Canada: Technical Explanation Clarifies Protocol To Canada-U.S. Tax Treaty, Part Two

Last Updated: July 24 2008
This article is part of a series: Click Technical Explanation Clarifies Protocol To Canada-U.S. Tax Treaty, Part One for the previous article.

To read Part One of this article please click here

Derivative Benefits Test

A "derivative benefits" clause extends Treaty protection for dividends, interest and royalties to companies controlled (requiring, generally, at least 90% ownership) by qualified persons or other persons if those other persons (a) are resident in countries that have a comprehensive income tax treaty with the United States or Canada, as the case may be, and would be entitled to the same kind of benefits under that treaty, (b) would be qualified persons or otherwise eligible for Treaty benefits if they were residents of the United States or Canada and (c) would be entitled to a rate of tax in that other treaty country on the relevant income that is at least as low as the tax rate in the Treaty. There is also a base erosion rule which requires that the amount of expenses deductible from gross income payable directly or indirectly to persons that are not qualifying persons for the preceding fiscal period is less than 50% of gross income.

General Anti-Abuse

The LOB article restates a previous general anti-abuse rule that permits the denial of benefits under the Treaty where it can reasonably be concluded that to do otherwise would result in an abuse of the provisions of the Treaty.

  • The TE refers to the independent status of Article XXIXA(7) that allows for the application of domestic anti-abuse rules in Canada and the United States. Thus, Canada may apply its domestic rules to counter abusive arrangements involving "treaty shopping" through the United States, and the United States may apply its substance-over-form and anti-conduit rules, for example, in relation to Canadian residents. The TE notes that this principle is recognized by the OECD in the Commentaries to its Model Treaty, and the United States and Canada agree that it is inherent in the Treaty.

Binding Arbitration

The Protocol provides for "baseball-style" arbitration of cases which the competent authorities (the CRA and the Internal Revenue Service) have been unable to resolve by mutual agreement. Under this procedure, an arbitration board with three members must choose between the proposed resolutions submitted by Canada and the United States. The arbitration provisions will become effective on the coming into force of the Protocol and, as described below, will apply to unresolved cases whether filed before or after the Protocol comes into force.

There is no mechanism under the current Treaty to compel the competent authorities to reach an agreement to relieve double taxation. Failure of the competent authorities to agree has, in some cases, resulted in substantial delays or the denial of relief. The introduction of arbitration is an extremely important development that should result in the resolution of competent authority cases within three years or less. In this regard, the prospect of arbitration of unresolved cases may induce the competent authorities to reach a negotiated settlement at an earlier stage in the process.

Arbitration is available only for a case in which a tax return has been filed with Canada or the United States for the taxable year at issue and which either (a) involves the application of one or more provisions of the Treaty that the competent authorities have agreed by exchange of diplomatic notes should be the subject of arbitration, or (b) is a particular case that the competent authorities agree is suitable for arbitration on a "one-off" basis. In the diplomatic notes in Annex A to the Treaty, Canada and the United States agree that arbitration should apply to the application of the provisions of the Treaty in respect of the residence of an individual, the existence of a permanent establishment, the attribution of business profits to a permanent establishment, transfer pricing adjustments, and the apportionment of royalties to exempt and taxable amounts, along with other provisions that the competent authorities may agree to in the future. The competent authorities may mutually agree that a particular case is not suitable for arbitration, but must do so before the arbitration proceeding for that case begins.

  • The TE refers to cases initially submitted as requests for advance pricing arrangements (APAs) in the context of the information necessary for the U.S. competent authority to undertake substantive consideration for a mutual agreement, but does not specify whether the binding arbitration provisions can be applied to resolve a disagreement over an APA. The U.S. competent authority has recently made public statements regarding the potential application of binding arbitration provisions in treaties entered into by the United States to APAs, noting that, in any case, binding arbitration would only be available in respect of tax years for which returns had been filed, and separately noting that the binding arbitration provisions in those treaties vary in scope. We note, however, that a failed APA could result in a transfer pricing adjustment, which could fall within the stated ambit of the arbitration procedures.

