Bill S-3
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SCHEDULE 3
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PART 1 |
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CONVENTION SIGNED ON FEBRUARY 28, 1999 |
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CONVENTION BETWEEN THE GOVERNMENT OF CANADA AND THE GOVERNMENT OF THE PEOPLE'S DEMOCRATIC REPUBLIC OF ALGERIA FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL |
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The Government of Canada and the Government of the People's
Democratic Republic of Algeria, 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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ARTICLE 1 |
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Persons Covered |
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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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ARTICLE 2 |
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Taxes Covered |
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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, taxes on the total
amounts of wages or salaries paid by enterprises, 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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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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ARTICLE 3 |
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General Definitions |
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1. For the purposes of this Convention, unless the context
otherwise requires:
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2. As regards the application of the Convention by a
Contracting State, any term not defined therein shall, unless the
context otherwise requires, have the meaning that it has under the
law of that State for the purposes of the taxes to which the
Convention applies.
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ARTICLE 4 |
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Resident |
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1. For the purposes of this Convention, the term ``resident of
a Contracting State'' means 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 or any other criterion
of a similar nature.
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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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3. Where by reason of the provisions of paragraph 1 a person
other than an individual 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. In the absence of such agreement, the person shall be
deemed not to be a resident of either Contracting States for the
purpose of obtaining benefits provided under the Convention.
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ARTICLE 5 |
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Permanent Establishment |
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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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3. Notwithstanding the preceding provisions of this Article,
the term ``permanent establishment'' shall be deemed not to
include:
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4. Notwithstanding the provisions of paragraphs 1 and 2,
where a person (other than an agent of an independent status to
whom paragraph 5 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 3 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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5. 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, or merely
because it maintains in that State a stock of goods or merchandise
with an agent of an independent status from which deliveries are
made by that agent, provided that such persons are acting in the
ordinary course of their business.
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6. 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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ARTICLE 6 |
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Income from Immovable Property |
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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. The term ``immovable property'' shall have the meaning
which it has under the 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.
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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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ARTICLE 7 |
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Business Profits |
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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 as deductions expenses
which are effectively incurred for the purposes 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 towards reimbursement of actual expenses) by
the permanent establishment to the head office of the enterprise
or to any of its other offices, by way of royalties, fees or other
similar payments in return for the use of patents or other rights,
or by way of commission, for services performed or for
management, or, except in the case of a banking enterprise, by
way of interest on moneys lent to the head office of the enterprise
or any of its other offices.
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Likewise, no account shall be taken, in the determination of the
profits of the permanent establishment, for amounts charged
(otherwise than towards reimbursement of actual expenses), by
the permanent establishment to the head office of the enterprise
or any of its other offices, by way of royalties, fees or other similar
payments in return for the use of patents or other rights, or by way
of commission for services performed or for management, or,
except in the case of a banking enterprise, by way of interest on
moneys lent to the head office of the enterprise or any of its other
offices.
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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. Insofar as it has been customary in a Contracting State to
determine the profits to be attributed to a permanent
establishment on the basis of an apportionment of the total profits
of the enterprise to its various parts, nothing in paragraph 2 shall
preclude that Contracting State from determining the profits to be
taxed by such an apportionment as may be customary; the
method of apportionment adopted shall, however, be such that
the result shall be in accordance with the principles contained in
this Article.
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6. 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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7. 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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ARTICLE 8 |
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Shipping and Air Transport |
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1. Profits from the operation of ships or aircraft in international
traffic shall be taxable only in the Contracting State in which the
place of effective management of the enterprise is situated.
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2. Notwithstanding the provisions of paragraph 1 and of
Article 7, profits from the operation of a ship or aircraft used
principally to transport passengers or property between places in
a Contracting State may be taxed in that State.
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3. If the place of effective management of a shipping enterprise
is aboard a ship, then it shall be deemed to be situated in the
Contracting State in which the home harbour of the ship is
situated, or, if there is no such home harbour, in the Contracting
State of which the operator of the ship is a resident.
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4. The provisions of paragraphs 1 and 2 shall also apply to
profits from the participation in a pool, a joint business or an
international operating agency.
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5. For the purposes of this Article, the term ``operation of ships
or aircraft'' in international traffic by a person, includes:
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by that person if such charter, rental or alienation is incidental to
the operation by that person of ships or aircraft in international
traffic.
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ARTICLE 9 |
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Associated Enterprises |
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1. Where
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and in either case conditions are made or imposed between the
two enterprises in their commercial or financial relations that
differ from those that would be made between independent
enterprises, then any profits that 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 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 that would have accrued to the enterprise of the
first-mentioned State if the conditions made between the two
enterprises had been those that 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 1 after the
expiry of the time limits provided in its national laws and, in any
case, after five years from the end of the year in which the profits
that would be subject to such change would 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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ARTICLE 10 |
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Dividends |
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1. Dividends paid by a company that 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
recipient is the beneficial owner of the dividends, the tax so
charged shall not exceed 15 per cent of the gross amount of the
dividends.
