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Exchange of Notes between the Government of Canada and the Government of Israel for the Prevention of Double Taxation of Income derived from the Operation of Ships or Aircraft [1966] CATSer 11 (30 November 1966)

E102288 - CTS 1966 No. 23

EXCHANGE OF NOTES BETWEEN THE GOVERNMENT OF CANADA AND THE GOVERNMENT OF ISRAEL FOR THE PREVENTION OF DOUBLE TAXATION OF INCOME DERIVED FROM THE OPERATION OF SHIPS OR AIRCRAFT

I

The Ambassador of Israel to the Secretary of State for External Affairs

EMBASSY OF ISRAEL

November 30, 1966.

The Hon. Paul Martin, P.C., M.P.
Secretary of State for External Affairs
Ottawa, Ontario

Sir:

I have the honour to refer to discussions between representatives of our two Governments for the conclusion of an Agreement for the avoidance of double taxation of income derived from the operation of ships or aircraft.

On instructions from my Government, I have the honour to propose that an Agreement be concluded between the Government of Israel and the Government of Canada having the following terms:

(1) The Government of Israel shall exempt, from income tax and all other taxes on income imposed in Israel, all income derived by a Canadian enterprise from the operation by that enterprise of ships or aircraft in international traffic.

(2) The Government of Canada shall exempt, from income tax and all other taxes on income imposed by it, all income derived by an Israeli enterprise from the operation by that enterprise of ships or aircraft in international traffic.

(3) For the purpose of this Agreement, unless the context otherwise requires, the term:

(a) "Canadian enterprise" shall mean the Government of Canada, a physical person ordinarily resident in Canada and not ordinarily resident in Israel, and a corporation or a partnership managed and controlled in Canada;

(b) "Israeli enterprise" shall mean the Government of Israel, a physical person ordinarily resident in Israel and not ordinarily resident in Canada, and a body of persons managed and controlled in Israel;

(c) "the operation of ships or aircraft" shall mean the business of transporting persons, livestock, goods or mail, by ship or aircraft owned or chartered by a Canadian or an Israeli enterprise, respectively; and

(d) "international traffic" shall include traffic between places in one country in the course of a voyage or flight that extends over more than one country.

(4) As regards the application of this Agreement by one of the Contracting Governments, any term not otherwise defined shall, unless the context otherwise requires, have the meaning which it has under the laws of that Contracting Government relating to the taxes which are the subject of this Agreement.

(5) This Agreement shall become effective with respect to taxation years commencing on or after the 1st day of January 1965.

(6) This Agreement shall continue in effect indefinitely but may be terminated on the 1st day of January of any calendar year after 1967 by either of the Contracting Governments if that Contracting Government has given at least six months notice in writing before that day to the other Contracting Government. In such event the Agreement shall cease to be effective with respect to any taxation year commencing in or after that calendar year.

If the foregoing proposals are acceptable to your Government, I have the honour to propose that this Note and your reply shall constitute an Agreement between our two Governments which will enter into force upon the date of your reply.

Yours sincerely,

Gershon Avner

Ambassador of Israel

II

The Secretary of State for External Affairs to the Ambassador of Israel

DEPARTMENT OF EXTERNAL AFFAIRS

Ottawa, November 30, 1966

His Excellency Mr. G. Avner
Ambassador of Israel
Embassy of Israel
Ottawa, Ontario

Excellency,

I have the honour to refer to your Note of November 30 proposing an agreement between our two Governments for the avoidance of double taxation on income derived from the operation of ships or aircraft. The terms proposed in your Note are acceptable to the Government of Canada, and I have the honour to confirm that your Note and this reply, which is authentic in English and French, shall constitute an agreement between the Government of Canada and the Government of Israel, to be effective from the date of this reply.

Accept, Excellency, the assurances of my highest consideration.

Paul Martin

Secretary of State for External Affairs.