SUMMARY

The purpose of this enactment is to implement income tax treaties - income tax conventions or agreements and protocols thereto - that have been concluded with Slovenia, Ecuador, Venezuela, Peru, Senegal, the Czech Republic, the Slovak Republic and Germany.

Parts 1 to 7 of this enactment implement tax treaties with Slovenia, Ecuador, Venezuela, Peru, Senegal, the Czech Republic and the Slovak Republic. This is the first time that Canada has concluded a tax treaty with any of these States. It should be noted, however, that the tax treaty between the Government of Canada and the Government of the Czech and Slovak Federal Republic, signed on August 30, 1990, currently applies between Canada and the Czech Republic and Slovak Republic, respectively.

Part 8 of this enactment amends the Canada-Germany Tax Convention Act, 1982 to implement a new treaty, replacing the tax agreement with Germany that is currently in force.

The tax treaties implemented by this enactement reflect efforts to update and expand Canada's network of tax treaties so as to obtain results in conformity with current Canadian tax policy. These treaties are generally patterned on the Model Double Taxation Convention prepared by the Organisation for Economic Co-operation and Development.

Income tax 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 after an Act giving them precedence over domestic legislation is passed by Parliament.