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The Government of Canada and the Government of the
Bolivarian Republic of Venezuela, desiring to conclude
a Convention for the avoidance of double taxation and
the prevention of fiscal avoidance and evasion with re
spect 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, or 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 Venezuela:
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the taxes on income and the business assets tax, (hereinafter
referred to as ``Venezuelan tax'').
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4. The Convention shall apply also to any identical or
substantially similar taxes 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. For the purposes of this Convention, unless the context
otherwise requires:
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(a) the terms ``a Contracting State'' and ``the other
Contracting State'' mean, as the context requires, Canada or
Venezuela;
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(b) the term ``person'' includes an individual, a trust, a
company, a partnership and any other body of persons;
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(c) the term ``company'' means any body corporate or any
entity which is treated as a body corporate for tax purposes;
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(d) 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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(e) the term ``competent authority'' means:
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(i) in the case of Canada, the Minister of National Revenue
or the Minister's authorized representative, and
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(ii) in the case of Venezuela, the Integrated National Service
of Customs and Tax Administration (Servicio Nacional
Integrado de Administraci«n Aduanera y
Tributaria - SENIAT), its authorized representative or
the authority which is designated as a competent authority
for the purposes of the Convention;
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(f) 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 or association deriving its
status as such from the laws in force in a Contracting State;
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(g) 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 at any time by
a Contracting State 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, any meaning under the tax laws of that State
prevailing over a meaning given to the term under other laws of
that State.
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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 the person's domicile, residence, place of
management, place of incorporation or any other criterion of
a similar nature but does not include any person who is liable
to tax in that State in respect only of income from sources in
that State, and
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(b) the Government of that State or a political subdivision 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 the
individual's status shall be determined as follows:
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(a) the individual shall be deemed to be a resident only of the
State in which the individual has a permanent home available
and if the individual has a permanent home available in both
States, the individual shall be deemed to be a resident only of
the State with which the individual's personal and economic
relations are closer (centre of vital interests) ;
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(b) if the State in which the individual's centre of vital interests
cannot be determined, or if there is not a permanent home
available to the individual in either State, the individual shall
be deemed to be a resident only of the State in which the
individual has an habitual abode;
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(c) if the individual has an habitual abode in both States or in
neither of them, the individual shall be deemed to be a resident
only of the State of which the individual is a national;
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(d) if the individual 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.
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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.
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3. A building site or construction or installation project
constitutes a permanent establishment only where such site or
project continues for a period or periods aggregating more than
183 days within any twelve month period commencing or
ending in the taxable year concerned.
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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, 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 for the purpose of
the relevant 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 in a Contracting State, there shall, in accordance
with the law of that State, be allowed as deductions expenses
which are incurred for the purposes of the business activities 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 as a reimbursement of actual expenses) by
the permanent establishment to the head office of the enterprise
or any of its other offices as 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 the case of a bank, as interest on
moneys lent to the permanent establishment.
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4. 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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5. 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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6. 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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The provisions of this Convention shall not affect the
application of the reciprocal exemption from taxes on income
with respect to income from the operation of ships or aircraft in
international traffic as provided in the Agreement Between the
Government of Canada and the Government of the Republic of
Venezuela for the Avoidance of Double Taxation Regarding
Shipping and Air Transport signed at Caracas on June 26, 1990.
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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, has 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, if it agrees
with such adjustment, shall, in accordance with paragraph 4 of
Article 25, 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.
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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 domestic 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 the
beneficial owner of the dividends is a resident of the other
Contracting State, the tax so charged shall not exceed:
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(a) except in the case of dividends paid by a
non-resident-owned investment corporation that is a resident
of Canada, 10 per cent of the gross amount of the dividends
if the beneficial owner is a company that controls directly or
indirectly at least 25 per cent of the voting power in the
company paying the dividends;
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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, mining
shares, founders' 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 paragraphs 1 and 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, or on the
earnings attributable to the alienation of immovable property
situated in that State by a company carrying on a trade in
immovable property, 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 10 per cent of the amount of such earnings which have not
been subjected to such additional tax in previous taxation years.
For the purpose of this provision, the term ``earnings'' means the
earnings attributable to the alienation of such immovable
property situated in a Contracting State as may be taxed by that
State under the provisions of Article 6 or of paragraph 1 of Article
13, and the profits, including any gains, attributable to a
permanent establishment in a Contracting State in a year and
previous years after deducting therefrom all taxes, other than the
additional tax referred to herein, imposed on such profits by that
State.
