CRA rules that a digital content sales data centre held by a Cansub is not a permanent establishment of the parent

CRA considers that a Canadian server potentially can constitute a permanent establishment of a non-resident: 18 October 2011 T.I. 2010-038195.

A U.S. corporation and its non-resident subsidiary (located in another treaty jurisdiction) together run a digital content sales platform that enables third parties to sell content, and collect a percentage of the sales proceeds (i.e. similar to iTunes).  CRA has ruled that the two non-residents will not be considered to carry on business in Canada through a permanent establishment for purposes of the two applicable treaties by virtue of having a Canadian subsidiary (Canco) run a data centre in Canada to mirror the USCo's websites and digital content sales platform -  with a "small group" of operational employees of the U.S. corporation coming to Canada "from time to time for the purposes of inspection, maintenance or similar purposes" and with applications and data hosted in the Canadian data centre being managed remotely by employees of the non-resident companies located outside of Canada.

Scott Armstrong.  Summary of 2012 Ruling 2012-0432141R3 under Treaties - Article 5.