Page:United States Statutes at Large Volume 56 Part 2.djvu/323

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CANADA-DOUBLE TAXATION-MAR. 4, 1942 4. The provisions of this Article shall not be construed so as to contravene the Tax Convention between the United States of America and Canada, effective January 1, 1936, to April 29, 1941.[1] ARTICLE XII Dividends and interest paid on or after the effective date of this Convention by a corporation organized under the laws of Canada to individual residents of Canada, other than citizens of the United States of America, or to corporations organized under the laws of Canada shall be exempt from all income taxes imposed by the United States of America. ARTICLE XIII Corporations organized under the laws of Canada, more than 50 percent of the outstanding voting stock of which is owned directly or indirectly throughout the last half of the taxable year by individual residents of Canada, other than citizens of the United States of America, shall be exempt from any taxes imposed by the United States of America with respect to accumulated or undistributed earnings, profits, income or surplus of such corporations. With respect to corporations organized under the laws of Canada not exempt from such taxes under the provisions of this Article the compe- tent authorities of the two contracting States will consult together. ARTICLE XIV 1. (a) The United States income tax liability for any taxable year beginning prior to January 1,1936, of any individual resident of Canada, other than a citizen of the United States of America, or of any corpo- ration organized under the laws of Canada, remaining unpaid as of the date of signature of this Convention may be adjusted on a basis satisfactory to the Commissioner: Provided, That the amount to be paid in settlement of such liability shall not exceed the amount of the liability which would have been determined if- (A) the Revenue Act of 1936 as modified by the Tax Convention between the United States of America and Canada, effective January 1, 1936, to April 29,1941[I] (exceptinthe case of a corpo- ration organized under the laws of Canada more than 50 percent of the outstanding voting stock of which was owned directly or indirectly throughout the last half of the taxable year by citizens or residents of the United States of America) and (B) Articles XII and XIII of this Convention had been in effect for such year. If the taxpayer was not, within the meaning of the Revenue Act of 1936, engaged in trade or business within the United States of America and had no office or place of business therein during the taxable year, 1[Treaty Series 920; 50 Stat. 1399.1 Prior Convention not contravened. Dividends and in- terest. Canadian corpora- tions. Unpaid tax. 49 Stat. 148 . 56 STAT.] 1403