,canada ,cu/oms                       #a
& ,rev5ue ,ag5cy

          ,9t]pret,n ,bullet9
    
,subjetc3 ,9come ,tax ,act
  ,hire ( ,%ips & ,aircraft f ,non-
  ,resid5ts
,numb]3 ,,it-#did
,date3 ,janu>y #ca1 #aihc
,ref];e3 ,p>agraph #bab7#a77d7 7al sec;n
  #bee1 subsec;n #bae7#a7 & p>agraphs
  #ha7#a77c7 & #bbg7#h77a77

#a4 ,? bullet9 expla9s ! ,de"p;t's
  posi;n ) respect 6! tax,n ( pay;ts
  made 0p]sons resid5t 9 ,canada 6non-
  resid5ts =! hire ( %ips &/or aircraft
  = use 9 ,canada4 ,? bullet9 d1ls )!
  tax,n ( only ^? pay;ts made "u a
  3tract = hire t is a dry l1se1 demise
  or b>eboat *>t] : cu/om>ily makes !
  *>t]] responsi# = all op],ns (! %ip or
  aircraft4 ,s* a 3tract is "h9af ref]r$
  6z a b>eboat *>t]4                  #a
               ,,it-#did             a#a
#b4 ,subp>agraph #bab7#a77d77;i7
  subjects a non-resid5t p]son 6an 9come
  tax ( #be@3p on all am.ts pd or cr$it$
  6t p]son 0a resid5t ( ,canada z1 on
  a3.t or 9 lieu ( pay;t ( or 9
  satisfac;n ( r5t1 royalty or a simil>
  pay;t1 =! use or ! "r 6use 9 ,canada1
  any prop]ty4 ,subp>agraph
  #bab7#a77d77;ix7 exempts f tax 9
  ,canada a r5tal pay;t made 0a p]son
  resid5t 9 ,canada 6a non-resid5t =!
  use ( or ! "r 6use \tside ,canada1 any
  corpor1l prop]ty4 ,acly1 ": a %ip or
  aircraft is hir$ "u a b>eboat *>t] =
  use 9side & \tside ,canada1 x is !
  ,de"p;t's view t ! r5t is 6be prorat$
  s t ! por;n "!( t relates 6! use (!
  %ip or aircraft \tside ,canada w n 2
  tax$4
#c4 ,! am.t subject 6! #be@3p tax is t
  por;n (! gross r5t t is det]m9$ 6be
  applica# 6! "t dur+ : ! %ip or
  aircraft is us$ 9 ,canada 7see #e 2l74
  ,a rate ( tax less ?an #be@3p w     #b
               ,,it-#did             b#a
  apply if s* less] rate is provid$ = 9
  a reciprocal tax agree;t 2t ,canada &!
  c.try 9 : ! lessor resides4 ,ref];e %d
  2 made 6,9=m,n ,circul> #gf-ab;,r#b :
  9cludes a s*$ule ( non-resid5t tax
  rates = tr1ty c.tries4 ,nei ! exempt+
  provi.ns ( p>agraph #ha7#a77c7 3c]n+ !
  op],n (a %ip or aircraft 9 9t]n,nal
  tra6ic nor ! provi.ns ( any bilat]al
  %ipp+ & air transport agree;ts apply
  6b>eboat *>t] hire 2c ! 9come is r5tal
  9come & n 89come e>n$ ''' f ! op],n (a
  %ip or aircraft04
#d4 ,! t]m 8in ,canada0 z us$ 9 #b abv w
  2 3sid]$ 69clude ! t]ritorial sea (
  ,canada1 z def9$ 9 ! ,t]ritorial ,s1s
  & ,fi%+ ,z"os ,act &
--------------------------------------#b
  ! ov]ly+ airspace4 ,9 g5]al t]ms1 ?
  embraces all wat] & airspace )9 :at is
  "kn z ! #ab nautical mile limit4
  ,h["e1 = 9come tax purposes1 p>agraph
  #bee7a7 provides t ,canada al 9cludes
  ! sea b$ & subsoil (! subm>9e >1s   #c
               ,,it-#did             a#b
  adjac5t 6! coa/s ( ,canada 9 respect (
  : ! ,gov]n;t ( ,canada or (a prov9ce1
  grants a "r1 lic;e or privilege
  6explore =1 drill = or take any
  m9]als1 petroleum1 natural gas or
  relat$ hydroc>bons 7basic,y ,canada's
  ,3t95tal ,%elf74 ,p>agraph #bee7b7
