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The Government of Canada and the Government of the Russian
Federation, 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 the following taxes on
income and on capital, irrespective of the manner in which they
are levied:
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(a) in the case of Canada, 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 the Russian Federation, the taxes imposed
under the following Acts:
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(i) ``Tax on profits of enterprises and organizations'',
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(ii) ``Income tax on individuals'',
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(iii) ``Tax on capital of enterprises'', and
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(iv) ``Tax on capital of individuals'',
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including taxes of a similar nature levied by state authorities
of the Russian Federation (hereinafter referred to as ``Russian
tax'').
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2. The Agreement shall apply also to any identical or
substantially similar taxes which are imposed after the date of
signature of the Agreement in addition to, or in place of, the taxes
referred to in paragraph 1. The competent authorities of the
Contracting States shall notify each other of any significant
changes which have been made in their respective taxation laws.
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1. In 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 ``Russian Federation - Russia'', used in a
geographical sense, means its territory, including its internal
bodies of water, territorial waters in the sea and the air space
above them, as well as the continental shelf and the exclusive
economic zone, where the Russian Federation has sovereign
rights and exercises jurisdiction as defined by federal law and
the rules of international law. The names ``Russian
Federation'' and ``Russia'' are synonymous;
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(c) the terms ``a Contracting State'' and ``the other Contracting
State'' mean, as the context requires, Canada or the Russian
Federation;
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(d) the term ``person'' includes an individual, 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;
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(f) 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 the Russian Federation, the Ministry of
Finance or its authorized representative;
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(g) the term ``international traffic'' means any transport by a
ship or aircraft except when the ship or aircraft is operated
solely between places in a Contracting State.
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2. As regards the application of the Agreement by a
Contracting State, any term not defined therein shall, unless the
context otherwise requires, have the meaning which it has 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 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 not a 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 citizen;
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(d) if each State considers him as its citizen or if neither State
considers him as its citizen, 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 under the
laws of which it was created;
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(b) if it was created under the laws 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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1. For the purposes of this Agreement, the term ``permanent
establishment'' means a fixed place of business through which
the business of a resident of a Contracting State is wholly or
partly carried on in the other Contracting State.
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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
relating to the exploration for or the exploitation of natural
resources.
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3. A building site or construction or installation project
constitutes a permanent establishment only if it lasts for more
than twelve months.
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4. Notwithstanding the preceding provisions of this Article,
the term ``permanent establishment'' in respect of a resident of a
Contracting State 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
resident;
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(b) the maintenance of a stock of goods or merchandise
belonging to the resident 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 resident solely for the purpose of processing
by another person;
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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 resident;
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(e) the maintenance of a fixed place of business solely for the
purpose of carrying on, for the resident, 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 6 applies - is acting on behalf of a resident of a
Contracting State and has, and habitually exercises, in the other
Contracting State an authority to conclude contracts in the name
of the resident, that resident shall be deemed to have a permanent
establishment in that other Contracting State in respect of any
activities which that person undertakes for the resident unless the
activities of such person are limited to those mentioned in
paragraph 4.
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6. A resident 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.
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7. 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 law of
the Contracting State in which the property in question is
situated. 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.
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3. For the purposes of the Agreement, ships and aircraft shall
not be regarded as immovable property.
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4. 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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5. The provisions of paragraphs 1 and 4 shall also apply to the
income from immovable property used in carrying on a business
or in the performance of independent personal services.
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1. The business profits of a resident of a Contracting State shall
be taxable only in that State unless the resident carries on
business in the other Contracting State through a permanent
establishment situated therein. If the resident carries on or has
carried on business as aforesaid, the business profits of the
resident may be taxed in the other State but only so much of them
as is attributable to that permanent establishment.
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2. Subject to the provisions of paragraph 3, where a resident
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 business profits which it might be expected to
make if it were a distinct and separate person engaged in the same
or similar activities under the same or similar conditions and
dealing wholly independently with the resident and with other
persons.
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3. In the determination of the business profits of a permanent
establishment, there shall be allowed those deductible expenses
which are incurred for the purposes of the permanent
establishment including executive and general administrative
expenses, whether incurred in the State in which the permanent
establishment is situated or elsewhere.
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4. No business profits shall be attributed to a permanent
establishment of a person by reason of the mere purchase by that
permanent establishment of goods or merchandise for the
person.
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5. For the purposes of the preceding paragraphs, the business
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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6. Where business 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. Income or profits derived by a resident of a Contracting
State from the operation of ships or aircraft in international traffic
shall be taxable only in that State.
