Finance Minister Paul Martin announced that an agreement between Canada and the Slovak Republic for the avoidance of double taxation and the prevention of fiscal evasion was signed today in Bratislava.

Human Resources Development Minister Jane Stewart signed the Agreement on behalf of Canada. Dr. Brigita Schmögnerová, the Slovak Republic’s Minister of Finance, signed on behalf of her country.

Under the agreement a withholding tax of 5% will apply to dividends paid to a company that controls at least 10% of the voting power in the company paying the dividends. A withholding tax of 15% will apply to all other dividend payments. As well, a withholding tax of 10% will apply to interest and royalty payments.

Canada and the Slovak Republic are to notify each other of the completion of the procedures required for bringing the Agreement into force, and it will enter into force on the day the last notification is received.

In the case of withholding tax, the agreement will apply as of January 1 in the calendar year following that in which it enters into force. In the case of other taxes, the provisions of the Agreement will apply for taxation years beginning on or after that day.

Once in force, the agreement will replace, as far as relations between Canada and the Slovak Republic are concerned, the tax treaty signed in 1990 between Canada and Czechoslovakia.