
1 
This Order may be cited as the 
Double Taxation Relief (Taxes on Income) (Canada) Order 1980.

2 
It is hereby declared—
(a) that the arrangements specified in the
Convention set out in the Schedule to this Order have been made with the Government
of Canada with a view to affording relief from double taxation in relation
to income tax, corporation tax or capital gains tax and taxes of a similar
character imposed by the laws of Canada; and
(b) that it is expedient that those arrangements
should have effect.
N.E. Leigh
Clerk of the Privy Council
For the Government of the United Kingdom of Great Britain and
Northern Ireland:
FRANK JUDD
For the Government of Canada:
PAUL MARTIN

SCHEDULE
The Government of the United Kingdom of Great
Britain and Northern Ireland and the Government of Canada;

Desiring to conclude a Convention for the avoidance of double taxation and
the prevention of fiscal evasion with respect to taxes on income and capital
gains;
Have agreed as follows:

ARTICLE 1
This Convention shall apply to persons who are
residents of one or both of the Contracting States.

ARTICLE 2
1 
The taxes which are the subject of this Convention
are:
(a) in Canada: the
income taxes which are imposed by the Government of Canada, (hereinafter referred
to as “Canadian tax”);

(b) in the United Kingdom
of Great Britain and Northern Ireland: the income tax, the corporation tax,
the capital gains tax, the petroleum revenue tax and the development land
tax (hereinafter referred to as “United Kingdom
tax”).
2 
The Convention shall apply also to any identical
or substantially similar taxes which are imposed after the date of signature
of this Convention in addition to, or in place of, the existing taxes by either
Contracting State or by the Government of any territory to which the present
Convention is extended under Article 26.
The Contracting States shall notify each other of changes which have been
made in their respective taxation laws.
ARTICLE 3
1 
In this Convention, unless the context otherwise
requires:
(a) 
(i) the term “Canada”
 used in a geographical sense, means 
the territory of Canada, including any area beyond the territorial waters
of Canada which is an area where Canada may, in accordance with its national
legislation and international law, exercise sovereign rights with respect
to the sea-bed and sub-soil and their natural resources;
(ii) the term 
“United Kingdom” means Great
Britain and Northern Ireland, including any area outside the territorial sea
of the United Kingdom which in accordance with international law has been
or may be hereafter designated, under the laws of the United Kingdom concerning
the Continental Shelf, as an area within which the rights of the United Kingdom
with respect to the sea-bed and sub-soil and their natural resources may be
exercised;
(b) the terms 
“a Contracting State” and 
“the other Contracting State” mean, as the context requires, the United Kingdom or Canada;
(c) the term“person”
comprises an individual, a company, any
entity treated as a unit for tax purposes or any other body of persons;

(d) the term “company”
 means any body corporate or any other
entity which is treated as a body corporate for tax purposes; in French,
the term “société”
also means a “corporation” within the meaning
of Canadian law;
(e) the terms 
“enterprise of a Contracting State” and “enterprise of the other Contracting State”
mean respectively an enterprise carried on by a resident
of a Contracting State and an enterprise carried on by a resident of the other
Contracting State;
(f) the term “competent
authority” means : 
(i) in the case of Canada, the Minister of National Revenue
or his authorised representative;

(ii) in the case of the United Kingdom,
the Commissioners of Inland Revenue or their authorised representative;
(g) the term “tax”
 means United Kingdom tax or Canadian
tax, as the context requires;
(h) the term “national”
 means :— 
(i) in relation to the United Kingdom all citizens of the United Kingdom
and Colonies, British Subjects under Sections
2, 13(1) or 
16 of the British Nationality Act 1948
, and British Subjects by virtue of 
Section 1 of the British Nationality
Act 1965, provided they are patrial within
the meaning of the Immigration Act 1971,
so far as these provisions are in force on the date of entry into force of
this Convention or have been modified only in minor respects, so as not to
affect their general character; and all legal persons, partnerships, and associations
deriving their status as such from the law in force in the United Kingdom;


(ii) in relation to Canada, all citizens
of Canada and all legal persons, partnerships and associations deriving their
status as such from the law in force in Canada.
2 
As regards the application of the Convention
by a Contracting State any term not otherwise defined shall, unless the context
otherwise requires, have the meaning which it has under the laws of that Contracting
State relating to the taxes which are the subject of the Convention.
ARTICLE 4
1 
For the purposes of this Convention, the term “resident of a Contracting State” means any person who, under the law of that State, is liable to taxation
therein by reason of his domicile, residence, place of management or any other
criterion of a similar nature. But this term does not include any person who
is liable to tax in that Contracting State in respect only of income from
sources therein.
2 
Where by reason of the provisions of 
paragraph 1 an individual is a resident of
both Contracting States, then his status shall be determined as follows:
(a) he shall be deemed to be a resident of
the Contracting State in which he has a permanent home available to him. If
he has a permanent home available to him in both Contracting State, he shall
be deemed to be a resident of the Contracting State with which his personal
and economic relations are closer (centre of vital interests);
(b) if the Contracting State in which he
has his centre of vital interests cannot be determined, or if he has not a
permanent home available to him in either Contracting State, he shall be deemed
to be a resident of the Contracting State in which he has an habitual abode;

(c) if he has an habitual abode in both Contracting
State or in neither of them, he shall be deemed to be a resident of the Contracting
State of which he is a national;
(d) if he is a national of both Contracting
State or of neither of them, the competent authorities of the Contracting
States shall settle the question by mutual agreement.
3 
Where by reason of the provisions of 
paragraph 1 a person other than an individual
is a resident of both Contracting States, the competent authorities of the
Contracting States shall by mutual agreement endeavour to settle the question
and to determine the mode of application of the Convention to such person.