An arbitration proceeding will begin on the later of (a) the date that is two years after the "commencement date" of any case that has not been resolved by mutual agreement unless both competent authorities have agreed to a different date, and (b) the date each affected taxpayer and its authorized representatives deliver to both competent authorities a written agreement not to disclose to any other person any information received during the course of the arbitration proceeding from Canada, the United States, or the arbitration board, other than the determination of the board. The "commencement date" is the date of entry into force of the Protocol for existing cases and is otherwise the date on which both competent authorities have all the information necessary to undertake substantive consideration for a mutual agreement.

  • To avoid a large number of simultaneous arbitration cases two years after the entry into force of the Protocol, the TE calls for the competent authorities to establish procedures by January 1, 2009 and begin scheduling arbitration proceedings. It is likely that the agreed procedures will address various open issues.

The Protocol provides that arbitration is to be conducted in accordance with the rules for procedure agreed to by Canada and the U.S. by exchange of diplomatic notes. Annex A to the Treaty provides that arbitration proceedings may be terminated before a determination by the board has been made, but only if the competent authorities reach a mutual agreement or if mutual agreement proceedings are terminated by the affected taxpayer. As noted, arbitration boards constituted under the binding arbitration provisions are to contain three members. Each of Canada and the United States is to appoint one member, and the two appointees are to agree on a third member.

  • The TE states that it is agreed that the third member of an arbitration board ordinarily should not be a citizen of either Canada or the United States.

If the two board members appointed by Canada and the United States are unable to agree on a third appointee (or if either Canada or the United States fails to appoint a member), Annex A to the Treaty provides for the missing board member to be appointed by the highest ranking member of the Secretariat at the Centre for Tax Policy and Administration of the OECD who is not a citizen of either Canada or the United States.

Annex A to the Treaty also provides that the board must apply the following authorities in making its determination: (a) the provisions of the Treaty; (b) any agreed commentaries or explanations of Canada and the United States concerning the Treaty; (c) the laws of the United States and Canada to the extent they do not conflict; and (d) relevant OECD Commentary, Guidelines or Reports.

  • As noted, the TE states that the Government of Canada has reviewed the TE and subscribes to its contents. Thus, the TE is likely an "agreed explanation" of the Treaty for the purposes of Annex A to the Treaty and must be applied by an arbitration board along with the other authorities listed in Annex A.

Annex A also states that the arbitration decision itself is restricted to the amount of income, expense or tax (excluding interest and penalties) reportable to a contracting state and that the board is not permitted to deliver reasons for its decision. If the affected taxpayers accept the arbitration board's decision, then the Protocol provides that the decision constitutes resolution by the mutual agreement procedure in the Treaty and is binding on both Canada and the United States. If an affected taxpayer rejects the board's decision, then the mutual agreement procedure is terminated.

Permanent Establishment For Service Providers

The Protocol introduces a new rule, in Article V(9), under which the cross-border provision of services may give rise to a permanent establishment of the service provider. This is the first time the United States has included such a rule in a treaty with a developed country.

Under this new rule, a service provider may have a permanent establishment even in the absence of a fixed place of business or an agent. Canada requested the inclusion of this rule in response to the decision of the Canadian Federal Court of Appeal in Dudney. In Dudney, a foreign consultant who spent 300 days in Canada in one year was held not to have had a Canadian permanent establishment, as his services were provided at the premises of his client, which were not under his control.

  • The TE makes it clear that Article V(9) only applies to the provision of services (although it does not elaborate on the meaning of "services"), and only to services provided by an enterprise to third parties (and not to the enterprise itself). However, neither the Protocol nor the TE defines an "enterprise." Article V(9) also only applies where the services are physically provided from within the source country.

