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Canada and Poland sign new tax convention
By Government of Canada
May 14, 2012 - 12:05:33 PM

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Ottawa, Ontario - Prime Minister Stephen Harper and Polish Prime Minister Donald Tusk today witnessed the signing of a new tax convention that will reduce tax barriers and encourage increased trade and investment between the two countries.

“Canada is committed to strengthening its relationship with Poland by fostering an environment that will encourage growth and long-term prosperity for both countries,” said Prime Minister Harper. “The new tax convention is a step in the right direction, as it will help reduce tax barriers, and support increased bilateral trade and investment.”

The new tax convention will replace the 1987 Tax Convention between Canada and Poland to better reflect current Canadian and international tax convention policies.  In particular, the new tax convention lowers the maximum rate of withholding tax imposed on dividends paid between companies, and on interest payments.

Consistent with the Government of Canada's policy announced in Budget 2007 to combat international tax evasion, the updated tax convention also includes provisions reflecting the standard developed by the Organization for Economic Co-operation and Development (OECD) for the effective exchange of tax information.

More specifically, the new tax convention will:

  • Further reduce tax barriers in order to encourage trade and investment between Canada and Poland;
  • Lower the maximum rate of withholding tax on dividends paid between companies from 15% to 5% and on interest payments from 15% to 10%;
  • Ensure the elimination of double taxation for individuals and companies doing business or earning income in the other country.

Canada currently has tax conventions in force with 89 countries. The signature of this new tax convention with Poland reflects the efforts of the Government of Canada to update its tax convention network.

Prime Minister Stephen Harper made the following remarks at a joint news conference with Donald Tusk, Prime Minister of the Republic of Poland:

“Prime Minister Tusk, you were a gracious host during my 2008 trip to Poland and it is a pleasure to at last be able to return your hospitality.

“We all recall that a similar visit, scheduled for 2010, was cancelled following the tragic plane crash that took the lives of President Kaczynski, his wife Maria and so many others.

“Today we again remember them and renew our expressions of sorrow.

“Today we also reaffirm the deep, historic partnership and friendship between Canada and Poland.

“The free Poland, which has arisen from the ashes of the old Communist state, is a democracy, a NATO ally, a partner with Canada in Afghanistan and an important market for Canadian exports.

“And largely due to Prime Minister Tusk’s leadership, Poland is also the only EU country to have completely avoided a recession following the 2008-2009 global economic and financial crisis. 

“There is therefore much that draws us together, including a vibrant Polish diaspora here in Canada of almost a million people.

“And of course, when a Comprehensive Economic Trade Agreement between Canada and the EU is completed, our ties with Poland will be further strengthened.

“Now of course moments ago, Prime Minister Tusk and I witnessed the signing of an updated double taxation agreement, to assist companies doing business in both our countries.

“This completes a project that we began on my visit to Poland. 

“Prime Minister Tusk and I have also formally agreed to work together to advance energy security.

“And finally, I am pleased to announce that Canada will make a donation to support the preservation of the Auschwitz-Birkenau Memorial in Poland.

“Prime Minister, your visit here has been long anticipated.

“And I know that you were well-received yesterday in Wilno, the site of Canada’s first Polish settlement a hundred and fifty-eight years ago.

“Like you, many Wilno residents are proud to have roots in Kaszuby.

“And Wilno is a living symbol of the generations-old relationship that connects our two countries, a relationship that we value greatly, and look forward to strengthening.

“So again, Donald, welcome to Canada.”

The Joint Statement can be found at www.nrcan-rncan.gc.ca.

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