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2. For the purpose of this Article, the term ``income or profits''
includes income or profits from the charter or rental of ships or
aircraft and from the rental or maintenance of containers and
related equipment derived by a resident of a Contracting State,
provided that such charter, rental or maintenance is incidental to
the operation by that resident of ships or aircraft in international
traffic.
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3. The provisions of paragraphs 1 and 2 shall also apply to
income or profits referred to in those paragraphs derived by a
resident of a Contracting State from its participation in a pool, a
joint business or an international operating agency.
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4. Nothing in this Agreement shall prevent a Contracting State
from taxing the income or profits derived by a resident of the
other Contracting State from the transportation of passengers or
goods between places in the first-mentioned State.
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1. Where
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(a) a resident of a Contracting State participates directly or
indirectly in the management, control or capital of a resident
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 a resident of a Contracting
State and a resident of the other Contracting State,
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and in either case conditions are made or imposed between the
two persons in their commercial or financial relations which
differ from those which would be made between independent
persons, then any income which would, but for those conditions,
have accrued to one of the persons, but, by reason of those
conditions, have not so accrued, may be included in the income
of that person and taxed accordingly.
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2. Where a Contracting State includes in the income of a
resident of that State - and taxes accordingly - income on which
a resident 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 first-mentioned person if the
conditions made between the two persons had been those which
would have been made between independent persons, 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 a person
in the circumstances referred to in paragraph 1 after five years
from the end of the year in which the income which would be
subject to such change would have accrued to that person.
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4. The provisions of paragraphs 2 and 3 shall not apply in the
case of fraud or wilful default related to the amount of income
received or expenses claimed.
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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) 10 per cent of the gross amount of the dividends if the
beneficial owner is a company which owns at least 10 per cent
of the voting stock (or in the case of Russia, if there is no voting
stock, at least 10 per cent of the statutory capital) of the
company paying the dividends; and
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(b) 15 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, ``jouissance'' shares or ``jouissance'' rights 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 1 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 14, 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. Nothing in this Agreement shall prevent:
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(a) Canada from levying, in addition to the tax on a company
which is a resident of Canada, a tax on the earnings of a
permanent establishment of a company which is a resident of
the Russian Federation but the rate of such tax shall not exceed
10 per cent of such earnings;
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(b) the Russian Federation from taxing the remittance of
earnings by a permanent establishment situated in the Russian
Federation of a company which is a resident of Canada but the
rate of tax shall not exceed 10 per cent of such remittances.
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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 10 per cent of the gross amount of the
interest.
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3. Notwithstanding the provisions of paragraph 2, interest
arising in a Contracting State and paid to a resident of the other
Contracting State who is the beneficial owner thereof shall be
taxable only in that other State if it is paid:
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(a) to the Central Bank of that other State;
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(b) to a resident of that other State in respect of indebtedness
of the first-mentioned State or of its state authorities, including
local authorities thereof;
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(c) in respect of a loan made, guaranteed or insured, or a credit
extended, guaranteed or insured by an organisation created
and wholly owned by the Government of a Contracting State
for the purpose of facilitating export; it is understood that, for
the purposes of this provision, the Export Development
Corporation created under the laws of Canada meets these
requirements and that any organisation wholly owned by, and
created under the laws of, the Government of the Russian
Federation with similar mandate and functions shall, from the
date mentioned in an exchange of letters between the
competent authorities of the Contracting States, also be
considered to meet the requirements of this provision.
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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. However, the term ``interest'' does not include
income dealt with in 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
such permanent establishment or fixed base. In such case the
provisions of Article 7 or Article 14, 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 or its state authorities, including local
authorities thereof, 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 10 per cent of the
gross amount of the royalties.
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3. Notwithstanding the provisions of paragraph 2,
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(a) copyright royalties and other like payments in respect of
the production or reproduction of any literary, dramatic,
musical or other artistic work (but not including royalties in
respect of motion picture films nor royalties in respect of
works on film or videotape or other means of reproduction for
use in connection with television broadcasting),
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(b) royalties for the use of, or the right to use, computer
software, and
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(c) where the payer and the beneficial owner of the royalties
are not related persons, royalties for the use of, or the right to
use, any patent or any information concerning industrial,
commercial or scientific experience (but not including any
such information provided under a rental or franchise
agreement),
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arising in a Contracting State and paid to a resident of the other
Contracting State who is the beneficial owner thereof shall be
taxable only in that other State.
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4. 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, 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
television.
