Tax Convention Signed Between Canada and Finland

September 20, 2006

A new Convention between Canada and Finland for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income was signed on July 20, 2006, in Helsinki.

The Convention limits the rate of withholding tax to 5% for dividends between affiliated companies, to 15% for dividends in all other cases, to 10% for interest, and to 10% for royalties. The Convention also provides a withholding tax exemption for certain copyright royalties, for certain payments made for the use of any patent or computer software, and for information concerning industrial, commercial or scientific experience.

The Convention will enter into force 30 days after Canada and Finland have notified each other that all the necessary measures to give the Convention the force of law in their respective countries have been completed. The Convention will have effect, in respect of tax withheld at source on amounts paid or credited to non-residents, as of the beginning of the calendar year in which the later of the notifications takes place; and, in respect of other taxes, for taxation years beginning in the calendar year in which the later of the notifications takes place.

The existing Convention between Canada and Finland, signed at Helsinki on the 28th of May 1990, shall cease to have effect from the dates on which the new Convention becomes effective.

For further information contact:

Tax Legislation Division
Phone: 613-369-4016