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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 beneficial owner of the interest is a resident of the other
Contracting State, 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 Venezuela and paid to a resident of
Canada shall be taxable only in Canada if it is paid in respect
of a loan made, guaranteed or insured, or a credit extended,
guaranteed or insured by the Export Development
Corporation;
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(c) interest arising in Canada and paid to a resident of
Venezuela shall be taxable only in Venezuela if it is paid in
respect of a loan made, guaranteed or insured, or a credit
extended, guaranteed or insured by the ``Fondo de
Inversiones de Venezuela (FIV) '' or by the ``Banco de
Comercio Exterior (BANCOEX)'' or by any other institution,
wholly owned by the government of Venezuela, specified and
agreed in letters exchanged between the competent authorities
of the Contracting States.
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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. Penalty charges for late payment
shall not be regarded as interest for the purpose of this Article.
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5. The provisions of paragraphs 1, 2 and 3 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 the payer 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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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 beneficial owner of the royalties is a
resident of the other Contracting State, the tax so charged shall
not exceed:
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(a) 5 per cent of the gross amount of the royalties in the case
of:
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(i) 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) and
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(ii) royalties for the use of, or the right to use, computer
software or any patent or for information concerning
industrial, commercial or scientific experience (but not
including any such royalty provided in connection with a
rental or franchise agreement) where the payer and the
beneficial owner of the royalties are not related persons;
and
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(b) 10 per cent of the gross amount of the royalties in all other
cases.
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3. 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. The term ``royalties'' also includes gains derived from
the alienation of any such right or property to the extent that such
gains are contingent on the productivity, use or disposition
thereof.
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4. The provisions of paragraphs 1 and 2 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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5. 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 the payer 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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6. 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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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 or had in the other
Contracting State or of movable property pertaining to a fixed
base that is or was 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
from the alienation of containers and other equipment 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 quoted on an approved stock
exchange, deriving their value or the greater part of their value
directly or indirectly from immovable property situated in the
other Contracting State; or
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(b) an interest in a partnership or trust, the assets of which
consist principally of immovable property situated in the other
Contracting State or that derive directly or indirectly their
value or the greater part of their value from such immovable
property;
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may be taxed in that other State. For the purposes of this
paragraph, the term ``immovable property'' does not include any
property, other than rental property, in which the business of the
company, partnership or trust 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.
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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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7. Where an individual who ceases to be a resident of a
Contracting State, and immediately thereafter becomes a resident
of the other Contracting State, is treated for the purposes of
taxation in the first-mentioned State as having alienated a
property and is taxed in that State by reason thereof, the
individual may elect to be treated for purposes of taxation in the
other State as if the individual had, immediately before becoming
a resident of that State, sold and repurchased the property for an
amount equal to its fair market value at that time.
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8. Where a resident of a Contracting State alienates property
in the course of a corporate or other organization, reorganization,
amalgamation, division or similar transaction and profit, gain or
income with respect to such alienation is not recognized for the
purpose of taxation in that State, if requested to do so by the
person who acquires the property, the competent authority of the
other Contracting State may agree, in order to avoid double
taxation and subject to terms and conditions satisfactory to such
competent authority, to defer the recognition of the profit, gain
or income with respect to such property for the purpose of
taxation in that other State until such time and in such manner as
may be stipulated in the agreement.
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1. Income derived by an individual who is a resident of a
Contracting State in respect of professional or similar services of
an independent character shall be taxable only in that State unless
the individual has a fixed base regularly available in the other
Contracting State for the purpose of performing the services. If
the individual 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, a person 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 person 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, may be taxed in that State.
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Directors' fees and other similar payments derived by a
resident of a Contracting State for services performed in the
capacity as a member of the board of directors 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 sportsperson, from that resident's
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 activities exercised by an
entertainer or a sportsperson in that individual's capacity as such
accrues not to the entertainer or sportsperson but to another
person, that income of that other person may, notwithstanding
the provisions of Articles 7, 14 and 15, be taxed in the
Contracting State in which the activities of the entertainer or
sportsperson are exercised, unless it is established that neither the
entertainer or the sportsperson nor persons related thereto
participate directly or indirectly in the profits of that other person
in any manner, including the receipt of deferred remuneration,
bonuses, fees, dividends, partnership distributions or other
distributions.
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3. The provisions of paragraphs 1 and 2 shall not apply to
income derived from activities performed in a Contracting State
by a resident of the other Contracting State in the context of a visit
in the first-mentioned State of a non-profit organization of the
other State, provided that the visit is primarily supported by
public funds.
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1. Pensions and annuities 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. Pensions and annuities arising in a Contracting State and
paid to a resident of the other Contracting State may also be taxed
in the State in which they arise and according to the law of that
State.
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3. Notwithstanding anything in this Convention, war
pensions and allowances (including pensions and allowances
paid to war veterans or paid as a consequence of damages or
injuries suffered as a consequence of a war) arising in a
Contracting State and paid to a resident of the other Contracting
State shall be exempt from tax in that other State to the extent that
they would be exempt from tax if received by a resident of the
first-mentioned State.