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The provisions of this paragraph shall not affect the taxation of
the company in respect of 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 from shares or rights
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 that 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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ARTICLE 11 |
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Interest |
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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 recipient is the beneficial owner of the interest, the tax so
charged shall not exceed 15 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 shall be exempt from tax in that
State if:
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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.
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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 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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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 that 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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ARTICLE 12 |
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Royalties |
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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 recipient is the beneficial owner of the
royalties, the tax so charged shall not exceed 15 per cent of the
gross amount of the royalties.
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3. Notwithstanding the provisions of paragraph 2, royalties
for the use of, or the right to use, computer software or any patent
(but not including any such information provided in connection
with a rental or franchise agreement), arising in a Contracting
State and paid to a resident of the other Contracting State who is
the beneficial owner of the royalties 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 of literary, artistic or scientific work
including motion picture films and works on film, videotape or
other means of reproduction for use in connection with television
or radio broadcasting, any patent, trade mark, design or model,
plan, secret formula or process, or for the use of, or the right to
use, industrial, commercial or scientific equipment, or for
information concerning industrial, commercial or scientific
experience.
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5. The provisions of paragraphs 1, 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 that 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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ARTICLE 13 |
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Capital Gains |
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1. Gains derived by a resident of a Contracting State from the
alienation of immovable property referred to in Article 6 and
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 that an
enterprise of a Contracting State has in the other Contracting
State or of 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,
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 or from movable property pertaining to the
operation of such ships or aircraft shall be taxable only in the
Contracting State in which the place of effective management of
the enterprise is situated.
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4. Gains from the alienation of any property, other than that
referred to in paragraphs 1, 2 and 3, shall be taxable only in the
Contracting State of which the alienator is a resident.
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ARTICLE 14 |
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Independent Personal Services |
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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 except that:
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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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ARTICLE 15 |
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Dependent Personal Services |
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1. Subject to the provisions of Articles 16, 18 and 19, salaries,
wages and other similar 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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3. Notwithstanding the preceding provisions of this Article,
remuneration derived in respect of an employment exercised
aboard a ship or aircraft operated in international traffic may be
taxed in the Contracting State in which the place of effective
management of the enterprise is situated.
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ARTICLE 16 |
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Directors' Fees |
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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 of a company which is a
resident of the other Contracting State may be taxed in that other
State.
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ARTICLE 17 |
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Artistes and Sportspersons |
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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 paragraphs 1 and 2 shall not apply to
income derived from activities exercised in a Contracting State
where such activities are wholly or substantially supported by
public funds of the other Contracting State or a political
subdivision or local authority thereof. In such case, the income
derived from such activities shall be taxable only in that other
Contracting State.
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ARTICLE 18 |
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Pensions and Annuities |
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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 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 but, in the
case of periodic pension payments, the tax so charged shall not
exceed the lesser of:
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The competent authorities of the Contracting States may, if
necessary, agree to modify the above-mentioned amount as a
result of monetary or economic developments. For the purposes
of this paragraph, the term ``pensions'' does not include
payments under the social security legislation in a Contracting
State.
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3. 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,
but the tax so charged shall not exceed 15 per cent of the portion
thereof that is subject to tax in that State. However, this limitation
does not apply to lump-sum payments arising on the surrender,
cancellation, redemption, sale or other alienation of an annuity,
or to payments of any kind under an annuity contract the cost of
which was deductible, in whole or in part, in computing the
income of any person who acquired the contract.
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4. Notwithstanding anything in this Convention:
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ARTICLE 19 |
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Government Service |
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2. The provisions of Articles 15 and 16 shall apply to salaries,
wages and other 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
thereof.
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ARTICLE 20 |
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Students |
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1. 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, if such payments arise from sources outside that State.
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2. As regards bursaries and remuneration from employment to
which paragraph 1 does not apply, a student or business trainee
within the meaning of paragraph 1 may, for the period of the
individual's education or training, claim exemptions, allowances
or deductions from tax that are available to residents of the State
the individual is visiting.
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ARTICLE 21 |
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Other Income |
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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. The provisions of paragraph 1 shall not apply to income,
other than income from immovable property as defined in
paragraph 2 of Article 6, if the recipient of such income, being a
resident of a Contracting State, carries on business in the other
Contracting State 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 income 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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3. Notwithstanding the provisions of paragraph 1, items of
income of a resident of a Contracting State which are not dealt
with in the foregoing Articles of the Convention and which arise
in the other Contracting State may also be taxed in that other
State.
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ARTICLE 22 |
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Capital |
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1. Capital represented by immovable property referred to in
Article 6, 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 that 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 in
international traffic and by movable property pertaining to the
operation of such ships or aircraft, shall be taxable only in the
State in which the place of effective management of the enterprise
is situated.