ARTICLE 5
1 
For the purposes of this Convention, the term “permanent establishment” means a fixed place of business in which the business of the enterprise
is wholly or partly carried on.
2 
The term “permanent establishment”
shall include especially:
(a) a place of management;
(b) a branch;
(c) an office;
(d) a factory;
(e) a workshop;
(f) a mine, quarry or other place of extraction
of natural resources;
(g) a building site or construction or assembly
project which exists for more than 12 months.
3 
The term “permanent establishment”
 shall not be deemed to include:
(a) the use of facilities solely for the
purpose of storage, display or delivery of goods or merchandise belonging
to the enterprise;
(b) the maintenance of a stock of goods or
merchandise belonging to the enterprise solely for the purpose of storage,
display or delivery;
(c) the maintenance of a stock of goods or
merchandise belonging to the enterprise solely for the purpose of processing
by another enterprise;
(d) the maintenance of a fixed place of business
solely for the purpose of purchasing goods or merchandise, or for collecting
information, for the enterprise;
(e) the maintenance of a fixed place of business
solely for the purpose of advertising, for the supply of information, for
scientific research, or for similar activities which have a preparatory or
auxiliary character, for the enterprise.
4 
A person—other than an agent of an independent
status to whom paragraph 5
applies—acting in a Contracting State on behalf of an enterprise of
the other Contracting State shall be deemed to be a permanent establishment
in the first-mentioned State if he has, and habitually exercises in that first-mentioned
State, an authority to conclude contracts in the name of the enterprise, unless
his activities are limited to the purchase of goods or merchandise for the
enterprise.
5 
An enterprise of a Contracting State shall not
be deemed to have a permanent establishment in the other Contracting State
merely because it carries on business in that other State through a broker,
general commission agent or any other agent of an independent status, where
such persons are acting in the ordinary course of their business.
6 
The fact that a company which is a resident
of a Contracting State controls or is controlled by a company which is a resident
of the other Contracting State, or which carries on business in that other
State (whether through a permanent establishment or otherwise), shall not
of itself constitute either company a permanent establishment of the other.

ARTICLE 6
1 
Income from immovable property, including income
from agriculture or forestry, may be taxed in the Contracting State in which
such property is situated.
2 
For the purposes of this Convention, the term “immovable property” 
shall be defined in accordance with the law of the Contracting State in which
the property in question is situated. The term shall in any case include property
accessory to immovable property, livestock and equipment used in agriculture
and forestry, rights to which the provisions of general law respecting landed
property apply, usufruct of immovable property and rights to variable or fixed
payments as consideration for the working of, or the right to work, mineral
deposits, sources and other natural resources; ships, boats and aircraft shall
not be regarded as immovable property.
3 
The provisions of 
paragraph 1 shall apply to income derived from
the direct use, letting, or use in any other form of immovable property and
to profits from the alienation of such property.
4 
The provisions of 
paragraphs 1 and 3
shall also apply to the income from immovable property of an enterprise and
to income from immovable property used for the performance of professional
services.
ARTICLE 7
1 
The profits of an enterprise of a Contracting
State shall be taxable only in that State unless the enterprise carries on
business in the other Contracting State through a permanent establishment
situated therein. If the enterprise carries on or has carried on business
as aforesaid, the profits of the enterprise may be taxed in the other State
but only so much of them as is attributable to that permanent establishment.

2 
Subject to the provisions of 
paragraph 3, where an enterprise of a Contracting
State carries on business in the other Contracting State through a permanent
establishment situated therein, there shall be attributed to that permanent
establishment profits which it might be expected to make if it were a distinct
and separate enterprise engaged in the same or similar activities under the
same or similar conditions and dealing wholly independently with the enterprise
of which it is a permanent establishment.
3 
In the determination of the profits of a permanent
establishment situated in a Contracting State, there shall be allowed as deductions
expenses of the enterprise (other than expenses which would not be deductible
under the law of that State if the permanent establishment were a separate
enterprise) which are incurred for the purposes of the permanent establishment
including executive and general administrative expenses, whether incurred
in the State in which the permanent establishment is situated or elsewhere.

4 
Insofar as it has been customary in a Contracting
State to determine the profits to be attributed to a permanent establishment
on the basis of an apportionment of the total profits of the enterprise to
its various parts, nothing in paragraph 2
shall preclude that Contracting State from determining the profits to be taxed
by such an apportionment as may be customary; the method of apportionment
adopted shall, however, be such that the result shall be in accordance with
the principles embodied in this Article.
5 
No profits shall be attributed to a permanent
establishment by reason of the mere purchase by that permanent establishment
of goods or merchandise for the enterprise.
6 
For the purposes of the preceding paragraphs,
the profits to be attributed to the permanent establishment shall be determined
by the same method year by year unless there is good and sufficient reason
to the contrary.
7 
Where profits include items of income which
are dealt with separately in other Articles of this Convention, the provisions
of this Article shall not prevent the application of the provisions of those
other Articles with respect to the taxation of such items of income.
ARTICLE 8
1 
Profits derived by an enterprise of a Contracting
State from the operation of ships or aircraft in international traffic shall
be taxable only in that State.
2 
Notwithstanding the provisions of 
paragraph 1 and Article 7,
profits derived from the operation of ships used principally to transport
passengers or goods exclusively between places in a Contracting State may
be taxed in that State.
3 
The provisions of 
paragraphs 1 and 2
shall also apply to profits referred to in those paragraphs derived by an
enterprise of a Contracting State from its participation in a pool, a joint
business or in an international operating agency.
ARTICLE 9
Where—
(a) an enterprise of a Contracting State participates
directly or indirectly in the management, control or capital of an enterprise
of the other Contracting State, or
(b) the same persons participate directly or indirectly
in the management, control or capital of an enterprise of a Contracting State
and an enterprise of the other Contracting State,

