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Upcoming Treaty Changes— Review Withholding Obligations Now
Canadian residents should assess whether their withholding tax obligations will soon change now that Canada has ratified the multilateral instrument (MLI). Canadian residents may have to meet new conditions starting January 1, 2020 to benefit from the lower withholding tax rate under affected treaties when paying or receiving amounts such as interest, dividends and royalties. In addition, these Canadian residents will also have to carefully consider how the MLI may affect different bilateral tax treaties — in some cases, certain optional MLI provisions could apply, depending on whether both Canada and its treaty partner have adopted the particular provision.