  • The TE indicates that, because Article V(6) applies notwithstanding Article V(9), days spent on preparatory or auxiliary activities are not taken into account in applying Article V(9). This is presumably a reference to activities that are preparatory or auxiliary to the provision of the services by the service provider (i.e., the "resident" at risk of creating a permanent establishment in the host country), and not to services that are preparatory or auxiliary from the perspective of the recipient of the services.

The new rule in Article V(9) deems an enterprise of Canada or the United States that does not otherwise have a permanent establishment in the other country (the host country) to have a permanent establishment in the host country if it provides services in the host country and it meets either one of the following two thresholds:

Article V(9)(a) - Key person services: The services are performed in the host country by an individual (i.e., a natural person) who is physically present there for one or more periods totalling 183 days or more during any twelve-month period, and the income derived from the services performed in the source country by that individual amounts to more than 50% of the enterprise's gross active business revenues during that 183-day+ period. This provision is relevant to self-employed individuals or to enterprises providing services through a small number of key employees. The residence of the customer is not relevant under this test.
  • The TE confirms that the 183-day test under Article V(9)(a) is based on the number of days the relevant individual is physically present in the host country, without regard to whether such presence is related to the services being provided or whether the individual actually performs work on those days.

  • The TE indicates that "gross active business revenues" means the gross revenues attributable to active business activities that the enterprise has charged or should charge for its active business activities, regardless of when the actual billing occurs and of domestic tax law rules concerning when such revenues should be taken into account. The TE also notes such active business activities are not restricted to the activities related to the provision of services; however, the term does not include income from "passive investment activities."

Article V(9)(b) - Large project services: The services are provided in the host country for an aggregate of 183 days or more in any twelve-month period with respect to the same or connected projects for customers who either are host-country residents or who maintain a host-country permanent establishment in respect of which the services are provided. The diplomatic notes included as Annex B of the Protocol clarify that projects are considered to be "connected" if they constitute a coherent whole, commercially and geographically.
  • The TE confirms that the 183-day test in Article V(9)(b) is based on days during which services are provided in the host country (and not just physical presence), and thus would not include non-working days such as weekends and holidays, as long as no services are being provided in the host country on such days.

  • The TE indicates that the 183-day test in both paragraphs of Article V(9) relies on actual days, not "people days," so that even if many individuals are providing services in the host country, their collective presence on a single calendar day will count as one day. According to the TE example, 20 employees providing services in a host country for 10 days counts as 10 days (and not 200).

  • The TE states that the determination of whether projects are connected should be determined from the point of view of the enterprise (not that of the customer) and will depend on the facts and circumstances of each case.

  • In determining the existence of commercial coherence, the TE notes the following factors as being relevant: (a) whether the projects would, in the absence of tax planning considerations, have been concluded pursuant to a single contract; (b) whether the nature of the work involved under different projects is the same; and (c) whether the same individuals are providing the services under the different projects.

  • The TE also provides an example of projects that lack geographic coherence in a case in which an enterprise is hired to execute separate auditing projects at 44 different branches of a bank located in different cities pursuant to a single contract. While the projects are commercially coherent, they are not geographically coherent. Thus, each separate auditing project would be considered separately for purposes of Article V(9)(b).

If the new rule is found to apply, the services are taxed on a net basis under Article VII (Business Profits) of the Treaty and, therefore, such taxation is limited to the profits attributable to the activities carried on in performing those services. It will be important to ensure that only the profits properly attributable to the functions performed and risks assumed in the provision of the services will be attributed to the deemed permanent establishment of the enterprise.

The U.S. Congress Joint Committee has raised several concerns relating to Article V(9) and, in particular, administrative and compliance issues applicable both to the enterprise providing the services and to its employees. For example, service providers will be required to establish an administrative infrastructure to track employees' activities in the host state on a rolling 12-month basis and will need to anticipate and deal with the potential application of Article V(9) in unexpected situations. Employees earning more than $10,000 in the host country may be faced with the prospect of being taxed under Article XV of the Treaty in the host country in respect of remuneration that is "borne by" the newly-established Article V(9) permanent establishment of their employer.