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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.
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(b) However, such salaries, wages and 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 salaries,
wages and 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 that individual's
education or training receives for the purpose of that individual's
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.
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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
Venezuela on profits, income or gains arising in Venezuela
shall be deducted from any Canadian tax payable in respect of
such profits, income or gains;
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(b) where in accordance with any provision of the Convention
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 other income or capital, take
into account the exempted income or capital.
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2. When a resident of Venezuela derives income that, in
accordance with the provisions of the Convention, may be taxed
in Canada, Venezuela shall allow a relief to such resident. Such
relief shall be allowed in accordance with the provisions and
subject to the limitations of the law of Venezuela, as they may be
amended from time to time without changing the principle
hereof. The relief shall consist in a credit against the Venezuelan
tax on income.
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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 the Convention shall be
deemed to arise from sources in that other State.
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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 more burdensome than the taxation
and connected requirements to which nationals of that other State
in the same circumstances, in particular with respect to residence,
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. The taxation on a permanent establishment which an
enterprise 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 residents of that other State carrying on the
same activities.
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3. 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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4. In this Article, the term ``taxation'' means taxes which are
the subject of 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 that person in
taxation not in accordance with the provisions of this
Convention, that person may, irrespective of the remedies
provided by the domestic law of those States, address to the
competent authority of the Contracting State of which that
person is a resident or, if that person's case comes under
paragraph 1 of Article 24, to that of the Contracting State of
which that person 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 resulting in 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 domestic 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. In particular, the competent authorities of the
Contracting States may agree to the same allocation of income,
deductions, credits or allowances between persons.
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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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6. If any difficulty or doubt arising as to the interpretation or
application of the Convention cannot be resolved by the
competent authorities pursuant to the preceding paragraphs of
this Article, the case may be submitted for arbitration if both
competent authorities and the taxpayer agree and the taxpayer
agrees in writing to be bound by the decision of the arbitration
board. The decision of the arbitration board in a particular case
shall be binding on both States with respect to that case. The
procedure shall be established in an exchange of notes between
the Contracting States.
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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 Convention or of the domestic laws of the
Contracting States concerning taxes imposed by that State
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) concerned with the assessment or collection of, the
enforcement in respect of, or the determination of appeals in
relation to, the taxes in that State. 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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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 the provisions of 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 only of the sending
State if the individual is liable in the sending State to the same
obligations in relation to tax on 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 that resident has an interest.
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3. The Convention shall not apply to any company, trust or
other entity that is a resident of a Contracting State and is
beneficially owned or controlled directly or indirectly by one or
more persons who are not residents of that State, if the amount of
the tax imposed on the income or capital of the company, trust or
other entity by that State is substantially lower than the amount
that would be imposed by that State if all of the shares of the
capital stock of the company or all of the interests in the trust or
other entity, as the case may be, were beneficially owned by one
or more individuals who were residents of that State.
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4. Contributions in a year in respect of services rendered in that
year paid by, or on behalf of, an individual who is resident of one
of the Contracting States or who is temporarily present in that
State, to a pension plan that is recognized for tax purposes in the
other Contracting State shall, during a period not exceeding in
the aggregate 60 months, be treated in the same way for tax
purposes in the first-mentioned State as a contribution paid to a
pension plan that is recognized for tax purposes in that
first-mentioned State, provided that:
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(a) such individual was contributing on a regular basis to the
pension plan for a period ending immediately before that
individual became a resident of or temporarily present in the
first-mentioned State; and
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(b) the competent authority of the first-mentioned State agrees
that the pension plan generally corresponds to a pension plan
recognized for tax purposes by that State.
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For the purposes of this paragraph, ``pension plan'' includes a
pension plan created under the social security system in a
Contracting State.
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5. With respect to 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 and after the mutual agreement
procedure has been exhausted.
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6. Where under any provision of the Convention any income
is relieved from tax in a Contracting State and, under the law in
force in the other Contracting State a person, in respect of that
income, is subject to tax by reference to the amount thereof that
is remitted to or received in that other Contracting State and not
by reference to the full amount thereof, then the relief to be
allowed under the Convention in the first-mentioned
Contracting State shall apply only to so much of the income as
is taxed in the other Contracting State.
