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The Government of Canada and the Government of
Ukraine, desiring to conclude a Convention 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 Convention shall apply to persons who are residents of
one or both of the Contracting States.
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1. This Convention 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 Convention 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 Ukraine:
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(i) the tax on profit of enterprises, and
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(ii) the income tax on citizens,
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(hereinafter referred to as ``Ukrainian tax'').
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4. The Convention shall apply also to any substantially similar
taxes and to taxes on capital which are imposed after the date of
signature of the Convention in addition to, or in place of, the
existing taxes. 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 Convention, 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 ``Ukraine'', used in a geographical sense, means
the territory of Ukraine, its Continental Shelf and its exclusive
(maritime) economic zone, including any area outside the
territorial sea of Ukraine which in accordance with
international law has been or may hereafter be designated as
an area within which the rights of Ukraine with respect to the
seabed and subsoil and their natural resources may be
exercised;
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(c) the terms ``a Contracting State'' and ``the other Contracting
State'' mean, as the context requires, Canada or Ukraine;
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(d) the term ``person'' includes an individual, a company and
any other body of persons; in the case of Canada, the term also
includes an estate, a trust and a partnership;
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(e) 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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(f) the term ``company'' means any body corporate or any
entity which is treated as a body corporate for tax purposes;
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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 Ukraine, the Ministry of Finance or its
authorized representative;
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(h) 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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(i) the term ``international traffic'' means any voyage of a ship
or aircraft operated by an enterprise of a Contracting State to
transport passengers or property except where the principal
purpose of the voyage is to transport passengers or property
between places within the other Contracting State.
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2. As regards the application of the Convention 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 Convention applies.
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1. For the purposes of this Convention, the term ``resident of
a Contracting State'' means:
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(a) 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; but this term does not include any person who
is liable to tax in that State in respect only of income from
sources in that State;
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(b) the Government of that State or a political subdivi-sion or
local authority thereof or any agency or instrumentality of any
such government, subdivision or authority.
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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 only 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 only 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 only 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 only 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 only 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 only 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 Convention to
such person. In the absence of such agreement, such person shall
not be considered to be a resident of either Contracting State for
the purposes of enjoying benefits under the Convention.
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1. For the purposes of this Convention, 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
relating to the exploration for or the exploitation of natural
resources; and
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(g) a warehouse or other premises used as a sales outlet.
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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'' 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 6 applies - is acting on behalf of an enterprise
and has, and habitually exercises in a Contracting State an
authority to conclude contracts on behalf of the enterprise, or
maintains in that State a stock of goods or merchandise
belonging to the enterprise from which sales of such goods or
merchandise are regularly made on behalf of the enterprise, that
enterprise shall be deemed to have a permanent establishment in
that State in respect of any activities which that person undertakes
for the enterprise unless the activities of such 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. An enterprise shall not be deemed to have a permanent
establishment in a Contracting State merely because it carries on
business in that 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 Convention, the term ``immovable
property'' shall have the meaning which it has under the taxation
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; 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 and 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
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 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. However, no such
deduction shall be allowed in respect of amounts, if any, paid
(otherwise than towards reimbursement of actual expenses) by
the permanent establishment to the head office of the enterprise
or any of its other offices, by way of royalties, fees or other similar
payments in return for the use of patents or other rights, or by way
of commission, for specific services performed or for
management, or, except in case of a banking enterprise, by way
of interest on moneys lent to the permanent establishment by the
enterprise.
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4. Insofar as it has been customary in a Contracting State to
determine, according to its laws, 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 an 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 Convention, 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 ships or aircraft in international traffic shall be
taxable only in that State.
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2. Notwithstanding the provisions of paragraph 1 and of
Article 7, profits derived by an enterprise of a Contracting State
from a voyage of a ship or aircraft where the principal purpose of
the voyage is to transport passengers or property between places
in the other Contracting State may be taxed in that other State.
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3. The provisions of paragraphs 1 and 2 shall also apply to
profits referred to in those paragraphs derived by an enterprise of
a Contracting State from its participation in a pool, a joint
business or an international operating agency but only so much
of the profits as is attributable to the participant in proportion to
its share in the joint business.
