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The Government of Canada and the Government of the United
Arab Emirates, 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, the taxes on income and on capital
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 the United Arab Emirates:
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(ii) the corporation tax,
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(hereinafter referred to as ``U.A.E. tax'').
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4. The Convention shall apply also to any identical or
substantially similar taxes on income 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. For the purposes of 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 sea of Canada that, in
accordance with international law and the laws of Canada,
is an area in respect of which Canada may exercise rights
with respect to the seabed and subsoil and their natural
resources;
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(ii) the sea and airspace above every area referred to in
clause (i);
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(b) the term ``United Arab Emirates'' means the United Arab
Emirates and, when used in a geographical sense, means the
area in which the territory is under its sovereignty as well as
the territorial sea, airspace and submarine areas over which the
United Arab Emirates exercises, in conformity with
international law and the laws of the United Arab Emirates,
sovereign rights, including the mainland and islands under its
jurisdiction in respect of any activity carried on in connection
with the exploration for or the exploitation of the natural
resources of the seabed and subsoil;
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(c) the terms ``a Contracting State'' and ``the other Contracting
State'' mean, as the context requires, Canada or the United
Arab Emirates;
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(d) the term ``person'' includes an individual, a trust, a
company, a partnership and any other body of persons;
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(e) the term ``company'' means any body corporate or any
entity which is treated as a body corporate for tax purposes;
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(f) 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;
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(ii) in the case of the United Arab Emirates, the Minister of
Finance and Industry or the Minister's authorized
representative;
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(g) the term ``national'' means:
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(i) any individual possessing the nationality of a
Contracting State according to the law of that 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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(h) 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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(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 that it
has at that time under the law of that State for the purposes of 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) in the case of Canada, 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;
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(b) in the case of the United Arab Emirates,
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(i) an individual who is a national of the United Arab
Emirates, provided that the individual has a substantial
presence, permanent home or habitual abode in the United
Arab Emirates and that individual's personal and economic
relations are closer to the United Arab Emirates than to any
other State;
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(ii) a company which is incorporated in the United Arab
Emirates, provided such company can establish that:
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(A) all of the shares of the company are beneficially
owned by residents of the United Arab Emirates; or
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(B) all or substantially all of the company's income is
derived by the company from the active conduct of a
trade or business, other than an investment business,
in the United Arab Emirates and all or substantially all
of the value of the company's property is attributable
to property used in that trade or business.
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2. For the purposes of paragraph 1, the term ``resident of a
Contracting State'' shall include:
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(a) the Government of that Contracting State or a political
subdivision or local Government or local authority thereof;
and
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(b) any corporation, Central Bank, Abu Dhabi Investment
Authority, fund, authority, foundation, commission, agency
or other entity that was established under the law of that
Contracting State and that is wholly-owned and controlled by
the Government of that Contracting State or a political
subdivision or local authority thereof, by any entity referred
to in this subparagraph or by any combination thereof; and
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(c) any entity established in that Contracting State all the
capital of which has been provided by the Government of that
Contracting State or a political subdivision or local authority
thereof either alone or together with the governments of other
states.
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3. 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;
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
is situated cannot be determined, or if there is not a permanent
home available 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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4. Where by reason of the provisions of paragraph 1 a person
other than an individual is a resident of both Contracting States,
then it shall be deemed to be a resident only of the Contracting
State of which it is a national.
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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 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 in the name 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.
However, when the activities of such an agent are devoted wholly
or almost wholly to the business of that enterprise, such agent
shall not be considered an agent of an independent status within
the meaning of this paragraph.
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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 l shall apply to income derived
from the direct use, letting, or use in any other form of immovable
property.
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4. The provisions of paragraphs l 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.
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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 Contracting State in which the
permanent establishment is situated or elsewhere.
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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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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 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 the participation in a pool, a joint
business or an international operating agency.
