Issue
Article 2, paragraph 3(b)(3) the words "la redevance....sur les resultats...." do they commit Canada to treat, for foreign tax credit purposes, a royalty as an income tax?
Position
The above mentioned words could be interpreted to include royalty payments in respect of prospecting, research, development and pipeline transportation activities. However, the Department of Finance is aware of the problem and has disscussed it with the Algerian delegation to the current round of treaty negotiations. Both Canada and Algeria agree that there is no intention that the Canada/Algeria Income Tax Convention should apply to anything other than income or profits taxes.