- Notices of Tax Treaty Developments - Status of Tax Treaties

Protocol Signed Between Canada and the United Kingdom

May 14, 2003


A Protocol amending the Convention between Canada and the United Kingdom for the avoidance of double taxation and the prevention of fiscal evasion was signed on May 7, 2003 in London.

The Protocol provides that the rate of withholding tax on dividends between affiliated companies will be reduced from 10 per cent to 5 per cent. The Protocol will also provide an exemption in respect of certain payments made for the use of any patent or computer software and for information concerning industrial, commercial or scientific experience.

The Protocol will enter into force once Canada and the United Kingdom have notified each other that all the necessary measures to give the Protocol the force of law have been completed. In the case of Canada, the Protocol will have effect in respect of withholding tax on amounts paid or credited to non-residents on or after the first day of January in the calendar year next following that in which the Protocol enters into force, and in respect of other Canadian tax, for taxation years beginning on or after the first day of January in the calendar year next following that in which the Protocol enters into force. In the case of the United Kingdom, the Protocol will have effect in respect of income tax and capital gains tax, for any year of assessment beginning on or after April 6th, in the calendar year next following that in which the Protocol enters into force, and in respect of corporation tax, for any financial year beginning on or after April 1st in the calendar year next following that in which the Protocol enters into force.

For further information contact:
Parry Athenaios
Tax Legislation Division
Phone: (613) 992-5864