The Canada-France tax agreement, also known as the Convention between Canada and France for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and on Capital, was signed in 1975 and has been in force since 1976.
The agreement is designed to avoid double taxation of income and capital gains between Canada and France for individuals and companies. Double taxation can occur when a taxpayer is subject to tax on the same income in two different countries. This can happen when a person or company has income in both Canada and France.
Under the Canada-France tax agreement, income and capital gains are taxed in the country where they are earned, with some exceptions. For example, dividends paid by a French company to a Canadian resident are taxed at a maximum rate of 15%, while interest and royalties may also be subject to lower withholding tax rates.
The agreement also contains provisions for the exchange of information between Canada and France to help prevent tax evasion. Each country can request information from the other country related to the administration and enforcement of their respective tax laws. This helps ensure that taxpayers do not engage in tax fraud or other illegal activities to avoid paying their fair share of taxes.
The Canada-France tax agreement is just one of several international tax treaties that Canada has signed with other countries. These agreements help promote trade and investment by providing greater tax certainty and reducing tax barriers for individuals and companies doing business in Canada and abroad.
In conclusion, the Canada-France tax agreement is an important international tax treaty that helps prevent double taxation and tax evasion between Canada and France. It also promotes trade and investment by reducing tax barriers for individuals and companies doing business in both countries. As such, it plays a critical role in supporting economic growth and prosperity for both Canada and France.