and in either case conditions are made or imposed between the two
enterprises in their commercial or financial relations which differ from those
which would be made between independent enterprises, then any income, deductions,
receipts or outgoings which would, but for those conditions, have been attributed
to one of the enterprises, but, by reason of those conditions, have not been
so attributed, may be taken into account in computing the profits or losses
of that enterprise and taxed accordingly.

ARTICLE 10
1 
Dividends paid by a company which is a resident
of Canada to a resident of the United Kingdom may be taxed in the United Kingdom.
Such dividends may also be taxed in Canada, and according to the laws of Canada,
but provided that the beneficial owner of the dividends is a resident of the
United Kingdom the tax so charged shall not exceed 15 per cent of the gross
amount of the dividends.
2 
Dividends paid by a company which is a resident
of the United Kingdom to a resident of Canada may be taxed in Canada. Such
dividends may also be taxed in the United Kingdom, and according to the laws
of the United Kingdom, but provided that the beneficial owner of the dividends
is a resident of Canada the tax so charged shall not exceed 15 per cent of
the gross amount of the dividends.
3 
However, as long as an individual resident in
the United Kingdom is entitled to a tax credit in respect of dividends paid
by a company resident in the United Kingdom, the following provisions of this
paragraph shall apply instead of the provisions of 
paragraph 2 of this Article:
(a) 
(i) Dividends paid by a company which is
a resident of the United Kingdom to a resident of Canada may be taxed in Canada.

(ii) Where a resident of Canada is entitled
to a tax credit in respect of such a dividend under 
sub-paragraph (b) of this paragraph, tax may
also be charged in the United Kingdom and according to the laws of the United
Kingdom, on the aggregate of the amount or value of that dividend and the
amount of that tax credit at a rate not exceeding 15 per cent.
(iii) Except as provided in 
sub-paragraph (a) (ii) of this paragraph, dividends
paid by a company which is a resident of the United Kingdom to a resident
of Canada who is the beneficial owner of those dividends shall be exempt from
any tax which is chargeable in the United Kingdom on dividends.
(b) A resident of Canada who receives a dividend
from a company which is a resident of the United Kingdom shall, subject to
the provisions of sub-paragraph (c)
of this paragraph and provided he is the beneficial owner of the dividend,
be entitled to the tax credit in respect thereof to which an individual resident
in the United Kingdom would have been entitled had he received that dividend,
and to payment of any excess of such credit over his liability to United Kingdom
tax.
(c) The provisions of 
sub-paragraph (b) of this paragraph shall not
apply where the beneficial owner of the dividend is a company which, either
alone or together with one or more associated companies, controls directly
or indirectly at least 10 per cent of the voting power in the company paying
the dividend. For the purposes of this sub-paragraph two companies shall be
deemed to be associated if one is controlled directly or indirectly by the
other or both are controlled directly or indirectly by a third company.
4 
The term “dividends”
 as used in this Article means income
from shares, “jouissance” shares or “jouissance” rights,
mining shares, founders' shares or other rights not being debt-claims, participating
in profits, as well as income assimilated to or treated in the same way as
income from shares by the taxation law of the State of which the company making
the payment is a resident.
5 
The provisions of 
paragraphs 1, 2
and 3 shall not apply if
the recipient of the dividends, being a resident of a Contracting State, carries
on business in the other Contracting State of which the company paying the
dividends is a resident, through a permanent establishment situated therein,
or performs in that other State professional services from a fixed base situated
therein, and the holding in respect of which the dividends are paid is effectively
connected with such permanent establishment or fixed base. In such a case,
the provisions of Article 7
or Article 14, as the case
may be, shall apply.
6 
Where a company is a resident of only one Contracting
State, the other Contracting State may not impose any tax on the dividends
paid by the company, except insofar as such dividends are paid to a resident
of that other State or insofar as the holding in respect of which the dividends
are paid is effectively connected with a permanent establishment or a fixed
base situated in that other State, nor subject the company's undistributed
profits to a tax on undistributed profits, even if the dividends paid or the
undistributed profits consist wholly or partly of profits or income arising
in such other State.
7 
If a resident of Canada does not bear Canadian
tax on dividends derived from a company which is a resident of the United
Kingdom and owns 10 per cent or more of the class of shares in respect of
which the dividends are paid, then neither paragraph
2 nor 3
shall apply to the dividends to the extent that they can have been paid only
out of profits which the company paying the dividends earned or other income
which it received in a period ending twelve months or more before the relevant
date. For the purposes of this paragraph the term 
“relevant date” means the
date on which the beneficial owner of the dividends became the owner of 10
per cent or more of the class of shares referred to above.
Provided that this paragraph shall not apply if the shares
were acquired for bona fide commercial reasons and not primarily
for the purpose of securing the benefit of this Article.
ARTICLE 11
1 
Interest arising in a Contracting State and
paid to a resident of the other Contracting State may be taxed in that other
State.
2 
However, such interest may be taxed in the Contracting
State in which it arises, and according to the law of that State; but if the
recipient is the beneficial owner of the interest, the tax so charged shall
not exceed 15 per cent of the gross amount of the interest.
3 
Notwithstanding the provisions of 
paragraph 2 of this Article,
(a) interest arising in the United Kingdom
and paid to a resident of Canada shall be taxable only in Canada if it is
paid in respect of a loan made, guaranteed or insured, or a credit extended,
guaranteed or insured by the Export Development Corporation; and
(b) interest arising in Canada and paid to
a resident of the United Kingdom shall be taxable only in the United Kingdom
if it is paid in respect of a loan made, guaranteed or insured, or a credit
extended, guaranteed or insured by the United Kingdom Export Credits Guarantee
Department.
4 