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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 that is incidental to the operation of ships or
aircraft in international traffic;
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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,
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(ii) the rental of containers and related equipment, and
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(iii) the alienation of ships, aircraft, containers and related
equipment,
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by that enterprise provided that such charter, rental or
alienation 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 profits 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
profits of that enterprise and taxed accordingly.
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2. Where a Contracting State includes in the profits of an
enterprise of that State - and taxes accordingly - profits on
which an enterprise of the other Contracting State has been
charged to tax in that other State and the profits so included are
profits 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 make
an appropriate adjustment to the amount of tax charged therein
on those profits. 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 profits of an
enterprise in the circumstances referred to in paragraph l 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 profits
which would be subject to such change would, but for the
conditions referred to in paragraph l, have been attributed 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) 5 per cent of the gross amount of the dividends if the
beneficial owner is a company which controls directly or
indirectly at least 10 per cent of the voting power in the
company paying the dividends;
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(b) notwithstanding the provisions of subparagraph (a), 10
per cent of the gross amount of the dividends if they are paid
by a non-resident owned investment corporation that is a
resident of Canada to a company that is a resident of the United
Arab Emirates and that holds directly or indirectly at least 10
per cent of the voting power of the company paying the
dividends;
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(c) 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 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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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, interest
arising in a Contracting State and paid to the Government of the
other Contracting State including a political subdivision and a
local authority thereof, the Central Bank of that other State or any
financial institution wholly owned by that Government shall be
exempt from tax in the first-mentioned State.
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4. For the purposes of paragraph 3, the terms ``the Central
Bank'' and ``financial institution wholly owned by the
Government'' mean:
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(a) in the case of Canada,
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(ii) Export Development Canada; and
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(iii) such other financial institution the capital of which is
wholly owned by the Government of Canada as is specified
and agreed in letters exchanged between the competent
authorities of the Contracting States;
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(b) in the case of the United Arab Emirates,
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(i) the Central Bank of the United Arab Emirates;
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(ii) the Abu Dhabi Investment Authority; and
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(iii) such other financial institution the capital of which is
wholly owned by the Government of the United Arab
Emirates as is specified and agreed in letters exchanged
between the competent authorities of the Contracting
States.
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5. 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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6. 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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7. Interest shall be deemed to arise in a Contracting State when
the payer is that State itself, a political subdivision, a local
authority or 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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8. 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 10 per cent of the gross amount of the royalties.
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3. Notwithstanding the provisions of paragraph 2,
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(a) 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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(b) 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 in connection with a rental or
franchise agreement),
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arising in a Contracting State and paid to a resident of the other
Contracting State who is the beneficial owner thereof shall be
taxable only in that other State.
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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, 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.
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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 that State itself, a political subdivision, a local
authority or 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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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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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
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, the value of which is derived principally from
immovable property situated in that other State; or
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(b) an interest in a partnership or trust, 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.
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5. Gains from the alienation of any property, other than that
referred to in paragraphs l, 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
either of the Contracting States 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 Contracting 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 the individual has a fixed base regularly available in
the other Contracting State for the purpose of performing the
activities. 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 such 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, 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 that resident's 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 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 personal activities exercised by
an entertainer or a sportsperson in that individual's capacity as
such accrues not to the entertainer or sportsperson personally 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 sportsperson 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 sportsperson 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 from activities performed in a Contracting State
by a resident of the other Contracting State:
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(a) within the framework of a cultural exchange between the
Contracting States, or
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(b) in the context of a visit in the first-mentioned State of a
non-profit organization of the other State, provided the visit is
substantially supported by public funds,
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shall be exempt from tax in the first-mentioned Contracting
State.
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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 laws of that
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 or a local government thereof to an
individual in respect of services rendered to that State or
subdivision or authority or government in any other State
shall be taxable only in the first-mentioned 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 Contracting State who:
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(i) is a national of that Contracting State; or
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(ii) did not become a resident of that Contracting State
solely for the purpose of rendering the services.
