Protocol to the 1980 Treaty (1984)
Date of Conclusion: 28 March 1984.
Entry into Force: 16 August 1984.
Effective Date: 1 January 1985 (see Article III).
SECOND PROTOCOL AMENDING THE CONVENTION BETWEEN
THE UNITED STATES OF AMERICA AND CANADA
WITH RESPECT TO TAXES ON INCOME AND ON CAPITAL
SIGNED AT WASHINGTON ON SEPTEMBER 26 1980
AS AMENDED BY THE PROTOCOL SIGNED AT OTTAWA ON JUNE 14 1983
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.”
- 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”
- 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.”
- This 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.
- 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.
In witness whereof, the undersigned, being duly authorized thereto by their respective Governments, have signed this Protocol.
Done in duplicate at Washington, this 28th day of March 1984, in the English and French languages, the two texts being equally authentic.