Canada: Double Tax Treaties

Canada Introduction

A double tax treaty allows that tax paid can be offset in one of two countries against tax payable in the other, thus avoiding double taxation. Canada is a signatory to double tax treaties with several countries throughout the world. Some forms of income are exempt from tax or qualify for reduced rates. These include royalties, dividends and capital gains.

The following is a list of countries with which Canada has a double tax treaty which is currently in force.

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Canada Table of Double Tax Treaties

*The treaty with China does not include Hong Kong.
As at February 2010, double tax treaties have been signed with Colombia, Greece, Italy, Lebanon and Turkey, but are not yet in force. There are a number of treaties under negotiation and renegotiation.

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Canada Other International Agreements

As at October 2010, Canada has signed tax information exchange agreements (TIEA) with the Bahamas, Bermuda, the Cayman Islands, Dominica, Netherlands Antilles, St. Lucia, St. Kitts and Nevis, St. Vincent and the Grenadines and Turks and Caicos Islands although these are not yet in force. Canada is negotiating TIEAs with Anguilla, Aruba, Bahrain, Belize, British Virgin Islands, Brunei, Cook Islands, Costa Rica, Gibraltar, Guernsey, the Isle of Man, Jersey, Liberia, Liechtenstein, San Marino and Vanuatu.

Canada is party to the North American Free Trade Agreement, under which traders can enter the United States and Mexico to conduct trade in goods and services, and also to allow investors to enter the US and Mexico to develop and direct a company in which they own at least a 50% interest, or maintain a controlling interest. Certain employees of traders and investors may also be allowed to enter the US and Mexico under the agreement.

Canada has also entered into free trade agreements (FTAs) with Panama, Jordan, Colombia, Peru, the European Free Trade Association, Costa Rica, Chile, and Israel. Other FTAs are under negotiation. In addition, Canada has entered into foreign investment promotion and protection agreements with over 30 countries, with others in the pipeline, as well as various trade and investment co-operation agreements, trade and economic co-operation agreements, and memoranda of understanding.