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5. The provisions of paragraphs 2 and 3 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 such permanent establishment or
fixed base. In such case the provisions of Article 7 or Article 14,
as the case may be, shall apply.
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6. Royalties shall be deemed to arise in a Contracting State
when the payer is that State itself or its state authorities, including
local authorities thereof, 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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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 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 Contracting State.
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2. Gains from the alienation of movable property forming part
of the business property of a permanent establishment of a
resident of a Contracting State 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 a resident of a Contracting State or
movable property pertaining to the operation of such ships or
aircraft shall be taxable only in the State of which the alienator is
a resident.
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4. Gains derived by a resident of a Contracting State from the
alienation of a share of a company which is a resident of the other
Contracting State and of which the first-mentioned resident owns
at least 25 per cent of the value of the capital stock, or of an
interest in a partnership or trust established under the law of that
other State and of which the first-mentioned resident's total
interest was at least 25 per cent of the value of all such interests,
may be taxed in that other State if at least 50 per cent of the value
of the share or interest, as the case may be, is attributed, directly
or indirectly, to immovable property situated in that other State.
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5. Gains from the alienation of any property, other than that
referred to in paragraphs 1, 2, 3 and 4 shall be taxable only in the
Contracting State of which the alienator is a resident.
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6. The provisions of paragraph 5 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. Income derived by an individual who is 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 he has a fixed base regularly available to him in the
other Contracting State for the purpose of performing his
activities. If he has or had such a fixed base, the income may be
taxed in the other State but only so much of it as is attributable to
that fixed base.
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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 16, 18 and 19, salaries,
wages and other 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 from the day of his arrival in the other State; 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,
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(a) remuneration in respect of an employment exercised
aboard a ship or aircraft operated in international traffic by a
resident of a Contracting State shall be taxable only in that
State unless the remuneration is derived by a resident of the
other Contracting State;
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(b) remuneration derived by a resident of a Contracting State
in respect of an employment connected with a place of
business in the other Contracting State which does not
constitute a permanent establishment under the provisions of
paragraph 3 of Article 5 shall be taxable only in the
first-mentioned State.
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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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1. Notwithstanding the provisions of Articles 14 and 15,
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 a sportsman, 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 a sportsman in his capacity as such accrues not
to the entertainer or sportsman himself but to another person, that
income may, notwithstanding the provisions of Articles 7, 14 and
15, be taxed in the Contracting State in which the activities of the
entertainer or sportsman are exercised.
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3. Notwithstanding the provisions of paragraphs 1 and 2,
income derived by an artiste or a sportsman in respect of his
personal activities as such shall be exempt from tax in the
Contracting State in which his activities are exercised if his
activities are exercised in accordance with an exchange
programme between the Governments of the Contracting States
or between their state authorities, including local authorities
thereof. Such exemption shall apply only if the competent
authority of the State in which the artiste or the sportsman is a
resident confirms to the competent authority of the other
Contracting State that the performance of the artiste or the
sportsman is in accordance with the exchange programme.
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Pensions and other similar payments of any kind arising in a
Contracting State and paid to a resident of the other Contracting
State shall be taxable only in the first-mentioned State.
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1. Remuneration, other than a pension, paid by a Contracting
State or its state authorities, including local authorities thereof, to
an individual in respect of services rendered to that State, state
authorities, including local authorities thereof, shall be taxable
only in that State.
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However, such remuneration shall be taxable only in the other
Contracting State if the services are rendered in that State and the
individual is a resident of that State who:
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(a) is a citizen of that State; or
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(b) did not become a resident of that State solely for the
purpose of rendering the services.
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2. The provisions of Articles 15 and 16 shall apply to
remuneration in respect of services rendered in connection with
a business carried on by a Contracting State or its state authorities
or local authorities thereof.
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Payments which a student or apprentice 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. 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. However, if such income is derived by a resident of a
Contracting State from sources in the other Contracting State,
such income may also be taxed in the State in which it arises, and
according to the law of that State.
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3. 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 14,
as the case may be, shall apply.
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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 a
resident 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 by a
resident of a Contracting State in international traffic 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 the
Russian Federation on profits, income or gains arising in the
Russian Federation 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 taxation of income from 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 the Russian
Federation;
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(c) where in accordance with any provision of this Agreement
income derived or capital owned by a resident of Canada is
exempt from tax in Canada, Canada may nevertheless, in
calculating the amount of tax on the remaining income or
capital, take into account the exempted income or capital;
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(d) for the purposes of this paragraph, profits, income or gains
of a resident of Canada which are taxed in the Russian
Federation in accordance with this Agreement shall be
deemed to arise from sources in the Russian Federation.