  fur!r provides t ,canada 9cludes ! s1s
  & airspace abv ^? subm>9e >1s 9
  respect ( any activities c>ri$ on 9
  3nec;n )! explor,n = or exploit,n (!
  sd m9]als1 petroleum1 natural gas or
  hydroc>bons4 ,? m1ns t any equip;t &
  p]sonnel t >e 5gag$ "u1 ^u or abv !
  s1s :ile c>ry+ \ any (! activities
  describ$ 9 p>agraph #bee7b7 in1 ^u or
  ov] any subm>9e >1s describ$ 9
  p>agraph #bee7a7 w 2 3sid]$ 6be 9
  ,canada :ile s 5gag$4 ,acly1 x is !
  ,de"p;t's view t "t 9 ,canada =!
  purpose ( #e 2l1 w al 9clude ! "t dur+
  : a %ip or aircraft is in1 ^u or ov]
  any subm>9e >ea describ$ 9 p>agraph
  #bee7a71 =! purpose ( c>ry+ \ any   #d
               ,,it-#did             b#b
  activ;y describ$ 9 p>agraph #bee7b71
  or =! purpose ( c>ry+ \ any activ;y
  directly or 9directly relat$ "!to
  7e4g4 f]ry+ supplies & p]sonnel74
  ,h["e1 %ips n 5gag$ directly or
  9directly 9 any activ;y describ$ 9
  p>agraph #bee7b7 w n 2 3sid]$ 6be 9
  ,canada =! purpose ( #e 2l1 :ile m]ely
  trav]s+ an >ea (! sea : is 0virtue (
  sec;n #bee1 det]m9$ 6be 9 ,canada =
  purposes ( t sec;n only4
#e4 ,! ,de"p;t is (! view t "t 9 ,canada
  is ! prop] basis =! appor;n;t (
  b>eboat *>t] hire 2t use 9side &
  \tside ,canada4 ,9 3tracts ": ! am.t (
  r5t is -put$ 0ref];e 6"t1 a daily or
  h\rly rate c 2 r1dily -put$ & appli$
  6! numb] ( "ds or h\rs 9 ,canada4 ,if
  r5t is calculat$ on any o!r basis a
  no;nal daily or h\rly rate c usu,y 2
  -put$4 ,o!r bases ( appor;n;t w 2
  a3ept$ if x c 2 demon/rat$ t ! result
  w 2 sub/anti,y ! same z t obta9$ 0use
                                      #e
               ,,it-#did             c#b
  (! me?od describ$ abv &! "t ele;t is !
  basic factor 9 ! det]m9,n4
#f4 ,subsec;n #bae7#a7 requires ! pay] (
  any am.t subject 6tax "u p>agraph
  #bab7#a77d7 6)hold f ! non-resid5t &
  remit 6! ,rcvr ,g5]al ! am.t (! tax
  impos$4 ,s9ce r5t is norm,y pd 9
  adv.e1 ! pay] is frequ5tly oblig$
  6)hold tax 2f ! actual "t 9 ,canada
  has be5 e/abli%$ 7mak+ an exact -put,n
  ( applica# )hold+ tax impossi#74
  ,3sequ5tly1 x is a3epta# 6base am.ts
  )held on r1sonably e/imates drawn f
  propos$ it9]>ies =! p]iod cov]$ 0a
  r5tal pay;t4 ,if a 3tract 9volves a
  s]ies ( r5tal pay;ts1 x is expect$ t
  excess or defici5cies 9 tax )held f
  e>li] pay;ts w 2 adju/$ 9 !
--------------------------------------#c
  am.ts )held f subsequ5t pay;ts4 ,!
  ,de"p;t w n apply ! p5alty provi.ns (
  p>agraph #bbg7#h77a7 9 respect (a
  defici5cy 9 tax )held if a pay] c
                                      #f
               ,,it-#did             a#c
  demon/rate t ^! guidel9es 7 foll[$ 9
  gd fai?4
#g4 ,x is recogniz$ t %ipp+ lanes may
  cross 9 & \ ( ,canadian wat]s s"eal
  "ts 9 ! c\rse ( "o voyage 6or f a
  ,canadian port1 mak+ a precise
  det]m9,n ( "t 9 ,canada a di6icult
  task4 ,6assi/ 9 mak+ ? det]m9,n1
  except ": sec;n #bee applies z set \ 9
  #d abv1 taxpay]s may use ! guidel9es
  set =? 9 ,app5dix ;,a4












