Canada-US tax treaty.

CANADA; UNITED States

The article reports that on December 14, 2007, the fifth Protocol to the Canada-U.S. Income Tax Convention was ratified by Canada when Bill S-2 received royal assent. It is reported that the U.S. has yet to complete its ratification process and the Protocol will enter into force once it has been ratified by the U.S. As reported, the Protocol will extend Treaty benefits, such as the reduced withholding tax rates and the exemption for capital gains in certain circumstances, to U.S. limited liability companies (LLCs). It is also reported that although the Protocol provides for the extension of Treaty benefits to LLCs, it also proposes to deny Treaty benefits for other types of hybrid entities in two new rules.