(a) Notwithstanding the provisions of 
paragraph 2 of this Article, interest arising
in Canada and paid in respect of a bond, debenture or other similar obligation
of the Government of Canada or of a political subdivision or local authority
thereof shall, provided that the interest is beneficially owned by a resident
of the United Kingdom, be taxable only in the United Kingdom;
(b) Notwithstanding the provisions of 
Article 29 Canada may, on or before the thirtieth
day of June in any calendar year give to the United Kingdom notice of termination
of this paragraph and in such event this paragraph shall cease to have effect
in respect of interest paid on obligations issued after 31 December of the
calendar year in which the notice is given.
5 
The term “interest”
 as used in this Article means income
from debt claims of every king, whether or not secured by mortgage, and whether
or not carrying a right to participate in the debtor's profits, and in particular,
income from government securities and income from bonds or debentures, including
premiums and prizes attaching to bonds or debentures, as well as income assimilated
to income from money lent by the taxation law of the State in which the income
arises. However, the term “interest”
 does not include income dealt with in 
Article 10.
6 
The provisions of 
paragraphs 1, 2
and 4 of this Article shall
not apply if the recipient of the interest, being a resident of a Contracting
State, carries on business in the other Contracting State in which the interest
arises through a permanent establishment situated therein, or performs in
that other State professional services from a fixed base situated therein,
and the debt-claim in respect of which the interest is paid is effectively
connected with such permanent establishment or fixed base. In such a case,
the provisions of Article 7
or Article 14, as the case
may be, shall apply.
7 
Interest shall be deemed to arise in a Contracting
State when the payer is that State itself, a political subdivision, a local
authority or a resident of that State. Where, however, the person paying the
interest, whether he is a resident of a Contracting State or not, has in a
Contracting State a permanent establishment in connection with which the indebtedness
on which the interest is paid was incurred, and that interest is borne by
that permanent establishment, then such interest shall be deemed to arise
in the Contracting State in which the permanent establishment is situated.

8 
Where, owing to a special relationship between
the payer and the person deriving the interest or between both of them and
some other person, the amount of the interest paid exceeds for whatever reason
the amount which would have been paid in the absence of such relationship,
the provisions of this Article shall apply only to the last-mentioned amount.
In that case, the excess part of the payments shall remain taxable according
to the law of each Contracting State, due regard being had to the other provisions
of this Convention.
9 
Any provision in the law of a Contracting State
relating only to interest paid to a non-resident company shall not operate
so as to require such interest paid to a company which is a resident of the
other Contracting State to be treated as a distribution of the company paying
such interest. The preceding sentence shall not apply to interest paid to
a company which is a resident of a Contracting State in which more than 50
per cent of the voting power is controlled, directly or indirectly, by a person
or persons resident in the other Contracting State.
10 
The provisions of 
paragraph 2 of this Article shall not apply
to interest where the beneficial owner of the interest—
(a) does not bear tax in respect thereof
in Canada; and
(b) sells (or makes a contract to sell) the
holding from which the interest is derived within three months of the date
on which such beneficial owner acquired that holding.
ARTICLE 12
1 
Royalties arising in a Contracting State and
paid to a resident of the other Contracting State may be taxed in that other
State.
2 
However, such royalties may be taxed in the
Contracting State in which they arise, and according to the law of that State;
but if the recipient is the beneficial owner of the royalties the tax so charged
shall not exceed 10 per cent of the gross amount of the royalties.
3 
Notwithstanding the provisions of 
paragraph 2, copyright royalties and other
like payments in respect of the production or reproduction of any literary,
dramatic, musical or artistic work (but not including royalties in respect
of motion picture films and works on film or videotape for use in connection
with television) arising in a Contracting State and beneficially owned by
a resident of the other Contracting State shall be taxable only in that other
State.
4 
The term “royalties”
 as used in this Article means payments
of any kind received as a consideration for the use of, or the right to use,
any copyright, 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, and includes payments of any kind in respect of
motion picture films and works on film or videotape for use in connection
with television.
5 
The provisions of 
paragraphs 1, 2
and 3 shall not apply if
the recipient of the royalties, being a resident of a Contracting State, carries
on business in the other Contracting State in which the royalties arise through
a permanent establishment situated therein, or performs in that other State
professional services from a fixed base situated therein, and the right or
property in respect of which the royalties are paid is effectively connected
with such permanent establishment or fixed base. In such a case, the provisions
of Article 7 or 
Article 14, as the case may be, shall apply.