  • The TE states that the competent authorities are encouraged to consider adopting rules to reduce the potential for excess withholding or estimated tax payments with respect to employee wages that may result from the application of Article V(9).

The recently-concluded Canada-Mexico Tax Treaty, and the pending U.S.-Bulgaria Tax Treaty, have provisions similar to Article V(9). New Article V(9) is also similar in many respects to the sample article included by the OECD in pending revisions to the Commentary to Article 5 of the OECD Model Tax Treaty (see new paragraphs 42.11-42.48 and, in particular, paragraph 42.23) dealing with the taxation of services. The OECD Commentary should be a useful source of guidance to supplement the TE (although the U.S. Joint Committee notes certain differences between the OECD version of this rule and Article V(9)).

A building site or construction or installation project lasting more than 12 months continues to constitute a permanent establishment under Article V(3). Thus, new Article V(9) would not deem a permanent establishment to arise where construction services are provided for more than 183 days (but less than 12 months) since Article V(9) is subject to Article V(3).

Article V(9) is effective for the third taxable year after the Protocol's entry into force (ignoring any days of presence, services rendered and gross active business income earned before January 1, 2010).

Determination of Business Profits for Article VII

Under Article VII, Canada or the United States may only tax the business profits of a resident of the other country to the extent that it carries on a business through a permanent establishment. Once a permanent establishment has been found to exist, the permanent establishment is attributed the business profits it would be expected to earn if it were a separate entity and dealing wholly independently with the enterprise of which it is a part.

This fiction raises issues, such as whether internal dealings should give rise, themselves, to profits in one or the other country (and not merely an allocation of costs actually incurred by the entity, for example, in transactions with third parties). Recent litigation in Canada and the United States has considered whether "notional" or "internal" dealings should be recognized. Another issue generally is whether the attribution exercise required by Article VII is confined to splitting the actual profit or loss of the entity as a whole or whether, for example, despite losses sustained by the entity, a permanent establishment could be profitable.

In Annex B to the Treaty, Canada and the United States have effectively adopted the approach for attributing profits to a permanent establishment outlined in the OECD's Report on the Attribution of Profits to a Permanent Establishment. In so doing, they have explicitly incorporated by reference the analysis recommended in the OECD's Transfer Pricing Guidelines. A restated Article 7 of the OECD Model Tax Treaty with relevant Commentary more fully adopting the OECD Report is expected later this year.

  • The TE recognizes that the amount of income attributable to a permanent establishment under Article VII may be greater or less than the amount of income that would be treated as "effectively connected" to a U.S. trade or business under U.S. domestic rules. In particular, in the case of financial institutions, the TE notes that income from interbranch notional principal contracts may be taken into account under Article VII, despite the fact that they would be ignored for U.S. domestic law purposes. The TE also indicates that the so-called "consistency rule" will apply to ensure that Canadian taxpayers do not inappropriately combine the attribution principles of Article VII and the "effectively connected" principles of the Internal Revenue Code.

  • The TE also notes that internal dealings that would not be recognized under U.S. domestic rules may be used to attribute income to a permanent establishment in cases where the dealings accurately reflect the allocation of risk within the enterprise. However, the books of a branch will not be respected where the results are inconsistent with a functional analysis. By way of example, the TE states that income from a transaction booked in a particular branch will not be treated as attributable to that location if the sales and risk management functions that generate the income are performed elsewhere.

  • The TE states that deductions allowed for expenses incurred for the purposes of a permanent establishment will not be limited to expenses incurred exclusively for such purposes, but will include expenses incurred for the purposes of the enterprise as a whole. The TE also notes that deductions will be allowed regardless of which accounting unit of the enterprise books the expenses, so long as they are incurred for the purposes of the permanent establishment.

