End of the "Address Rule" for Determining Withholding on Payments to Non-Residents — Extension of Transitional Period Announced

In our earlier update, New Developments in Canadian Withholding Tax Obligations — New Forms Signal the End of the "Address Rule", we discussed the change from the Canada Revenue Agency's previous position that generally accepted the use of the payee's name and address for determining whether to apply treaty benefits. There was a transition period until December 31, 2011 to allow payers to gather any additional information they needed. The Canada Revenue Agency has announced that it is extending the transitional period from December 31, 2011 until December 31, 2012 to allow payers to gather additional information about payees and to perform procedural changes and system upgrades that may be required to react to the increase in information.

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