6 
Royalties shall be deemed to arise in a Contracting
State when the payer is that State itself, a political subdivision, a local
authority or a resident of that State. Where, however, the person paying the
royalties, whether he is a resident of a Contracting State or not, has in
a Contracting State a permanent establishment in connection with which the
obligation to pay the royalties was incurred, and those royalties are borne
as such by that permanent establishment, then such royalties shall be deemed
to arise in the Contracting State in which the permanent establishment is
situated.
7 
Where, owing to a special relationship between
the payer and the person deriving the royalties or between both of them and
some other person, the amount of the royalties paid exceeds for whatever reason
the amount which would have been paid in the absence of such relationship,
the provisions of this Article shall apply only to the last-mentioned amount.
In that case, the excess part of the payments shall remain taxable according
to the law of each Contracting State, due regard being had to the other provisions
of this Convention.
ARTICLE 13
1 
Gains from the alienation of immovable property
may be taxed in the Contracting State in which such property is situated.

2 
Gains from the alienation of movable property
forming part of the business property of a permanent establishment which an
enterprise of a Contracting State has in the other Contracting State or of
movable property pertaining to a fixed base available to a resident of a Contracting
State in the other Contracting State for the purpose of performing professional
services, including such gains from the alienation of such a permanent establishment
(alone or together with the whole enterprise) or of such a fixed base may
be taxed in the other State. However, gains derived by a resident of a Contracting
State from the alienation of ships and aircraft operated in international
traffic and movable property pertaining to the operation of such ships and
aircraft, shall be taxable only in that Contracting State.
3 
Gains from the alienation of:
(a) any right, licence or privilege to explore
for, drill for, or take petroleum, natural gas or other related hydrocarbons
situated in a Contracting State or
(b) any right to assets to be produced in
a Contracting State by the activities referred to in 
sub-paragraph (a) above or to interests in
or to the benefit of such assets situated in a Contracting State,
may be taxed in that State.
4 
Gains from the alienation of:
(a) shares, other than shares quoted on an
approved stock exchange, deriving their value or the greater part of their
value directly or indirectly from immovable property situated in a Contracting
State or from any right referred to in paragraph
3 of this Article, or
(b) an interest in a partnership or trust
the assets of which consist principally of immovable property situated in
a Contracting State, of rights referred to in 
paragraph 3 of this Article, or of shares referred
to in sub-paragraph (a)
above,
may be taxed in that State.
5 
For the purposes of 
paragraph 4 of this Article 
“an approved stock exchange” means a stock exchange prescribed for the purposes of the Canadian Income
Tax Act or a recognised stock exchange within the meaning of the United Kingdom
Corporation Tax Act.
6 
Gains from the alienation of any property, other
than those mentioned in paragraphs 1, 
2, 3 and 
4 shall be taxable only in the Contracting
State of which the alienator is a resident.
7 
The provisions of 
paragraph 6 of this Article shall not affect
the right of a Contracting State to tax, according to its domestic law, gains
derived by an individual resident in the other Contracting State from the
alienation of any property, if the alienator:
(a) is a national of the first-mentioned
Contracting State or was a resident of that State for 15 years or more prior
to the alienation of the property and
(b) was a resident of the first-mentioned
Contracting State at any time during the five years immediately preceding
such alienation.
ARTICLE 14
1 
Income derived by a resident of a Contracting
State in respect of professional services or other independent activities
of a similar character shall be taxable only in that State unless he has a
fixed base regularly available to him in the other Contracting State for the
purpose of performing his activities. If he has such a fixed base, the income
may be taxed in the other Contracting State but only so much of it as is attributable
to that fixed base.
2 
The term “professional
services” includes independent
scientific, literary, artistic, educational or teaching activities as well
as the independent activities of physicians, lawyers, engineers, architects,
dentists and accountants.
ARTICLE 15
1 
Subject to the provisions of 
Articles 17 and 18,
salaries, wages and other similar remuneration derived by a resident of a
Contracting State in respect of an employment shall be taxable only in that
State unless the employment is exercised in the other Contracting State. If
the employment is so exercised, such remuneration as is derived therefrom
may be taxed in that other State.
2 
Notwithstanding the provisions of 
paragraph 1, remuneration derived by a resident
of a Contracting State in respect of an employment exercised in the other
Contracting State shall be taxable only in the first-mentioned State if:
(a) the recipient is present in the other
State for a period or periods not exceeding in the aggregate 183 days in the
calendar year concerned, and
(b) the remuneration is paid by, or on behalf
of, an employer who is not a resident of the other State, and
(c) the remuneration is not borne by a permanent
establishment or a fixed base which the employer has in the other State.
3 
Notwithstanding the preceding provisions of
this Article, remuneration in respect of an employment exercised aboard a
ship or aircraft operated in international traffic may be taxed in the Contracting
State in which the place of effective management of the enterprise is situated.

4 
In relation to remuneration of a director of
a company derived from the company the preceding provisions of this Article
shall apply as if the remuneration were remuneration of an employee in respect
of employment, and as if references to employer were references to the company.

ARTICLE 16
1 
Notwithstanding the provisions of 
Articles 7, 14
and 15, income derived by
entertainers, such as theatre, motion picture, radio or televison artistes,
and musicians, and by athletes, from their personal activities as such may
be taxed in the Contracting State in which these activities are exercised.

