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ARTICLE 7

U.S. Income Tax Treaty — Canada Income Tax Treaty and Protocols - 1980 · 2026-10-03 edition · updated 2026-10-04 · United States

  1. Paragraph 3 of Article XII (Royalties) of the Convention shall be deleted and replaced by the following: “3. Notwithstanding the provisions of paragraph 2,

(a) Copyright royalties and other like payments in respect of the production or reproduction of any literary, dramatic, musical or artistic work (other than payments in respect of motion pictures and works on film, videotape or other means of reproduction for use in connection with television);

(b) Payments for the use of, or the right to use, computer software; (c) Payments for the use of, or the right to use, any patent or any information concerning industrial, commercial or scientific experience (but not including any such information provided in connection with a rental or franchise agreement); and

(d) Payments with respect to broadcasting as may be agreed for the purposes of this paragraph in an exchange of notes between the Contracting States; arising in a Contracting State and beneficially owned by a resident of the other Contracting State shall be taxable only in that other State.”

  1. Paragraph 6 of Article XII (Royalties) of the Convention shall be deleted and replaced by the following: “6. For the purposes of this Article,

(a) Royalties shall be deemed to arise in a Contracting State when the payer is 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 State a permanent establishment or a fixed base in connection with which the obligation to pay the royalties was incurred, and such royalties are borne by such permanent establishment or fixed base, then such royalties shall be deemed to arise in the State in which the permanent establishment or fixed base is situated and not in any other State of which the payer is a resident; and

(b) Where subparagraph (a) does not operate to treat royalties as arising in either Contracting State and the royalties are for the use of, or the right to use, intangible property or tangible personal property in a Contracting State, then such royalties shall be deemed to arise in that State.”

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▸Contents — U.S. Income Tax Treaty — Canada Income Tax Treaty and Protocols - 1980
U.S. Income Tax Treaty — Canada Income Tax Treaty and Protocols - 1980

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