How will CRA interpret "paid or payable...directly or indirectly" in Art. XXIX A(2)(e) and (4)(b) of the Canada-U.S. Convention? CRA responded:
The CRA will interpret the words "paid or payable...directly or indirectly" contained in Articles XXIX A(2)(e) and (4)(b) of the Treaty consistent with the approach we have taken in interpreting those words under subparagraph 95(2)(a)(ii) of the Act. For example, for the purpose of applying Article XXIX A(2)(e) or (4)(b) of the Treaty, a payment by a company to a qualifying person will be considered to be made indirectly to a non-qualifying person if there is a sufficient link between the payment and a subsequent payment by the qualifying person to a non-qualifying person (e.g. back-to-back arrangement).