2 
Where income in respect of personal activities
as such of an entertainer or athlete accrues not to that entertainer or athlete
himself but to another person, that income may, notwithstanding the provisions
of Articles 7, 
14 and 15,
be taxed in the Contracting State in which the activities of the entertainer
or athlete are exercised.
3 
The provisions of 
paragraphs 1 and 2
shall not apply:
(a) to income derived from activities performed
in a Contracting State by entertainers or athletes if the visit to that Contracting
State is wholly or substantially supported by public funds;
(b) to a non-profit making organization no
part of the income of which is payable, or is otherwise available for the
personal benefit of, any proprietor, member or shareholder thereof; or
(c) to an entertainer or athlete in respect
of services provided to an organization referred to in 
sub-paragraph (b).
ARTICLE 17
1 
Pensions and annuities arising in a Contracting
State and paid to a resident of the other Contracting State may be taxed in
that other State. However, such pensions and annuities may also be taxed in
the first-mentioned Contracting State but only to the extent that the total
amount thereof paid in any year of assessment or taxation year to the resident
of the other Contracting State exceeds ten thousand Canadian dollars ($10,000)
or five thousand pounds sterling (£5,000), whichever is the greater.
However, the tax so charged in the first-mentioned Contracting State shall
not exceed the tax chargeable on such pensions and annuities in the other
Contracting State.
2 
Notwithstanding the provisions of 
paragraph 1 of this Article, pensions paid
out of public funds of the United Kingdom or Northern Ireland or of the funds
of any local authority in the United Kingdom to any individual in respect
of services rendered to the Government of the United Kingdom or Northern Ireland
or a local authority in the United Kingdom in the discharge of functions of
a governmental nature may be taxed in the United Kingdom.
3 
The term “annuity”
 means a stated sum payable periodically
at stated times during life or during a specified or ascertainable period
of time under an obligation to make the payments in return for adequate and
full consideration in money or money's worth, but does not include payments
of any kind under an income-averaging annuity contract.
4 
Notwithstanding any other provision of this
Convention, alimony and similar payments arising in a Contracting State and
paid to a resident of the other Contracting State who is the beneficial owner
thereof shall be taxable only in that other State.
ARTICLE 18
1 

(a) Remuneration, other than a pension, paid
by a Contracting State or a political subdivision or a local authority thereof
to any individual in respect of services rendered to that State or sub-division
or local authority thereof shall be taxable only in that State.
(b) However, such remuneration shall be taxable
only in the other Contracting State if the services are rendered in that State
and the recipient is a resident of that State who:
(i) is a national of that State; or
(ii) did not become a resident of that State
solely for the purpose of performing the services.
2 
This Article shall not apply to remuneration
in respect of services rendered in connection with any trade or business carried
on by one of the Contracting States or a political subdivision or a local
authority thereof.
3 
In this Article, the term 
“political subdivision” 
shall, in relation to the United Kingdom, include Northern Ireland.
ARTICLE 19
Payments which a student, apprentice or business
trainee who is or was immediately before visiting one of the Contracting States
a resident of a Contracting State and who is present in the other Contracting
State solely for the purpose of his education or training receives for the
purpose of his maintenance, education or training shall not be taxed in that
other State, provided that such payments are made to him from sources outside
that other State.

ARTICLE 20
1 
Income received from an estate or trust resident
in Canada by a resident of the United Kingdom who is the beneficial owner
thereof may be taxed in Canada according to its law, but the tax so charged
shall not exceed 15 per cent of the gross amount of the income.
2 
The provisions of 
paragraph 1 of this Article shall not apply
if the recipient of the income, being a resident of the United Kingdom, carries
on business in Canada through a permanent establishment situated therein,
or performs in Canada professional services from a fixed base situated therein,
and the right or interest in the estate or trust in respect of which the income
is paid is effectively connected with such permanent establishment or fixed
base. In such a case, the provisions of Article
7 or Article 14,
as the case may be, shall apply.
ARTICLE 21
1 
In the case of Canada, double taxation shall
be avoided as follows:
(a) Subject to the existing provisions of
the law of Canada regarding the deduction from tax payable in Canada of tax
paid in a territory outside Canada and to any subsequent modification of those
provisions—which shall not affect the general principle hereof—and
unless a greater deduction or relief is provided under the laws of Canada,
tax payable in the United Kingdom on profits, income or gains arising in the
United Kingdom shall be deducted from any Canadian tax payable in respect
of such profits, income or gains.
(b) Subject to the existing provisions of
the law of Canada regarding the determination of the exempt surplus of a foreign
affiliate and to any subsequent modification of those provisions—which
shall not affect the general principle hereof—for the purpose of computing
Canadian tax, a company resident in Canada shall be allowed to deduct in computing
its taxable income any dividend received by it out of the exempt surplus of
a foreign affiliate resident in the United Kingdom.The terms “foreign affiliate”
 and “exempt surplus”
 shall have the meaning which they have
under the Income Tax Act of Canada.
2 
In the case of the United Kingdom, double taxation
shall be avoided as follows: subject to the provisions of the law of the United
Kingdom regarding the allowance as a credit against United Kingdom tax of
tax payable in a territory outside the United Kingdom (which shall not affect
the general principle hereof):
(a) tax payable under the laws of Canada
and in accordance with this Convention, whether directly or by deduction,
on profits, income or chargeable gains from sources within Canada (excluding
in the case of a dividend, tax payable in respect of the profits out of which
the dividend is paid) shall be allowed as a credit against any United Kingdom
tax computed by reference to the same profits, income or chargeable gains
by reference to which the Canadian tax is computed; and
(b) in the case of a dividend paid by a company
which is a resident of Canada to a company which is resident in the United
Kingdom and which controls directly or indirectly at least 10 per cent of
the voting power in the Canadian company, the credit shall take into account
(in addition to any tax creditable under (a))
tax payable under the laws of Canada by the company in respect of the profits
out of which such dividend is paid.
3 
For the purposes of 
paragraphs 1 and 2
of this Article, income, profits and capital gains owned by a resident of
a Contracting State which are taxed in the other Contracting State in accordance
with this Convention shall be deemed to arise from sources in that other Contracting
State.
ARTICLE 22
1 
The nationals of a Contracting State shall not
be subjected in the other Contracting State to any taxation or any requirement
connected therewith which is other or more burdensome than the taxation and
connected requirements to which nationals of that other State in the same
circumstances are or may be subjected.
2 
The taxation on a permanent establishment which
an enterprise of a Contracting State has in the other Contracting State shall
not be less favourably levied in that other State than the taxation levied
on enterprises of that other State carrying on the same activities. This provision
shall not be construed as obliging either Contracting State to grant to individuals
not resident in its territory those personal allowances and reliefs for tax
purposes which are by law available only to individuals who are so resident.