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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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ARTICLE 23 |
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Elimination of Double Taxation |
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1. In the case of Canada, double taxation shall be avoided as
follows:
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2. In the case of Algeria, double taxation shall be avoided as
follows:
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3. For the purposes of subparagraph (a) of paragraph 1, tax
payable in Algeria by a company that is a resident of Canada in
respect of profits attributable to a trade or business carried on by
it in Algeria shall include any amount which would have been
payable thereon as Algerian tax for any year but for an exemption
from, or reduction of, tax granted for that year or any part thereof
under the provisions of Decree Law no 93-12 of October 5, 1993,
relating to the promotion of investment so far as they were in
force on, and have not been modified since, the date of signature
of this Convention, or have been modified only in minor respects
so as not to affect their general character. The provisions of this
paragraph shall apply for the first five years for which the
Convention is effective, but the competent authorities of the
Contracting States may consult with each other to determine
whether this period shall be extended.
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4. For the purposes of this Article, profits, income or gains of
a resident of a Contracting State that 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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ARTICLE 24 |
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Non-Discrimination |
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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 that is other or 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.
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2. The taxation on a permanent establishment that 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 enterprises 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 that
it grants to its own residents.
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4. Enterprises 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 that is other or more
burdensome than the taxation and connected requirements to
which other similar enterprises that 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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ARTICLE 25 |
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Mutual Agreement Procedure |
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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 resulting in taxation not in accordance
with the provisions of the Convention.
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2. The competent authority 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. 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. They may also consult together for the elimination
of double taxation in cases not provided for in the Convention.
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4. The competent authorities of the Contracting States may
communicate with each other directly for the purpose of reaching
an agreement in the sense of the preceding paragraphs. When it
seems advisable in order to reach an agreement to have an oral
exchange of opinions, such exchange may take place through a
Commission consisting of representatives of the competent
authorities of the Contracting States.
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ARTICLE 26 |
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Exchange of Information |
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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 in the
Contracting States concerning taxes covered by the Convention
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) involved in the assessment or collection of, the
enforcement or prosecution 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. In no case shall the provisions of paragraph 1 be construed
so as to impose on a Contracting State the obligation:
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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, even though
the other State does not, at that time, need such information.
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ARTICLE 27 |
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Diplomatic Agents and Consular Officers |
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Nothing in this Convention shall affect the fiscal privileges of
diplomatic agents or consular officers under the general rules of
international law or under the provisions of special agreements.
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ARTICLE 28 |
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Entry into Force |
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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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ARTICLE 29 |
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Termination |
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This Convention shall continue in effect as long as it has not
been terminated by a Contracting State. Either Contracting State
may, through diplomatic channels, terminate the Convention by
giving a six-month notice before the end of any calendar year
beginning after the fifth year from the date of entry into force of
the Convention.
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In such event, the Convention shall cease to have effect
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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 Algiers, this 28th day of February 1999,
in the English, French and Arabic languages, each version being
equally authentic.
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FOR THE GOVERNMENT FOR THE GOVERNMENT OF CANADA: OF THE PEOPLE'S DEMOCRATIC REPUBLIC OF ALGERIA:
Franco D. Pillarella Lahcène Moussaoui
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PART 2 |
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PROTOCOL SIGNED ON FEBRUARY 28, 1999 |
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PROTOCOL |
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At the moment of signing the Convention between the
Government of Canada and the Government of the People's
Democratic Republic of Algeria for the avoidance of double
taxation and the prevention of fiscal evasion with respect to taxes
on income and on capital the undersigned, duly authorized, have
agreed on the following provisions which shall be an integral part
of the Convention.
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1. With reference to paragraph 1 of Article 2
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2. With respect to paragraph 1 (d) of Article 3
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3. With reference to paragraph 1 of Article 4
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4. With reference to paragraph 1 of Article 6
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5. Notwithstanding the provisions of paragraph 2 of Article
11, interest arising in Algeria and paid to a resident of Canada
shall be taxable only in Canada if it is paid in respect of a loan
guaranteed or insured, or a credit guaranteed or insured by the
Export Development Corporation.
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6. Notwithstanding the provisions of paragraph 4 of Article
13, gains derived by a resident of Algeria from the alienation of:
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may be taxed in Canada. For the purposes of this paragraph, the
term ``immovable property'' includes the shares of a company
referred to in subparagraph (a) or an interest in a partnership, trust
or estate referred to in subparagraph (b).
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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 the 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. Notwithstanding any provision of the Convention,
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9. The provisions of the Convention shall not be construed to
restrict in any manner any exemption, allowance, credit or other
deduction accorded
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10. 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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11. The Convention shall not apply to any company, trust or
partnership 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
partnership 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
partnership, as the case may be, were beneficially owned by one
or more individuals who were residents of that State.
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12. The Contracting States agree that 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 paragraph 3 of Article XXII
(Consultation) of the General Agreement on Trade in Services,
only with the consent of both Contracting States. Any doubt as
to the interpretation of this paragraph shall be resolved under
paragraph 3 of Article 25 or, failing agreement, pursuant to any
other procedure agreed to by both Contracting States.
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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 Algiers, this 28th day of February 1999,
in the English, French and Arabic languages, each version being
equally authentic.
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FOR THE GOVERNMENT FOR THE GOVERNMENT OF CANADA: OF THE PEOPLE'S DEMOCRATIC REPUBLIC OF ALGERIA:
Franco D. Pillarella Lahcène Moussaoui
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