Global Rewards Update - Canada - February 2013
Canada — stock option benefit sourcing and Article XV(2)(b) of the Canada-U.S. Income Tax Convention
This Global Rewards Update discusses two technical interpretations issued by the Canada Revenue Agency. The first interpretation adopts the OECD's default stock option sourcing position of grant to vest for domestic purposes. The second interpretation clarifies the exemption in Article XV (2)(b) of the Canada U.S. Income Tax Convention in the context of stock option compensation. The CRA’s analysis can however be extended to Canada’s other treaties, and thus its importance is broader than the U.S. context.