On December 14, 2007, the fifth Protocol to the Canada-U.S.
Income Tax Convention (the "Treaty") was ratified by
Canada when Bill S-2 received royal assent. The U.S. has yet to
complete its ratification process and the Protocol will enter
into force once it has been ratified by the U.S (and Canada has
been notified). In addition, the draft legislation to amend the
Income Tax Act (Canada) (the "Tax Act")
introduced by the Minister of Finance this past October (the
"Proposals") received royal assent on December 14,
2007.
Elimination of Withholding Tax on Interest Payments
As a result of the Proposals receiving royal assent, the
exemption from withholding tax on interest paid to
arm's-length non-residents, regardless of their country
of residence, became effective as of January 1, 2008. For a
detailed discussion of this amendment to the Tax Act, refer to
our December 2007 Structured Finance Update.
