Hence, we urge the Standing Committee to recommend that the Department of Finance expeditiously negotiate and implement a new protocol with the United States that eliminates
withholding taxes on all dividends and interest for payments to both related and unrelated parties.
Hence, we urge the Government to negotiate a new treaty with the United States that eliminates
withholding taxes on all dividends and interest for payments to both related and unrelated parties.
The IRS and Congress have closely scrutinized such arrangements because of their perceived lack of economic substance outside of generating FTCs, especially when a taxpayer claims an FTC on
withholding taxes on dividend income, but holds the underlying stock on which the dividend is paid for a relatively short period.
Thus, TEI urges the Standing Committee to recommend expeditious negotiation and implementation of a new provision in the Income Tax Convention with the United States eliminating
withholding taxes on all dividends and interest for payments to both related and unrelated parties.
The elimination of
withholding taxes on royalty income is effective for amounts paid or credited offer June 30, 2004, according to Article 31.
00 in cash, without interest and less any applicable
withholding taxes.
Howe Institute, (8) have shown a strong link between the elimination of
withholding taxes on dividends and interest and increased foreign direct investment.
Some states consider the payments as
withholding taxes, while others treat them as estimated taxes.
Two principal items remaining in the review relate to the timing of the expense recognition of the Company's foreign source
withholding taxes and the ten year amortization period for costs of internally developed patents.
Of the many recommendations made, TEI wishes to highlight three for the Standing Committee: (1) elimination of
withholding taxes under Regulation 105; (2) the negotiation and adoption of a binding arbitration procedure in Canada's tax treaties; and (3) streamlining of the reporting for foreign affiliates.
The 50/50 practice is applicable not only for federal income taxes, but also for Swiss
withholding taxes on profit distribution (and in some cases for cantonal/ communal income taxes as well).
Nortem stated in its 2005 Proxy Statement that it would allow individual shareholders who qualify for a reduced Dutch tax withholding rate to file the proper paperwork with Nortem to allow Nortem to reduce the amount of Dutch tax withheld from the final liquidating distribution to such individual shareholders, due to Nortem's initial estimate of the magnitude of the likely Dutch
withholding taxes to its shareholders.
