Canadian Treaty Series
E102392 - CTS 1993 No. 28
AGREEMENT BETWEEN THE GOVERNMENT OF CANADA AND THE GOVERNMENT OF THE REPUBLIC OF VENEZUELA FOR THE AVOIDANCE OF DOUBLE TAXATION REGARDING SHIPPING AND AIR TRANSPORT
THE CONTRACTING PARTIES
DESIRING to conclude an agreement for the avoidance of double taxation in respect of the operation of ships and aircraft in international traffic;
HAVING EXAMINED and verified the reciprocity of legal treatment concerning the taxation of such operations;
HAVE AGREED AS FOLLOWS:
1. Canada shall exempt Venezuelan enterprises from all taxes on capital relating to, and on income derived from, the operation of ships or aircraft in international traffic.
2. The Republic of Venezuela shall exempt Canadian enterprises from all taxes on capital relating to, and on income derived from, the operation of ships or aircraft in international traffic.
3. The exemptions provided in paragraphs 1 and 2 above shall also apply to income derived from, or capital relating to, the participation of Canadian or Venezuelan enterprises in pools, joint businesses or international operating agencies.
4. In no case shall paragraphs 1, 2 and 3 apply to income not directly derived from or relating to the operation of ships or aircraft in international traffic.
For the purposes of this Agreement:
(A) The expression "Venezuelan enterprises" means enterprises of:
1) the Government of Venezuela,
2) individuals, other than nationals of Canada, resident in Venezuela for the purposes of taxes imposed by the Government of Venezuela and not resident in Canada, or
3) corporations, groups of persons or other entities organized under the laws of Venezuela and resident in Venezuela for the purposes of taxes imposed by the Government of Venezuela.
(B) The expression "Canadian enterprises" means enterprises of:
1) The Government of Canada,
2) individuals, other than nationals of Venezuela, resident in Canada for the purposes of taxes imposed by the Government of Canada and not resident in Venezuela, or
3) corporations, groups of persons or other entities organized under the laws of Canada, and resident in Canada for the purposes of taxes imposed by the Government of Canada.
(C) The term "income" includes:
1) profits, net profits, gross receipts and revenues derived directly from the operation of ships or aircraft in international traffic, and
2) interest on sums generated directly from the operation of ships or aircraft in international traffic provided that such interest is incidental to the operation and the other income from such operation is exempt from tax by one of the Contracting Parties by virtue of this Agreement.
(D) The term "operation of ships or aircraft in international traffic" includes, but is not limited to:
1) the charter or rental of ships or aircraft,
2) the rental of containers and related equipment, and
3) the alienation of ships, aircraft, containers and related equipment, provided that such charter, rental or alienation is incidental to the operation of ships or aircraft in international traffic.
(E) The term "taxes" includes all levies based on income and capital imposed by the Republic of Venezuela or Canada, as the case may be. It does not include municipal taxes in Venezuela. However, should Venezuela grant a reduction or exemption from its municipal taxes to a third state, such reduction or exemption shall automatically be applied to Canadian enterprises.
(F) Any term not otherwise defined shall, unless the context otherwise requires, be given the meaning by each Contracting Party which it has for the purposes of the laws of the Contracting Party relating to the taxes which are the subject of this Agreement.
The Contracting Parties shall notify each other through diplomatic channels when the constitutional requirements for the entry into force of this Agreement have been satisfied. The Agreement shall enter into force on the date of the latter of these notifications and shall take effect with respect to taxation years commencing on or after January 1, 1988.
This Agreement shall remain in force for an indefinite period. However, either Contracting Party may, on or before June 30 of any calendar year after the year 1990, give notice of termination of the Agreement to the other Contracting Party. In such event, the Agreement shall cease to be effective for taxation years beginning on or after the first day of January in the calendar year following that in which the notice is given.
Both Parties agree to negotiate through diplomatic channels to solve any dispute arising from the interpretation or the application of the Agreement.
In Witness Whereof, the undersigned, being duly authorized thereto by their respective Governments have signed this Agreement.
Done in duplicate at Caracas, this twenty-sixth day of June, nineteen hundred and ninety, in the English, French and Spanish languages, each being equally authentic.
John W. Graham
FOR THE GOVERNMENT OF CANADA
Reinaldo Feguerodo Planchart
FOR THE GOVERNMENT OF THE REPUBLIC OF VENEZUELA.