In Annex B to the Treaty, Canada and the United States have also agreed that the business profits attributed to a permanent establishment will only include the profits that are derived from the assets used, risks assumed and activities performed by the permanent establishment.

  • The TE clarifies that the Transfer Pricing Guidelines apply only for purposes of attributing profits within the legal entity, and do not create legal obligations or other tax consequences that would result from transactions having independent legal significance. The TE states that Canada and the United States agree that notional payments used to compute profits attributable to a permanent establishment will not be taxed as if they were actual payments for purposes of other provisions of the Treaty; for example, a notional royalty used for this purpose will not be treated as a royalty for purposes of Article XII (Royalties).

  • According to the TE, the method to be used in calculating the amount of a payment made by a branch to its head office or another branch in compensation for services performed for the benefit of the branch depends on the terms of the arrangements between the branches and head office. The TE provides an example with two alternative arrangements: one in which intra-company payments are determined on a cost-sharing basis, and another where such payments are made on an arm's length fee-for-services basis. According to the TE, in the circumstances of the two examples, either arrangement would be acceptable provided that it was made in writing and the enterprise acted in accordance with it.

Annex B to the Treaty goes on to state that a permanent establishment should be treated as having the amount of capital necessary to support the activities it performs.

  • The TE states that the benefit of the lower capital requirements that arise from the operation of an enterprise through branches rather than subsidiaries must be allocated among the branches in an appropriate manner.

  • The TE asserts that Annex B to the Treaty makes it clear that a permanent establishment cannot be entirely debt-funded.

  • The TE notes that Annex B allows taxpayers to apply a "more flexible" approach to capital allocation than would be the case under U.S. domestic rules by taking into account the relative risk of its assets in the various jurisdictions in which it does business.

Annex B to the Treaty provides that the capital attributed to a permanent establishment of financial institutions (other than insurance companies) in a contracting state is to be determined by allocating the institution's total equity between its various offices on the basis of the risk-weighted assets that are attributable to each office.

  • The TE notes that risk-weighting is more complicated than the method prescribed by U.S. domestic rules. In order to ease the administrative burden, the TE states that taxpayers may choose to apply those rules to determine the amount of capital allocable to a U.S. permanent establishment as an alternative to the method prescribed by Annex B to the Treaty. However, the TE warns that such election is not binding for Canadian tax purposes unless "the result is in accordance with the arm's-length principle".

For insurance companies, the analysis is, not surprisingly, more in line with draft Part IV of the OECD's Report: the profits attributable to a permanent establishment will include the premiums earned through the permanent establishment and the portion of the company's overall investment income from its reserves and surplus that support the risks assumed by the permanent establishment.

Pension Provisions

The Treaty currently provides that an individual who is a citizen or resident of one country and who is a beneficiary of a trust or other arrangement that is a resident of the other country that is generally exempt from income taxation in the other country and operated exclusively to provide pension, retirement or employee benefits, may elect to defer taxation in the first country with respect to the income accrued in the plan until a distribution is made from the plan. Each country has its own procedures for making the election. That this election only applies to accrued income, not contributions or accrued benefits, has long been perceived to be a flaw in the current rules.

The Protocol contains new rules to address the treatment of contributions to, and benefits accrued in, "qualifying retirement plans" which are defined in Annex B to the Treaty. The new rules apply to individuals residing in one country (the residence country) and working in the other and who contribute to a qualifying retirement plan in the country where they work. The new rules also apply to individuals who move from one country to the other country (the source country) on short-term (up to five years) work assignments and continue to contribute to a qualifying retirement plan in the first country. In certain cases, the employers of such individuals may also benefit.