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2. The provisions of Articles 15, 16 and 17 shall apply to
salaries, wages and similar 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 or
a local government 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. Notwithstanding the provisions of Article 10, dividends
paid by a company that is a resident of a Contracting State to a
resident of the other Contracting State that is referred to in
paragraph 2 of Article 4 and that is the beneficial owner of the
dividends shall be taxable only in the other Contracting State
provided that:
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(a) the recipient, together with all other residents of the other
Contracting State that are referred to in paragraph 2 of Article
4, neither own or control shares of the company representing
more than 25 per cent of the value of all of its issued and
outstanding shares nor control directly or indirectly in any
manner whatever more than 25 per cent of the votes in respect
of the shares of the company; and
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(b) the recipient has not received the dividends in the course
of carrying on an industrial or commercial activity.
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If the conditions set out in this paragraph are not met, the
provisions of Article 10 shall apply.
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2. Notwithstanding the provisions of Article 13, gains derived
by a resident of a Contracting State that is referred to in paragraph
2 of Article 4 from the alienation of shares, the dividends on
which would be exempt from taxation in the other Contracting
State, shall be taxable only in the first-mentioned Contracting
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 a trust which is a resident of a Contracting State, other than
a trust to which contributions were deductible, the tax so charged
in that Contracting State shall, provided that the income is
taxable in the Contracting State in which the recipient 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 Contracting 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 Contracting State.
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3. Capital represented by ships and aircraft operated in
international traffic by an enterprise of a Contracting State, and
by movable property pertaining to the operation of such ships
and aircraft, shall be taxable only in that Contracting State.
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4. All other elements of capital of a resident of a Contracting
State shall be taxable only in that Contracting 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 the
United Arab Emirates on profits, income or gains arising in the
United Arab Emirates 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. In the case of the United Arab Emirates, double taxation
shall be avoided in accordance with the provisions of the tax laws
of the United Arab Emirates.
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3. For the purposes of this Article, profits, income or gains of
a resident of a Contracting State which may be 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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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.
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2. 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 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. Companies which are residents of a Contracting State, the
capital of which is wholly or partly owned or controlled, directly
or indirectly, by one or more residents of the other Contracting
State, shall not be subjected in the first-mentioned State to any
taxation or any requirement connected therewith which is other
or more burdensome than the taxation and connected
requirements to which other similar companies which are
residents of the first-mentioned State, the capital of which is
wholly or partly owned or controlled, directly or indirectly, by
one or more residents of a third State, are or may be subjected.
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5. 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 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 l 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 to which the income
concerned was attributed, 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 necessary for carrying out the
provisions of this Convention or of the domestic laws of the
Contracting States concerning taxes covered by the Convention
insofar as the taxation thereunder is not contrary to the
Convention. 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, 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. 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 were involved
notwithstanding the fact that the other State does not, at that time,
need such information.
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The provisions of this Convention shall not affect the fiscal
privileges of members of diplomatic or consular missions under
the general rules of international law or under the provisions of
special agreements.
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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. For purposes of paragraph 3 of Article XXII (Consultation)
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 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. Any doubt as to the interpretation of this
paragraph shall be resolved under paragraph 4 of Article 26 or,
failing agreement under that procedure, pursuant to any other
procedure agreed to by both Contracting States.
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1. This Convention shall be ratified and the instruments of
ratification shall be exchanged as soon as possible.
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2. The Convention shall enter into force upon the exchange of
instruments of ratification and its provisions shall 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 year 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 of the year 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
beginning after the expiration of a period of ten years after the
year of the exchange of instruments of ratification, 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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(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 of the next following calendar year; and
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(ii) in respect of other Canadian tax, for taxation years
beginning on or after the first day of January of the next
following calendar year;
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(b) in the United Arab Emirates:
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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 of the next following calendar year; and
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(ii) 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 Abu Dhabi, this 9th day of June 2002,
in the English, French and Arabic languages, each version being
equally authentic.
