Canada–Colombia Tax Convention Act, 2010 (S.C. 2010, c. 15, s. 2)

At the time of signing of this Convention between Canada and the Republic of Colombia for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and on Capital, the undersigned have agreed upon the following provisions which shall be an integral part of the Convention.

• 1 It is understood that

  • (a) With reference to paragraph 3 of Article 5, for the purpose of calculating the time limit referred to therein, the period during which the activities carried out by an enterprise associated with another enterprise within the meaning of Article 9 shall be added to the period during which the activities are carried out by the enterprise with which it is associated, provided that the activities of the two enterprises are identical or substantially similar and are carried on in connection with the same site or project.

  • (b) With reference to paragraph 3 of Article 5, planning, preparatory work and supervisory activities shall be considered to be associated to a building site or construction or installation project only where such work or activities are performed at the location of the building site or construction or installation project.

  • (c) For purposes of Article 7, profits are attributed to a permanent establishment under paragraph 2 of Article 7 as if the permanent establishment were a separate enterprise dealing independently from the enterprise of which it is a part. Paragraph 3 of Article 7 sets out the principle that expenses incurred by the enterprise for the purpose of the permanent establishment, wherever incurred, shall be allowed as a deduction in attributing profits to the permanent establishment. In applying that paragraph, deductibility of expenses shall be determined in accordance with the internal legislation of the Contracting State in which the permanent establishment is located, provided that the requirements, conditions, and limitations to which they are subjected, are complied with.

  • (d) In the case of Colombia, for the purposes of this Convention, the term ships includes vessels.

  • (e) In the case of Colombia, notwithstanding the provisions of paragraph 2 of Article 10, when a company resident in Colombia has not paid income tax on the profit distributed to shareholders (socios o accionistas), because of exemptions or because the profit exceeds the maximum non-taxed limit contained in Article 49 and in paragraph 1 of Article 245 of the Tax Statute, the dividend distributed may be taxed in Colombia at a rate of 15 per cent, if the beneficial owner of the dividend is a shareholder (socio o accionista) resident in Canada.

  • (f) For greater certainty, the term right in paragraph 4 of Article 12 includes contractual rights to receive payments in respect of the furnishing of technical assistance, technical services or consulting services.

  • (g) If, after the signing of the Convention, Colombia concludes with a third state a Convention which provides for provisions in respect of technical assistance, technical services or consulting services that are more favourable than those provided for in Article 12 of the Convention, such provisions shall apply automatically to the Convention, under the same conditions as if such provisions had been set out in the Convention. Such provisions shall apply to this Convention from the date of entry into force of the convention with the third state. The competent authority of Colombia shall inform the competent authority of Canada without delay that the conditions of application of this subparagraph have been fulfilled.

  • (h) Paragraphs 6 and 7 of Article 13 are included in the Convention in view of Canada’s domestic rules regarding taxpayer migration. At the time of the signature of the Convention, Colombia has no similar domestic rules and, therefore, it is anticipated that these paragraphs will initially only apply in the case of an individual who ceases to be a resident of Canada.

  • (i) With reference to paragraph 2 of Article 20, it is agreed to have that paragraph apply only in the case of Canada on the understanding that under the domestic law of Colombia, income from a trust retains the legal characterization of the underlying income earned by that trust.

  • (j) For greater certainty, the seven year time limit referred to in paragraph 3 of Article 24 and paragraph 3 of Article 9 shall only apply if the domestic law of the Contracting State first-mentioned in such paragraphs provides for a longer time period.

IN WITNESS whereof the undersigned, duly authorised thereto, by their respective Governments, have signed this Protocol.

DONE in duplicate at Lima, this 21st day of November 2008, in the English, French and Spanish languages, each version being equally authentic.