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Cdn$500,000. The first Cdn$500,000 of cumulative branch profits are exempt from branch 

tax. See also note (4).

 Royalties—Royalties are generally defined as payments for the use of, or right to use, any 

cultural property and any copyright of scientific work; any patent, trademark, design or 

model, plan, secret formula or process; and information concerning industrial, commercial 

or scientific experience. The definition also includes gains from the alienation of any 

intangible property or rights in such property to the extent that such gains are contingent 

on the productivity, use or subsequent disposition of such property or rights. See also  

note (5).

 

The following royalties are exempt from withholding tax:

• Cultural royalties, excluding royalties in respect of films or motion pictures, and

videotapes or other media for use in television broadcasting

• Payments for the use of, or right to use, computer software

• Payments for the use of, or right to use, patents or information concerning industrial,

commercial or scientific experience (excluding any such information in relation to a 

rental or franchise agreement)

• Payments in respect of broadcasting as may be agreed to between the countries.

Pensions/Annuities—Pensions are defined to include any payment under a superannuation, 

pension, or other retirement arrangement and certain other amounts, but exclude income 

averaging annuity contract payments. The definition of pensions also includes Roth IRAs 

and similar arrangements. Payments of Old Age Security and Canada/Quebec Pension 

Plan benefits to U.S. residents are taxable only in the U.S. and are not subject to Canadian 

withholding tax. The U.S. does not withhold tax on social security benefits paid to 

Canadian residents, and only 85% of such benefits are taxable by Canada.

Annuities are defined as periodic payments payable during a person’s lifetime or for a 

specified period of time, under an obligation to make the payments in return for adequate 

and full consideration (other than services rendered). The definition excludes non-periodic 

payments or any annuity the cost of which was tax deductible in the country in which it 

was acquired. See also note (6).

Current as of September 30, 2014