Industry News

Agreement an effort to help fight offshore tax evasion and prevent double taxation

By James Langton |

The federal government announced Monday it has reached a deal to amend its tax convention with the United Kingdom, in an effort to help fight offshore tax evasion, and prevent double taxation, on income and capital gains.

The provisions of the agreement signed today will take effect from Jan. 1, 2015. Among other things, it amends provisions dealing with the taxation of business profits, the treatment of interest, dividends, and royalties. It also amends the sections that govern information sharing and assistance in collecting taxes.

Foreign affairs minister, John Baird, noted that the deal is the latest step the government has taken to improve the coordination of tax rules for cross-border trade and investment.

"Bilateral tax conventions like this are fundamental to eliminating tax barriers to trade and investment. They provide greater certainty to taxpayers regarding their potential liability to tax in the other country," added Finance minister, Joe Oliver.

"They allocate taxing rights between the two countries so that taxpayers are not subject to double taxation. They reduce the risk of burdensome taxation that may arise because of high withholding taxes. And they ensure that taxpayers will not be subject to discriminatory taxation in the foreign jurisdiction," Oliver said. "By advancing these goals, today's agreement will help keep Canada well positioned as a place to work, do business and invest."