See treaty text. The usual provision founding the OECD Model is used but with different time limits. Where a person considers that the actions of one or both of the States result or will result for him in taxation not in accordance with the provisions of this Treaty, he may present his case to the competent authority of the State of which he is resident or if not resident in either the Netherlands or China, to the competent authority of which he is a national. This is so irrespective of the remedies provided by domestic law. The time limit for bringing a claim is three years from the date of first notification of the disputed tax liability. The two tax authorities will try to resolve the case by mutual agreement. They will also try to agree on definitions of terms not specifically defined in the Treaty and on general matters of interpretation of the Treaty. Thus this Article removes the need for the tax authorities in each State to go through diplomatic channels, they may simply contact each other directly. The mutual agreement procedure is commonly used to decide matters concerning income and expense allocations and transfer pricing.
See treaty text. The usual OECD provisions, that nationals of one of the States shall not be subjected in the other State to any taxation or any requirement connected with tax, which is other or more burdensome than the taxation and connected requirements to which nationals of the other State in the same circumstances are or may be subjected. There is an extension so that the principle of non-discrimination also applies to persons not residents of either Canada or China.
See treaty text. Any income not dealt with in the preceding Articles is taxable only in the State of residence but if it arises in the other State then the other State may tax it according to domestic law. Thus the default position regarding the two States is that the State of source has primary taxing rights. Income not arising in either State may only be taxed by the State of residence. These rules follow the UN Model Treaty. There is an express provision that income in respect of rights or property which is connected to a permanent establishment is taxed under Article 7 as the income of that permanent establishment. Income from immovable property remains taxable under Article 6 in the State in which the property is located.
See treaty text. This Convention provides for withholding tax rates below those which would be applied by virtue of domestic law. This treaty permits a withholding tax of 10% providing the recipient is the beneficial owner. Royalties are defined as payments of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work, including cinematograph films and films or tapes for television or radio broadcasting, any patent, trade mark, design or model, plan, secret formula or process, or for information (know-how) concerning industrial, commercial or scientific experience. There are the usual provisions such that royalties received by a non-resident but which relate to a permanent establishment which that non-resident has in the other Contracting State are taxed under Article 7 and thus escape withholding tax. Also, royalties paid by an enterprise which are borne by a permanent establishment are deemed to arise in the State in which the permanent establishment is situated. Hence, if the permanent establishment and the recipient are in the same State, no withholding tax can arise. Where the payer and recipient are connected and the amount of royalties exceeds an arm's length amount, the excess amount paid will not enjoy the Treaty benefits and will be liable to tax in the payer's State at the normal domestic rate of withholding tax. Domestic law China Withholding tax of 10%. Russia
See treaty text. Any income not dealt with in the preceding Articles is taxable only in the State of residence. There is an express provision that income in respect of rights or property which is connected to a permanent establishment are taxed under Article 7 as the income of that permanent establishment. Income from immovable property remains taxable under Article 6 in the State in which the property is located.
See treaty text. This Article provides for the source State to levy withholding tax on dividends paid to a resident of the other Contracting State at a rate which may be lower than that charged under domestic law. The recipient of the dividend must also be the beneficial owner. Withholding tax under this Treaty: 10%. Paragraph (3) defines the term “dividends” to include income from shares or other rights (which are not debt-claims) which participate in profits. Also included is income from other corporate rights which is treated as income from shares under the law of the State in which the distributing company is tax resident. There is no inclusion of distributions of profits from joint ventures. Paragraph (4) provides that where, say, a Czech company receives a dividend from a Chinese company, and that dividend is effectively connected with a permanent establishment which the Czech company has in China, then the dividend income will be deemed to be part of the income of the permanent establishment and the provisions of Article 7 dealing with the attribution of business profits will apply. Paragraph (5) contains the usual provision that a State does not have the right to levy any tax on a dividend unless either the dividend is paid by a resident company or received by a resident shareholder. Thus the fact that a dividend paid by, say, a Czech company may be sourced from profits earned by a permanent establishment which that Czech company has in China, does not give China any taxing rights over that dividend, unless of course, it is received by Chinese shareholders. Domestic law China Per Article 4 of CITL which came into effect on January 1, 2008: 10% withholding tax. This replaces the previous exemption from withholding tax for dividends.
