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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.
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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.
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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.
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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.
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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.
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