Provided certain conditions are met, individuals who reside in one country and work in the other (e.g., commuters) may deduct, for residence country tax purposes, the contributions they make to a qualifying retirement plan in the country where they work. Similarly, individuals who move for work and meet certain conditions may deduct, for source country tax purposes, their contributions to a qualifying retirement plan in the first country, for up to five years. (For this purpose, it is irrelevant whether such an individual becomes a resident of the source country while working there). In both cases, accruing benefits are not taxable.

For example, a resident of Canada employed in the United States may contribute to the employer's pension plan in the United States. The employee's contributions to the plan (up to the employee's available RRSP deduction limit in Canada) will be deductible for Canadian tax purposes.

As a further example, an employee of a Canadian company who participates in the employer's pension plan in Canada may be temporarily assigned to a related U.S. company. The employee keeps contributing to the pension plan of the Canadian company while working in the United States. For U.S. tax purposes, both the employee and the U.S. company will be able to deduct their contributions to the Canadian plan.

The tax relief afforded by the new rules only applies to the extent that contributions or benefits would qualify for tax relief in the country where the qualifying retirement plan is situated. For a citizen of the United States, the U.S. tax benefit may not exceed the amount that could be excluded from income for contributions and benefits under a corresponding plan established in, and recognized for tax purposes by, the United States. For purposes of Canadian taxation, the amount of the contributions otherwise allowed as a deduction to an individual for a taxation year shall not exceed the individual's RRSP deduction limit (after taking into account contributions to RRSPs deducted by the individual for the year) Such deduction shall be taken into account in computing the individual's RRSP deduction limit in Canada for subsequent taxation years.

The new rules are intended to facilitate movement of personnel between the two countries by removing a possible disincentive for cross-border commuters and temporary work assignments.

The new rules apply for taxation years that begin after the calendar year in which the amendments come into force.

Employee Stock Options—Apportionment of Taxing Rights

For purposes of applying Article XV (Income from Employment) and Article XXIV (Elimination of Double Taxation), a significant new rule regarding the "sourcing" of employee stock option benefits as between Canada and the United States is contained in Annex B to the Treaty.

Under the current Treaty, there is no specific rule that provides for apportionment of an employee's stock option benefit between the two countries where the stock option was granted to the employee while employed in one country but was exercised or disposed of by the employee after moving to the other country to work for the same or a related employer.

Under the new rule, where an individual was granted an option to acquire shares or units (securities) of the employer (or a related entity) as an employee of a corporation or a mutual fund trust, the income arising from the exercise or disposition of the option will generally be considered to have been derived in Canada or in the United States in the proportion that (i) the number of days that the individual's principal place of employment was in Canada or in the United States, respectively, during the period between the date of grant and the date of exercise or disposition is to (ii) the total number of days in that period. However, if the competent authorities of both countries agree that the terms of the option were such that the grant of the option is more appropriately treated as a transfer of ownership of the securities (e.g., because the options were in-the-money or not subject to a substantial vesting period), they may agree to attribute income accordingly.

This new rule clarifies the "sourcing" of option benefits for employees in these circumstances and ensures that double taxation will not arise. Where the employee also had a principal place of employment in a third country during the period between the date of grant and the date of exercise, it is not clear how the portion of any option benefits that are not apportioned to either Canada or the United States in accordance with Annex B to the Treaty will be taxed.

U.S. Tax (IRS Circular 230): Any U.S. tax or other legal advice in this update is not intended and is not written to be used, and it cannot be used, by any person to avoid penalties under U.S. federal, state or local tax law, or promote, market or recommend to any person any transaction or matter addressed herein.

This update is not a comprehensive summary of all of the changes to the Treaty enacted by the Protocol. Changes not addressed in this update include those relating to exempt organizations, the exchange of information, the emigration of individuals and the residence of continued corporations, among others. If you have any questions or require additional analysis of the Protocol, the Treaty, and the Technical Explanation, please contact any member of our National Tax Department.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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This article is part of a series: Click Technical Explanation Clarifies Protocol To Canada-U.S. Tax Treaty, Part One for the previous article.
 
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The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

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