DoubleTaxationPakistan – Canada tax treaty: residence, 183 days, rates
Convention between Canada and the Islamic Republic of Pakistan for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income (signed at Ottawa on 24 February 1976), with Protocol
- Signed: 24/02/1976
- In force since: 15/12/1977
- Official text
If both countries treat you as resident
- Dual-resident individual: (a) resident of the State where he has a permanent home available to him; if he has one in both States — the State with which his personal and economic relations are closest (centre of vital interests); (b) if that State cannot be determined, or if he has not a permanent home available to him in either State — the State of his habitual abode; (c) habitual abode in both States or in neither — nationality; (d) national of both or of neither — mutual agreement of the competent authorities. Art. IV(2) Pakistan–Canada Convention (1976)
- Pakistan lists among its covered agreements the conventions with Canada (signed 24.02.1976, in force 15.12.1977), France (15.06.1994; 01.09.1996), the Netherlands (24.03.1982; 04.10.1982) and the United Kingdom (24.11.1986; 08.12.1987). MLI Article 4 deals only with dual-resident persons other than individuals, so the individual tie-breaker is not affected. OECD — MLI position of Pakistan at deposit of the instrument of ratification (18 December 2020)
- If you have not a permanent home available to you in either State, the treaty goes straight to habitual abode (the centre of vital interests step applies only where there is a home in both States). Art. IV(2)(b) Pakistan–Canada Convention
- Centre of vital interests: the State with which your personal and economic relations are closest. Art. IV(2)(a) Pakistan–Canada Convention
- Habitual abode in both States or in neither — the State of which you are a national; national of both or neither — mutual agreement of the competent authorities (Art. XXIV). Art. IV(2)(c), (d) Pakistan–Canada Convention
Income: who taxes it
| Income | Treaty rule | Article |
|---|---|---|
| Salary (employment) | The country where the work is done may tax it. Exempt if all apply: no more than 183 days in the tax year; the employer is not resident there; the pay is not borne by its permanent establishment there. | Art. XV(2) |
| Self-employment, business, services | Country of residence; the other country taxes profits of a permanent establishment (fixed base) there, or if your stay there reaches 183 days in the tax year. | Art. VII, Art. XIV |
| Pension | Only the source country (for pensions, the paying country). | Art. XVIII |
| Government service | Usually only the paying country; exception: service in the other country by its national. | Art. XIX |
| Government service pension | General rules for pensions apply. | Art. XIX |
| Rent from real estate | The country where the property is located may tax; the country of residence relieves double taxation. | Art. VI(1) |
| Dividends | The source country may tax; the country of residence relieves double taxation. Other rates or exemptions apply in some cases (see the article). | Art. X(1)-(3) |
| Interest (deposits, bonds, loans) | Source country: at most 25%; the country of residence relieves double taxation. Other rates or exemptions apply in some cases (see the article). | Art. XI(1)-(2) |
| Royalties (copyright, licences) | Source country: at most 20%; the country of residence relieves double taxation. Other rates or exemptions apply in some cases (see the article). | Art. XII(1)-(2) |
| Sale of property or shares | Real estate: the country where it is located may tax. Shares of companies deriving their value mainly from real estate: the same. Other property: under certain conditions the source country may also tax (see the article). | Art. XIII |
| Other income | The source country may tax; the country of residence relieves double taxation. | Art. XXI(2) |
How double taxation is relieved
- Canada: credit for the tax paid in the source country, up to the country’s own tax on that income Art. XXII(1)(a)
- Pakistan: credit for the tax paid in the source country, up to the country’s own tax on that income Art. XXII(3)
Data checked: 10/11/2026. A short summary for individuals; the full conditions, exceptions and protocols are in the treaty text. General information, not legal advice.