Many individuals and multinationals will be impacted by changes to Canada’s tax treaties.
Finance recently indicated that Canada will adopt additional provisions to apply to the multilateral instrument (MLI) that are set to modify a significant portion of Canada's international tax treaties. Details of these provisions, which reflect the OECD's Base Erosion and Profit Shifting (BEPS) measures, were included alongside a Notice of Ways and Means Motion (NWMM) released on May 28, 2018 which Finance released as the next step in the MLI ratification process. Specifically, Finance says Canada intends to adopt an additional provision of the MLI to allow certain treaty partners to move to a foreign tax credit system (from an exemption system) to relieve double-taxation. Canada also intends to remove certain reservations that it initially made to the MLI related to dividends, capital gains and dual-resident entities.
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