present in a
Contracting State and who are not liable in either Contracting
State to the same obligations in relation to tax on their total
income as are residents thereof.
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1. The provisions of this Agreement shall not be construed to
restrict in any manner any exemption, allowance, credit or other
deduction accorded
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(a) by the laws of a Contracting State in the determination of
the tax imposed by that State; or
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(b) by any other agreement entered into by a Contracting
State.
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2. Nothing in the Agreement shall be construed as preventing
Canada from imposing a tax on amounts included in the income
of a resident of Canada with respect to a partnership, trust, or
controlled foreign affiliate, in which he has an interest.
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3. The Agreement shall not apply to any company, trust or
partnership that is a resident of a Contracting State and is
beneficially owned or controlled directly or indirectly by one or
more persons who are not residents of that State, if the amount of
the tax imposed on the income or capital of the company, trust or
partnership by that State is substantially lower than the amount
that would be imposed by that State if all of the shares of the
capital stock of the company or all of the interests in the trust or
partnership, as the case may be, were beneficially owned by one
or more individuals who were residents of that State.
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1. This Agreement shall be ratified and the instruments of
ratification shall be exchanged at the City of Dar-Es-Salaam,
United Republic of Tanzania.
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2. The Agreement shall enter into force upon the exchange of
instruments of ratification and its provisions shall have effect:
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(i) in respect of tax withheld at the source on amounts paid
or credited to non-residents on or after the first day of
January in the calendar year next following the year in
which the Agreement enters into force, and
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(ii) in respect of other Canadian tax for taxation years
beginning on or after the first day of January in the calendar
year next following the year in which the Agreement enters
into force;
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(i) in respect of taxes withheld at source, to amounts derived
on or after the first day of January in the calendar year next
following the year in which the Agreement enters into
force, and
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(ii) in respect of other taxes on income and taxes on capital,
to taxes chargeable for the taxable year beginning on or
after the first day of January in the calendar year next
following the year in which the Agreement enters into
force.
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1. This Agreement shall remain in force until terminated by a
Contracting State.
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2. Either Contracting State may (on or before the 30th day of
June in a calendar year) through diplomatic channels and in
writing give notice of the termination of the Agreement to the
other Contracting State; in such event the Agreement shall cease
to have effect:
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(i) in respect of tax withheld at the source on amounts paid
or credited to non-residents on or after the first day of
January of the next following calendar year, and
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(ii) in respect of other Canadian tax for taxation years
beginning on or after the first day of January of the next
following calendar year;
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(i) in respect of taxes withheld at source, to amounts derived
on or after first day of January of the next following
calendar year, and
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(ii) in respect of other taxes on income, and taxes on capital,
to taxes chargeable for any taxable year beginning on or
after the first day of January of the next following calendar
year.
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IN WITNESS WHEREOF the undersigned, duly authorized
to that effect, have signed this Agreement.
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DONE in duplicate at Dar-Es-Salaam, United Republic of
Tanzania, this 15th day of December 1995 in the English and
French languages, each version being equally authentic.
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FOR THE GOVERNMENT OF CANADA:
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Verona Edelstein
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FOR THE GOVERNMENT OF THE UNITED REPUBLIC
OF TANZANIA:
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Simon Mbilinyi
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