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Each of the Contracting States shall take all measures
necessary to give this Convention the force of law within its
jurisdiction and shall notify the other through diplomatic
channels of the completion of such measures. The Convention
shall enter into force on the date on which the later notification
is made and its provisions shall thereupon have effect:
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(a) 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
Convention enters into force; and
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(b) in respect of other taxes, 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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This Convention shall continue in effect indefinitely but either
Contracting State may, on or before June 30 of any calendar year
after the year of the entry into force of the Convention, give to the
other Contracting State a notice of termination in writing through
diplomatic channels; in such event, the Convention shall cease to
have effect:
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(a) in respect of tax withheld at the source on amounts paid or
credited to non-residents, on or after the first day of January
of the next following calendar year; and
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(b) in respect of other taxes, for taxation years beginning on
or after the first day of January of the next following calendar
year.
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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 Caracas, this 10th day of July, 2001, in
the English, French and Spanish languages, each version being
equally authentic.
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FOR THE GOVERNMENT FOR THE GOVERNMENT
OF CANADA OF THE BOLIVARIAN REPUBLIC OF VENEZUELA
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Allan J. Stewart Luis Alfonso Davila
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At the moment of signing the Convention this day concluded
between the Government of Canada and the Government of the
Bolivarian Republic of Venezuela for the avoidance of double
taxation and the prevention of fiscal avoidance and evasion with
respect to taxes on income and on capital, the undersigned have
agreed upon the following provisions which shall be an integral
part of the Convention.
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1. It is understood that the taxes levied by municipalities in
Venezuela are not taxes covered by the Convention.
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2. For the purpose of computing the time limits in paragraph
3 of Article 5:
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(a) it is understood that if an enterprise (general contractor),
that has undertaken the performance of a comprehensive
project, subcontracts parts of such a project to other
enterprises (subcontractors), the period spent by a
subcontractor must be considered as time spent by the general
contractor. The subcontractor has a permanent establishment
only if its activities continue for a period or periods
aggregating more than 183 days in any twelve month period
commencing or ending in the taxable year concerned;
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(b) the 183 day period begins as of the date on which the
construction activity itself begins; it does not take into account
time spent solely on preparatory activities such as obtaining
permits.
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3. It is understood that, in order for paragraph 4 of Article 5 to
apply, the activities listed in subparagraphs 4(a) through (f) and
conducted by the resident of a Contracting State must each be of
a preparatory or auxiliary character. Therefore, maintaining sales
personnel in a Contracting State would not be an activity
excepted under paragraph 4 and, subject to paragraphs 1, 5 and
6 of Article 5, would constitute a permanent establishment.
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4. Where an enterprise of a Contracting State sells goods or
merchandise or carries on business in the other Contracting State
through a permanent establishment situated therein, the profits of
that permanent establishment shall not be determined on the
basis of the total amount received by the enterprise, but shall be
determined only on the basis of the income which is attributable
to the actual activity of the permanent establishment for such
sales or business. In particular, in the case of contracts for the
survey, supply, installation or construction of industrial,
commercial or scientific equipment or premises, or of public
works, when the enterprise has a permanent establishment, the
profits of such permanent establishment shall not be determined
on the total amount of the contract, but shall be determined only
on the basis of that part of the contract which is effectively carried
out by the permanent establishment in the State where the
permanent establishment is situated. The profits related to that
part of the contract which is carried out by the head office of the
enterprise shall be taxable only in the State of which the
enterprise is a resident.
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5. Notwithstanding the provisions 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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6. It is understood that the reference to an ``additional tax'' in
paragraph 6 of Article 10 includes the tax that may be imposed
by Venezuela pursuant to the provisions of Article 72 of
Presidential Decree No. 307 published on October 22, 1999, in
so far as those provisions were in force on, and have not been
modified since, the date of signature of the Convention or have
been modified only in minor respects so as not to effect their
general character. Furthermore, for the purposes of subparagraph
(a) of paragraph 1 of Article 23, the tax so imposed by Venezuela
will be considered to have been paid by the company on its own
behalf.
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7. In the event that, pursuant to an agreement or convention
concluded with a country that is a member of the Organisation for
Economic Co-operation and Development after the date of
signature of the Convention, Venezuela agrees to a rate of tax on
dividends referred to in subparagraph (a) of paragraph 2 of
Article 10 that is lower than 10 per cent, the greater of such new
rate and a rate of 5 per cent shall automatically apply for the
purposes of that subparagraph as well as for paragraph 6 of the
same Article.
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8. It is understood that nothing in Article 24 shall be construed
as preventing a Contracting State from imposing an additional
tax as referred to in paragraph 6 of Article 10 or paragraph 6 of
this Protocol.
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IN WITNESS WHEREOF the undersigned, duly authorized
to that effect, have signed this Protocol.
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DONE in duplicate at Caracas, this 10th day of July, 2001, in
the English, French and Spanish languages, each version being
equally authentic.
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FOR THE GOVERNMENT FOR THE GOVERNMENT
OF CANADA OF THE BOLIVARIAN REPUBLIC OF VENEZUELA
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Allan J. Stewart Luis Alfonso Davila
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