On December 23, 2016 the Canadian Department of Finance issued a press release announcing that the new Convention between the Government of Canada and the Government of the State of Israel for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income, which was signed on September 21, 2016, (Hereafter: the new DTA) entered into force on December 21, 2016. The new DTA replaces the existing Convention between Canada and the State of Israel for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and Capital, done at Ottawa on July 21, 1975.
Based on Article 28, Paragraph 1 of the new DTA (“Entry into Force”) the fact that the new DTA entered into force on December 21, 2016 means that its provisions shall have effect:
(a) in respect of taxes withheld at source, on amounts paid or credited to non-residents, on or after January 1, 2017; and
(b) in respect of other taxes, for taxation years beginning on or after January 1, 2017.
Article 28 Paragraph 2 of the DTA subsequently arranges that the Convention between Canada and the State of Israel for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and Capital, done at Ottawa on 21 July 1975 (referred to herein as the "1975 Convention") shall cease to have effect from the dates on which the new DTA becomes effective in accordance with paragraph 1.
Article 28 Paragraph 4 of the DTA arranges that notwithstanding the provisions of this Article, the provisions of Article 23 (Mutual Agreement Procedure) and Article 24 (Exchange of Information) of the new DTA shall have effect from December 21, 2016, without regard to the taxable period to which the matter relates.
A further analysis of a selection of provisions as included in the new DTA can be found in our article from September 26, 2016.
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