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2. In the case of the Russian Federation, double taxation shall
be avoided as follows: where a resident of the Russian Federation
derives income or owns capital which, in accordance with the
provisions of this Agreement, may be taxed in Canada, the
amount of tax on that income or capital payable in Canada shall
be credited against the tax imposed on such resident of the
Russian Federation. The amount of such credit shall not,
however, exceed the amount of the tax on that income or capital
computed in accordance with the taxation laws and regulations
of the Russian Federation.
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1. Residents 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 residents of that
other State in the same circumstances are or may be subjected.
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This provision shall not 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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2. The taxation of income or profits which a person that is a
resident of a Contracting State derives through a permanent
establishment situated in the other Contracting State or from
property forming part of the business property of that permanent
establishment shall not be less favourably levied in that other
State than the taxation levied on residents of that other State
carrying on the same activities.
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3. The provisions of this Article shall not be construed as
obliging a Contracting State to grant to residents of the other
Contracting State any tax allowance which is granted by the
first-mentioned State to residents of third States under the
provisions of tax agreements with such third States.
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4. The provisions of this Article shall apply to 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. 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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4. 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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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. 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 and 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. Such persons or
authorities shall use the information only for such purposes.
They may disclose the information in public court proceedings
or in judicial decisions.
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2. Nothing in paragraph 1 shall 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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3. 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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Nothing in this Agreement shall affect the fiscal privileges of
persons under the general rules of international law or under the
provisions of special agreements.
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Nothing in this Agreement shall be construed as preventing a
Contracting State from imposing a tax on amounts included in
the income of its residents with respect to a partnership, trust, or
controlled foreign affiliate, in which he has an interest.
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1. Each of the Contracting States shall notify the other
Contracting State through diplomatic channels of completion of
the internal procedures required by its law for the entry into force
of this Agreement.
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2. This Agreement shall enter into force on the date the later
of the notifications referred to in paragraph 1 is received and its
provisions shall apply:
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(a) in respect of taxes withheld at the source on amounts paid
or credited to non-residents from or after January 1 of the
calendar year following the year the present Agreement enters
into force; and
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(b) in respect of other taxes for taxation periods beginning
from or after January 1 of the calendar year following the year
the present Agreement enters into force.
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3. From the date this Agreement enters into force, the
Agreement between the Government of Canada and the
Government of the Union of Soviet Socialist Republics for the
Avoidance of Double Taxation on Income of June 13, 1985, shall
cease to have effect in relations between Canada and the Russian
Federation.
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This Agreement has been entered into for an indeterminate
period and shall remain in force until one of the Contracting
States notifies the other Contracting State through diplomatic
channels at least six months before the end of any calendar year,
of its intention to terminate its effect. In such event, the
Agreement shall cease to have effect:
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(a) in respect of taxes withheld at the source on amounts paid
or credited to non-residents from or after January 1 of the next
calendar year; and
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(b) in respect of other taxes for taxation periods beginning
from or after January 1 of the next calendar year.
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DONE in Ottawa this 5th day of October 1995, in two copies,
each in the English, French and Russian languages, all the three
texts having the same force.
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FOR THE GOVERNMENT OF CANADA:
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Paul Martin
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FOR THE GOVERNMENT OF THE RUSSIAN
FEDERATION:
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Alexander Zaveryukha
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At the signing of the Agreement between the Government of
Canada and the Government of the Russian Federation for the
avoidance of double taxation and the prevention of fiscal evasion
with respect to taxes on income and on capital, the undersigned
have agreed on the following provisions which shall form an
integral part of the Agreement.
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1. It is understood that an entity that is a resident of Russia and
of which at least 10 per cent of the statutory capital is owned by
residents of Canada, or a permanent establishment of a Canadian
resident carrying on activities in Russia, shall, in computing its
profits, deduct interest on loans, whether paid to a bank or
another person and without regard to the period of the loan,
provided the amount of the interest does not exceed the amount
that would have been agreed upon between independent persons.
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2. Irrespective of the participation of the Contracting States in
the General Agreement on Trade in Services (GATS), or in other
international agreements, the Contracting States in their tax
relations will be covered by the provisions of the present
Agreement.
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DONE in Ottawa this 5th day of October 1995, in two copies,
each in the English, French and Russian languages, all the three
texts having the same force.
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FOR THE GOVERNMENT OF CANADA:
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Paul Martin
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FOR THE GOVERNMENT OF THE RUSSIAN
FEDERATION:
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Alexander Zaveryukha
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