Tax Convention Signed by Canada and Peru

Related document:

• Text of the Convention.

Finance Minister Paul Martin today announced that a Convention between Canada and Peru for the avoidance of double taxation and the prevention of fiscal evasion was signed on July 20, 2001, in Lima.

Under the Convention:

• a withholding tax of 10 per cent will apply to dividends paid to a company that controls at least 10 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; and

• a withholding tax of 15 per cent will apply to interest and royalties.

Canada and Peru 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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