| - | - 15% on dividends in general and, except for dividends paid by a non-resident owned investment corporation that is a resident of Canada, 5% if the beneficial owner is a company which controls directly or indirectly 10% or more of the voting power in the company paying the dividends; | |
| - | - 10% on interest, but 0% if indebtedness arising as a result of the sale on credit by a resident of the other state of any equipment, merchandise or services, except if the sale or indebtedness was between related persons. There is also an exemption for interest (subject to certain conditions) paid to a resident of the other state who was constituted and is operated exclusively to administer or provide benefits under one or more pension, retirement or other employee benefits plans; | |
| - | - 10% on royalties. There are exemptions for (i) copyright royalties and other similar payments in respect of the production or reproduction of any literary, dramatic, musical or artistic work (but not including royalties in respect of motion picture films nor in respect of works on film or videotape or other means of reproduction for use in connection with television broadcasting) and (ii) royalties for the use of, or the right to use, computer software or any patent or for information concerning industrial, commercial or scientific experience (but not including any such information provided in connection with a rental or franchise agreement). The definition of royalties includes payments for the use of, or the right to use, industrial, commercial or scientific equipment. |
Both states may impose a branch profits tax on the earnings (as defined) of a company attributable to permanent establishments in that state, provided that the rate does not exceed 5% and the earnings have not been subjected to such additional tax in previous tax years. The provision also applies (subject to certain conditions) to earnings derived from the alienation of immovable property in one of the states by a company carrying on a trade in immovable property, whether or not it has a permanent establishment in that state.
Both states generally provide for the credit method to avoid double taxation. Both states also grant a credit for the underlying corporate tax on the profits out of which the dividends are paid, provided that the recipient company controls directly or indirectly at least 10% of the voting power in the company paying the dividends. If the income derived by a resident of one state is, under the treaty, exempt from tax in that state, that state may nevertheless take into account the exempt income in calculating the amount of tax on the resident's other income (exemption with progression).