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Ottawa, June 29, 2001
2001-058

Tax Convention Signed by Canada and Ecuador

Related document: 

• Convention Between the Government of Canada and the Government of the Republic of Ecuador.

Finance Minister Paul Martin announced that a Convention between Canada and Ecuador for the avoidance of double taxation and the prevention of fiscal evasion was signed yesterday in Quito.

Under the Convention:

• a withholding tax of 5 per cent will apply to dividends paid to a company that controls at least 25 per cent of the voting power in the company paying the dividends. A withholding tax of 15 per cent will apply to all other dividend payments;
• a withholding tax of 15 per cent will apply to interest; and
• a withholding tax of 10 per cent will apply to royalties for the use of, or the right to use, industrial, commercial or scientific equipment. A 15-per-cent rate will apply in respect of all other royalties.

Canada and Ecuador are to notify each other of the completion of the procedures required for bringing the Convention into force, and it will enter into force on the day the last notification is received.

In the case of withholding tax, the Convention will apply as of January 1 in the calendar year following that in which it enters into force. In the case of other taxes, the Convention will apply for taxation years beginning on or after that day.

The full text of the Convention is available on the Department of Finance Canada Web site at www.fin.gc.ca.

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