See treaty text. This Article provides for the source State to levy withholding tax on dividends paid to a resident of the other Contracting State at a rate which may be lower than that charged under domestic law. The recipient of the dividend must also be the beneficial owner. Withholding tax under this Treaty: 10%. Paragraph (3) defines the term “dividends” to include income from shares or other rights (which are not debt-claims) which participate in profits. Also included is income from other corporate rights which is treated as income from shares under the law of the State in which the distributing company is tax resident. The Protocol adds that remittances out of China from profits from investment as a participant in a joint venture with Chinese and foreign investment are to be treated as dividends. Paragraph (4) provides that where, say, a Netherlands company receives a dividend from a Chinese company, and that dividend is effectively connected with a permanent establishment which the Netherlands company has in China, then the dividend income will be deemed to be part of the income of the permanent establishment and the provisions of Article 7 dealing with the attribution of business profits will apply. Paragraph (5) contains the usual provision that a State does not have the right to levy any tax on a dividend unless either the dividend is paid by a resident company or received by a resident shareholder. Thus the fact that a dividend paid by, say, a Netherlands company may be sourced from profits earned by a permanent establishment which that Netherlands company has in China, does not give China any taxing rights over that dividend, unless of course, it is received by Chinese shareholders. Domestic law China Per Article 4 of CITL which came into effect on January 1, 2008: 10% withholding tax. This replaces the previous exemption from withholding tax for dividends.
See treaty text. Withholding tax is limited to 10% provided the recipient is also the beneficial owner. There is an exception for the use of or right to use industrial, commercial or scientific equipment: withholding tax on these is only to be levied (at the 10% rate) on 60% of the gross income (per the Protocol). Royalties are defined as payments of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work, including cinematographic films any patent, trade mark, design or model, plan, secret formula or process, or for the use of, or the right to use, industrial, commercial or scientific equipment, or for information concerning industrial, commercial or scientific experience. Technical service fees are specifically excluded from the definition of royalties. These are explicitly treated as profits arising from a permanent establishment (see Article 7). There are the usual provisions such that royalties received by a non-resident but which relate to a permanent establishment which that non-resident has in the other Contracting State are taxed under Article 7 and thus escape withholding tax. Also, royalties paid by an enterprise which are borne by a permanent establishment are deemed to arise in the State in which the permanent establishment is situated. Hence, if the permanent establishment and the recipient are in the same State, no withholding tax can arise. Where the payer and beneficial owner are connected and the amount of royalties exceeds an arm's length amount, the excess amount paid will not enjoy the treaty benefits and will be liable to tax in the payer's State at the normal domestic rate of withholding tax. Domestic law China Withholding tax of 10%. Netherlands No withholding tax.
See treaty text. These fees and other similar payments may be taxable in the country in which the company is resident as well as that in which the director is resident.
See treaty text. Withholding tax is limited to 10%. The recipient of the dividends must also be the beneficial owner. There is an exception for the use of or right to use industrial, commercial or scientific equipment: withholding tax on these is only to be levied (at the 10% rate) on 60% of the gross income giving an effective rate of 6% (per the Protocol). Royalties are defined as payments of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work (including cinematograph films, and films or tapes for radio or television broadcasting), any patent, trade mark, design or model, plan, secret formula or process, or for information (know-how) concerning industrial, commercial or scientific experience. There are the usual provisions such that royalties received by a non-resident but which relate to a permanent establishment which that non-resident has in the other Contracting State are taxed under Article 7 and thus escape withholding tax. Also, royalties paid by an enterprise which are borne by a permanent establishment are deemed to arise in the State in which the permanent establishment is situated. Hence, if the permanent establishment and the recipient are in the same State, no withholding tax can arise. Where the payer and beneficial owner are connected and the amount of royalties exceeds an arm's length amount, the excess amount paid will not enjoy the treaty benefits and will be liable to tax in the payer's State at the normal domestic rate of withholding tax. Domestic law China Withholding tax of 10%. Sweden Unusually, the receipt of royalties by a non-resident gives rise to a deemed permanent establishment in Sweden. This enables Sweden to tax the royalties at normal income tax rates. Where a treaty, such as this one, provides for a particular rate of withholding tax, that rate is applied to the gross royalty income before expenses.
