Canada, Madagascar Agree Lower Cross-Border WHT Rates

by Mike Godfrey, Tax-news.com, Washington

06 December 2016

Canada and Madagascar have signed a double taxation agreement (DTA) that will limit the withholding tax rates for dividends, interest, and royalties.

The DTA was signed on November 24. It sets the maximum withholding tax rate for dividends at 15 percent. It limits the rate to five percent for dividends paid to a company that holds directly or indirectly at least 25 percent of the voting power of the company that pays the dividends.

The DTA also sets a maximum 10 percent withholding tax rate for payments of interest and royalties. It exempts from withholding tax certain payments of interest, and provides a five percent rate for certain payments of royalties.

The agreement includes provisions for the exchange of tax information, in line with the standard developed by the OECD.

The DTA will enter into force once Canada and Madagascar have notified each other that their respective domestic ratification procedures have been completed.

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