3 
Subject to the provisions of 
paragraph 4 of this Article, nothing in this
Convention shall be construed as preventing a Contracting State from imposing
on the earnings attributable to a permanent establishment in that State of
a company which is a resident of the other Contracting State, tax in addition
to the tax which would be chargeable on the earnings of a company which is
a resident of the first-mentioned State, provided that the rate of any additional
tax so imposed shall not exceed the lesser of:
(a) 15 per cent of the amount of such earnings
which have not been subjected to such additional tax in previous taxation
years, and
(b) the rate specified in respect of such
additional tax in any agreement or convention entered into by Canada with
any third State.
For the purposes of this provision, the term “earnings” means 
an amount not in excess of the profits attributable to a permanent establishment
in a Contracting State in a year and previous years after deducting therefrom
all taxes, other than the additional tax referred to herein, imposed on such
profits in that State.
4 
The provisions of 
paragraph 3 of this Article shall not apply
where the profits attributable to a permanent establishment in a year or previous
years do not exceed in the aggregate 500,000 Canadian dollars or 250,000 pounds
sterling, whichever is the greater.
5 
In this Article, the term 
“taxation” means taxes which
are the subject of this Convention.
ARTICLE 23
1 
Where a resident of a Contracting State considers
that the actions of one or both of the Contracting States result or will result
for him in taxation not in accordance with this Convention, he may, without
prejudice to the remedies provided by the national laws of those States, address
to the competent authority of the Contracting State of which he is a resident
an application in writing stating the grounds for claiming the revision of
such taxation.
2 
The competent authority referred to in 
paragraph 1 shall endeavour, if the objection
appears to it to be justified and if it is not itself able to arrive at an
appropriate solution, to resolve the case by mutual agreement with the competent
authority of the other Contracting State, with a view to the avoidance of
taxation not in accordance with the Convention.
3 
The competent authorities of the Contracting
States shall endeavour to resolve by mutual agreement any difficulties or
doubts arising as to the interpretation or application of the Convention.
In particular, the competent authorities of the Contracting States may reach
agreement on:
(a) the same attribution of profits to a
resident of a Contracting State and its permanent establishment situated in
the other Contracting State;
(b) the same allocation of income between
a resident of a Contracting State and any associated person provided for in 
Article 9.
ARTICLE 24
The competent authorities of the Contracting States
shall exchange such information (being information which is at their disposal
under their respective taxation laws in the normal course of administration)
as is necessary for the carrying out of the provisions of this Convention
or for the prevention of fraud or for the administration of statutory provisions
against legal avoidance in relation to the taxes which are the subject of
this Convention. Any information so exchanged shall be treated as secret and
shall not be disclosed to persons other than persons (including a court or
administrative tribunal) concerned with the assessment, collection or enforcement
in respect of the taxes which are the subject of this Convention. No information
as aforesaid shall be exchanged which would disclose any trade, business,
industrial or professional secret or trade process.

ARTICLE 25
1 
Nothing in this Convention shall affect the
fiscal privileges of members of diplomatic or consular missions under the
general rules of international law or under the provisions of special agreements.

