Proclamation giving notice that the annexed November 30, 1995 supplementary agreement, entitled Protocol to the Tax Convention Between the Government of Canada and the Government of the French Republic signed on May 2, 1975 and amended by the Protocol of January 16, 1987, came into force on September 1, 1998 — “ARTICLE 10
Article 10 of the Convention shall be deleted and replaced by the following: “ARTICLE 10 Dividends 1 Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State. 2 However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident and according to the laws of that State, but if the recipient is the beneficial owner of the dividends the tax so charged shall not exceed: (a) 5 per cent of the gross amount of the dividends if the beneficial owner is a company liable to corporation tax which: (i) controls directly or indirectly at least 10 per cent of the voting power in the company paying the dividends where that company is a resident of Canada; (ii) holds directly or indirectly at least 10 per cent of the capital of the company paying the dividends where that company is a resident of France; (b) notwithstanding the provisions of subparagraph (a), 10 per cent of the gross amount of the dividends if they are paid by a non-resident owned investment corporation that is a resident of Canada to a company that is a resident of France and that controls directly or indirectly at least 10 per cent of the voting power in the company paying the dividends; (c) 15 per cent of the gross amount of the dividends in all other cases. The provisions of this paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid. 3 (a) A resident of Canada who is the beneficial owner of dividends received from a company which is a resident of France, which dividends, if received by a resident of France would entitle such resident to a tax credit (“avoir fiscal”), shall be entitled to a payment from the French Treasury of an amount equal to such tax credit (“avoir fiscal”), subject to the deduction from such payment of the tax provided for in subparagraph (c) of paragraph 2. (b) The provisions of subparagraph (a) shall apply only to a resident of Canada who is: (i) an individual; or (ii) a company other than a company that holds directly or indirectly at least 10 per cent of the capital of the company resident in France paying the dividends. (c) The provisions of subparagraph (a) shall not apply if the beneficial owner of the dividends is not liable to Canadian tax on the dividends and the payment of the French Treasury. However, the competent authorities of the Contracting States may agree to also apply the provisions of subparagraph (a) to any organisation referred to in subparagraph (a) of paragraph 7 of Article 29, but only with respect to that part of the dividends which corresponds to the rights owned in such organisations by residents of Canada and provided that, if so requested by the competent authorities, that part of the dividends is taxed in the hands of such residents. (d) The provisions of subparagraph (a) shall not apply if the beneficial owner of the dividends does not, when asked by the French tax administration, justify that he is the owner of the interest giving rise to the payment of the dividends and that the holding of that interest does not have as its main objective, or as one of its main objectives, to allow another person, whether a resident of a Contracting State or not, to take advantage of the provisions of subparagraph (a). (e) The gross amount of the payment from the French Treasury referred to in subparagraph (a) shall be treated as a dividend for the application of this Convention. 4 A resident of Canada who receives dividends paid by a company which is a resident of France shall, unless it is eligible to receive a payment from the French Treasury referred to in subparagraph (a) of paragraph 3, be entitled to the refund of the prepayment to the extent that the prepayment has effectively been paid by the company with respect to the dividends. The gross amount of the prepayment refunded shall be deemed to be a dividend for the purpose