CANADA-DOUBLE TAXATION-MAR . 4, 1942 Convention and protocol between the United States of America and Canada respecting double taxation. Signed at Washington AMarch 4, 1942; ratification advised by the Senate of the United States May 28, 1942; ratified by the President of the United States June 4, 1942; ratified by Canada June 12, 1942; ratifications exchanged at Wash- ington June 15, 1942; proclaimed by the Presidentof the United States June 17, 1942. BY THE PRESIDENT OF THE UNITED STATES OF AMERICA A PROCLAMATION WHEREAS a convention between the United States of America and Canada providing for the avoidance of double taxation and prevention of fiscal evasion in the case of income taxes, and a protocol forming an integral part of the said convention, were concluded and signed by the respective Plenipotentiaries of the two countries at Washington on the fourth day of March, one thousand nine hundred and forty-two, the original of which convention and protocol are word for word as follows: The Government of the United States of America and the Govern- ment of Canada, being desirous of further promoting the flow of commerce between the two countries, of avoiding double taxation and of preventing fiscal evasion in the case of income taxes, have decided to conclude a Convention and for that purpose have appointed as their Plenipotentiaries: Mr. Sumner Welles, Acting Secretary of State of the United States of America; and Mr. Leighton McCarthy, K. C ., Envoy Extraordinary and Minister Plenipotentiary of Canada at Washington; who, having communicated to one another their full powers found in good and due form, have agreed upon the following Articles: ARTICLE I An enterprise of one of the contracting States is not subject to taxation by the other contracting State in respect of its industrial and commercial profits except in respect of such profits allocable in accordance with the Articles of this Convention to its permanent establishment in the latter State. No account shall be taken in determining the tax in one of the con- tracting States, of the mere purchase of merchandise effected therein by an enterprise of the other State. ARTICLE II For the purposes of this Convention, the term "industrial and com- mercial profits" shall not include income in the form of rentals and March 4, 1942 IT. S. 983] Plenipotentiaries. Tax on profits, re- striction. Purchase of mer- chandise. "Industrial and commercial profits." 56 STAT.] 1399
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