VIEWS: 5 PAGES: 2 CATEGORY: Business & Economics POSTED ON: 5/30/2010
On Sep 21, 2007, US Secretary of the Treasury Henry M. Paulson Jr, and Canadian Minister of Finance Jim Flaherty signed the Fifth Protocol to the US-Canada Income Tax Treaty. This agreement is the result of nearly 10 years of negotiations. In order for the protocol to be put into force, it must be approved by the respective governments. Hybrid entities like the limited liability company (LLC) can be transparent for US tax purposes, unless the LLC has elected to be taxed as a corporation. Currently, the US-Canada Income Tax Treaty reduces the standard withholding rate of 30% in the US and 25% in Canada to 10% on cross-border interest payments. The new protocol will provide a total phaseout of withholding tax on interest payments. A significant change will now allow individuals working outside their country of residence to deduct, on their home country tax return, contributions to a pension in the country where they work.
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"United States-Canada Income Tax Treaty Update"Please download to view full document