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FOR THE GOVERNMENT F
OR THE GOVERNMENT OF CANADA OF THE UNITED ARAB EMIRATES
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Christopher J.M. Thomson Dr.
Mohammed Khalfan Bin Khirbash
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At the signing of the Convention between the Government of
Canada and the Government of the United Arab Emirates for the
avoidance of double taxation and the prevention of fiscal evasion
with respect to taxes on income and on capital (hereinafter
referred to as ``the Convention''), the undersigned have agreed
upon the following provisions which form an integral part of the
Convention.
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1. With reference to Articles 6 and 13 of the Convention, in the
case of Canada, income from the alienation of immovable
property shall be subjected to taxation in accordance with the
provisions of paragraph 1 of Article 6 of the Convention.
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2. With reference to Article 8 of the Convention, it is
understood that:
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(a) the provisions of paragraph 1 of that Article apply
notwithstanding the provisions of Article 7 of the
Convention; and
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(b) the provisions of that Article apply to the sale of passage
tickets on behalf of other enterprises and to a hotel business,
provided that the keeping of the hotel is for no other purpose
than to provide transit passengers with night accommodation,
the cost of such a service being included in the price of the
passage ticket.
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3. With reference to Article 10 of the Convention, it is
understood that nothing contained therein affects the fiscal
privileges available under the doctrine of sovereign immunity to
the Government of a Contracting State or local Governments,
and their agencies and institutions.
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4. With reference to Article 12 of the Convention, it is
understood that the term ``royalties'' does not include payments
in respect of the operation of mines or quarries or the exploitation
of natural resources.
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5. With reference to Article 22 of the Convention, it is
understood that nothing contained therein affects the rights of the
United Arab Emirates to tax income related to oil and natural
resources situated in the United Arab Emirates in accordance
with its tax laws.
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6. A company which is a resident of a Contracting State and
which has earnings in that State which may be taxed in a
Contracting State in accordance with the provisions of Articles
6, 7 or 13 of the Convention, remains subject to the branch tax
on such earnings but the rate of such tax shall not exceed 5 per
cent.
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7. For the purpose of paragraph 6, the term ``earnings'' means
the profits in a year and previous years after deducting therefrom:
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(a) business losses attributable to such permanent
establishments (including losses from the alienation of
property forming part of the business property of such
permanent establishments) in such year and previous years,
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(b) all taxes chargeable in that Contracting State on such
profits, other than the additional tax referred to herein,
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(c) the profits reinvested in that Contracting State, provided
that where that Contracting State is Canada, the amount of
such deduction shall be determined in accordance with the
existing provisions of the law of Canada regarding the
computation of the allowance in respect of investment in
property in Canada, and any subsequent modification of those
provisions which shall not affect the general principle hereof,
and
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(d) five hundred thousand Canadian dollars ($500,000) or its
equivalent in United Arab Emirates currency, less any amount
deducted
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(ii) by a person related thereto from the same or a similar
business as that carried on by the company under this
subparagraph (d);
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for the purposes of this subparagraph (d) a company is related
to another company if one company directly or indirectly
controls the other, or both companies are directly or indirectly
controlled by the same person or persons, or if the two
companies deal with each other not at arm's length.
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8. Where at any time an individual is treated for the purposes
of taxation in Canada as having alienated a property and is taxed
in Canada by reason thereof, that individual may elect in the
individual's annual return of income for the year of such
alienation to be liable to tax in the United Arab Emirates in that
year as if the individual had, immediately before that time, sold
and repurchased such property for an amount equal to its fair
market value at that time.
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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 Abu Dhabi, this 9th day of June 2002,
in the English, French and Arabic languages, each version being
equally authentic.
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FOR THE GOVERNMENT F
OR THE GOVERNMENT OF CANADA OF THE UNITED ARAB EMIRATES
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Christopher J.M. Thomson Dr.
Mohammed Khalfan Bin Khirbash
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