The Double Taxation Relief (Taxes on Income) (Canada) Order 2003

ARTICLE XIII

1.  Paragraphs 2 and 3 of Article 27 of the Convention shall be deleted and replaced by the following:

“2.   Where under any provision of this Convention any income is relieved from tax in a Contracting State and, under the law in force in the other Contracting State a person, in respect of that income, is subject to tax by reference to the amount thereof which is remitted to or received in that other Contracting State and not by reference to the full amount thereof, then the relief to be allowed under this Convention in the first-mentioned Contracting State shall apply only to so much of the income as is taxed in the other Contracting State.

3.   Nothing in this Convention shall be construed as restricting the right of Canada to tax a resident of Canada on that resident’s share of any income or capital gains of a partnership, trust or controlled foreign affiliate in which that resident has an interest.”

2.  Paragraph 4 of Article 27 of the Convention shall be deleted.

3.  The following new paragraph shall be added immediately after paragraph 6 of Article 27 of the Convention:

“7.   Contributions paid in a year by, or on behalf of, an individual who exercises employment in a Contracting State in that year to a pension arrangement established in the other Contracting State (including an arrangement created under the social security legislation in that other State) and in which the individual participates in order to secure retirement benefits in respect of those services shall, during a period not exceeding in the aggregate 60 months, and if the contributions to the arrangement would qualify for tax relief if they had been made in that other State, be treated in the same way for tax purposes in the first-mentioned State as contributions paid to a pension arrangement that is recognised for tax purposes in the first-mentioned State, provided that:

(a) immediately before the individual began to exercise employment in the first-mentioned State, that individual was not a resident of that State and contributions had been paid by or on behalf of that individual to the pension arrangement; and

(b) the pension arrangement is accepted by the competent authority of the first-mentioned State as generally corresponding to a pension arrangement recognised as such for tax purposes by that State.”