Double Taxation Agreement Canada China

3. If, under paragraph 1, a person other than a person resides in the two contracting states, the competent authorities of the contracting states agree to clarify the issue and determine the nature of the application of this Convention to that person. Canada and China recently concluded negotiations on updating the agreement between the Government of Canada and the Government of the People`s Republic of China, which came into force on December 29, 1986, to avoid double taxation and prevent tax evasion with respect to income taxes. The purpose of updating the tax treaty is to reduce tax barriers to encourage trade and investment between Canada and China, reduce withholding rates for certain cross-border payments, and eliminate double taxation of taxpayers who trade or earn income in another country. 1. The competent authorities of the contracting parties exchange information that is foreseeable for the implementation of the provisions of this agreement or for the management or application of the internal tax legislation of the parties relating to the taxes governed by this agreement, provided that the taxation of this agreement is not contrary to this agreement. The exchange of information is not limited by Article 1 (people concerned). Of particular interest is the absence of residents of Canada or Hong Kong for contractual benefits for pension benefits other than those provided under section 21 to exempt double taxation. Therefore, the full 25% withholding rate in paragraph 212, paragraph 1 of the tax law applies, if applicable, to pensions paid by Canada to Hong Kong residents. Therefore, Hong Kong residents should be aware of their potential under Canadian tax law to potentially reduce this liability by holding a Section 217 election where appropriate.

2. The competent authority endeavours to resolve the matter by mutual agreement with the competent authority of the other contracting State where the objection appears to be well founded and it is unable to find a satisfactory solution to resolve the matter by mutual agreement with the competent authority of the other contracting State, in order to avoid a tax that is not in accordance with the provision of this agreement. 6. Where a person who no longer has a residence in one of the contracting parties and immediately resides after the other contracting party is treated, for the purposes of taxation, in the first contracting party, as if he had disposed of a property (in this paragraph called “alienation”) and who is taxed in that part on the merits, the person may choose to be treated in the other contracting party for the purpose of the , just prior to being established in that other part, the person had sold and repurchased the property for an amount equal to the lesser value of its fair value on the date of disposal and the amount that the individual chose at the time of actual disposal as the proceeds of the assignment of the first part in connection with the assignment considered to be alienating.