New Amendment To The Income Tax Act (Canada)

On December 14, 2007, the Income Tax Act (Canada) ("ITA") was amended to eliminate withholding tax on interest paid by a Canadian resident to a non-resident creditor or lender who deals at arm's-length with the payer, regardless of the recipient's country of residence. This change to Canada's domestic tax rules became effective as of January 1, 2008, and applies generally to arm's length interest payable by a Canadian resident to any non-resident, with the exception of "participating debt interest". Generally speaking, "participating debt interest" is interest that is contingent or dependent on the use of, or production from, property in Canada or is computed by reference to revenue, profit, cash flow, commodity price or any other similar criterion or by reference to dividends paid or payable to shareholders of any class of shares of the capital stock of a corporation.