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4. In this Article,
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(a) the term ``profits'' includes:
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(i) 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, and
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(ii) the rental, use or maintenance of containers (including
trailers and related equipment for the transport of
containers),
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by that enterprise provided that such charter, rental, use or
maintenance 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, where it agrees with the
inclusion, 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 Convention
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 a resident
of the other Contracting State is the beneficial owner of the
dividends the tax so charged shall not exceed:
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(a) 5 per cent of the gross amount of the dividends if the
beneficial owner is a company which controls directly or
indirectly, in the case of Canada at least 20 per cent of the
voting power in the company paying the dividends and in the
case of Ukraine at least 20 per cent of the authorised capital in
the company paying the dividends;
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(b) 15 per cent of the gross amount of the dividends in the case
of dividends paid by a non-resident owned investment
corporation that is a resident of Canada and in all other cases.
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The provisions of this paragraph shall not affect the taxation of
the company in respect of 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 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 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 Convention shall be construed as preventing
a Contracting State from imposing on the earnings of a company
attributable to a permanent establishment in that State, a tax in
addition to the tax which would be chargeable on the earnings of
a company which is a national of that State, provided that any
additional tax so imposed shall not exceed 5 per cent of the
amount of such earnings.
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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 a resident of the other Contracting State 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:
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(a) interest arising in a Contracting State and paid in respect
of indebtedness of the government of that 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 a Contracting State and paid to a resident
of the other Contracting State shall be taxable only in that
other State if it is paid in respect of a loan made, guaranteed or
insured, or a credit extended, guaranteed or insured by an
entity wholly-owned and controlled by the government of
that other State, provided the loan or credit is in respect of
imports or exports;
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(c) interest arising in a Contracting State and paid to a resident
of the other Contracting State which 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. 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
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 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 Convention.
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8. The provisions of this Article shall not apply if it was the
main purpose or one of the main purposes of any person
concerned with the creation or assignment of the debt-claim in
respect of which the interest is paid to take advantage of this
Article by means of that creation or assignment.
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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 a resident of the other Contracting State 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, royalties
arising in a Contracting State and paid to a resident of the other
Contracting State who is the beneficial owner of the royalties,
shall be taxable only in that other State if they are royalties for the
use of, or the right to use, computer software.
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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 of literary, artistic or scientific work, patent,
trade mark, design or model, plan, secret formula or process, 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, tape or other means of reproduction for use in
connection with television or radio broadcasting.
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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 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 Convention.
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8. The provisions of this Article shall not apply if it was the
main purpose or one of the main purposes of any person
concerned with the creation or assignment of the right in respect
of which the royalties are paid to take advantage of this Article
by means of that creation or assignment.
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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 listed on an approved stock
exchange in the other Contracting 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 Contracting 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 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 provided
that those gains are subject to tax in that State.
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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 five 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 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 shall be taxable only in that State unless the
remuneration is derived by a resident of the other Contracting
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. The provisions of paragraph 2 shall not apply if it is
established that neither the entertainer or the sportsman nor
persons related thereto, participate directly or indirectly in the
profits of the person referred to in that paragraph.
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4. Notwithstanding the provisions of paragraphs 1 and 2,
income derived by entertainers and sportsmen who are residents
of a Contracting State from activities performed in the other
Contracting State within the framework of cultural exchanges
established under cultural agreements concluded between the
Contracting States or if their activities are principally financed
from the public funds of either Contracting State, shall be exempt
from tax in that other State.
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1. Pensions, including social security benefits, and annuities
arising in a Contracting State and paid to a resident of the other
Contracting State shall be taxable only in the State in which they
arise.
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2. The term ``annuities'' means a stated sum payable
periodically at stated times during life or during a specified or
ascertainable period of time under an obligation to make the
payments in return for adequate and full consideration in money
or money's worth.
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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 provided they are subject to tax
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 State and the individual is a
resident of that State who:
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(i) is a national of that State; or
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(ii) did not become a resident of that State solely for the
purpose of rendering the services.
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2. The provisions of paragraph 1 shall not apply to
remuneration 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 Convention 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. Where such income is income
from an estate or a trust, other than a trust to which contributions
were deductible, the tax so charged shall, provided that the
income is taxable in the Contracting State in which the beneficial
owner is a resident, not exceed 15 per cent of the gross amount
of the income.
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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 by an
enterprise 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
Ukraine on profits, income or gains arising in Ukraine 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 Ukraine.
