Protocol, signed March 28,
1984, amending the Convention between the United States of America
and Canada with respect to Taxes on Income and on Capital, signed
September 26, 1980 (Second Protocol)
Paragraph 5 of Article
XVIII (Pensions and Annuities) of the Convention shall be deleted
and replaced by the following:
"5. Benefits under the social security
legislation in a Contracting State paid to a resident of the other
Contracting State shall be taxable as follows:
(a) Such benefits shall be taxable only
in that other State;
(b) Notwithstanding the provisions of subparagraph
(a), one-half of the total amount of any such benefit paid in
a taxable year shall be exempt from taxation in that other State."
 Article
9, paragraph 2, of the Third Protocol
deleted and replaced the above paragraph 5.
1. Subparagraph 3(a) of Article
XXIX (Miscellaneous Rules) of the Convention shall be deleted
and replaced by the following:
"(a) under paragraphs 3 and 4 of Article
IX (Related Persons), paragraphs 6 and 7 of Article XIII (Gains),
paragraphs 1, 3, 4, 5(b), and 6(b) of Article XVIII (Pensions
and Annuities), paragraphs 5 and 7 of Article XXIX (Miscellaneous
Rules), paragraphs 3 and 5 of Article XXX (Entry into Force),
and Articles XIX (Government Service), XXI (Exempt Organizations),
XXIV (Elimination of Double Taxation), XXV (Non-Discrimination),
and XXVI (Mutual Agreement Procedure); and"
Article 17, paragraph 1, of the Third Protocol
deleted and replaced the above subparagraph (a).
2. There shall be added to Article
XXIX (Miscellaneous Rules) of the Convention a new paragraph
7, as follows:
"7. One-half of the total amount of benefits
under the social security legislation in Canada paid in a taxable
year to a resident of Canada who is a citizen of the United States
shall be exempt from taxation in the United States."
Article
17, paragraph 2, of the Third Protocol
deleted and replaced the above paragraph 7.
1. The Protocol shall be subject to ratification
in accordance with the applicable procedures of the United States
and Canada and instruments of ratification shall be exchanged
as soon as possible.
2. The Protocol shall enter into force upon
the exchange of instruments of ratification and shall have effect
in accordance with the provisions of Article XXX (Entry into Force)
of the Convention.
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