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The Canada Revenue Agency (“CRA”), on February 11, 2010, issued a Technical Memorandum on the application by Canada of the look-through rule in Article IV(6) of the Canada-U.S. Income Tax Convention (the “Treaty”) to U.S. limited liability companies (LLCs) and their members
Any structuring of investments by Japanese investor into Canada through the U.S., or any acquisition of a U.S. business which either operates a Canadian business or which receives Canadian-sourced payments, and any decision to acquire a Canadian business or to expand Canadian operations where business arrangements and particularly intercompany funding result in a U.S. resident receiving Canadian-sourced cash flows should include a review of how the Limitation on Benefits (“LOB”) rules in the recently revised Canada-U.S. Income Tax Convention (the “Treaty”) may apply
