SUMMARY

The purpose of Parts 1 to 5 of this enactment is to implement income tax conventions that have been signed with Sweden, Lithuania, Kazakhstan, Iceland and Denmark.

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

The conventions in this enactment are generally patterned on the Model Double Taxation Convention prepared by the Organisation for Economic Co-operation and Development.

Part 6 of this enactment amends the Canada-Netherlands Income Tax Convention Act, 1986 to implement a Protocol that amends the income tax convention between Canada and the Netherlands. The Protocol adds provisions concerning mutual assistance in the collection of taxes and the elimination of the withholding tax on patent and know-how royalties. A number of technical amendments are also made to clarify existing provisions.

Part 7 of this enactment amends the Canada-United States Tax Convention Act, 1984 to implement a Protocol that amends the income tax convention between Canada and the United States. The Protocol provides that social security benefits will be taxable only in the recipient's country of residence. It also limits the circumstances under which one country may tax gains realized by a resident of the other country on shares of a corporation.