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2. In the case of Ukraine, double taxation shall be avoided as
follows:
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(a) subject to the provisions of the law of Ukraine regarding
the elimination of tax payable in a territory outside Ukraine
(which shall not affect the general principle hereof), Canadian
tax payable under the laws of Canada and in accordance with
this Convention, whether directly or by deduction, on profits,
income or capital from sources within Canada shall be
allowed as a credit against any Ukrainian tax computed by
reference to the same profits, income or capital by reference to
which the Ukrainian tax is computed;
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(b) the deduction in either case shall not exceed that part of
income tax or capital tax, as computed before the deduction is
given, which is attributable, as the case may be, to the income
or the capital which may be taxed in Canada.
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3. 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 Convention shall be
deemed to arise from sources in that other State.
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4. Where in accordance with any provision of the Convention
income derived or capital owned by a resident of a Contracting
State is exempt from tax in that State, such State may
nevertheless, in calculating the amount of tax on the remaining
income or capital of such resident, take into account the
exempted income or capital.
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1. 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.
This provision shall, notwithstanding the provisions of Article 1,
also apply to individuals who are not residents of one or both of
the Contracting States.
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2. Stateless persons who are residents of a Contracting State
shall not be subjected in either 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 the State concerned in the same circumstances
are or may be subjected.
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3. The taxation on a permanent establishment which a resident
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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4. 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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5. The provisions of this Article shall apply to taxes covered
by this Convention.
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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 Convention, 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 or, if his case comes
under paragraph 1 of Article 24, to that of the Contracting State
of which he is a national, 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 Convention.
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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 Convention.
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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
Convention.
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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 Convention and may communicate with
each other directly for the purpose of applying the Convention.
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1. The competent authorities of the Contracting States shall
exchange such information as is relevant for carrying out the
provisions of this Convention or of the domestic laws (including
the provisions for the prevention of fraud or fiscal avoidance) of
the States concerning taxes covered by the Convention insofar as
the taxation thereunder is not contrary to the Convention. 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, taxes.
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. 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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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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1. Nothing in this Convention shall affect the fiscal privileges
of members of diplomatic missions or consular posts 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
Convention 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 Convention 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 Convention 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 Convention 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. For the purposes of paragraph 3 of Article XXII of the
General Agreement on Trade in Services, the Contracting States
agree that, notwithstanding that paragraph, any dispute between
them as to whether a measure relating to a tax to which any
provision of this Convention applies falls within the scope of this
Convention may be brought before the Council for Trade in
Services, as provided by that paragraph, only with the consent of
both Contracting States.
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1. Each of the Contracting States shall notify the other,
through the diplomatic channel, of the completion of the
procedures required by its domestic law for the bringing into
force of this Convention. The Convention shall enter into force
on the date of the later of these notifications and shall thereupon
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 sixtieth day
following the day on which the Convention 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 that in which the Convention enters
into force;
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(i) in respect of taxes on dividends, interest or royalties for
any payments made on or after the sixtieth day following
the day on which the Convention enters into force,
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(ii) in respect of the tax on profit of enterprises for any
taxation period beginning on or after the first day of
January in the calendar year next following that in which
the Convention enters into force, and
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(iii) in respect of the income tax on citizens for any
payments made on or after the sixtieth day following the
day on which the Convention enters into force.
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2. From the date of entry into force of this Convention 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 signed at Moscow on
the 13th day of June, 1985, shall, as between Canada and
Ukraine, terminate. However, the provisions of the 1985
Agreement corresponding to those of this Convention shall
continue to have effect until the provisions of this Convention
take effect in accordance with the provisions of paragraph 1.
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This Convention shall remain in force until terminated by one
of the Contracting States. Either Contracting State may terminate
the Convention, through the diplomatic channel, by giving
notice of termination at least six months before the end of any
calendar year beginning after the expiry of five years from the
date of entry into force of the Convention. In such event, the
Convention 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 in the calendar year next following that in which
the notice is given, 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 that in which the notice is given;
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(i) in respect of taxes on dividends, interest or royalties for
any payments made on or after the sixtieth day following
the day on which the notice is given,
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(ii) in respect of the tax on profit of enterprises for any
taxation period beginning on or after the first day of
January in the calendar year next following that in which
the notice is given, and
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(iii) in respect of the income tax on citizens for any
payments made on or after the sixtieth day following the
day on which the notice is given.
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IN WITNESS WHEREOF the undersigned, duly authorized
to that effect, have signed this Convention.
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DONE in duplicate at Kyiv, this 4th day of March 1996, in the
English, French and Ukrainian languages, each version being
equally authentic.
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FOR THE GOVERNMENT OF CANADA:
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C. Westdal
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FOR THE GOVERNMENT OF UKRAINE:
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Petro Hermanchuk
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