2 
This Convention shall not apply to International
Organizations, to organs or officials thereof and to persons who are members
of a diplomatic or permanent mission or consular post of a third State, being
present in a Contracting State and not treated in either Contracting State
as residents in respect of taxes on income or capital gains.
ARTICLE 26
1 
This Convention may be extended, either in its
entirety or with modifications to any territory for whose international relations
either of the Contracting States is responsible, and which imposes taxes substantially
similar in character to those which are the subject of this Convention and
any such extension shall take effect from such date and subject to such modifications
and conditions (including conditions as to termination) as may be specified
and agreed between the Contracting States in notes to be exchanged for this
purpose.
2 
The termination of this Convention under 
Article 29 shall, unless otherwise expressly
agreed by both Contracting States, terminate the application of this Convention
to any territory to which it has been extended under this Article.
ARTICLE 27
1 
The provisions of this Convention shall not
be construed to restrict in any manner any exclusion, exemption, deduction,
credit or other allowance now or hereafter accorded by the laws of a Contracting
State in the determination of the tax imposed by that Contracting State.
2 
Where under any provision of this Convention
any person is relieved from tax in a Contracting State on certain income and,
under the law in force in the other Contracting State, that person is subject
to tax in that other State in respect of that income by reference to the amount
thereof which is remitted to or received in that other State, the relief from
tax to be allowed under this Convention in the first-mentioned State shall
apply only to the amounts so remitted or received.
3 
Nothing in this Convention shall be construed
as preventing Canada from imposing a tax on amounts included in the income
of a resident of Canada by virtue of the provisions of 
section 91 of the Canadian Income Tax Act,
so far as they are in force on the date of entry into force of this Convention,
or have been modified only in minor respects, so as not to affect their general
character.
4 
The aggregate of the amount or value of the
dividend and the amount of the tax credit referred to in 
paragraph 3(b) of Article 10 of this Convention
shall be treated as a dividend for Canadian income tax purposes.
5 
Each of the Contracting States will endeavour
to collect on behalf of the other Contracting State such amounts as may be
necessary to ensure that relief granted by this Convention from taxation imposed
by that other State does not ensure to the benefit of persons not entitled
thereto. However, nothing in this paragraph shall be construed as imposing
on either of the Contracting States the obligation to carry out administrative
measures of a different nature from those used in the collection of its own
tax or which would be contrary to its public policy.
6 
The competent authorities of the Contracting
States may communicate with each other directly for the purpose of applying
this Convention.
ARTICLE 28
1 
The Convention shall come into force on the
date when the last of all such things shall have been done in the United Kingdom
and Canada as are necessary to give the Convention the force of law in the
United Kingdom and Canada respectively and shall thereupon have effect:
(a) in Canada:
(i) in respect of tax withheld at the source
on amounts paid or credited to non-residents on or after 1 January 1976;
(ii) in respect of other Canadian taxes,
for the 1976 taxation year and subsequent years;
(b) in the United Kingdom:
(i) in relation to any dividend to which 
paragraph 3 of Article 10 applies in respect
of income tax and payment of tax credit, for any year of assessment beginning
on or after 6 April 1973. A dividend paid on or after 1 April 1973 but before
6 April 1973 shall be treated for tax credit purposes as paid on 6 April 1973;

(ii) in relation to any other provision of
this Convention, in respect of income tax and capital gains tax, for any year
of assessment beginning on or after 6 April 1976;
(iii) in respect of corporation tax, for
any financial year beginning on or after 1 April 1976;
(iv) in respect of petroleum revenue tax
for any chargeable period beginning on or after 1 January 1976;
(v) in respect of development land tax, for
any realised development value accruing on or after 1 August 1976.
2 
The Governments of the Contracting States shall,
as soon as possible, inform one another in writing of the date when the last
of all such things have been done as are necessary to give the Convention
the force of law in the United Kingdom and Canada respectively. The date specified
by the last Government to fulfil this requirement, being the date on which
the Convention shall come into force in accordance with 
paragraph 1, shall be confirmed in writing
by the Government so notified.
3 
Subject to the provisions of 
paragraph 4 of this Article the existing Agreement
shall cease to have effect as respects taxes to which this Convention applies
in accordance with the provisions of paragraph
1 of this Article.
4 
Where, however, any greater relief from tax
would have been afforded by any provision of the existing Agreement than is
due under this Convention, any such provision as aforesaid shall continue
to have effect—
(a) in the United Kingdom for any year of
assessment, chargeable period or financial year;
(b) in Canada for any taxation year;
beginning before the entry into force of this Convention.

5 
The existing Agreement shall terminate on the
last date on which it has effect in accordance with the foregoing provisions
of this Article.
6 
The termination of the existing Agreement as
provided in paragraph 5
of this Article shall not revive the Agreement between
the Government of Canada and the Government of the United Kingdom of Great
Britain and Northern Ireland for the Avoidance of Double Taxation with respect
to certain classes of Income signed at Ottawa on 6 December 1965. Upon the entry
into force of this Convention that Agreement shall terminate.
7 
In this Article the term 
“the existing Agreement” means 
the Agreement between the Government of Canada and
the Government of the United Kingdom of Great Britain and Northern Ireland
for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion
with respect to Taxes on Income and Capital Gains signed at Ottawa on 12 December
1966.
ARTICLE 29
This Convention shall continue in effect indefinitely
but the Government of either Contracting State may, on or before 30 June in
any calendar year after the year 1980 give notice of termination to the Government
of the other Contracting State and, in such event, this Convention shall cease
to be effective:
(a) in Canada:

(i) in respect of tax withheld at the source on amounts paid or credited to non-residents
on or after 1 January in the calendar year next following that in which the
notice is given; and
(ii) in respect of other Canadian taxes for any taxation year ending in or after
the calendar year next following that in which the notice is given;
(b) in the United Kingdom;

(i) in respect of income tax and capital gains tax for any year of assessment
beginning on or after 6 April in the calendar year next following that in
which such notice is given;
(ii) in respect of corporation tax, for any financial year beginning on or after
1 April in the calendar year next following that in which such notice is given;

(iii) in respect of petroleum revenue tax for any chargeable period beginning on
or after 1 January in the calendar year next following that in which such
notice is given;
(iv) in respect of development land tax, for any realised development value accruing
on or after 1 April in the calendar year next following that in which such
notice is given.

In witness whereof the undersigned, duly authorised thereto, have
signed this Convention.

Done in duplicate at London,
this 8th day of September 1978 in the English and French languages, both texts
being equally authoritative.