                                      #g
              ,app5dix ;,a           b#c
    
             ,%ipp+ ,tra6ic
    
  ,assump;n 9 ! ,det]m9,n ( ,"t 9
,canada
  7a7 ,tra6ic 9 ! foll[+ wat]s does n
    9volve any "t 9 ,canadian t]ritorial
    wat]s3
    7;i7 ! ,gulf ( ,/4 ,lawr;e on !
      s1w>d side ( ,esc\m9s1
    7;ii7 ! ,cabot ,/rait4
  7b7 ,! foll[+ wat]s >e 5tirely
    ,canadian3
    7;i7 ,hudson ,/rait1
    7;ii7 ,hudson ,bay
    7;iii7 ,/rait ( ,belle ,isle1
    7;iv7 ,canso ,/rait1
    7;v7 ,bay ( ,fundy1
    7;vi7 ,gulf ( ,/4 ,lawr;e & ,/4
      ,lawr;e ,riv] 9l& f ,esc\m9s 6,/4
      ,lamb]t ,lock1
    7;vii7 ,well& ,canal1
    7;viii7 ,que5 ,*>lotte ,/rait1
    7;ix7 ,john/on ,/rait             #h
               ,,it-#did             c#c
  7c7 ,tra6ic 9 ! ,grt ,lakes & ,/4
    ,lawr;e ,riv] is 9 ,canadian wat]s
    =! foll[+ p]c5tage (! total "t tak5
    6travel directly 2t ! po9ts
    describ$3
    7;i7 ,/4 ,lamb]t lock & ,ti2]t ,po9t
      at ! ea/]n 5d ( ,lake ,ont>io1
      #fj@3p1
    7;ii7 ,ti2]t ,po9t & ,port ,well]1
      #de@3p1
    7;iii7 ,port ,colborne &! m\? (!
      ,detroit ,riv]1 #gj@3p1
    7;iv7 ! m\? (! ,detroit ,riv] &! h1d
      (! ,/4 ,clair ,riv]1 #de@3p1
    7;v7 ! h1d (! ,/4 ,clair ,riv] &
      ,sault ,/e4 ,m>ie1 #e@3p1
    7;vi7 ,sault ,/e4 ,m>ie & ,?"u ,bay1
      #ae@3p4
  7d7 ,tra6ic 2t ! s1w>d side (! ,/rait
    ( ,juan de ,fuca & f\rty-n9e?
    p>allel is 9 ,canadian wat]s =
    #ee@3p (! "t tak5 6travel ! total
    4t.e4
                                      #i
               ,,it-#did             d#c
  7e7 ,a %ip b.d 6a ,canadian port f 7or
    \tb.d f a ,canadian port to7
    9t]n,nal wat]s takes ! r\te t
    9volves ! m9imum naviga# 4t.e 9
    ,canadian wat]s4 ,?us1 ! 4t.e 9
    ,canadian wat]s may 2 z %ort z #ab
    nautical miles4
  7f7 ,%ips 5t]+ or de"p+ ,canadian
    ports 9 ! ,grt ,lakes foll[
    recogniz$ or usual %ipp+ lanes4
--------------------------------------#e
  7g7 ,%ips 9 ! ,/rait ( ,juan de ,fuca
    foll[ recogniz$ or usual %ipp+
    lanes4
  7h7 ,"t 6travel 2t ,ti2]t ,po9t &! ,/4
    ,lamb]t lock 9 ! ,/4 ,lawr;e ,s1way
    sy/em is #be h\rs4
  7i7 ,passage "? ! ,well& ,canal takes
    #ab h\rs4
  



                                     #aj