{"id":1441,"date":"2015-02-10T16:08:58","date_gmt":"2015-02-10T16:08:58","guid":{"rendered":"https:\/\/thor.ca\/\/blog\/?p=1441"},"modified":"2015-02-10T16:36:23","modified_gmt":"2015-02-10T16:36:23","slug":"cra-confirms-canada-us-tax-treaty-does-not-limit-canadas-right-to-tax-resource-royalties","status":"publish","type":"post","link":"https:\/\/www.thor.ca\/blog\/2015\/02\/cra-confirms-canada-us-tax-treaty-does-not-limit-canadas-right-to-tax-resource-royalties\/","title":{"rendered":"CRA confirms Canada-US tax treaty does not limit Canada\u2019s right to tax resource royalties"},"content":{"rendered":"<p>In <a href=\"http:\/\/thor.ca\/blog\/wp-content\/uploads\/2015\/02\/2013-0509771E5.pdf\">2013-0509771E5<\/a>, the CRA confirmed that oil &amp; gas royalties earned by a U.S. resident are subject to tax in Canada and no relief is available under the Canada-US tax treaty (Treaty).\u00a0 Such royalties constitute income from immovable property as contemplated under Article VI of the Treaty, which preserves Canada\u2019s right to tax the income.\u00a0 Article VII of the Treaty does not apply because the income is described in another article of the treaty (i.e., Article VI).\u00a0 Article XII of the Treaty does not apply because oil &amp; royalties are not captured by the definition of royalties in that Article.\u00a0 In Canada, the oil &amp; gas royalties are subject to 25% withholding tax under Part XIII or are taxable under Part I if the U.S. resident carries on business in Canada through a permanent establishment (see s. 115(1)(a), Reg. 805, and Reg. 8201).\u00a0 The U.S. resident will also be subject to taxation in Canada if the U.S. resident either sells a Canadian resource property (s. 115(1)(a)(iii.1) &amp; (iii.3)) or ceases to carry on a resource business in Canada (s. 115(4)). In all events, the Canadian payer will also have reporting and potential withholding obligations in Canada.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In <a href=\"http:\/\/thor.ca\/blog\/wp-content\/uploads\/2015\/02\/2013-0509771E5.pdf\">2013-0509771E5<\/a>, the CRA confirmed that oil &amp; gas royalties earned by a U.S. resident are subject to tax in Canada and no relief is available under the Canada-US tax treaty (Treaty).\u00a0 Such royalties constitute income from immovable property&hellip;<\/p>\n","protected":false},"author":11,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"class_list":["post-1441","post","type-post","status-publish","format-standard","hentry","category-corporate-tax"],"_links":{"self":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts\/1441","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/comments?post=1441"}],"version-history":[{"count":0,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts\/1441\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/media?parent=1441"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/categories?post=1441"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/tags?post=1441"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}